Opinion ID: 1583791
Heading Depth: 2
Heading Rank: 1

Heading: Whether Section 533D.9 is Unconstitutional Under Article I, Section 1 of the Iowa Constitution.

Text: Article I, section 1, of the Iowa Constitution provides: All men and women are, by nature, free and equal, and have certain inalienable rights  among which are those of enjoying and defending life and liberty, acquiring, possessing and protecting property, and pursuing and obtaining safety and happiness. Iowa Const. art. I, § 1. This is known as the inalienable rights clause. We most recently discussed this clause in Atwood v. Vilsack, 725 N.W.2d 641 (Iowa 2006). In Atwood, we noted the clause secures[s] to the people of Iowa common law rights that pre-existed Iowa's Constitution. 725 N.W.2d at 651. We also recognized the following: It is well established that the protections of Iowa's inalienable rights clause are not absolute. The clause does not prevent all legislative action taken pursuant to the police power that benefits the community and impacts an inalienable right (i.e. a common law or natural right). Instead, it prevents only arbitrary, unreasonable legislative action that impacts an inalienable right. Id. at 652 (citations omitted). Thus, the question is whether section 533D.9 impacts an inalienable right and is arbitrary and unreasonable. Section 533D.9 impacts a property right. But it is far removed from the type of legislation that is arbitrary and unreasonable. Instead, and in accordance with all the provisions of the DDSLA, section 533D.9 creates protections for consumers and imposes limits on delayed deposit services. As Midwest points out, the largest check (or total amount of two checks) a delayed deposit lender can hold from a customer is $500. Iowa Code § 533D.10(1)( a ), ( b ). Thus, the most that can be borrowed in a delayed deposit transaction is $445, if the maximum $55 is charged as a fee in accordance with section 533D.9(1). If the check is returned for insufficient funds or otherwise not paid, the most the customer will pay is $70, representing a $15 charge for the returned check. Id. § 533D.9(2)( d ). Section 533D.9(1) prohibits a lender from charging more than $15 on the face amount of the first one-hundred dollars, and more than 10% on everything thereafter. Id. § 533D.9(1). Finally, the procedure must be fully disclosed to the customer. Id. § 533D.9(2), (3). While these limitations are not as protective as Richey would like, the statute is not arbitrary or unreasonable. A law that permits a business to engage in the payday loan procedure with these limitations does not violate article I, section I of the Iowa Constitution.