A bill for an act relating to the provision of debt management services in connection with educational loan...
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HSB 40 — A bill for an act relating to the provision of debt management services in connection with educational loans, and making penalties applicable. (See HF 321.)
Last action — Committee report, recommending passage.
No card. One bill, free forever — alerts when it moves.
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✓Introduced
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2In Committee
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3Passed House
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4Passed Senate
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5To Executive
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6Enacted
This bill died with 2019-2020 Regular Session. It reached “In Committee” and never advanced before the session ended, so it can no longer move — a new version would have to be reintroduced in the current session.
This bill is no longer active — its legislative session has ended, so there is no live prognosis. It would have to be reintroduced in the current session to move again.
Bill Text
- Introduced View text Current pdf
AI-generated reading aid from the bill's amendatory text — verify against the official bill.
The bill establishes specific regulations and requirements for debt management services related to educational loans in Iowa.
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Section 533A.1
Serving as an intermediary between a debtor and one or more creditors or loan servicers of the debtor for the purpose of seeking modification of the terms of an educational loan.
Adds a new role for debt managers to facilitate loan modifications.
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Section 533A.1
"Educational loan" means the same as defined in section 261F.1.
Defines 'educational loan' to include loans under the Higher Education Act.
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Section 533A.1
"Loan servicer" means a person who is engaged in the direct collection of payments on a loan from the debtor or holds the right to undertake direct collection of payments on a loan from the debtor, including but not limited to receiving scheduled periodic payments from the debtor pursuant to the terms of the loan or holding the right to service the loan, such as by contracting with or otherwise arranging for another person to service the loan.
Establishes a definition for 'loan servicer' clarifying their role in educational loan management.
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Section 533A.8A
In addition to any other requirements applicable to a licensee pursuant to this chapter, a licensee engaging in the business of debt management in connection with educational loans, as described in section 533A.1, subsection 2, paragraph "e", shall do so in accordance with this section.
Specifies that debt management for educational loans must meet new criteria.
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Section 533A.8A
A licensee shall not receive any compensation for providing educational loan debt management services until after the licensee has fully performed all services that the licensee contracted to perform or represented the licensee would perform, and shall not request any payment from the debtor or require the debtor to provide payment to any third party prior to fully performing all services.
Prohibits advance payments for educational loan debt management services, ensuring services are completed first.
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Section 533A.8A
A debtor has an unconditional right to cancel a contract with a licensee for educational loan debt management services at any time prior to midnight of the third business day following the date a contract which complies with this section is signed and executed.
Gives debtors a specific, unconditional right to cancel such contracts within three business days.
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Section 533A.8A
A contract to provide debt management services in connection with an educational loan shall be written in clear, understandable language, shall clearly and conspicuously set forth any and all terms, restrictions, and conditions governing the contract, and shall describe fully and in detail all services that the licensee contracts to perform for the debtor.
Requires contracts for debt management services to be clear and detailed, enhancing consumer protection.
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Section 533A.8A
A licensee engaging in the business of debt management in connection with educational loans shall not do any of the following: a. Claim, demand, charge, collect, or receive compensation until after the licensee has fully performed each and every service the licensee contracted to perform or represented the licensee would perform.
Reiterates the prohibition on receiving compensation before services are fully performed.
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Section 533A.8A
A violation of this section is an unlawful practice pursuant to section 714.16, and all remedies of section 714.16 are available for such an action.
Establishes that violations of the new debt management regulations constitute unlawful practices.
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Section 533A.8A
Notwithstanding any other provision of this section, an action shall not be brought on the basis of a violation of this section, except by a debtor against whom the violation was committed or by the attorney general or superintendent.
Limits enforcement actions under this section to debtors directly affected or certain authorities.
Action History
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Committee report, recommending passage.
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Subcommittee recommends passage.
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Subcommittee Meeting: 01/30/2019 10:30AM House Lounge.
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Subcommittee: Mohr, G., Mitchell and Nielsen.
Sponsors
- COMMITTEE ON COMMERCE · Primary
Sponsorship breakdown
Export CSV (upgrade) →1 sponsors · 0 co-sponsors · 149 not signed on
Sponsors (1)
- COMMITTEE ON COMMERCE
Co-sponsors (0)
None.
Not signed on (149)
149 members have not signed on to this bill.
Show all 149 →"Not signed on" means a member has not sponsored or co-sponsored this bill — it does not imply opposition. Members flagged Voted No have a recorded No vote on this bill.
Subjects
Frequently asked questions
- Who sponsors HSB 40?
- HSB 40 is sponsored by COMMITTEE ON COMMERCE.
- What is the current status of HSB 40?
- This bill died with 2019-2020 Regular Session. It reached “In Committee” and never advanced before the session ended, so it can no longer move — a new version would have to be reintroduced in the current session.
- Where can I track HSB 40?
- Track HSB 40 free on One Click Politics — get push/email alerts when it moves.
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