97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB5022

 

Introduced 2/7/2012, by Rep. Brandon W. Phelps

 

SYNOPSIS AS INTRODUCED:
 
815 ILCS 122/1-10

    Amends the Payday Loan Reform Act to provide that "official documentation of income" includes documentation of tax returns, government benefits, credit reports, and other documents in addition to pay stubs. Effective immediately.


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A BILL FOR

 

HB5022LRB097 18641 JLS 63875 b

1    AN ACT concerning business.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Payday Loan Reform Act is amended by
5changing Section 1-10 as follows:
 
6    (815 ILCS 122/1-10)
7    Sec. 1-10. Definitions. As used in this Act:
8    "Check" means a "negotiable instrument", as defined in
9Article 3 of the Uniform Commercial Code, that is drawn on a
10financial institution.
11    "Commercially reasonable method of verification" or
12"certified database" means a consumer reporting service
13database certified by the Department as effective in verifying
14that a proposed loan agreement is permissible under this Act,
15or, in the absence of the Department's certification, any
16reasonably reliable written verification by the consumer
17concerning (i) whether the consumer has any outstanding payday
18loans, (ii) the principal amount of those outstanding payday
19loans, and (iii) whether any payday loans have been paid in
20full by the consumer in the preceding 7 days.
21    "Consumer" means any natural person who, singly or jointly
22with another consumer, enters into a loan.
23    "Consumer reporting service" means an entity that provides

 

 

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1a database certified by the Department.
2    "Department" means the Department of Financial and
3Professional Regulation.
4    "Secretary" means the Secretary of Financial and
5Professional Regulation.
6    "Gross monthly income" means monthly income as
7demonstrated by official documentation of the income,
8including, but not limited to, a pay stub or a receipt
9reflecting payment of government benefits, for the period 30
10days prior to the date on which the loan is made.
11    "Lender" and "licensee" mean any person or entity,
12including any affiliate or subsidiary of a lender or licensee,
13that offers or makes a payday loan, buys a whole or partial
14interest in a payday loan, arranges a payday loan for a third
15party, or acts as an agent for a third party in making a payday
16loan, regardless of whether approval, acceptance, or
17ratification by the third party is necessary to create a legal
18obligation for the third party, and includes any other person
19or entity if the Department determines that the person or
20entity is engaged in a transaction that is in substance a
21disguised payday loan or a subterfuge for the purpose of
22avoiding this Act.
23    "Loan agreement" means a written agreement between a lender
24and consumer to make a loan to the consumer, regardless of
25whether any loan proceeds are actually paid to the consumer on
26the date on which the loan agreement is made.

 

 

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1    "Member of the military" means a person serving in the
2armed forces of the United States, the Illinois National Guard,
3or any reserve component of the armed forces of the United
4States. "Member of the military" includes those persons engaged
5in (i) active duty, (ii) training or education under the
6supervision of the United States preliminary to induction into
7military service, or (iii) a period of active duty with the
8State of Illinois under Title 10 or Title 32 of the United
9States Code pursuant to order of the President or the Governor
10of the State of Illinois.
11    "Official documentation of income" includes, but is not
12limited to, a recent pay stub, a receipt reflecting payment of
13government benefits, a tax return, documentation prepared by
14the source of income, the consumer's credit report from a
15consumer reporting agency as part of the licensee's
16underwriting process, or other official documentation.
17    "Outstanding balance" means the total amount owed by the
18consumer on a loan to a lender, including all principal,
19finance charges, fees, and charges of every kind.
20    "Payday loan" or "loan" means a loan with a finance charge
21exceeding an annual percentage rate of 36% and with a term that
22does not exceed 120 days, including any transaction conducted
23via any medium whatsoever, including, but not limited to,
24paper, facsimile, Internet, or telephone, in which:
25        (1) A lender accepts one or more checks dated on the
26    date written and agrees to hold them for a period of days

 

 

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1    before deposit or presentment, or accepts one or more
2    checks dated subsequent to the date written and agrees to
3    hold them for deposit; or
4        (2) A lender accepts one or more authorizations to
5    debit a consumer's bank account; or
6        (3) A lender accepts an interest in a consumer's wages,
7    including, but not limited to, a wage assignment.
8    The term "payday loan" includes "installment payday loan",
9unless otherwise specified in this Act.
10    "Principal amount" means the amount received by the
11consumer from the lender due and owing on a loan, excluding any
12finance charges, interest, fees, or other loan-related
13charges.
14    "Rollover" means to refinance, renew, amend, or extend a
15loan beyond its original term.
16(Source: P.A. 96-936, eff. 3-21-11.)
 
17    Section 99. Effective date. This Act takes effect upon
18becoming law.