I need some help from my fellow Iowa Bankers. Back in 1991 a law came into effect (House File 677) that basically said any loan more than $20,000 needed wording to protect us from lender liability. The wording suggested was "the terms of this agreement should be read carefully because only those terms in writing are enforceable...etc". There are some loan types excluded such as consumer open-end credit and home equity lines of credit.

Okay now for my question. If we purchase dealer paper for car loans that are in excess of $20,000 do we need this wording on the note (or separate disclosure)? I just hate to go to the car dealer again with yet another form we need to have them get signed but if I need to I know I will. Any help would be appreciated.

All consumer credit transactions in Iowa must have the disclaimer of oral agreement, with exception of open-end credit here is the link to IA Code. Iowa Consumer Credit Code applies to all credit transactions less than $25,000 for personl, family or household purposes.

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