The bill amends Section 536.13 of the Iowa Code to establish regulations regarding the sale of auto club memberships and vehicle warranties by licensed loan officers (licensees) after a loan has been approved for a borrower. It introduces a new subsection that mandates the licensee to inform the borrower, through a written document that the borrower must initial, that purchasing an auto club membership or vehicle warranty is optional and will not impact their loan approval. Additionally, if the borrower opts to purchase either, the licensee must allow them to either pay for it with non-loan funds or include the cost in the loan amount, while ensuring that this cost does not factor into the maximum interest rate calculation for the loan.

Furthermore, the bill stipulates that borrowers have the right to cancel their auto club membership or vehicle warranty within thirty calendar days of purchase and receive a full refund, provided they have not utilized any services associated with the membership or warranty. This legislation aims to enhance consumer protection and transparency in the sale of these products in conjunction with loan approvals.

Statutes affected:
Introduced: 536.13