IA HSB523

Licensed loan officers may offer borrowers the option to purchase auto club memberships or vehicle warranties after a loan has been approved.

Lenders must provide written disclosure, initialed by the borrower, stating that purchasing a membership or warranty is optional and will not affect loan approval.

Borrowers who purchase a membership or warranty must be given the choice to pay with separate funds or include the cost in the loan amount.

Borrowers can cancel and receive a full refund within 30 calendar days of purchase if they have not used any services provided by the membership or warranty.

The cost of auto club memberships or vehicle warranties shall not be included when calculating the maximum interest rate of the loan.