AUTHORITY: Implementing and authorized by Section 13 of the Sales Finance Agency Act [205 ILCS 660/13].

SOURCE: Filed September 21, 1970; amended at 5 Ill. Reg. 1358, effective February 3, 1981; codified at 7 Ill. Reg. 11728; amended at 9 Ill. Reg. 1370, effective January 17, 1985; amended at 12 Ill. Reg. 17844, effective October 24, 1988; amended at 19 Ill. Reg. 49, effective December 22, 1994; emergency amendment at 22 Ill. Reg. 1543, effective January 2, 1998; amended at 22 Ill. Reg. 13699, effective July 14, 1998; amended at 25 Ill. Reg. 6261, effective May 17, 2001; amended at 26 Ill. Reg. 14248, effective October 1, 2002; amended at 41 Ill. Reg. 11289, effective August 28, 2017; amended at 45 Ill. Reg. 4459, effective March 24, 2021; amended at 46 Ill. Reg. 2635, effective January 28, 2022; amended at 46 Ill. Reg. 12529, effective July 8, 2022; amended at 47 Ill. Reg. 9324, effective June 20, 2023.

SUBPART A: GENERAL PROVISIONS

 

Section 160.1  Definitions

 

“Controlling person” means a person, entity, or ultimate equitable owner that:

 

owns or controls, directly or indirectly, 10% or more of any class of stock of the license applicant;

 

is not a depository institution, as defined in Section 1007.50 of the Savings Bank Act [205 ILCS 205] that lends, provides, or infuses, directly or indirectly, in any way, funds to or into a license applicant, in an amount equal to or more than 10% of the license applicant’s net worth;

 

controls, directly or indirectly, the election of 25% or more members of the board of directors of a license applicant; or

 

the Director finds influences management of the license applicant.

 

“Department” means the Department of Financial and Professional Regulation.

 

“Director” means the Director or Acting Director of the Department of Financial and Professional Regulation-Division of Financial Institutions with the authority delegated by the Secretary or the Director’s designee.

 

“Division” means the Department of Financial and Professional Regulation-Division of Financial Institutions.

 

“Generally accepted accounting principles” or “GAAP” means those published by the Federal Accounting Standards Advisory Board.

 

“Person” means an individual, partnership, association, joint stock association, corporation or any other form of business organization.

 

“Secretary” means the Secretary or Acting Secretary of Financial and Professional Regulation or the Secretary’s designee.

 

(Source:  Amended at 47 Ill. Reg. 9324, effective June 20, 2023)

 

Section 160.2  Service by the Department

 

All notices by the Department required under the Act or this Part shall be deemed to be served when a copy is deposited in the United States mail.

 

(Source:  Added at 47 Ill. Reg. 9324, effective June 20, 2023)

 

Section 160.5  Definitions (Repealed)

 

(Source:  Repealed at 47 Ill. Reg. 9324, effective June 20, 2023)

 

Section 160.10  Record Keeping

 

a)         Every licensee shall keep the following records or their equivalent:

 

1)         Transaction register.

 

2)         Individual accounts cards of all obligors.

 

3)         File of all original papers or copies which have been reproduced in any medium or format which accurately reproduces the original papers.

 

4)         Cash Book.

 

5)         Alphabetical record of all buyers, co-purchasers, and obligors on all obligations.

 

6)         Permanent file.

 

b)         Records pertaining to the conduct of business regulated by the Sales Finance Agency Act shall be kept at the licensed office, separate or readily identifiable from other types of business conducted in the office of the licensee.

 

c)         Electronic data processing, combination forms and special office systems may be used to keep records if in accordance with standard accounting procedures and if they contain the information enumerated in subsection (a).

 

d)         The licensee shall keep in the licensed office a record of all transactions purchased from or sold to another affiliated or non-affiliated licensee until examined and released by the examiner.

 

e)         All books, records, files, and account cards required by applicable State and federal law and regulations shall at all times be kept current.

 

f)         The Director may order a licensee to keep and maintain additional records as necessary to determine whether the licensee is complying with the Act or administrative rules promulgated pursuant to the Act.

 

(Source:  Amended at 47 Ill. Reg. 9324, effective June 20, 2023)

 

Section 160.15  Application for License/Controlling Person

 

a)         An application for a sales finance agency license must be under oath and in the form the Director prescribes.  The application shall contain the following:

 

1)         The name of the applicant, including any other names the applicant does or intends to do business as, and the address of the proposed place of business.

 

2)         The form of business organization of the applicant, including:

 

A)        a copy of its filed articles of incorporation;

 

B)        a copy of the filed articles of organization, if the applicant is a limited liability company; and

 

C)        a certified statement of the ownership of the partnership, if the applicant is a partnership.  Any changes to the statement of ownership occurring after the application has been submitted shall be forwarded to the Director.

 

3)         Information on Involved Individuals

 

A)        The name, business and home address, credit report (except for a publicly traded company), and a chronological summary of the business experience, material litigation history, and felony convictions over the preceding 10 years of:

 

i)          the proprietor, if the applicant is an individual;

 

ii)         every general partner, if the applicant is a partnership;

 

iii)        President, Secretary, Executive and Senior Vice Presidents, and Directors;

 

iv)        the manager, if the applicant is a manager-managed limited liability company or the member if the applicant is a member-managed limited liability company; and

 

v)         any controlling person.

 

B)        A licensee shall not submit the information required in subsections (a)(2) and (3), if the licensee has previously submitted the information to the Department in a previous license application within the last 5 years and there have been no material changes, unless requested by the Director to submit this information.

 

4)         The most current year end financial statements, prepared in accordance with generally accepted accounting principles and a balance sheet and statement of operations as of the most recent quarterly report before the date of the application.

 

5)         A list of all states in which the applicant is licensed as a lender or sales finance agency and whether a license of the applicant has ever been withdrawn, refused, cancelled or suspended in any other state, with full details.

 

6)         A business plan, which shall at minimum detail the nature, amount, and terms of the retail installment contracts, retail charge agreements or motor vehicle retail installment contracts that will be purchased, or loans secured by retail installment contracts, loans secured by motor vehicles retail installment contracts, or loans secured by retail charge agreements that will be made.

 

7)         The applicable fees as required by the Act.

 

8)         Any additional information the Director considers necessary to evaluate the application.

 

b)         A licensee shall seek prior approval from the Division whenever a person proposes to become a controlling person of the licensee.  The request for approval of added controlling persons shall be accompanied by an amendment fee of $1,000.

 

c)         A licensee shall provide all information the Director requests to evaluate the license, in the form requested, at the time of renewal of license under Section 6 of the Act.

 

(Source:  Added at 47 Ill. Reg. 9324, effective June 20, 2023)

 

Section 160.20  Transaction Register

 

a)         The Transaction Register shall contain the original entry and be a permanent record.  It shall show for every transaction the account number, date of transaction, nature of security, type and cost of insurance and amount of fees.

 

b)         It shall show the amount financed, finance charge, annual percentage rate, itemization of all other charges not specified in subsection (a), schedule of payments, and total of payments which will include all charges.

 

c)         The Register shall be kept numerically by number of transactions in the order made and shall have proper headings for the items required.

 

d)         The Transaction Register shall be maintained in a form accessible to the Department and a licensee may maintain these files in any medium or format which accurately reproduces original documents or papers.

 

(Source:  Amended at 47 Ill. Reg. 9324, effective June 20, 2023)

 

Section 160.30  Individual Account Cards

 

An individual account card shall be kept for each transaction or appropriate combination of records with respect to each finance agreement, which the licensee acquires pursuant to Section 2(a) of the Sales Finance Agency Act.

 

a)         Such account card or records shall show the name and address of buyer, names of co-purchasers or obligors, transaction number, date of transaction, nature of security, type and cost of insurance, official fees charged and paid, amount and date of each installment due and paid; the schedule of installments as set forth in the instrument purchased, total finance charge where applicable, and the name of holder if the instrument is hypothecated.  The record shall also show the amount of official fees received and paid out for filing, recording or releasing a financing statement or security agreement, including the fee required by the Secretary of State for perfecting a lien on a motor vehicle title.

 

1)         The record for an interest-bearing contract shall show the original principal amount of the contract, rates of interest, and finance charge where applicable.

 

2)         The record for a precomputed contract shall show the original principal amount of the contract, excluding the precomputed interest and charges, the amount of the finance charge and the face amount of the contract including the finance charge.

 

b)         The record for an interest-bearing contract shall show the amount and date of each payment of principal and interest, the balance due on principal, and the date to which interest is paid.  If the amount paid is insufficient to meet the entire amount of interest due, the record shall be clearly marked to indicate the extent of credit given for such interest payment and the date to which interest is paid.  Upon the Division’s or obligor’s request involving a specific account or accounts, the licensee shall provide the amount of accrued but unpaid interest.

 

c)         The account record for a precomputed contract shall show the amount and date of each payment applied to the contract, the unpaid balance of the contract after applying such payment, and the date and amount of any additional interest collected for delinquency, default or deferment.  If deferment interest is collected in whole or in part, the record shall indicate the deferred due date of the final installment and any uncollected portion of the deferment interest.  The account record shall also show the original principal of the contract excluding the charge, the amount of the charge, the face amount of the note including the charge, and any additional charge made for extra days in the first installment process.

 

d)         The card shall also show the date of purchase by licensee, the name of the seller, the amount financed, the amount and description of all charges to debtor not specified above and total of payments including all charges.

 

e)         When a transaction is prepaid in full, the account card shall show the date of prepayment, the amount paid to discharge the debt, the amount of the rebate for each insurance and finance charge, if any, and any deduction from the rebate for previously earned but uncollected delinquency charges and insurance.

 

f)         The card shall contain the date and amount of all late charges and extension charges collected indicating the period for which said charges are applicable.

 

g)         If payment is made in any other way than in the ordinary course of business, it shall be so designated.  (For example, payment by a third party, insurance claim or sale of collateral.)

 

h)         If receivables are sold, the individual account cards or copies thereof for such receivables shall show the name of the purchaser and the date of such sale.

 

i)          No erasures whatsoever may be made in the payment or charge section of any account card.  In case of error, a line shall be drawn in ink through the improper entry and the correct entry made on the following line.  The entries on the card shall correspond with the receipts given the borrower.

 

j)          Every licensee shall preserve the account card for at least two years after final entry.  Records shall be maintained in a form accessible to the Department.  A licensee may maintain these files in any medium or format which accurately reproduces original documents or papers.

 

(Source:  Amended at 47 Ill. Reg. 9324, effective June 20, 2023)

 

Section 160.40  File of Original Papers

 

a)         A separate file shall be maintained for each obligor.  Each such file shall contain the contract, security agreement or financing statement, wage assignment, evidence of compliance with the requirements of the federal Consumer Credit Protection Act (15 U.S.C. 41) and all other instruments which are evidence of indebtedness or security pertaining to the transaction, except when the documents are in the custody of a court or of an agent for collection or are hypothecated or sold as provided in this Part.  Other papers relating to the obligor, or the obligor's debt may be kept in the same or a separate file in the same office.  A licensee may maintain these files in any medium or format that accurately reproduces original documents or papers.

 

b)         All legal instruments evidencing indebtedness in connection with a transaction and executed by an obligor, including a copy of the Disclosure Statement, if a separate instrument, must bear the transaction number.

 

c)         Except for the account number, no licensees shall take the assignment or purchase any instruments in which the blanks are not filled in completely.

 

d)         All spaces or sections not used in the preparation of legal documents shall be ruled out or designated as “non” or “n/a”.

 

e)         Any amendments to the retail installment contract shall be signed by the obligor and creditor or assignee.

 

f)         The name and address of the original seller must be incorporated into or appear on all legal instruments taken from an obligor and acquired by a licensee.

 

g)         Every licensee shall preserve the records of all retail installment contracts , retail charge agreements, and/or loans secured by retail installment contracts for at least two years after making the final entry for such contract, agreement, or loan.  Records shall be maintained in a form accessible to the Department.

 

(Source:  Amended at 47 Ill. Reg. 9324, effective June 20, 2023)

 

Section 160.50  Cash Book

 

a)         All receipts and disbursements of any amount whatsoever shall be entered on the day they occur in the cash book or equivalent record. Separate headings shall be provided for installments, charges, and for official fees collected and disbursed, and for amounts received and disbursed for any type of insurance coverage.

 

b)         The cash book shall be a permanent record of all details of income and disbursements including all entries to individual accounts of obligors.  A licensee may maintain these files in any medium or format which accurately reproduces original documents or papers.

 

c)         For precomputed contracts, payments applied to a transaction may be shown as a total sum and need not be itemized between amount financed and finance charges, but additional charges collected for delinquency shall be itemized or otherwise separately indicated.

 

d)         For interest-bearing contracts, payments applied to a transaction must be itemized between principal, interest, other charges and additional charges collected for delinquency.

 

(Source:  Amended at 47 Ill. Reg. 9324, effective June 20, 2023)

 

Section 160.55  Permanent File

 

Each licensee shall maintain a permanent file which includes the following:

 

a)         A copy of all correspondence sent to or received from the Department within the past 24 months.

 

b)         A copy of the last two examination exception reports and any related correspondence.

 

c)         A copy of the Sales Finance Agency Act, a copy of this Part, the Motor Vehicle Retail Installment Sales Act and the Retail Installment Sales Act.

 

d)         A list of Business Source and Affiliates as prescribed in Section 160.200 of this Part.

 

(Source:  Added at 22 Ill. Reg. 13699, effective July 6, 1998)

 

Section 160.60  Alphabetical Record of Buyers, Co-Purchasers and Obligors

 

The alphabetical record shall show the name of each buyer, co-buyer and obligor who is currently indebted to the licensee, together with sufficient information to locate the account card.  A licensee may maintain these files in any medium or format that accurately reproduces original documents or papers.

 

(Source:  Amended at 47 Ill. Reg. 9324, effective June 20, 2023)

 

Section 160.70  Payments

 

a)         All payments shall be credited on the account card as of the date received.

 

b)         A receipt shall be issued to the obligor for each payment received.

 

c)         When the finance charge is precomputed, the receipt for each payment shall show the date of payment, the amount applied to the balance of the contract and the amount applied to any other charges permissible under the applicable State law.  Payments shall be applied in the order in which they become due.

 

d)         The receipt for each payment on an interest-bearing account shall show the date of payment, amount applied to interest, amount applied to insurance, amount applied to principal, balance due on the account, amount applied to any other charges permissible under the applicable State law and any amount of interest earned by not collected.

 

e)         No licensee may retain any portion of a payment processing fee.

 

(Source:  Amended at 47 Ill. Reg. 9324, effective June 20, 2023)

 

Section 160.80  Delinquency Charges (Default Charges)

 

All delinquency charges (Default Charges) shall comply with any requirements and provisions of applicable federal and State law under which the contract was made.

 

(Source:  Amended at 47 Ill. Reg. 9324, effective June 20, 2023)

 

Section 160.90  Cancellation and Return of Documents

 

All original legal documents executed by the obligor evidencing indebtedness shall be cancelled and returned to the obligor promptly following the renewal or payment in full.  Where original documents are not available, a licensee shall substitute copies reproduced from any medium or format which accurately reproduces the original documents.  Continuing security agreements shall be retained until subsequent debts are paid in full.  If an executed copy of a legal document is retained following payment in full or renewal, it must be clearly indicated by physical or digital method as "PAID" or "CANCELLED" or "RENEWED", indicating the date of payment, cancellation, or renewal.  Copies clearly identified with the legend "COPY NOT NEGOTIABLE" or similar language, may be used in lieu of this requirement.

 

(Source:  Amended at 47 Ill. Reg. 9324, effective June 20, 2023)

 

Section 160.100  Extensions – Renewals – Rebates

 

a)         The obligor may prepay in full by cash, extension, renewal or otherwise at any time before maturity and shall be entitled to a refund in accordance with Section 7 of the Motor Vehicle Retail Installment Sales Act [815 ILCS 375] or in accordance with Section 7 of the Retail Installment Sales Act [815 ILCS 405], whichever is applicable.

 

b)         The holder of the contract may, if the obligor requests, renew or extend the maturity date of all or part of the contract for which the licensee may charge and collect a refinance charge in accordance with Section 20 of the Retail Installment Sales Act or Section 19 of the Motor Vehicle Retail Installment Sales Act, whichever is applicable.

 

c)         If the contract provides for precomputed interest, a deferment charge may be calculated as the difference between the rebate that would be required for prepayment in full as of the scheduled due date of the deferred installment and the rebate which would be required for prepayment in full as of one month prior to said date.

 

d)         If the contract provides for precomputed interest, any required rebate of finance charge may be calculated using the actuarial method, defined by the federal Truth in Lending Act (15 U.S.C. 1601 et seq.) and Regulation Z, Appendix J (12 CFR 226) or any other method permitted by applicable State law.  The rebate for prepayment in full after extension charges have been levied must be larger than the rebate which otherwise would be required.  For the purpose of computing rebates, the number of elapsed months must be reduced by one month for each month for which an extension charge has been collected; and the number of months of prepayment must be increased by one month for each month for which an extension charge has been collected.

 

e)         The licensee may not charge an acquisition cost in computing rebates on prepayment in full following extension or renewal if such cost was included as an item in arriving at the net balance to be extended or renewed when the account was at any prior time renewed or extended.

 

f)         When a contract is prepaid in full, the obligor shall be advised as to the amount of the rebate of finance charge and unearned insurance premiums.

 

(Source:  Amended at 47 Ill. Reg. 9324, effective June 20, 2023)

 

Section 160.110  Hypothecation of Security Instruments

 

a)         All instruments held by licensees as evidence of indebtedness may be pledged without the prior consent of the Department, except the pledgee must provide the Department, in writing, in a form satisfactory to the Department that the Director or the Director's representatives may at any time examine the pledged instruments, and such pledgee shall also agree, in writing, to provide suitable working quarters for the examiner of the Department to make such examination.

 

b)         Should the physical records or documents of the accounts pledged be located outside of the geographic boundaries of the State of Illinois, the licensee must pay all of the expense of examination by the representatives of this Department, in addition to the examination fees as specified in Section 160.210.

 

c)         Each instrument hypothecated must bear the following endorsement or substantially similar language:

 

"This instrument is non-negotiable in form but may be pledged as collateral security.  If so pledged, any payment made to the pledgor, upon the debt evidenced by this obligation, shall be considered and construed as a payment on this instrument, the same as though it were still in the possession and under the control of the pledgor named herein; and the pledgee holding this instrument as collateral security hereby makes said pledgor its agent to accept and receive payments hereon, either of installments or charges."

 

(Source:  Amended at 47 Ill. Reg. 9324, effective June 20, 2023)

 

Section 160.120  Legal Forms

 

a)         All forms of contracts and assignments of wages furnished by the licensee to a retail seller in connection with a regulated transaction under the Sales Finance Agency Act are required to be submitted to the Department.  Where the licensee or affiliate is engaged in the same business and licensed by this Department to engage in such business in another location, the use of identical forms in the new location is not required to be submitted to the Department.

 

b)         Should the licensees at any time following submission of the forms modify the forms, the forms as modified shall be submitted to the Department.

 

c)         All forms shall be submitted in the format requested by the Division.

 

(Source:  Amended at 47 Ill. Reg. 9324, effective June 20, 2023)

 

Section 160.130  Judgments

 

a)         When an account has been reduced to judgment, the face of the account card, in physical or digital form, shall show the amount and date of the judgment.  When judgment is taken before maturity on a precomputed contract, the same rebate of finance charge is required that would be required for prepayment in full on the date of the entry of judgment.

 

b)         All payments received shall be applied to the judgment balance and be properly identified.  The rate of interest charged on a judgment balance must comply with current applicable federal and State law.  No higher rate of interest or charge shall be assessed or accepted.

 

c)         The files of the licensee must contain statements setting forth the following items:

 

1)         Date of judgment.

 

2)         Copy of judgment.

 

3)         Date suit was filed.

 

4)         The amount of principal and the amount of charges for which judgment was taken.

 

5)         In the case of a precomputed contract, the unpaid balance of contract, the rebate of interest subtracted therefrom, the resulting balance, plus the amount of any interest included in the judgment.

 

6)         Attorney’s fees if permitted by the terms of the instrument.

 

7)         Court costs.

 

8)         Amount of the judgment.

 

d)         Court costs charged to the obligor must be itemized and verified by receipts.

 

e)         Where property is foreclosed or sold pursuant to any judgment or judicial process, the file must contain a copy of the decree of judicial sale.

 

f)         If records related to the judgment are kept off-site, the licensee shall make these documents available from that site or return the records to the licensed location within 72 hours after the Department's request.

 

(Source:  Amended at 47 Ill. Reg. 9324, effective June 20, 2023)

 

Section 160.140  Sale of Security

 

a)         When part or all of the collateral is repossessed or sold, the fact must be noted on the account card.

 

b)         All credits from proceeds of the sale of security must be properly identified.

 

c)         The files of the licensee must contain:

 

1)         When possession of the security was obtained, and whether by voluntary or involuntary action.

 

2)         Whether the collateral was sold by public or private sale and date of sale.

 

3)         Evidence of compliance by licensee with the requirements of Article 9 of the Uniform Commercial Code, the Motor Vehicle Retail Installment Sales Act, the Retail Installment Sales Act and related statutes where applicable in the sale and disposition by a secured party of collateral after default, including copies of all notices directed to the obligor as required therein or as required by any other law, statute or regulation, State or federal.

 

4)         A report of condition of property at time of retaking.

 

5)         Copy of notice of intended sale which must contain notice of default, balance owing, date, place and time of public sale or the date after which a private sale may occur.  Such notice must be forwarded to the obligor by certified mail to the last known address of the obligor.

 

6)         Signed receipts from the purchasers (or from the auctioneer if the sale is public), describing the property purchased, showing the amount paid for same, and copies of any competitive bids if the sale is private.

 

7)         Copy of the statement of final accounting, original of which shall be sent to the obligor after the sale, which statement shall set forth the sale price of the property, itemization of the costs of sale, and any surplus or deficiency balance due on the account.

 

8)         When the property is abandoned and the address of the obligor is uncertain or unknown, notice of sale and a statement of final accounting shall be sent to the last known address by registered or certified mail, return receipt requested.

 

d)         In connection with the sale after default of collateral for a debt, the licensee shall only make charges for expenses incurred as are permitted by the applicable provisions of the federal and State law which charges must be reasonable, taking into consideration the nature of the security, the circumstances surrounding retaking and the sale, the fair market value of the collateral and the amount of the indebtedness.  Such charges must be substantiated by paid receipts.  The licensee may charge any necessary expense in connection with the retaking and sale of collateral, including all expense incurred for required repairs to restore the collateral to a saleable condition, and for mechanic's liens, storage liens, and similar liens occasioned by the obligor.

 

(Source:  Amended at 47 Ill. Reg. 9324, effective June 20, 2023)

 

Section 160.150  Trouble File (Repealed)

 

(Source:  Repealed at 47 Ill. Reg. 9324, effective June 20, 2023)

 

Section 160.160  Lien Charges

 

All official fees paid for the purpose of perfecting or releasing a security interest in property which may be the subject of any sale contract may be collected from the obligor.

 

(Source:  Amended at 47 Ill. Reg. 9324, effective June 20, 2023)

 

Section 160.170  Insurance

 

a)         Credit Life, Health and Accident:

Licensees, at their option, may provide, but not require, decreasing term credit life insurance and credit accident and health insurance and make a charge to the obligor, providing the obligor has indicated in a specific dated and separately signed statement that the coverage is not required by seller and obligor desires the insurance coverage which is included as a charge or paid by the obligor.

 

1)         The licensee may provide joint credit life or joint credit accident and health insurance if both insured are obligated for the debt.

 

2)         The maximum charge for credit life and credit accident and health insurance shall be as prescribed by the State of Illinois Department of Insurance.

 

3)         When an account is prepaid in full the obligor shall receive a refund of the unearned credit life, health and accident insurance charges.  The required refund shall be computed according to the actuarial method.  When the refund of either credit life or credit accident and health premiums is less than $1.00, no refund is required.

 

4)         If the obligor dies during the term of the transaction, the life insurance, if any, shall pay the benefits due according to the terms of the policy.  The obligor's estate shall be paid the difference between the net unpaid balance and the insurance benefit paid. Evidence of this payment shall be maintained by the licensee.

 

5)         For death claims on account of credit life insurance, the account cards shall indicate the date of death and the refunds of finance charge and unearned insurance premiums paid to the estate.  The refund check or voucher number shall be available on demand.

 

6)         Credit life and credit accident and health insurance provided by a licensee may be cancelled within 15 days after the date of the loan by written request of all parties to the obligation.  In the event of cancellation, the entire premium cost, if any, shall be refunded to the obligors and insurance shall then be void from its inception.

 

b)         Property Insurance:

 

1)         Insurance against loss or damage to property, or liability arising out of ownership may be required of an obligor by the licensee.

 

2)         The amount of insurance shall be only in the amount sufficient to cover the cash price of the item being financed.

 

c)         All insurance provided by a licensee for an obligor must be issued by insurance companies licensed to do business in the State of Illinois and in compliance with the applicable provisions of the Illinois Insurance Code and the administrative rules of the Department of Insurance.

 

1)         No obligor shall be required to purchase any policy of insurance from any company, agent, broker or person as a condition precedent to the extension or renewal of an obligation.

 

2)         Insurance for a period less than the full term may be agreed upon between the parties which agreement may be a part of the contract or separate instrument.

 

3)         No licensee shall decline new or existing insurance which meets the standards set forth in the federal and State law or prevent any obligor from obtaining insurance coverage from other sources. If insurance is included in a transaction by the seller, the licensee shall upon prepayment by the obligor notify the obligor and seller of the possibility of rebate due by reason of such prepayment and the amount of rebate so due.

 

4)         It shall be the licensee's responsibility to explain clearly to the obligor the type, cost, benefits and limitations of any insurance requested by licensee after acquisition of the account.

 

5)         The licensee shall also deliver or cause to be delivered to the obligor a copy of the policy, or policies, certificate, or other evidence thereof acquired by the licensee in connection with the indebtedness.

 

d)         In the event of a judgment prior to maturity of the loan, the judgment shall be decreased by the amount equal to any unearned premium.  Evidence of this payment shall be maintained by the licensee.

 

(Source:  Amended at 47 Ill. Reg. 9324, effective June 20, 2023)

 

Section 160.180  Office and Office Hours

 

Every licensee shall maintain a place of business or website to which the general public shall have free access and where all obligations shall be payable.

 

a)         Except as authorized by the Department, each licensed office shall be open not less than three consecutive hours, between 8:00 A.M. and 6:00 P.M. on every business day, except Saturdays, Sundays and legal holidays, during the term of the license, and the licensee shall file with the Department a schedule of the hours during which the licensee elects to keep the office open, provided that any licensee may keep the office open for any period the licensee sees fit, in addition to the hours listed in such schedule.

 

b)         Whenever a licensee desires to change the schedule of hours during which the office shall remain open, the licensee may do so upon filing with the Department a new schedule setting forth the changes at least three days before the change shall go into effect.  The schedule of hours shall be prominently displayed in the licensee's place of business.

 

c)         If any payment shall be due on any obligation to such licensee on any closed day, then such payment shall be considered for all purposes, including the computation of interest or charges, as having been received on any closed day, if such payment shall be received, whether through the mails or otherwise, at any time before the closing of business on the next regular business day following such closed day.

 

d)         The license of each licensee and the license renewal certificate shall be prominently displayed in the licensee's place of business and website.

 

e)         Whenever a licensee changes the place of business to a location other than that set forth in his license, he shall submit his license to the Department for change of address 10 days before he intends to occupy new quarters.  The relocation fee of $500 shall accompany the license.

 

(Source:  Amended at 47 Ill. Reg. 9324, effective June 20, 2023)

 

Section 160.190  Advertising

 

a)         No licensee shall represent either orally or in writing, directly or indirectly, by any means whatsoever, including but not limited to, the use of any office sign (except its duly issued license) or the use and circulation of any letterheads, billheads, blank forms, notes, receipts, certificates, circulars or any written or printed matter that it is licensed by or subject to the supervision of the Department, or the State of Illinois, except by use of the following phrase:

 

"Licensed by the Illinois Department of Financial and Professional Regulation pursuant to the Sales Finance Agency Act."

 

Provided, however, that the use or circulation of any written or printed matter containing the foregoing phrase may only be in connection with the licensee's business as a Sales Finance Agency.

 

b)         The licensee shall not advertise in a false, misleading or deceptive manner or imply or indicate that the rates or charges for loans or extensions of credit are "approved", "set", or "established" by the State of Illinois or the Department.

 

(Source:  Amended at 47 Ill. Reg. 9324, effective June 20, 2023)

 

Section 160.200  Business Practices

 

a)         Notary fees shall not be charged to or collected from the obligor, co-maker, or surety.

 

b)         No licensee shall take any power of attorney except to cancel any policies of insurance financed by the licensee as permitted by the Act and to receive either rebate of unearned premiums or loss payments.

 

c)         No licensee shall transact business licensed under the Sales Finance Agency Act under any other name or at any other place of business than that named in the license.

 

d)         Interest charges shall be collected only from the date the proceeds of the contract are delivered to or expended on behalf of the obligor, even if the contract bears a prior date.

 

e)         No licensee shall knowingly purchase contracts from one who does either of the following:

 

1)         In the course of the seller’s business, employs a chain referral sales technique prohibited by the Consumer Fraud and Deceptive Business Practices Act [815 ILCS 505].

 

2)         Uses a contract, a security instrument or other document not in conformance with the provisions of the Retail Installment Sales Act [815 ILCS 405], Motor Vehicle Retail Installment Sales Act [815 ILCS 375], the federal Consumer Protection Act (15 U.S.C. 1601-1665b), or other applicable federal or State law.

 

f)         Except as provided in this Part and as contained in the Act, the licensee may not charge the obligor a loan fee, points, finder’s fee, service fee, transaction fee, activity fee, appraisal fee, investigation fee, credit report form or any such similar charge or fee.

 

g)         Contract Provisions

 

1)         When a licensee owns a substantial interest in the business of a retail seller from whom the licensee purchases a contract, agreement or other evidence of indebtedness, the document shall clearly reflect the relationship in the following language:

 

“The retail buyer hereunder has been informed by the retail seller that his contract will be sold and assigned by the retail seller to _____________________ (a licensed Sales Finance Agency) and that the said Sales Finance Agency has a substantial interest in the business of the retail seller and that pursuant to the Sales Finance Agency Act [205 ILCS 660/8.12] the retail buyer may assert all defenses equally against the retail seller and said ______________________, Sales Finance Agency.”

 

2)         The statement in subsection (g)(1) shall be printed, typed or otherwise placed on the sales contract, agreement or other evidence of indebtedness, in a size and style equal to 8 point bold type.

 

h)         The licensee shall maintain in its permanent file the following:

 

1)         A list of all entities with which the licensee transacts business as a Sales Finance Agency.

 

2)         The name of any person or other entity that has a 10% or greater ownership interest in the licensee.

 

3)         The name of any entity in which the licensee has a 50% or greater ownership interest.

 

(Source:  Amended at 47 Ill. Reg. 9324, effective June 20, 2023)

 

Section 160.205  Name Change

 

Whenever the licensee desires to amend the name of the licensed business, the licensee shall submit to the Department, within 15 days after amending the name, the following:

 

a)         $300 amended name change fee.

 

b)         Amended Articles of Incorporation, if the licensee is a corporation.

 

c)         Amended organization papers, if the licensee is an entity other than a corporation.

 

(Source:  Added at 47 Ill. Reg. 9324, effective June 20, 2023)

 

Section 160.210  Examinations

 

a)         Licensees shall forward all examination remittances to the Division by any means designated by the Director.

 

b)         All fees and charges shall be remitted in the form designated and communicated by the Director.

 

c)         Examination

 

1)         The Department may examine all records and investigate any transactions in any office of the licensee operating under the Act, or at any other location where records or instruments of the licensee are situated to determine that the business complies with all applicable laws and regulations.  The Department will charge the licensee $1,200 for each examiner day or portion thereof required to make and complete an examination or investigation of the licensee.

 

2)         The examination of the books and records of the licensee may be conducted concurrently with the examination of any other business conducted by the licensee which is regulated or licensed by the Department.  A separate charge shall be made for each examiner day or portion thereof required to complete each examination as to each regulated or licensed business.

 

3)         Should any part of the records or documents be located outside of the geographic boundaries of the State of Illinois, the licensee shall pay all the expenses the Department incurs to perform the examination.

 

4)         The Department may conduct an examination for the purpose of verifying that the licensee has taken necessary actions to correct violations to the Act and/or related administrative rules and shall charge the licensee $1,500 for each examiner day or portion thereof.

 

(Source:  Amended at 47 Ill. Reg. 9324, effective June 20, 2023)

 

Section 160.220  Credit Practices

 

No licensee or agent of the licensee while collecting or attempting to collect an alleged debt shall engage in any of the following acts:

 

a)         Using or threatening to use force or violence to cause physical harm to an obligor, the obligor's family or the obligor's property.

 

b)         Threatening arrest or criminal prosecution when no basis for such action lawfully exists.

 

c)         Threatening the seizure, attachment and sale of an obligor's property when such action can only be taken pursuant to court order unless disclosure is made that prior court proceedings are required.

 

d)         Disclosing or threatening to disclose information adversely affecting an obligor's reputation for credit worthiness with knowledge or reason to know such information is false.

 

e)         Threatening to initiate or initiating communication with an obligor's employer unless there has been a default in the payment of the obligation and at least 5 days prior written notice to the last known address of the obligor of the intent to communicate with the employer and except as expressly permitted by statute or court order.

 

f)         Communicating or threatening to communicate with an obligor or the obligor's family with such unreasonable frequency as to constitute harassment, or at times reasonably considered to be unusual hours or known to be inconvenient.

 

g)         Using profane, obscene or abusive language with an obligor or the obligor's family.

 

h)         Disclosing or threatening to disclose information relating to an obligor's indebtedness to any other person except when such other person has a legitimate business need for the information.

 

i)          Disclosing or threatening to disclose information concerning the existence of a debt which the licensee knows to be reasonably disputed by the obligor without disclosing the fact that the debt is disputed.

 

j)          Attempting or threatening to attempt enforcement of a right or remedy with knowledge or reason to know that the right or remedy does not exist.

 

k)         Use of any form of communication simulating legal or judicial process which gives the appearance of being authorized, issued or approved by a governmental agency, official or attorney at law when it is not.

 

l)          Use of badges, uniforms, or other indicia of any governmental agency or official except as authorized by law.

 

m)        Misrepresenting the amount of the debt alleged to be owed.

 

n)         Representing that an alleged debt may be increased by the addition of attorney's fees, investigation fees or any other fees or charges when there is no contractual or statutory authorization for such addition.

 

(Source:  Amended at 47 Ill. Reg. 9324, effective June 20, 2023)

 

Section 160.230  Reports

 

a)         Licensees shall file with the Department such written reports as the Department may from time to time consider necessary.

 

b)         All applications, forms, and any other documents required to be filed or submitted under the Act or this Part shall be verified as to their truth and accuracy.

 

(Source:  Amended at 47 Ill. Reg. 9324, effective June 20, 2023)

 

Section 160.240  Hearing Procedures

 

All administrative hearings shall be conducted in accordance with 38 Ill. Adm. Code 100.

 

(Source:  Amended at 46 Ill. Reg. 12529, effective July 8, 2022)

 

Section 160.250  Servicing of Accounts by Contract

 

Upon prior approval of the Director, the licensee may contract for servicing of accounts.  A request for the Director's approval shall be in writing and include the following:

 

a)         Name and address of proposed servicer.

 

b)         Executed contract, conditioned upon approval by the Director, between licensee and servicer.

 

c)         Contact person and telephone number of the servicer.

 

d)         A statement that the licensee will make all books, records and account information readily available for examination by the Department.

 

e)         A statement that the licensee shall pay all examination expenses under Section 7 of the Act.

 

f)         Written consent of servicer for the Department to conduct its examination.

 

g)         A list of all Illinois licensees held by the proposed servicer.

 

(Source:  Amended at 47 Ill. Reg. 9324, effective June 20, 2023)

 

Section 160.260  Off-site Records

 

Upon prior written approval of the Director a licensee may retain physical records at a location other than the licensed facility.  A request for the Director's approval shall be in writing and include the following:

 

a)         Address of proposed off-site location.

 

b)         Contact person and telephone number at the proposed off-site location.

 

c)         Statement that all books, records and account information will be made available within 72 hours after the Department's request at either the licensed facility or the off-site location.

 

d)         A statement that, at the Director's discretion, an examination may be conducted at either the licensed facility or the off-site facility.

 

e)         A statement that the licensee shall pay for all examination expenses under Section 7 of the Act.

 

(Source:  Amended at 47 Ill. Reg. 9324, effective June 20, 2023)

 

Section 160.270  Revocation or Suspension of License

 

If it is determined that the Director had the authority to issue the suspension or revocation of a license pursuant to Section 10 of the Act, the Director may issue orders as may be reasonably necessary to correct, eliminate or remedy the conduct at issue.  (See Section 16.5(g) of the Act.)

 

(Source:  Amended at 47 Ill. Reg. 9324, effective June 20, 2023)

 

Section 160.280  Loan Sales

 

a)         For purposes of this Section:

 

1)         "Act" means the Sales Finance Agency Act [205 ILCS 660]; and

 

2)         "Licensee" means licensees under the Act and the Consumer Installment Loan Act [205 ILCS 670].

 

3)         "Transaction" means the pledge, hypothecation, sale, or other conveyance of contracts purchased, or loans made, under the provisions of the Act.

 

b)         A licensee may not pledge, hypothecate, sell, or otherwise convey contracts purchased, or loans made, under the provisions of the Act, except as provided in this Section.

 

c)         A licensee may not pledge, hypothecate, sell, or otherwise convey contracts purchased, or loans made, under the Act, except to:

 

1)         another licensee under the Act;

 

2)         a Consumer Installment Loan Act licensee;

 

3)         a special purpose vehicle as defined by the Act;

 

4)         a person or entity that lends against or purchases retail installment contracts, retail charge agreements, or the outstanding balances or any portion of the outstanding balances under those contracts or agreements from an Illinois licensed sales finance agency or Consumer Installment Loan Act licensee in connection with a securitization, private placement, or similar type of investment transaction.  A licensee may pledge, hypothecate, sell, or otherwise convey contracts purchased, or loans made, under the Act to a person or entity described in this subsection (c)(4) only if the conveyor licensee retains servicing of the loan agreements or contracts and maintains the records for those loan agreements or contracts (see Section 17(b) of the Act);

 

5)         the retail seller from which the conveyor licensee originally purchased the retail installment contracts or retail charge agreements; or

 

6)         a credit union, bank, banking association, trust company, savings bank, or savings and loan association authorized to do business under the laws of this State or of the United States.

 

d)         The conveyor licensee shall notify the Department in writing, no more than 10 days after the transaction, indicating the name of the purchaser/pledgee/recipient and evidence of their qualifications to purchase contracts under this Section.

 

(Source:  Amended at 47 Ill. Reg. 9324, effective June 20, 2023)

SUBPART B: HIGH RISK HOME LOANS

 

Section 160.500  Definitions (Repealed)

 

(Source:  Repealed at 41 Ill. Reg. 11289, effective August 28, 2017)

 

Section 160.505  Applicability of Rule (Repealed)

 

(Source:  Repealed at 41 Ill. Reg. 11289, effective August 28, 2017)

 

Section 160.510  Good Faith Requirements (Repealed)

 

(Source:  Repealed at 41 Ill. Reg. 11289, effective August 28, 2017)

 

Section 160.515  Fraudulent or Deceptive Practices (Repealed)

 

(Source:  Repealed at 41 Ill. Reg. 11289, effective August 28, 2017)

 

Section 160.520  Prohibited Refinances (Repealed)

 

(Source:  Repealed at 41 Ill. Reg. 11289, effective August 28, 2017)

 

Section 160.525  Negative Amortization (Repealed)

 

(Source:  Repealed at 41 Ill. Reg. 11289, effective August 28, 2017)

 

Section 160.530  Negative Equity (Repealed)

 

(Source:  Repealed at 41 Ill. Reg. 11289, effective August 28, 2017)

 

Section 160.535  Balloon Payments (Repealed)

 

(Source:  Repealed at 41 Ill. Reg. 11289, effective August 28, 2017)

 

Section 160.540  Financing of Certain Points and Fees (Repealed)

 

(Source:  Repealed at 41 Ill. Reg. 11289, effective August 28, 2017)

 

Section 160.545  Financing of Single Premium Insurance Products (Repealed)

 

(Source:  Repealed at 41 Ill. Reg. 11289, effective August 28, 2017)

 

Section 160.550  Lending Without Due Regard to Ability to Repay (Repealed)

 

(Source:  Repealed at 41 Ill. Reg. 11289, effective August 28, 2017)

 

Section 160.555  Verification of Ability to Repay (Repealed)

 

(Source:  Repealed at 41 Ill. Reg. 11289, effective August 28, 2017)

 

Section 160.560  Payments to Contractors (Repealed)

 

(Source:  Repealed at 41 Ill. Reg. 11289, effective August 28, 2017)

 

Section 160.565  Counseling Prior to Perfecting Foreclosure (Repealed)

 

(Source:  Repealed at 41 Ill. Reg. 11289, effective August 28, 2017)

 

Section 160.570  Mortgage Awareness Program (Repealed)

 

(Source:  Repealed at 41 Ill. Reg. 11289, effective August 28, 2017)

 

Section 160.575  Offer of Mortgage Awareness Program (Repealed)

 

(Source:  Repealed at 41 Ill. Reg. 11289, effective August 28, 2017)

 

Section 160.580  Third Party Review (Repealed)

 

(Source:  Repealed at 41 Ill. Reg. 11289, effective August 28, 2017)




 

Section 160.APPENDIX A   Estimated Monthly Income and Expenses Worksheet (Repealed)

 

(Source:  Repealed at 41 Ill. Reg. 11289, effective August 28, 2017)




 

Section 160.APPENDIX B   Mortgage Ratio Worksheet (Repealed)

 

(Source:  Repealed at 41 Ill. Reg. 11289, effective August 28, 2017)