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SF 398 Iowa Senate · 2025-2026 Regular Session

A bill for an act relating to closing costs for a debt secured by an interest in land.

This bill modifies Iowa law concerning closing costs for loans secured by land, such as mortgages, directly affecting both lenders and borrowers. It clarifies that certain state restrictions on fees and charges may not apply to consumer loans made by licensed mortgage bankers if the total points and fees charged to the borrower remain within specified federal limits. The bill also explicitly allows lenders to charge "discount points" that genuinely reduce the loan's interest rate. Additionally, it permits lenders to charge other "points" that are mutually agreed upon with the borrower to secure a particular interest rate.
Bill status signed all 5 stages cleared
Introduction
Feb 2025
Committee Review
Feb 2025
Senate Passage
Apr 2025
House Passage
Apr 2025
Signed into Law
May 2025
Introduced Feb 20, 2025 Signed May 6, 2025
Maddy AI version diff · 3 comparisons

What changed between versions

Enrolled → Enrolled with Governor's Action · 4 edits · May 6, 2025
MODERATE
This bill amends Iowa law to clarify how discount points and fees are treated for consumer loans secured by land. It adds specific language defining discount points as a bona fide reduction of interest rates and sets federal regulatory limits on points and fees for these loans. The changes ensure compliance with federal Truth in Lending Act requirements while maintaining state fee limitations.
Scope change
The bill expands the scope by adding new language to existing sections of Iowa Code 537.2501, specifically creating a new subparagraph and subsection to address discount points and fee limitations for consumer loans secured by land.
DEFINITION

Added new subparagraph (6) defining discount points as a bona fide reduction of interest rates applicable to debt

REQUIREMENT

Added new subsection 4 establishing fee limitations for consumer loans secured by land when originated by licensed mortgage bankers

Incorporated federal regulatory thresholds from 12 C.F.R. §1026.43(e)(2)(vi) and §1026.43(e)(3) into state law requirements

ELIGIBILITY

Clarified eligibility criteria for loans where points and fees charged by all lenders must not exceed specified federal amounts

Floor votes · Senate Mar 26, 2025 · House Apr 17, 2025

How they voted

48–0
Passed · 3 other
Total votes 51
Mar 26, 2025
D Democratic16
15 Yea 1
93% Yea
R Republican35
33 Yea 2
94% Yea
Vote distribution
All Yea All Nay Mixed No data
Full legislative history

Actions timeline

Total actions
22
Key actions
7
Committee
1
Amendments
4
May 6, 2025
Signed into law
Signed by Governor.
upper
Apr 28, 2025
Upper · Passed
Passed Senate, yeas 49, nays 0.
upper
Apr 28, 2025
Upper · Passed
Senate concurred with S-3112.
upper
Apr 21, 2025
Introduced
Message from House, with amendment S-3112.
upper
Apr 17, 2025
Lower · Passed
Passed House, yeas 93, nays 0.
lower
Apr 17, 2025
Lower · Passed
Amendment H-1240 adopted.
lower
Apr 16, 2025
Introduced
Amendment H-1240 filed.
lower
Apr 14, 2025
Introduced
Amendment H-1226 filed.
lower
Mar 26, 2025
Upper · Passed
Passed Senate, yeas 47, nays 0.
upper
Feb 20, 2025
Upper · Passed
Committee report, approving bill.
upper
Feb 20, 2025
Introduced
Introduced, placed on calendar.
upper
0 primary · 0 co-sponsors

Sponsors

No sponsor information available.