Opinion ID: 2187452
Heading Depth: 2
Heading Rank: 1

Heading: As to ICCC, a consumer loan is defined thus in section 537.1401(14)(a) of the Iowa Code:

Text: a. Except as provided in paragraph b, a consumer loan is a loan in which all of the following are applicable: (1) The person is regularly engaged in the business of making loans. (2) The debtor is a person other than an organization. (3) The debt is incurred primarily for a personal, family, household or agricultural purpose. (4) Either the debt is payable in installments or a finance charge is made. (5) Either the amount financed does not exceed thirty-five thousand dollars, or the debt is not incurred primarily for an agricultural purpose and is secured by an interest in land. Paglia contends that the transaction does not come within paragraphs 1 and 5. Taking paragraph 5 first, Paglia cites Farmer's Trust & Savings Bank v. Manning, 311 N.W.2d 285 (Iowa 1981). That case concerned a transaction which occurred prior to 1977, and we noted in the opinion that the law subsequently changed. Id. at 290. The amended statutory language does change the result, and the cited case is inapposite. Paragraph 5 in the 1979 Code contains two clauses, either of which will make the paragraph applicable. The second clause states: [T]he debt is not incurred primarily for an agricultural purpose and is secured by an interest in land. In this case the testimony at trial disclosed that the monies were used for personal reasons, not for business or agriculture. In addition, the loan was secured by an interest in land. Paragraph 5 therefore applies. Paragraph 1 of section 537.1401(14)(a) requires that the person be regularly engaged in the business of making loans. At this point Paglia injects his status as a pawnbroker into the argument, and he cites section 537.1202 of ICCC which provides in pertinent part: This chapter does not apply to: ... 5. Pawnbrokers who are licensed and whose rates and charges are regulated under or pursuant to ordinances of cities or statutes of this state.... We will assume arguendo that Paglia as a pawnbroker comes within this provision. Paglia's argument raises two distinct issues: whether Paglia made the present loan as a pawnbroker and if not, whether Paglia's business as a pawnbroker may nonetheless be considered, along with his other lending activities, on the factual question of whether he was in the business of making loans. As to the first of these issues, the evidence is clear that Paglia did not make the instant loan as a pawnbroker. The transaction is therefore not excluded from the operation of ICCC on that account. As to the second issue, in determining the factual question of whether Paglia was in the business of making loans we think that all of his money-lending activities are relevant. The evidence indicates that money lending in various ways was a substantial part, if not the main part, of his business activities. While according to the evidence he had made only four loans of the type we have here, he also made loans to bar owners against their shares of the coins that were in Paglia's coin machines at their bars. In addition, he made about one hundred loans per month in his pawn shop. A pawn is essentially a loan. A pawnbroker has been defined as a person who makes a business or occupation of lending money at interest on the security of personal property deposited in his keeping. 70 C.J.S. Pawnbroker § 1, at 186 (1951). Taken altogether, we find that Paglia's lending activities add up to the business of making loans. The requirements of paragraph 1 of section 537.1401(14)(a) are thus met. We hold that the transaction in question is a consumer loan under ICCC, and approve the trial court's conclusion.