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House passes tighter rules for debt-management firms, including fee limits
Summary
House File 2326, as amended, allows dedicated debtor accounts and narrows when firms may charge extra fees; the chamber adopted an amendment to prohibit certain additional renegotiation fees and retain a fee cap before passing the bill.
Representative Johnson opened debate on House File 2326 by saying the bill amends Chapter 533A on debt management, authorizing use of a dedicated bank account for debtor funds, permitting third-party payments and an additional fee in some cases, and incorporating an FTC regulation. Johnson said the bill removes a cap in prior language but that an amendment would restore consumer protections.
The clerk called up Amendment H8274. Representative Johnson said the amendment ‘‘prohibits a company from receiving an additional fee for renegotiating a debt,’’ allows incremental fee payments only after at least one quarter of payments on an account have been made, and keeps a fee cap in place raised to 30%.
Representative McBurnie spoke in support, saying the amendment returns protections considered in subcommittee and prioritizes Iowans over businesses. After debate, the House adopted Amendment H8274 and then passed House File 2326 as amended. The clerk reported the vote as 90 ayes, 2 no, and 8 absent/not voting; the bill received a constitutional majority and was declared passed.
Representative Johnson framed the measure as tailored to help some debtors negotiate and avoid bankruptcy while preserving consumer protections; the amendment was presented as a compromise keeping a cap and limiting incremental fee timing.
