EasyPay would automatically extract $128 from the couple’s bank account every two weeks.īut that disclosure statement was one of several documents placed before the Bowmans that day, and the couple was more focused on Zeke than on the terms of the loan. The loan documents, which include a federally mandated Truth in Lending Act disclosure statement, clearly state the precise terms of the deal - showing that the Bowmans would have to pay $1,827 in financing charges to borrow $1,500, for a total payback of $3,327. “But we didn’t know how much it would go up.” ‘Rent-a-bank’ loans avoid state interest capsĪlthough Iowa’s interest rates are capped at 36%, the Bowmans later discovered that the 12-month, $1,500 loan, provided through a business called EasyPay, stipulated that if they did not pay off the loan within 90 days, an interest rate of 188.98% would be applied to the loan.
“They did say, ‘Try to pay this off because after a certain point the interest rate will skyrocket,’” Jeff Bowman recalled. The couple put down $500 and, with the help of the Petland staff, they signed papers financing the rest of the purchase through two separate loans - one for $1,500 and one for $3,000.Ī Petland clerk cautioned the couple about the interest rate they would face if they didn’t pay off the $1,500 loan within 90 days. With the addition of taxes, a $300 “homecoming supply kit” and an Iowa Hawkeyes dog collar, the Bowmans owed Petland a total of $5,001.07. “They put us in a little room where we could sit with Zeke and he could run around, and we just fell in love with him,” Jeff Bowman said. The couple hadn’t planned to spend anywhere near that much money on a new dog, but with Zeke, she said, it “was love at first sight.” “They told us the price and I just about fell down on the floor,” Jennifer Bowman recalled.
The price for the puppy, which they later named Zeke, was $4,400. Jeff and Jennifer Bowman, whose story was first reported by the Washington Post, purchased a 12-week-old English bulldog in a Petland store in Iowa City three years ago. An Iowa couple who unwittingly purchased a seriously ill dog through a loan with an interest rate of 189% now want lawmakers to protect consumers from a similar experience.
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