This bill amends existing laws related to debt management programs in Iowa, specifically addressing the requirements for licensees and the handling of fees. It mandates that licensees maintain a separate bank or dedicated account for payments received from debtors intended for creditors. The bill also removes the previous prohibition on licensees receiving consideration from third parties for services rendered to debtors when the debt management program does not require the licensee to handle debtor funds. Additionally, it establishes new conditions under which a licensee may charge fees for services, including the necessity for the licensee to have renegotiated or altered the terms of a debt and for the debtor to have made at least one payment under the agreement.

Furthermore, the bill introduces a proportional fee structure based on the relationship between individual debts and the total debt amount, ensuring that fees are consistent across all debts enrolled in the program. It also exempts licensed debt management providers from certain regulations under Code chapter 538A, which pertains to credit services organizations. The bill strikes specific subsections that previously outlined licensee requirements and fee agreements, streamlining the regulatory framework for debt management services.

Statutes affected:
Introduced: 533A.8, 533A.9, 538A.2