536.13 Loan classifications, interest rates, and charges — report, penalty, and consumer credit code applicability.
1. The superintendent may investigate the conditions and find the facts with reference to the business of making regulated loans, as described in section 536.1, and after making the investigation, report in writing any findings to the next regular session of the general assembly, and upon the basis of the facts:
a. Classify regulated loans by a rule according to a system of differentiation which will reasonably distinguish the classes of loans for the purposes of this chapter.
b. Determine and fix by a rule the maximum rate of interest or charges upon each class of regulated loans which will induce efficiently managed commercial capital to enter the business in sufficient amounts to make available adequate credit facilities to individuals. The maximum rate of interest or charge shall be stated by the superintendent as an annual percentage rate calculated according to the actuarial method and applied to the unpaid balances of the amount financed.
2. Except as provided in subsection 7, the superintendent may redetermine and refix by rule, in accordance with subsection 1, any maximum rate of interest or charges previously fixed by it, but the changed maximum rates shall not affect preexisting loan contracts lawfully entered into between a licensee and a borrower. All rules which the superintendent may make respecting rates of interest or charges shall state the effective date of the rules, which shall not be earlier than thirty days after notice to each licensee by mailing the notice to each licensed place of business.
3. Before fixing any classification of regulated loans or any maximum rate of interest or charges, or changing a classification or rate under authority of this section, the superintendent shall give reasonable notice of the superintendent’s intention to consider doing so to all licensees and a reasonable opportunity to be heard and to introduce evidence with respect to the change or classification.
4. Beginning July 4, 1965, and until such time as a different rate is fixed by the superintendent, the maximum rate of interest or charges upon the class or classes of regulated loans is as follows:
a. Three percent per month on any part of the unpaid principal balance of the loan not exceeding one hundred fifty dollars.
b. Two percent per month on any part of the loan in excess of one hundred fifty dollars, but not exceeding three hundred dollars.
c. One and one-half percent per month on any part of the unpaid principal balance of the loan in excess of three hundred dollars, but not exceeding seven hundred dollars.
d. One percent per month on any part of the unpaid principal balance of the loan in excess of seven hundred dollars.
5. A licensee under this chapter may lend any sum of money not exceeding the threshold amount as defined in section 537.1301 in amount and may charge, contract for, and receive on the loan interest or charges at a rate not exceeding the maximum rate of interest or charges determined and fixed by the superintendent under authority of this section or pursuant to subsection 7 for those amounts in excess of ten thousand dollars.
6. If any interest or charge on a loan regulated by this chapter in excess of those permitted by this chapter is charged, contracted for, or received, the contract of loan is void as to interest and charges and the licensee has no right to collect or receive any interest or charges. In addition, the licensee shall forfeit the right to collect the lesser of two thousand dollars of principal of the loan or the total amount of the principal of the loan.
7. a. The superintendent may establish the maximum rate of interest or charges as permitted under this chapter for those loans with an unpaid principal balance of thirty thousand dollars or less. For those loans with an unpaid principal balance of over thirty thousand dollars, the maximum rate of interest or charges which a licensee may charge shall be the greater of the rate permitted by chapter 535 or the rate authorized for supervised financial organizations by chapter 537.
b. The Iowa consumer credit code, chapter 537, applies to a consumer loan in which the licensee participates or engages, and a violation of the Iowa consumer credit code, chapter 537, is a violation of this chapter.
c. Chapter 537, article 2, parts 3, 5, and 6, chapter 537, article 3, and sections 537.3203, 537.3206, 537.3209, 537.3304, 537.3305, and 537.3306 apply to any credit transaction, as defined in section 537.1301, in which a licensee participates or engages, and any violation of those parts or sections is a violation of this chapter. For the purpose of applying the Iowa consumer credit code, chapter 537, to those credit transactions, “consumer loan” includes a loan for a business purpose.
d. Except as provided in this subsection, the provisions of the Iowa consumer credit code, chapter 537, apply to loans regulated by this chapter and supersede conflicting provisions of this chapter. Section 537.2402, subsection 1, does not apply to loans regulated by this chapter.
[C24, 27, 31, §9420 – 9423; C35, §9438-f13; C39, §9438.13; C46, 50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §536.13]
85 Acts, ch 158, §4; 86 Acts, ch 1237, §34; 2003 Acts, ch 44, §114; 2004 Acts, ch 1141, §34; 2005 Acts, ch 3, §117, 118; 2006 Acts, ch 1042, §38; 2007 Acts, ch 22, §97; 2010 Acts, ch 1028, §12; 2013 Acts, ch 30, §133; 2014 Acts, ch 1037, §9; 2019 Acts, ch 27, §1
Referred to in §536.19