Senate File 398 amends Section 537.2501 of the Iowa Code to introduce new provisions regarding consumer loans secured by an interest in land. Specifically, it adds a new subparagraph that allows for the inclusion of discount points aimed at reducing the interest rate on the debt, as long as the total points and fees charged to the consumer by all lenders do not exceed the limits set forth in federal regulations (12 C.F.R. 1026.43(e)(3)). Additionally, a new subsection is added to exempt certain consumer loans from fee limitations if the loan is originated by a licensed mortgage banker and meets specified criteria regarding annual percentage rates, points, and fees.

This legislation aims to provide more flexibility for consumers seeking loans secured by land, potentially making it easier for them to negotiate better interest rates through the use of discount points. By aligning state law with federal regulations, the bill seeks to streamline the lending process while ensuring consumer protections are maintained.

Statutes affected:
Introduced: 537.2501, 535.8
Enrolled: 537.2501