The American Fintech Council (AFC) has urged the Iowa Division of Banking (IDOB) to modernize the state’s consumer finance licensing statutes. The AFC, representing responsible fintech companies and innovative banks, submitted a comment letter advocating for improved access to financial services for historically underrepresented communities and increased regulatory clarity around credit products.
“All Iowans deserve access to innovative and responsible financial products and services; however, the current regulatory framework excludes too many consumers,” said Ian P. Moloney, SVP and Head of Policy and Regulatory Affairs at AFC. “We encourage IDOB to explore proposals that would improve credit access to underserved communities so they may benefit from the products and services that are driving the future of consumer-centric finance. Further, providing clarity in Iowa’s licensing standards will strengthen the state’s financial services market and ensure Iowans are able to choose the products and services that best fit their needs and help them take control of their financial futures.”
In its letter, AFC recommends establishing a flat 36% interest rate cap on loans. This standard is supported by both AFC and national consumer advocates for its positive impact on underserved communities, particularly those with damaged or minimal credit histories. According to AFC's analysis, modernizing Iowa’s interest rate cap could expand access to responsible credit for an estimated 250,000 additional Iowans.
AFC also requested that IDOB establish clear definitions for "credit products" and "non-credit products" within Iowa’s Consumer Finance Licensing Statutes. Such clarity would ensure proper legal categorization of financial products while promoting innovation and consumer protection.
AFC remains committed to advocating for prudent consumer protections, increased access to responsible credit products, and regulatory clarity for financial services companies in Iowa and beyond.
The American Fintech Council is a trade association representing major fintech companies and innovative BaaS banks. Its mission is to promote a transparent, inclusive, customer-centric financial system by supporting responsible innovation in financial services and encouraging sound public policy.