Democrats vote to protect Iowa families

“I’m proud of our efforts today to stand up to the special interests and to protect consumers.”

Today, the Iowa Senate approve new consumer protections for Iowa families.

The two pieces of legislation make it easier and safer to take out a home loan and reduce the interest rate on car title loans from more than 250 percent to a maximum of 21 percent.

“For too long, Iowa families have been left to fend for themselves against sophisticated predatory lenders who use every trick in the book to separate them from their money, their cars, and even their homes,” said Senator Bolkcom, a main supporter of the bill. “Today we’ve approved reasonable consumer protections, most of which are already available to the residents of other states. Now Iowans will benefit from increased consumer protections and Iowa businesses will be less likely to suffer from unfair competition by the bad actors in these industries.”

The legislation approved by the Senate today included:

Home Loan Reforms:
Senate File 541 would reform the subprime lending market by preventing lenders from “flipping” consumers by refinancing their loan without a net benefit to the consumer; advertising “teaser” loans at terms that are not available to a reasonable number of qualified applicants and which quickly rise to higher rates; lying about a consumer’s income or credit rating to qualify the consumer for a loan; and engage in other predatory practices.

Car Title Reforms
House File 5 reduces the maximum amount of interest that can be charged by car title loan lenders from more than 250 percent to 21 percent. The 21 percent interest is the same as banks and credit unions are currently allowed to charge for loans secured by a car.