1. A covered institution may make available a list of preferred lenders, in print or any other medium or form, for use by the covered institution’s students or their parents, provided the list meets the following conditions:

 a. The list is not used to deny or otherwise impede a borrower‘s choice of lender.
 b. The list contains at least three lenders that are not affiliated and will make loans to borrowers or students attending the school. For the purposes of this paragraph, a lender is affiliated with another lender if any of the following applies:

 (1) The lenders are under the ownership or control of the same entity or individuals.
 (2) The lenders are wholly or partly owned subsidiaries of the same parent company.
 (3) The directors, trustees, or general partners, or individuals exercising similar functions, of one of the lenders constitute a majority of the persons holding similar positions with the other lender.
 c. The list does not include lenders that have offered, or have offered in response to a solicitation by the covered institution, financial or other benefits to the covered institution in exchange for inclusion on the list or any promise that a certain number of loan applications will be sent to the lender by the covered institution or its students.

Terms Used In Iowa Code 261F.6

  • Borrower: means a student attending a covered institution in this state, or a parent or person in parental relation to such student, who obtains an educational loan from a lending institution to pay for or finance a student's higher education expenses. See Iowa Code 261F.1
  • Covered institution: includes an authorized agent of the educational institution, including an alumni association, booster club, or other organization directly or indirectly associated with or authorized by the institution or an employee of the institution. See Iowa Code 261F.1
  • Educational loan: means any loan that is made, insured, or guaranteed under Tit. See Iowa Code 261F.1
  • following: when used by way of reference to a chapter or other part of a statute mean the next preceding or next following chapter or other part. See Iowa Code 4.1
  • Lender: means a person whose name appears on the records of the museum as the person legally entitled to property held or owing by the museum. See Iowa Code 305B.2
  • lending institution: means a creditor as defined in section 103 of the federal Truth in Lending Act, 15 U. See Iowa Code 261F.1
  • Loan: means a deposit of property not accompanied by a transfer of title to the property. See Iowa Code 305B.2
  • Preferred lender list: means a list of at least three recommended or suggested, unaffiliated lending institutions that a covered institution makes available for use, in print or any other medium or form, by borrowers, prospective borrowers, or others. See Iowa Code 261F.1
  • School: means an agency of the state or political subdivision of the state, individual, partnership, company, firm, society, trust, association, corporation, or any combination which meets any of the following criteria:
     a. See Iowa Code 261B.2
 2. A covered institution that provides or makes available a preferred lender list shall do the following:

 a. Disclose to prospective borrowers, as part of the list, the method and criteria used by the covered institution in selecting any lender that it recommends or suggests.
 b. Provide comparative information to prospective borrowers about interest rates and other benefits offered by the lenders.
 c. Include a prominent statement in any information related to its preferred lender list advising prospective borrowers that the borrowers are not required to use one of the covered institution’s recommended or suggested lenders.
 d. For first-time borrowers, refrain from assigning, through award packaging or other methods, a borrower’s loan to a particular lender.
 e. Not cause unnecessary certification delays for borrowers who use a lender that is not included on the covered institution’s preferred lender list.
 f. Update the preferred lender list and any information accompanying the list at least annually.
 3. If the servicer of a private educational loan is changed by a lending institution, the lending institution shall disclose the change to the affected borrower.
 4. A lending institution shall not be placed on a covered institution’s preferred lender list or in favored placement on a covered institution’s preferred lender list for a particular type of loan, in exchange for benefits provided to the covered institution or to the covered institution’s students in connection with a different type of loan.
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