Iowa Admin. Code r. 189-5.4 - Prohibited practices

(1) Anti-tying. A credit union may not extend credit or alter the terms or conditions of an extension of credit conditioned upon the borrower's entering into a debt cancellation contract or debt suspension agreement with the credit union.
(2) Misrepresentations generally. A credit union may not engage in any practice or use any advertisement that could mislead or otherwise cause a reasonable person to reach an erroneous belief with respect to a debt cancellation agreement.
(3) Prohibited contractual arrangement terms. A credit union may not offer debt cancellation agreements that contain terms:
a. Giving the credit union the right to unilaterally modify the arrangement unless:
(1) The modification is favorable to the borrower and is made without additional charge to the borrower; or
(2) The borrower is notified of any proposed change and is provided a reasonable opportunity to cancel the arrangement without penalty before the change goes into effect; or
b. Requiring the borrower to make a lump-sum, single payment at the outset of the contract or agreement where the debt subject to the contract or agreement is a residential mortgage loan.


Iowa Admin. Code r. 189-5.4

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