SF 2298

Senate
File
2298
-
Introduced
SENATE
FILE
2298
BY
COMMITTEE
ON
COMMERCE
(SUCCESSOR
TO
SSB
3090)
(COMPANION
TO
HF
2326
BY
COMMITTEE
ON
COMMERCE)
A
BILL
FOR
An
Act
relating
to
debt
management
programs,
services,
fees,
1
and
licensee
requirements.
2
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
3
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5596SV
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S.F.
2298
Section
1.
Section
533A.8,
subsection
5,
paragraph
a,
Code
1
2026,
is
amended
to
read
as
follows:
2
a.
Maintain
a
separate
bank
trust
account
or
dedicated
3
account
in
which
all
payments
received
from
debtors
for
the
4
benefit
of
creditors
shall
be
deposited
and
in
which
all
5
payments
shall
remain
until
a
remittance
is
made
to
either
the
6
debtor
or
the
creditor.
7
Sec.
2.
Section
533A.8,
subsection
5,
paragraph
d,
Code
8
2026,
is
amended
by
striking
the
paragraph.
9
Sec.
3.
Section
533A.8,
subsection
6,
Code
2026,
is
amended
10
to
read
as
follows:
11
6.
If
the
debt
management
program
is
not
based
on
a
model
12
which
requires
the
licensee
or
any
licensee
to
receive
money
or
13
evidences
thereof
from
the
debtor
to
distribute
to
the
debtor’s
14
creditors
,
both
of
the
following
shall
apply:
15
a.
The
the
debtor
shall
maintain
full
control
of
and
access
16
to
any
moneys
set
aside
for
payment
to
creditors.
17
b.
The
licensee
may
not
receive
consideration
from
any
third
18
party
in
connection
with
services
rendered
to
a
debtor.
19
Sec.
4.
Section
533A.9,
subsection
4,
Code
2026,
is
amended
20
by
striking
the
subsection
and
inserting
in
lieu
thereof
the
21
following:
22
4.
If
a
debt
management
program
is
not
based
on
a
model
that
23
requires
the
licensee
or
another
licensee
to
receive
money
or
24
evidences
thereof
from
the
debtor
to
distribute
to
the
debtor’s
25
creditors,
a
licensee
may
not
request
or
receive
payment
of
26
any
fee
or
consideration
for
debt
management
services
provided
27
under
a
debt
management
program
unless
all
of
the
following
are
28
true:
29
a.
The
licensee
has
renegotiated,
resolved,
reduced,
or
30
otherwise
altered
the
terms
of
at
least
one
debt
pursuant
to
a
31
resolution
agreement
or
other
contractual
agreement
executed
32
by
the
debtor
and
the
creditor.
33
b.
The
debtor
has
made
at
least
one
payment
pursuant
to
the
34
resolution
agreement
or
other
contractual
agreement
entered
35
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2298
into
under
paragraph
“a”
.
1
c.
To
the
extent
that
debts
enrolled
in
the
debt
management
2
program
are
renegotiated,
resolved,
reduced,
or
otherwise
3
altered
individually,
the
fee
or
consideration
for
the
debt
4
management
service
bears
the
same
proportional
relationship
to
5
the
total
fee
or
consideration
for
renegotiating,
resolving,
6
reducing,
or
otherwise
altering
the
terms
of
the
entire
debt
7
balance
as
the
individual
debt
amount
bears
to
the
entire
debt
8
amount.
The
individual
debt
amount
and
the
entire
debt
amount
9
are
those
owed
at
the
time
the
debt
was
enrolled
in
the
debt
10
management
program.
The
percent
charged
is
the
same
for
each
11
individual
debt
enrolled
in
the
debt
management
program.
12
Sec.
5.
Section
533A.9,
subsection
5,
Code
2026,
is
amended
13
by
striking
the
subsection.
14
Sec.
6.
Section
538A.2,
subsection
2,
Code
2026,
is
amended
15
by
adding
the
following
new
paragraph:
16
NEW
PARAGRAPH
.
i.
A
person
licensed
to
engage
in
the
17
business
of
debt
management
under
section
533A.2,
when
acting
18
within
the
course
and
scope
of
that
license.
19
EXPLANATION
20
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
21
the
explanation’s
substance
by
the
members
of
the
general
assembly.
22
This
bill
relates
to
debt
management,
services,
fees,
and
23
licensee
requirements.
24
Under
current
law,
if
a
debt
management
program
(program)
is
25
based
on
a
model
which
requires
a
licensee
to
receive
money
or
26
evidences
thereof
from
a
debtor
to
distribute
to
the
debtor’s
27
creditors,
the
licensee
who
receives
the
money
for
distribution
28
shall
maintain
a
separate
bank
trust
account
in
which
all
29
payments
received
from
the
debtor
for
the
benefit
of
creditors
30
shall
be
deposited
and
shall
remain
until
a
remittance
is
31
made
to
either
the
debtor
or
the
creditor.
Under
the
bill,
a
32
licensee
shall
maintain
a
separate
bank
account
or
dedicated
33
account
for
such
purpose.
34
Under
current
law,
if
a
debt
management
program
is
not
35
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2298
based
on
a
model
which
requires
a
licensee
to
receive
money
1
or
evidences
thereof
from
the
debtor
to
distribute
to
the
2
debtor’s
creditors
the
debtor
shall
maintain
full
control
of
3
and
access
to
any
moneys
set
aside
for
payment
to
creditors,
4
and
the
licensee
may
not
receive
consideration
from
any
third
5
party
in
connection
with
services
rendered
to
a
debtor.
The
6
bill
eliminates
the
prohibition
on
a
licensee
receiving
7
consideration
from
a
third
party
in
connection
with
services
8
rendered
to
a
debtor.
9
Under
current
law,
if
a
program
is
not
based
on
a
model
that
10
requires
a
licensee
to
receive
money
or
evidences
thereof
from
11
the
debtor
to
distribute
to
the
debtor’s
creditors,
a
debtor
12
may
not
be
charged
a
fee
exceeding
the
sum
of
the
initiation
13
fee
plus
18
percent
of
the
debtor’s
enrolled
debts,
as
detailed
14
in
Code
section
533A.9(4).
Under
the
bill,
a
licensee
may
not
15
request
or
receive
payment
of
a
fee
for
services
unless:
(1)
16
the
licensee
has
renegotiated,
resolved,
reduced,
or
otherwise
17
altered
the
terms
of
a
debt
pursuant
to
a
resolution
agreement
18
or
other
contractual
agreement
between
the
debtor
and
the
19
creditor;
(2)
the
debtor
has
made
at
least
one
payment
pursuant
20
to
the
agreement;
and
(3)
to
the
extent
that
debts
enrolled
in
21
a
service
are
renegotiated,
resolved,
reduced,
or
otherwise
22
altered
individually,
the
fee
or
consideration
for
the
service
23
bears
the
same
proportional
relationship
to
the
total
fee
for
24
altering
the
terms
of
the
entire
debt
balance
as
the
individual
25
debt
amount
bears
to
the
entire
debt
amount
as
owed
at
the
time
26
the
debt
was
enrolled
in
the
service,
and
the
same
percent
is
27
charged
for
each
individual
debt
enrolled
in
the
program.
28
Under
the
bill,
a
person
licensed
to
provide
debt
management
29
services
is
exempt
from
Code
chapter
538A
(credit
services
30
organizations).
31
The
bill
strikes
Code
sections
533A.8(5)(d)
(licensee
32
requirements)
and
533A.9(5)
(fee
agreed
in
advance).
33
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