537.2506 Advances to perform covenants of consumer. 1. If the agreement with respect to a consumer credit transaction other than a consumer lease or a consumer rental purchase agreement contains covenants by the consumer toperform certain duties pertaining to insuring or preserving collateral and the creditorpursuant to the agreement pays for performance of the duties on behalf of the consumer, thecreditor may add the amounts paid to the debt. Within a reasonable time after advancing anysums, the creditor shall state to the consumer in writing the amount of the sums advanced,any charges with respect to this amount, and any revised payment schedule and, if the dutiesof the consumer performed by the creditor pertain to insurance, a brief description of theinsurance paid for by the creditor including the type and amount of coverages. No furtherinformation need be given. 2. A finance charge may be made for sums advanced pursuant to subsection 1 at a rate not exceeding the rate of finance charge required to be stated to the consumer pursuant tolaw in the disclosure statement required by this chapter and the Truth in Lending Act, exceptthat with respect to open-end credit the amount of charge required to be stated to the consumer pursuant tolaw in the disclosure statement required by this chapter and the Truth in Lending Act, exceptthat with respect to open-end credit the amount of the advance may be added to the unpaidbalance of the debt and the creditor may make a finance charge not exceeding that permittedby section 537.2202 or 537.2402, as applicable. [C75, 77, 79, 81, §537.2506]87 Acts, ch 80, §37; 2018 Acts, ch 1041, §127 Sat Dec 23 01:40:08 2023 Iowa Code 2024, Section 537.2506 (20, 0)
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