Iowa House Bill HF878

Iowa 2025-2026 Regular Session

• Introduced: 3/7/25
• Refer: 4/3/25

Caption

A bill for an act relating to annual percentage rates for delayed deposit service transactions.(Formerly HF 627.)

Impact

The implementation of HF 878 would alter existing laws regarding consumer finance, placing a significant restriction on how much interest can be charged in delayed deposit transactions. This change aims to promote fairness and transparency in lending practices, potentially benefiting a large number of consumers by reducing the financial burdens associated with high-interest loans. The bill's stipulation that transactions exceeding this rate become void reinforces the seriousness of the regulation, emphasizing the importance of compliance among lenders.

Summary

House File 878 is a legislative proposal aimed at regulating the annual percentage rates (APRs) applicable to delayed deposit service transactions within the state of Iowa. The bill specifically prohibits any licensee from imposing rates exceeding 36 percent on such transactions. By establishing this cap, the bill aims to protect consumers from excessively high interests that could arise from these types of financial services, which are often used by individuals facing short-term financial difficulties.

Contention

While HF 878 seems to aim at consumer protection, the bill may also face contention from financial institutions that offer delayed deposit services, as they could argue that the imposed rate limit restricts their ability to operate viably. Opponents may raise concerns about the availability of such services, which could diminish if providers find it unprofitable to operate under the new cap. Moreover, the provision that protects individuals on active military duty—regulating their APRs to comply with federal guidelines—could provoke discussions regarding how to fairly implement protections for varying demographic groups within the state.