VI. IN THE BIG EVENT THERE ARE POTENTIAL CRIMINAL CONSEQUENCES ARISING FROM A BOUNCED CASH ADVANCE CHECK, MIGHT THREATENING ORIMPLYING A THREAT OFPROSECUTION BUT VIOLATE IOWA CODE § 537.7103 IF THE PAYDAY LOAN PROVIDER NEVER PRESSES CRIMINAL CHARGES?
Inasmuch because it’s our interpretation of Chap. 533D and 537 that default for a check loan will not implicate the unlawful procedure, threatening unlawful effects for non-payment of this loan would violate the Iowa business collection agencies procedures Act. Iowa Code § 537.7103.
But, in case it really is determined it would nevertheless not be permissible for the lender to routinely make such threats that it is theoretically possible to invoke the criminal process in connection with payday loans in some circumstances.
The possibility for abusive collection techniques that post-dated or deferred deposit checks are very well
Recognized. For instance, the federal Fair Debt Collection Practices Act places strict limits from the solicitation and cashing of post-dated checks. 15 usage § l 692f(2)-(4). 73
The risk of unlawful consequences for non-payment of debt is inherently coercive and oppressive. 74 Utilizing such threats is very problematic into the cash advance context, because it would place force on borrowers not able to repay a check loan to refinance a quick payday loan to help keep the check from bouncing, an effect the legislature desired to prevent. 75
Invoking the likelihood of criminal effects, then, needs to be done only if consequences that are criminal it. Read more