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House
File
475
-
Introduced
HOUSE
FILE
475
BY
THOMSON
A
BILL
FOR
An
Act
relating
to
financial
institution
acceptance
of
1
negotiable
instruments,
and
providing
penalties.
2
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
3
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Section
1.
NEW
SECTION
.
525.1
Definitions.
1
As
used
in
this
chapter,
unless
the
context
otherwise
2
requires:
3
1.
“Financial
institution”
means
and
includes
any
bank
4
incorporated
under
the
provisions
of
any
state
or
federal
5
law,
any
savings
and
loan
association
incorporated
under
the
6
provisions
of
federal
law,
any
credit
union
organized
under
7
the
provisions
of
any
state
or
federal
law,
any
corporation
8
licensed
as
an
industrial
loan
company
under
chapter
536A,
and
9
any
affiliate
of
a
bank,
savings
and
loan
association,
credit
10
union,
or
industrial
loan
company.
11
2.
“Negotiable
instrument”
means
the
same
as
defined
in
12
section
554.3104.
13
Sec.
2.
NEW
SECTION
.
525.2
Financial
institutions
——
14
negotiable
instruments.
15
1.
A
financial
institution
in
the
state
shall
do
all
of
the
16
following:
17
a.
Accept
tender
of
any
negotiable
instrument
in
exchange
18
for
issuance
of
a
conditional
credit
to
the
tendering
party.
19
b.
Make
a
good-faith
effort
to
obtain
payment
from
the
20
original
issuer
of
the
negotiable
instrument.
21
c.
Remit
cash
to
the
original
issuer
from
the
payment
of
the
22
negotiable
instrument
within
two
days
following
the
receipt
of
23
the
payment.
24
2.
A
financial
institution
receiving
the
tender
of
a
25
negotiable
instrument
may
impose
a
fee
for
related
services.
26
The
fee
for
the
services
shall
not
exceed
the
greater
of
twenty
27
dollars,
or
one
percent
of
the
lesser
of
any
of
the
following:
28
a.
The
face
amount
of
the
tendered
negotiable
instrument.
29
b.
The
amount
of
proceeds
received
by
the
financial
30
institution.
31
3.
The
financial
institution
shall
not
require
the
party
32
tendering
a
negotiable
instrument
to
open
an
account
with
the
33
financial
institution.
34
4.
The
financial
institution
shall
not
require
the
party
35
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tendering
a
negotiable
instrument
to
present
identification.
1
Sec.
3.
NEW
SECTION
.
525.3
Remedies.
2
1.
A
person
who
suffers
a
violation
of
this
chapter
may
3
bring
an
action
to
recover
damages
in
an
amount
up
to
five
4
times
the
amount
of
the
negotiable
instrument
and
attorney
5
fees.
6
2.
If
a
financial
institution
has
denied
acceptance
of
7
a
negotiable
instrument
three
or
more
times,
the
financial
8
institution
shall
be
assessed
a
civil
penalty
in
the
amount
of
9
not
less
than
ten
thousand
dollars,
not
to
exceed
twenty-five
10
thousand
dollars,
as
determined
by
the
court.
11
EXPLANATION
12
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
13
the
explanation’s
substance
by
the
members
of
the
general
assembly.
14
This
bill
relates
to
a
financial
institution’s
acceptance
of
15
negotiable
instruments.
16
The
bill
defines
“financial
institution”
to
mean
any
bank
17
incorporated
under
the
provisions
of
any
state
or
federal
18
law,
any
savings
and
loan
association
incorporated
under
the
19
provisions
of
federal
law,
any
credit
union
organized
under
20
the
provisions
of
any
state
or
federal
law,
any
corporation
21
licensed
as
an
industrial
loan
company
under
chapter
536A,
22
and
any
affiliate
of
a
bank,
savings
and
loan
association,
23
credit
union,
or
industrial
loan
company.
The
bill
defines
24
“negotiable
instrument”
to
mean
an
unconditional
promise
or
25
order
to
pay
a
fixed
amount
of
money,
with
or
without
interest
26
or
other
charges
described
in
the
promise
or
order,
as
defined
27
in
Code
section
554.3104.
28
The
bill
provides
that
a
financial
institution
in
the
state
29
shall
accept
tender
of
any
negotiable
instrument
in
exchange
30
for
issuance
of
a
conditional
credit
to
the
tendering
party,
31
make
a
good-faith
effort
to
obtain
payment
from
the
original
32
issuer
of
the
negotiable
instrument,
and
remit
cash
to
the
33
original
issuer
from
the
payment
of
the
negotiable
instrument
34
within
two
days
following
the
receipt
of
the
payment.
35
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The
bill
provides
that
a
financial
institution
receiving
the
1
tender
of
a
negotiable
instrument
may
impose
a
fee
for
related
2
services.
The
fee
for
the
services
shall
not
exceed
the
3
greater
of
$20,
or
1
percent
of
the
lesser
of
the
face
amount
of
4
the
tendered
negotiable
instrument
or
the
amount
of
proceeds
5
received
by
the
financial
institution.
6
The
bill
provides
that
a
financial
institution
shall
7
not
require
the
party
tendering
a
negotiable
instrument
to
8
open
an
account
with
the
financial
institution
or
present
9
identification.
10
The
bill
provides
that
a
person
who
suffers
a
violation
11
of
the
provisions
of
the
bill
may
bring
an
action
to
recover
12
damages
in
an
amount
up
to
five
times
the
amount
of
the
13
negotiable
instrument
and
attorney
fees.
If
a
financial
14
institution
has
denied
acceptance
of
a
negotiable
instrument
15
three
or
more
times,
the
financial
institution
shall
pay
a
16
civil
penalty
of
between
$10,000
and
$25,000,
as
determined
by
17
the
court.
18
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