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June 15, 2017

Iowa Division of Banking Issues New Rules Revising Regulated Loan Act Maximum Rate Tiers

Under Iowa law, every five years the Iowa Division of Banking (the "IDOB") is required to review and revise, if necessary, all of its rulemakings. Under this authority, the IDOB has rescinded its rules under the Regulated Loan Act and Industrial Loan Law and adopted new rules. The new rules are effective July 1, 2017.

Lenders (other than banks and credit unions) making consumer loans (other than first lien mortgage loans) with an amount financed of $54,600 or less and a finance charge that exceeds a rate published by the IDOB that adjusts on the first day of each month (4.25% effective July 1, 2017; see chart here), must obtain a license under either the Regulated Loan Act or Industrial Loan Law. Under the new IDOB regulations implementing the Regulated Loan Act, the maximum rate tiers have been changed as shown here.

These maximum rate tiers apply to both open- and closed-end loans.

  New Rules