A bill for an act relating to interest rates and charges on regulated loans, and consumer credit transaction service charges.(Formerly SSB 3065.)
Summary
Senate File 2216 would revise Iowa law governing regulated loans and consumer credit transaction service charges. The bill removes several existing provisions that allow the superintendent of banking to investigate regulated-loan conditions and to redetermine or reset maximum interest rates. In their place, it establishes a single maximum rate of 3 percent per month for all regulated loans, replacing the current tiered rate structure that varies by loan balance.
The bill also changes the service charge that may be imposed in a consumer credit transaction. Under current law, a creditor may charge the lesser of 10 percent of the amount financed or $30. SF 2216 would instead allow a service charge of the lesser of 3 percent of the amount financed or $100. The measure therefore lowers the percentage cap while raising the dollar cap, which would affect how lenders structure charges on smaller and larger consumer credit transactions.
Impact
If enacted, the bill would amend Iowa Code section 536.13 by eliminating subsections governing the superintendent of banking’s authority over regulated-loan rate adjustments and by replacing the existing graduated interest-rate schedule with a flat 3 percent monthly maximum. It would also amend Iowa Code section 537.2501 to change the permissible service charge on consumer credit transactions. These changes would directly affect licensed lenders, regulated-loan borrowers, and creditors offering consumer credit, while narrowing administrative discretion over rate-setting.
Sentiment
The bill appears to have had some support in committee, as reflected by the 14-2 Senate Commerce report, suggesting a favorable initial reception among most committee members. However, the bill was ultimately withdrawn, indicating that it did not advance to enactment and may not have had sufficient broader support or momentum. The available record does not include floor debate or detailed testimony, so the overall sentiment can only be characterized as generally favorable in committee but not sustained through the legislative process.
Contention
The main points of contention likely centered on consumer lending costs and regulatory authority. Supporters may have viewed the bill as simplifying loan-rate rules and updating service-charge limits, while critics may have been concerned that a flat 3 percent monthly rate could be too high for borrowers or that removing the superintendent’s ability to investigate and reset rates would reduce consumer protections and oversight. The change from a 10 percent/$30 service-charge cap to a 3 percent/$100 cap also creates winners and losers depending on loan size, which could have been another source of disagreement among lenders, consumer advocates, and regulators.
Similar To
A bill for an act relating to interest rates and charges on regulated loans, and consumer credit transaction service charges. (Formerly HSB 524.) Effective date: 07/01/2026.
A bill for an act relating to interest rates and charges on regulated loans, and consumer credit transaction service charges. (Formerly HSB 524.) Effective date: 07/01/2026.