Payday Loan in Iowa
Legal Status: Legal
Citation:
Iowa Code Ann. § 533D.1 et seq.
Loan Terms:
Maximum Loan Amount: $500
Loan Term: Max: 31 days
Maximum Finance Rate and Fees: $15: $0-$100; $10 per $100 thereafter
Finance Charge for 14-day $100 loan: $16.67
APR for 14-day $100 loan: 433%
Debt Limits:
Maximum Number of Outstanding Loans at One Time: Two
Rollovers Permitted: None (cannot repay, refinance or consolidate)
Cooling-off Period:
Repayment Plan:
Collection Limits:
Collection Fees: One $15 NSF fee (exclusive remedy)
Criminal Action: Not Specified
Where to Complain, Get Information:
Regulator: Iowa Division of Banking
Address: 200 East Grand Avenue, Suite 300 Des Moines IA 50309
Phone: (515) 281-4014
Fax: (515) 281-4862
Applicability: To a person who accepts a check dated subsequent to the date it was written or who accepts a check dated on the date it was written holds the check for a period of time prior to deposit. Otherwise, UCCC applies. Iowa Code § 537.2401 (21% per year on supervised loans).
Exemptions: Banks incorporated under the provisions of state or federal law, a savings and loan association, a credit union, a licensed industrial loan company.
Licensing requirements: Department of Commerce, division of banking enforces. An applicant must execute a bond in the amount of $25,000 and pay a fee of $150. The superintendent of banking will issue a license if the applicant can conduct the business honestly and fairly, has not been convicted of a felony, is financially responsible, has unencumbered assets of at least $25,000.
Permitted charges: $15 on first $100 of the face amount of check; $10 on subsequent $100 increments or a pro rata portion of $100 face value.
Prohibited acts: A person cannot operate a delayed deposit services business in this state unless the person is licensed by the superintendent. A licensee cannot: hold any more than 2 checks at a time; hold checks aggregating more than $500 at any one time; require the maker to receive payment by a method which causes the maker to pay additional fees; repay, refinance, or otherwise consolidate a postdated check transaction with the proceeds of another postdated check transaction made by the same licensee (by Interpretive Bulletin, this means that the licensee must wait at least one day between depositing or redeeming a check and the acceptance of a new postdated check unless the aggregate amount of the check maturing and the new check being written do not exceed $500 in which case this can be done on the same day); charge more than allowed under the act; collect more than one NSF charge on one check no matter how long the check remains unpaid.
Required disclosures: Licensee shall give the maker notice written in clear, understandable language; state the APR on the first $100 and the APR on the subsequent $100 increments if different; the date on which the check will be deposited; all fees, charges, and penalties for all services in all branches.
Loan terms: The face amount of the checks held at any one time which cannot exceed two cannot exceed $500.
Civil / Criminal Penalties: The superintendent of banking can impose a fine of up to $5,000 for each violation of the act. A person who operates without a license is guilty of a misdemeanor.
Enforcement: The superintendent of banking can suspend or revoke a license and issue cease and desist orders. If a pattern and practice of violating the act is occurring, the attorney general can initiate an action to enjoin the wrongdoer.
