Iowa Code 537.2504 – Finance charge on refinancing
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Terms Used In Iowa Code 537.2504
- Contract: A legal written agreement that becomes binding when signed.
- Finance charge: The total cost of credit a customer must pay on a consumer loan, including interest. The Truth in Lending Act requires disclosure of the finance charge. Source: OCC
- Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
- Open-end credit: A credit agreement (typically a credit card) that allows a customer to borrow against a preapproved credit line when purchasing goods and services. The borrower is only billed for the amount that is actually borrowed plus any interest due. (Also called a charge account or revolving credit.) Source: OCC
- year: means twelve consecutive months. See Iowa Code 4.1
537.2504 Finance charge on refinancing.
With respect to a consumer credit transaction in which the rate of finance charge required to be disclosed in the transaction pursuant to § 537.3201 does not exceed eighteen percent per year, other than a consumer lease or a consumer rental purchase agreement, the creditor may, by agreement with the consumer, refinance the unpaid balance and may contract for and receive a finance charge based on the amount financed resulting from the refinancing at a rate not exceeding that permitted by the provisions on finance charge for consumer credit sales other than open-end credit in § 537.2201 if a consumer credit sale is refinanced, the provisions on finance charge for a consumer loan other than a supervised loan in section
537.2401, subsection 1, or the provisions on finance charge for a supervised loan not pursuant to open-end credit in § 537.2401, subsection 2, as applicable, if a consumer loan is refinanced. With respect to a consumer credit transaction in which the rate of finance charge required to be disclosed in the transaction to the consumer pursuant to § 537.3201 exceeds eighteen percent per year, other than a consumer lease or a consumer rental purchase agreement, the creditor may by agreement with the consumer, refinance the unpaid balance and may contract for and receive a finance charge based on the amount financed resulting from the refinancing at a rate of finance charge not to exceed that which was required to be disclosed in the original transaction to the consumer pursuant to § 537.3201. For the purpose of determining the finance charge permitted, the amount financed resulting from the refinancing consists of:
1. If the transaction was not precomputed, the total of the unpaid balance of the amount financed and the accrued charges, including finance charges, on the date of the refinancing, or, if the transaction was precomputed, the amount determined by deducting the unearned portion of the finance charge and any other unearned charges, including charges for insurance or deferral charges, from the unpaid balance on the date of refinancing. For the purposes of this section, the unearned portion of the finance charge and deferral charge, if any, shall be determined as provided in § 537.2510, subsection 2, but without allowing any minimum charge.
2. Appropriate additional charges as permitted under § 537.2501, payment of which is deferred.
[C75, 77, 79, 81, §537.2504]
87 Acts, ch 80, §35; 2018 Acts, ch 1041, §127
Referred to in §537.2505, 537.2508, 537.3308
With respect to a consumer credit transaction in which the rate of finance charge required to be disclosed in the transaction pursuant to § 537.3201 does not exceed eighteen percent per year, other than a consumer lease or a consumer rental purchase agreement, the creditor may, by agreement with the consumer, refinance the unpaid balance and may contract for and receive a finance charge based on the amount financed resulting from the refinancing at a rate not exceeding that permitted by the provisions on finance charge for consumer credit sales other than open-end credit in § 537.2201 if a consumer credit sale is refinanced, the provisions on finance charge for a consumer loan other than a supervised loan in section
537.2401, subsection 1, or the provisions on finance charge for a supervised loan not pursuant to open-end credit in § 537.2401, subsection 2, as applicable, if a consumer loan is refinanced. With respect to a consumer credit transaction in which the rate of finance charge required to be disclosed in the transaction to the consumer pursuant to § 537.3201 exceeds eighteen percent per year, other than a consumer lease or a consumer rental purchase agreement, the creditor may by agreement with the consumer, refinance the unpaid balance and may contract for and receive a finance charge based on the amount financed resulting from the refinancing at a rate of finance charge not to exceed that which was required to be disclosed in the original transaction to the consumer pursuant to § 537.3201. For the purpose of determining the finance charge permitted, the amount financed resulting from the refinancing consists of:
1. If the transaction was not precomputed, the total of the unpaid balance of the amount financed and the accrued charges, including finance charges, on the date of the refinancing, or, if the transaction was precomputed, the amount determined by deducting the unearned portion of the finance charge and any other unearned charges, including charges for insurance or deferral charges, from the unpaid balance on the date of refinancing. For the purposes of this section, the unearned portion of the finance charge and deferral charge, if any, shall be determined as provided in § 537.2510, subsection 2, but without allowing any minimum charge.
2. Appropriate additional charges as permitted under § 537.2501, payment of which is deferred.
[C75, 77, 79, 81, §537.2504]
87 Acts, ch 80, §35; 2018 Acts, ch 1041, §127
Referred to in §537.2505, 537.2508, 537.3308