2009 Iowa Code
Title 13 - Commerce
Subtitle 3 - Money and Credit
CHAPTER 537 - CONSUMER CREDIT CODE
537.2401 - FINANCE CHARGE FOR CONSUMER LOANS NOT PURSUANT TO OPEN-END CREDIT.

        537.2401  FINANCE CHARGE FOR CONSUMER LOANS NOT
      PURSUANT TO OPEN-END CREDIT.
         1.  Except as provided with respect to a finance charge for loans
      pursuant to open-end credit under section 537.2402 and loans secured
      by a certificate of title of a motor vehicle under section 537.2403,
      a lender may contract for and receive a finance charge not exceeding
      the maximum charge permitted by the laws of this state or of the
      United States for similar lenders, and, in addition, with respect to
      a consumer loan, a supervised financial organization or a mortgage
      lender may contract for and receive a finance charge, calculated
      according to the actuarial method, not exceeding twenty-one percent
      per year on the unpaid balance of the amount financed.  Except as
      provided in section 537.2403, this subsection does not prohibit a
      lender from contracting for and receiving a finance charge exceeding
      twenty-one percent per year on the unpaid balance of the amount
      financed on consumer loans if authorized by other provisions of the
      law.
         2.  This section does not limit or restrict the manner of
      calculating the finance charge, whether by way of add-on, discount,
      or otherwise, so long as the rate of the finance charge does not
      exceed that permitted by this section or the laws of this state or of
      the United States.  The finance charge permitted by this section or
      the laws of this state or of the United States may be calculated by
      determining the single annual percentage rate as required to be
      disclosed to the consumer pursuant to section 537.3201 which, when
      applied according to the actuarial method to the unpaid balances of
      the amount financed, will yield the finance charge for that
      transaction which would result from applying any graduated rates
      permitted by this section or the laws of this state or of the United
      States to the transaction on the assumption that all scheduled
      payments will be made when due.  If the loan is a precomputed
      consumer credit transaction, the finance charge may be calculated on
      the assumption that all scheduled payments will be made when due, and
      the effect of prepayment is governed by section 537.2510.
         3.  Except as provided in subsection 5, the term of a loan for the
      purposes of this section commences on the date the loan is made.  Any
      month may be counted as one-twelfth of a year but a day is counted as
      one-three hundred sixty-fifth of a year.  Subject to classifications
      and differentiations the lender may reasonably establish, a part of a
      month in excess of fifteen days may be treated as a full month if
      periods of fifteen days or less are disregarded and that procedure is
      not consistently used to obtain a greater yield than would otherwise
      be permitted.  The administrator may adopt rules not inconsistent
      with the Truth in Lending Act with respect to treating as regular
      other minor irregularities in amount or time.
         4.  Subject to classifications and differentiations the lender may
      reasonably establish, the lender may make the same finance charge on
      all amounts financed within a specified range.  A finance charge so
      made does not violate subsection 1, if both of the following are
      applicable:
         a.  When applied to the median amount within each range, it
      does not exceed the maximum permitted by that subsection.
         b.  When applied to the lowest amount within each range, it
      does not produce a rate of finance charge exceeding the rate
      calculated according to paragraph "a" by more than eight percent
      of the rate calculated according to paragraph "a".
         5.  With respect to an insurance premium loan, the term of the
      loan commences on the earliest inception date of a policy or contract
      of insurance for which the premium is financed.  

         Section History: Early Form

         [C75, 77, 79, 81, § 537.2401; 82 Acts, ch 1153, § 16, 18(1)] 

         Section History: Recent Form

         83 Acts, ch 124, § 26; 2007 Acts, ch 26, §1
         Referred to in § 533.316, 537.1301, 537.2308, 537.2504, 537.2505