AUTHORITY: Implementing and authorized by Section 22 of the Consumer Installment Loan Act [205 ILCS 670].

SOURCE: Filed and effective June 19, 1970; amended at 3 Ill. Reg. 24, p. 16, effective June 15, 1979; emergency amendment at 4 Ill. Reg. 5, p. 372, effective January 16, 1980, for a maximum of 150 days; amended at 4 Ill. Reg. 36, p. 138, effective September 22, 1980; amended at 5 Ill. Reg. 1352, effective February 3, 1981; codified at 7 Ill. Reg. 11721; amended at 9 Ill. Reg. 1343, effective January 17, 1985; amended at 11 Ill. Reg. 2749, effective January 28, 1987; emergency amendment at 11 Ill. Reg. 14141, effective August 7, 1987, for a maximum of 150 days; amended at 12 Ill. Reg. 10456, effective June 7, 1988; amended at 19 Ill. Reg. 44, effective December 22, 1994; amended at 20 Ill. Reg. 5799, effective April 8, 1996; emergency amendment at 22 Ill. Reg. 1485, effective January 2, 1998, for a maximum of 150 days; emergency expired May 31, 1998; amended at 22 Ill. Reg. 13657, effective July 14, 1998; amended at 25 Ill. Reg. 6227, effective May 17, 2001; amended at 25 Ill. Reg. 7456, effective August 1, 2001; expedited correction at 29 Ill. Reg. 5776, effective August 1, 2001; amended at 26 Ill. Reg. 14232, effective October 1, 2002; amended at 30 Ill. Reg. 12558, effective July 7, 2006; amended at 33 Ill. Reg. 4142, effective April 1, 2009; amended at 35 Ill. Reg. 7319, effective April 21, 2011; amended at 41 Ill. Reg. 12380, effective October 6, 2017; amended at 45 Ill. Reg. 4449, effective March 24, 2021; amended at 26 Ill. Reg. 6519, effective August 1, 2022; amended at 46 Ill. Reg. 17939, effective October 27, 2022; amended at 47 Ill. Reg. 9271, effective June 20, 2023.

SUBPART A: GENERAL PROVISIONS

 

Section 110.1  Definitions

 

"Act" means the Consumer Installment Loan Act [205 ILCS 670].

 

"Affiliate", for purposes of Section 1 of the Act, means any person or entity that directly or indirectly controls, is controlled by, or shares control with another person or entity. A person or entity has control over another if the person or entity has an ownership interest of 25% or more in the other.

 

"Annual percentage rate" or "APR" is the cost of the consumer credit expressed as an annual rate and shall be calculated in accordance with Section 16 of the Act.

 

"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 more than 10% of the license applicant's net worth;

 

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

 

the Director finds influences management of the license applicant.

 

"Date of the loan" means the date on which the loan agreement is signed or accepted by the licensee.

 

"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 procedures" or "GAAP" means those adopted by the American Institute of Certified Public Accountants and Federal Accounting Standards Board.

 

"Hypothecate" means to pledge a security instrument without transfer of title.

 

"Illinois Insurance Code" means 215 ILCS 5.

 

"Licensee" means a person, partnership, association, limited liability company, corporation or other legal entity licensed under the Act.  Any person or entity who holds himself, herself, or itself out as a licensee or who is accused of unlicensed practice is considered a licensee for purposes of enforcement, investigation, hearings, and the Illinois Administrative Procedure Act [5 ILCS 100].

 

"Loan" means a loan governed by the Act.  "Loan" does not include a retail installment contract, a motor vehicle retail installment contract, a retail charge agreement, or a revolving line of credit.

 

"Missed payment" means any failure to make a payment within 90 days of the due date.

 

"Obligor" means a consumer who is contractually obligated to make all principal repayments and interest payments on an outstanding loan.

 

"Predatory Loan Prevention Act" means the act codified at 815 ILCS 123.

 

"Predatory Loan Prevention Act Annual Percentage Rate" or "PLPA APR" is the cost of the consumer credit expressed as an annual rate and shall be calculated in accordance with 32 CFR 232.4(c), the Predatory Loan Prevention Act, and as incorporated in 38 Ill. Adm. Code 215.

 

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

 

"Recording fee" is a fee paid to a government agency to record or release a security instrument.

 

"Sales Finance Agency Act" means 205 ILCS 660.

 

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

 

"Uniform Commercial Code" means 810 ILCS 5.

 

(Source:  Amended at 47 Ill. Reg. 9271, effective June 20, 2023)

 

Section 110.2  Rate Cap Disclosure Notices

 

All loan contracts or agreements must include a separate disclosure signed by the consumer that states:  "A lender shall not contract for or receive charges exceeding a 36% annual percentage rate on the unpaid balance of the amount financed for a loan, as calculated under the Illinois Predatory Loan Prevention Act (PLPA APR).  Any loan with a PLPA APR over 36% is null and void, such that no person or entity shall have any right to collect, attempt to collect, receive, or retain any principal, fee, interest, or charges related to the loan.  The annual percentage rate disclosed in any loan contract may be lower than the PLPA APR."  This disclosure shall be clear and conspicuous and shall be substantially similar to the form in Appendix C.  A lender shall provide all disclosures required by this section in English and in the same language as the loan agreement.

 

(Source:  Added at 46 Ill. Reg. 6519, effective August 1, 2022)

 

Section 110.5  Applicability

 

All rules in this Part, unless context indicates otherwise, apply only to loans made pursuant to the Consumer Installment Loan Act.

 

(Source:  Added at 47 Ill. Reg. 9271, effective June 20, 2023)

 

Section 110.10  Record Keeping

 

a)         Every licensee shall keep the following records at the licensed location in any medium or format that accurately reproduces original documents or papers:

 

1)         Loan register.

 

2)         Individual account records, including transaction histories of obligors.

 

3)         File of all original papers.

 

4)         Cash book.

 

5)         Alphabetical record of all co-makers, obligors, or sureties.

 

6)         Permanent file.

 

b)         Records for loans made under the Act shall be kept separate or readily identifiable from other types of business conducted in the office.

 

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

 

(Source:  Amended at 47 Ill. Reg. 9271, effective June 20, 2023)

 

Section 110.15  Application for License; Controlling Person

 

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

 

1)         The legal 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;

 

C)        a certified statement of the ownership of the partnership and any subsequent changes to the ownership, if the applicant is a partnership.

 

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, Directors and individuals owning more than 25% of the corporate stock, if the applicant is a corporation;

 

iv)        the manager, if the applicant is a 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 Division in a previous license application within the last 5 years and there have been no material changes unless the licensee is requested by the Director to submit this information.

 

4)         The most current year end financial statements, prepared in accordance with generally accepted accounting principles (as defined by the Financial Standards Accounting Board (401 Merritt 7, PO Box 5116, Norwalk Ct 06856-5116 (203/847-0700))) 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 the licenses of the applicant have ever been withdrawn, refused, cancelled, or suspended in any other state, with full details.

 

6)         Bond as required by the Act.

 

7)         Appointment of Attorney-in-Fact.

 

8)         Business Plan, which shall at minimum detail the nature, amount, and term of loans to be made and types of security that will be taken.

 

9)         Photographs of both the inside and outside of the proposed site.

 

10)        Details of any other businesses that will be conducted within the licensed premises.

 

11)        The applicable fees as required by the Act.

 

12)        Any additional information the Director considers necessary.

 

b)        A licensee that is a corporation must notify the Director within 15 days after a person becomes a controlling person.  Upon notification, the Director may require all information they consider necessary to determine if a new application is required.  A licensee that is an entity other than a corporation shall seek prior approval whenever a person proposes to become a controlling person.  The request for approval shall be accompanied by an amendment fee of $1000.

 

c)        Licensees shall file with the Department written reports as the Department may from time to time consider necessary in the form requested by the Department.

 

(Source:  Amended at 47 Ill. Reg. 9271, effective June 20, 2023)

 

Section 110.20  Loan Register

 

a)         The loan register shall contain the original entry and shall be a permanent record, and shall show for every loan the account number, date of loan, amount of loan, name of obligor, nature of security by types, amount of fees, cost and type of any insurance, and amount of the note, including precomputed interest, the simple interest rate contracted for or amount of precomputed interest.

 

b)         The loan register shall be kept numerically by number of loans in order made and shall have headings for each of the items required.

 

c)         Loan Registers 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. 9271, effective June 20, 2023)

 

Section 110.30  Individual Account Records

 

a)         An individual account record shall be kept for each obligor.  Individual account records shall show the name and address of the obligor, co-makers, or sureties, loan number, date of loan, the number of payments, the amount of payments and payment due dates, nature of security by type, type and cost of insurance and name of bank if the note is hypothecated. The record for an interest-bearing loan shall show the original principal amount of the loan, rates of interest and finance charge where applicable.  The record for a precomputed loan shall show the original principal amount of the loan, excluding the precomputed interest and charges, the amount of the finance charge and the face amount of the note including the finance charge.  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.

 

b)         The record for an interest-bearing loan 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 interest deficient.

 

c)         The account record for a precomputed loan shall show the amount and date of each payment applied to the loan, the unpaid balance of the loan 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 loan 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 period.

 

d)         When a loan is prepaid in full, the account record shall show the date of prepayment, the amount paid to discharge the loan, the amount of the rebate on the finance charge, if any, and any deduction from the rebate for previously earned but uncollected delinquency, default, or deferment charges.

 

e)         When a loan is prepaid in full, the amount of any unearned insurance premium for every policy shall be recorded on the account record.

 

f)         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 security.)

 

g)         If loan receivables are sold to another person the individual account record for such receivables shall show the name of the authorized person to whom sold and the date of such sale.

 

h)         No erasures whatsoever shall be made in the payment and charge sections of any account record.  In case of error, a line shall be drawn through the improper entry and the correct entry made on the following line. The entries on the record shall correspond with the receipts given the obligor.

 

i)          Every licensee shall preserve the records of all loans, including the account record, for at least two years after making the final entry for such loan.  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. 9271, effective June 20, 2023)

 

Section 110.40  File of Original Papers

 

a)         Files

 

1)         A separate file shall be maintained for each obligor and shall contain the note, security agreement, or financing statement, wage assignment, acknowledged copy of the disclosure statement of loan, insurance certificate, a separately signed statement indicating the borrower has received a copy of right to rescind (if required), or waiver, if any, and all other evidence of indebtedness or security pertaining to the loan, except when said documents are in the custody of a court or of an agent for collection, or are hypothecated as herein provided.  Evidence of disclosure must be retained for two years from the date of the loan.  A licensee may maintain these files in any medium or format which accurately reproduces original documents or papers.

 

2)         When an obligor is also a co-maker or obligor on another loan, the file of such obligor shall be cross-referenced to the other, unless such cross-reference is included on the alphabetical record required by Section 110.60.

 

b)         All legal instruments bearing evidence of indebtedness taken in connection with a loan and executed by an obligor including the disclosure statement of loan shall bear the loan number.

 

c)         No licensee shall offer to or accept from an obligor any instruments that contain blank terms.

 

d)         All spaces or sections not used in the preparation of legal documents shall be ruled out or designated as “none”, or “n/a”.

 

e)         Any amendments to closed-end contracts shall be signed by the obligor and creditor.

 

f)         The name and address of the licensee making the loan shall appear on any note, wage assignment, security agreement or other legal instrument taken from an obligor before the proceeds of the loan are delivered.

 

(Source:  Amended at 47 Ill. Reg. 9271, effective June 20, 2023)

 

Section 110.50  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 payments on principal and interest and for fees collected from obligors for filing, recording, and releasing security agreements, financing statement for perfecting a lien on a motor vehicle, or for amounts received for any type of insurance coverage. In the case of precomputed loans, payments applied to the note may be shown as a total sum and need not be itemized between principal and precomputed charges. Additional charges collected for delinquency shall be itemized or otherwise separately indicated.

 

b)         The cash book shall show all fees paid by the licensee for filing, recording, and releasing security agreements, for financing statements or for perfecting a lien on a motor vehicle, and the actual date of payment.

 

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

 

(Source:  Amended at 47 Ill. Reg. 9271, effective June 20, 2023)

 

Section 110.60  Alphabetical Record of Co-Makers, Obligors or Guarantors

 

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

 

(Source:  Amended at 41 Ill. Reg. 12380, effective October 6, 2017)

 

Section 110.65  Permanent File

 

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

 

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

 

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

 

c)         A copy of the Act and a copy of this Part.

 

(Source:  Amended at 30 Ill. Reg. 12558, effective July 7, 2006)

 

Section 110.70  Payments

 

a)         All payments shall be credited on the account record as of the date received.  Interest charges, as provided by the Act, shall be collected only from the date the proceeds of the loan are delivered to or expended on behalf of the obligor, even though the note shall bear a prior date.

 

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 loan and the amount applied to any other charges permissible under the Act.  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 Act, and any amount of interest earned but not collected.

 

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

 

(Source:  Amended at 47 Ill. Reg. 9271, effective June 20, 2023)

 

Section 110.80  Interest-Bearing Loans

 

a)         No payment shall be accepted on the principal balance unless interest is paid to date or is agreed to by the licensee, except a payment may be credited to principal if the amount of the payment is not sufficient to pay the interest due for one day.

 

b)         A calendar month is the period from a given date in one month to the same numbered date in the following month, and if there is no same numbered date in the following month, to the last day of the following month.

 

c)         Interest shall be computed on the basis of one month's interest for each calendar month and 1/30^th of a month's interest for each day in a fraction of a month or, alternatively, 1/365^th of the agreed annual rate for each day actually elapsed.

 

d)         When an interest-bearing loan contract is refinanced, accrued but uncollected interest may be included in the principal amount of the new loan contract.

 

e)         Loans must be fully amortizing and repayable in substantially equal and consecutive weekly, biweekly, semimonthly, or monthly installments.  The first installment period shall be deemed to begin on the day that interest begins to accrue.  No charge may be made for any days between the date of the loan and the beginning of the first installment period.  Notwithstanding the foregoing, the days between the date of the loan and the commencement of the first installment period may exceed one weekly, biweekly, semimonthly, or monthly period by no more than the following:

 

1)         For weekly payments, by 4 days;

 

2)         For biweekly and semimonthly payments, by 7 days;

 

3)         For monthly payments, by 15 days.

 

(Source:  Amended at 47 Ill. Reg. 9271, effective June 20, 2023)

 

Section 110.90  Cancellation and Return of Documents

 

The contract and promissory note executed by the obligor bearing evidence of indebtedness shall be cancelled and returned to the obligor promptly following the renewal or paid in full date.  Where prior written approval has been obtained from the Division and original documents are not available, a licensee shall substitute copies reproduced from any medium or format which accurately reproduces the original documents.  On renewal, continuing security agreements may be retained until subsequent loans 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", indicating the date of payment 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. 9271, effective June 20, 2023)

 

Section 110.100  Precomputed Loans

 

a)         A standard payment schedule is one under which a precomputed loan is repayable in substantially equal and consecutive weekly, biweekly, semimonthly, or monthly installments of principal and charges combined, and the first installment is due one weekly, biweekly, semimonthly, or monthly period from the date of the note, except as provided in subsections (b)(1), (2) and (3).

 

1)         The loan contract shall be drawn to reflect a standard payment schedule with payments to be made on a weekly, biweekly, semimonthly, or monthly basis, except that the first installment period may be longer than one month by not more than 15 days.

 

2)         If a charge is made for extra days in the first installment period it may be added to the first installment payment.  The interest for such period may be increased by ¹/₃₀ of the agreed monthly rate for each extra day.  A charge for extra days in the first installment period does not change the amount of rebate required for prepayment in full on or after the first installment date.

 

3)         If the first installment period is less than one month the loan charge shall be reduced by ¹/₃₀ of the agreed monthly rate for each day that the first installment period is less than one month, and the amount of the first installment shall be reduced by the same amount.  This adjustment in the first installment period does not change the amount of rebate required for prepayment in full on or after the first installment date.

 

b)         The obligor shall have the right to prepay a precomputed loan in full on any installment due date.  When prepayment in full occurs on a date other than a scheduled installment due date, the rebate may be computed as of the next following scheduled installment due date.

 

c)         When the contract is refinanced before maturity, or judgment is obtained before maturity, the same rebate is required as for prepayment in full.

 

d)         Any required rebate of finance charge for a precomputed loan 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 the Act.  The required rebate is a fraction (or percentage) of the precomputed interest charge.  The fraction differs for each number of months that the contract is prepaid in full.

 

e)         When a precomputed interest loan contract is refinanced, accrued but uncollected interest may be included in the principal amount of the new loan contract.

 

f)         If two or more installments are delinquent on any installment date the contract balance may be reduced as of that date by the rebate that would be required for prepayment in full on that date.  Thereafter, the agreed contractual rate may be charged on the actual unpaid balances of the loan contract until the contract is fully paid.  Interest received shall be in lieu of the rebated charges and any delinquency or default charge that would otherwise accrue after the date of which the rebate was made.

 

g)         When a contract is prepaid in full, a statement or receipt shall be given to the obligor, showing the date of prepayment, the amount of the rebate, if any, and the amount paid to discharge the loan.

 

h)         Fifteen days after the expiration date of the loan contract, interest may be charged at the contractually agreed rate, not to exceed the rate permitted in Section 15 of the Act on any balance remaining unpaid.  At the time of final payment the licensee shall notify the obligor of the balance unpaid.

 

i)          Deferment for Precomputed Loans

 

1)         The maximum amount that may be charged for a one month's deferment is equal to 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 that would be required for prepayment in full as of one month prior to the due date.

 

2)         On a precomputed loan the rebate for prepayment in full after deferment interest has been charged shall be larger than the rebate that otherwise would be required.

 

3)         If a rebate is required one month or more before the deferred due date of the first deferred installment, the licensee, at its option, may make a separate rebate of deferment interest for each unexpired month of the deferment period and then rebate the standard precomputed finance charge for the number of months to the original final installment date, plus one month for each month that deferment is retained.

 

(Source:  Amended at 47 Ill. Reg. 9271, effective June 20, 2023)

 

Section 110.105  Delinquency or Default Charges

 

a)         Delinquency charges may be assessed and collected and added to the balance of the note, but interest shall not be collected on charge.

 

b)         Earned, but uncollected delinquency charges shall be recorded on the account record on the date the delinquent payment is received, if the licensee intends to collect the charges at a later date.

 

c)         A licensee shall not directly or indirectly, to levy or collect any delinquency charge on a payment, which payment is otherwise a full payment for the applicable period and is paid on its due date or within an applicable grace period when the only delinquency is attributable to late fees or delinquency charges assessed on earlier installments.

 

(Source:  Added at 47 Ill. Reg. 9271, effective June 20, 2023)

 

Section 110.110  Hypothecation at the Time of the Sale of Obligor's Notes

 

a)         A licensee may pledge, hypothecate, or sell a note made under the provisions of the Act without the prior approval of the Director provided that said transaction is with another licensee under the Act, Sales Finance Agency Act, a bank, savings bank, savings and loan association or credit union created under the laws of this State or the United States and that the following conditions are satisfied:

 

1)         the licensee notifies the Division in writing within ten days of the transaction indicating the name of the purchaser/pledgee, location where the related notes can be examined, and that the licensee shall be responsible for all examination costs.

 

2)         the licensee will provide the Division with an executed agreement entered into by the licensee and the purchaser/pledgee authorizing the Director to conduct an examination of these notes.

 

b)         All pledges, hypothecations, or sales to entities other than those listed in subsection (a) require the prior approval of the Director after submission of documents required in subsection (a).

 

c)         Each instrument hypothecated must bear the following endorsement:

 

"This instrument is non-negotiable in form but may be pledged as collateral security.  If so pledged, any payment made to the payee, either of principal or of interest, 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 payee named herein; and the pledgee holding this instrument as collateral security hereby makes said payee its agent to accept and receive payments hereon, either of principal or of interest."

 

d)         The licensee shall keep in the licensed office a record or list of all account records of all loans sold to another affiliated or non-affiliated licensee at the time of the sale.  The account shall be maintained in such file until examined and released by the examiner.  This record or list shall indicate the date of transaction, account name and number, and the names of the other buyer in the transaction.

 

(Source:  Amended at 47 Ill. Reg. 9271, effective June 20, 2023)

 

Section 110.120  Legal Forms

 

a)         Submission to the Division

 

1)         All forms of notes, security agreements or assignments of wages or other forms used in connection with the making of loans shall be submitted to the Division prior to the conduct of the business in the licensed location; provided, however, where the licensee or affiliate is engaged in the same business and licensed by this Division, the use of forms in the new location identical to those being used in the existing location shall not require filing.  Notice of intent to use identical forms (change of name excepted) should be provided the Division by the licensee.

 

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

 

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

 

b)         Standard forms approved by the Division shall be used in the following cases:

 

1)         Application for original license.

 

2)         Application for annual renewal of license.

 

3)         Change of location.

 

4)         Annual Report.

 

5)         Appointment of attorney-in-fact for service of process.

 

6)         Bond.

 

(Source:  Amended at 47 Ill. Reg. 9271, effective June 20, 2023)

 

Section 110.130  Judgments

 

a)         When a note has been reduced to judgment, the face of the account record, in physical or digital form, shall show the amount and date of the judgment.  When judgment is taken on a precomputed loan before maturity, the same rebate of interest 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 applicable federal and State law.  No higher rate of interest or charge shall be assessed or accepted.

 

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

 

1)         Date of judgment.

 

2)         Copy of the judgment.

 

3)         Date suit was filed.

 

4)         Amount of the judgment.

 

5)         The amount of principal and the amount of interest for which judgment is taken.

 

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

 

d)         Court costs charged to the obligor shall 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 or 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 Division's request.

 

(Source:  Amended at 47 Ill. Reg. 9271, effective June 20, 2023)

 

Section 110.140  Sale of Security

 

The following regulations shall be observed in the sale of security:

 

a)         The account record shall give the following information:

 

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

 

2)         Public or private sale and date sold.

 

3)         When part or all of the security is sold, the fact must be noted on the account record.

 

4)         All credits from proceeds of the sale must be properly identified (whether by sale of security, etc.).

 

b)         The files of the licensee shall contain:

 

1)         Evidence of compliance by licensee with all applicable provisions of the Uniform Commercial Code 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.

 

2)         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.

 

3)         Signed receipts from the purchasers or auctioneer describing the collateral purchased, showing the amount paid for same, and, if a private sale, copies of any competitive bids.

 

4)         Copy of 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 collateral, itemization of the costs of sale, and any surplus or deficiency balance due on the account.

 

5)         A report of condition of the collateral at the time of retaking.

 

c)         No waiver of the provisions of the Uniform Commercial Code safeguarding the rights of the obligor shall be accepted by a licensee prior to default.

 

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

 

e)         In connection with the sale of collateral given as security for loans after default, the licensee shall make only such charges for expense incurred as are permitted by the applicable provision of the Uniform Commercial code which charges must be reasonable, taking into consideration the nature of the collateral, the circumstances surrounding the sale, the fair market value of the collateral and the amount of the indebtedness.  Such charges must be substantiated by paid receipts.

 

(Source:  Amended at 47 Ill. Reg. 9271, effective June 20, 2023)

 

Section 110.150  Trouble File (Repealed)

 

(Source:  Repealed at 47 Ill. Reg. 9271, effective June 20, 2023)

 

Section 110.155  Schedule of Fines

 

a)         The Department may assess fines on any licensee or unlicensed person or entity that violates, through any act or omission, any provision of the Act or this Part, and shall determine the amount of the fine pursuant to this Section:

 

1)         Fine Schedule:

 

Tier	Conduct	Fine Amount
Tier 1	For each identified act or omission related to information disclosure, information reporting, advertising, document maintenance, or other similar statutory and regulatory requirements.	A fine not to exceed $1,000 per violation except as provided for in Tier 3.
Tier 2	For each identified act or omission related to the terms of a loan, additional fees, costs, or charges, ancillary products, security interests, underwriting, servicing, collection or any other act or omission not expressly covered by Tiers 1 or 3.	A fine not to exceed $5,000 per violation except as provided for in Tier 3.
Tier 3	Any action or omission that is an intentional or reckless violation of the Act regardless of type.	A fine not to exceed $10,000 per violation.

 

2)         In determining the amount of any fine assessed under subsection (a)(1), the Department will take into account the totality of the circumstances, including, but not limited to:

 

A)        Proactive consumer remediation provided by the licensee or unlicensed person or entity to address harm caused by the act or omission;

 

B)        Frequency or pervasiveness of the act or omission;

 

C)        Adequacy of compliance policies, procedures, and practices to avoid recurrence of the act or omission and/or agreement to alter compliance policies, procedures, and practices to avoid recurrence of the act or omission in the future;

 

D)        History of compliant or non-compliant behavior, including past legal violations;

 

E)        Cooperation with the Department in its regulatory and examination activities; and

 

F)         Any other remedial measures the licensee or unlicensed person or entity has undertaken or has agreed to undertake in the future.

 

b)         Nothing in this Section shall be construed as limiting the Department’s investigative powers or remedies under the Act, including, but not limited to, fines, suspension or revocation under Section 9 of the Act, cease and desist orders under Section 20.5 of the Act, and injunctive relief under Section 24.5 of the Act.

 

c)         In accordance with Section 1 of the Act, the Department will follow the procedures established under Section 9 of the Act for unlicensed violators of the Act and this Part.

 

(Source:  Added at 47 Ill. Reg. 9271, effective June 20, 2023)

 

Section 110.160  Lien Charges

 

a)         All official fees paid for the purpose of perfecting or releasing a security interest in property given as collateral for a loan may be collected by a licensee from the obligor.

 

b)         As a prerequisite for a loan, the licensee may require the prospective obligor to provide evidence of ownership and condition of title.

 

(Source:  Amended at 30 Ill. Reg. 12558, effective July 7, 2006)

 

Section 110.170  Insurance and Other Products

 

a)         Licensees may provide insurances to the obligor provided the obligor has indicated in a specific, dated and separately signed statement that the obligor desires the insurance coverage.  The purchase of any policy of insurance from or through the licensee shall not be a condition precedent to a loan.  The insurance shall comply with the Illinois Insurance Code and all lawful requirements of the Director of the Department of Insurance related to that insurance.

 

b)         The licensee may provide joint credit life or joint credit accident and health insurance if both insureds are obligated for the loan; however, this coverage shall not be a requirement precedent to the extension of credit.

 

c)         When a loan is prepaid in full, the obligor shall receive a refund of the insurance charges.  When the refund of any insurance premium is less than $1.00, no refund is required.

 

d)         It shall be the licensee's responsibility to explain clearly to the obligor the benefits and limitations of any insurance requested in connection with any loan or loan extensions.

 

e)         The licensee shall also deliver or cause to be delivered to the obligor a copy of the policy, or policies, certificate, or other evidence at the time the loan is made, and all obligors shall sign and receive a copy of a separate agreement clearly and conspicuously disclosing the limits of coverage.

 

f)         No obligor shall be required to purchase any policy of insurance from any certain company, agent, broker, or person as a condition precedent to a loan.  No licensee shall decline new or existing insurance that is approved by the Director of the Department of Insurance or prevent any obligor from obtaining the insurance from any other source.

 

g)         When the loan is made, the insurance charges shall be computed for no more than the term of the loan contract on an amount that does not exceed the total amount required to pay the combined total of principal and interest charges.

 

h)         The obligor's estate shall be paid the amount due between the unpaid balance and the insurance benefit paid. Evidence of this payment shall be maintained by the licensee.

 

i)          In the case of a precomputed contract, the amount of the net unpaid balance shall be the unpaid balance of the note less any required rebate for prepayment in full on the date of the borrower's death, plus accrued but unpaid delinquency charges.  In the case of an interest-bearing contract, the amount of the net unpaid balance shall be the principal balance plus accrued interest to the date of the borrower's death.

 

j)          Account records shall indicate the date of death and the refunds of interest or loan charges and unearned insurance premiums paid to the estate.  The refund check or voucher shall be available on demand.

 

k)         Insurance against loss or damage to real or personal property given as security for a loan or liability arising out of ownership may be required of an obligor.

 

l)          Property insurance provided by a licensee shall be consistent with the amount and term of the loan and shall not extend beyond the maturity of the loan unless the loan is delinquent when it may be extended 30 days beyond the original expiration date without charge to the obligor.

 

m)        Upon cancellation of the loan by prepayment or refinancing, the obligor shall be entitled to a refund not less than the unearned insurance premium in any amount exceeding $1.00.

 

n)         The licensee or affiliate may receive compensation for the sale of any insurance or debt cancellation contract or other such product purchased pursuant to the loan made or held by the licensee, provided the licensee discloses to the obligor that either the licensee or an affiliate may receive something of value in connection with the purchase by the obligor.  This must be prominently disclosed in the loan contract.

 

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

 

p)         If the Director has authorized a licensee to offer debt cancellation products, when a loan is prepaid in full, cancelled, renewed, refinanced, or reduced to judgment prior to maturity, the obligor shall be entitled to a refund of any unearned debt cancellation premium, calculated by the actuarial method.

 

(Source:  Amended at 47 Ill. Reg. 9271, effective June 20, 2023)

 

Section 110.180  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 entered into shall be payable.

 

a)         Except as provided in subsection (c), or otherwise authorized by the Division, each licensed office shall be open not less 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 Division a schedule of the hours during which it elects to keep such office open, provided that any licensee may keep its office open for any period it sees fit in addition to the hours listed in such schedule.

 

b)         Whenever a licensee desires to change the schedule of hours during which its office shall remain open then on file with the Division, it may do so upon filing with the Division a schedule setting forth such change of time at least three days before such change shall go into effect. The schedule of hours shall be prominently displayed in the place of business of the licensee.

 

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

 

d)         The license of each licensee and the Annual License Fee Renewal Certificate shall be prominently displayed and be made available for easy reading by the public in the place of business and website of the licensee.

 

(Source:  Amended at 47 Ill. Reg. 9271, effective June 20, 2023)

 

Section 110.190  Advertising

 

a)         Licensees shall not advertise "No co-makers required", "No endorsers required", "Signature only" loans, "Loans made on your plain note" or the like, unless the loans constitute at least 50% of all loans made by the licensee.

 

b)         Licensees shall not make reference, in any form of advertising such as newspapers, circulars, letters, radio, or other media, to "Low rates", or "Lower rates", or "Lowest rates", or "Lowest cost", or indicate by direct or indirect means through such expression as "Low cost", "Lower cost", or "Easier to repay", or by any device that the charges for a loan are low.

 

c)         Licensees may advertise "New reduced rates" or "Reduced rates", or similar phrases for not more than 60 days after the effective date of the reduction in rates.

 

d)         Upon specific request by the Division, licensees shall forward to the Supervisor of the Consumer Credit Section the complete text of all advertising copy, whether printed or broadcast, for which questions have been raised concerning compliance with the Act.

 

e)         A licensee may indicate in advertising and otherwise that its business is "regulated" or "examined" or "supervised" or "licensed" by the State of Illinois.  A licensee may not advertise in a false, misleading, or deceptive manner or imply or indicate that the rates or charges for loans made are "approved", "set" or "established" by the State government. [205 ILCS 670/18]

 

f)         Should any advertisement by a licensee state the amount of any installment payment, dollar amount of any finance charge or number of installments, or period of repayment, the advertisement shall comply with the provisions of the federal Consumer Credit Protection Act (15 U.S.C. 41 et seq.) and the regulations applicable to that Act.

 

g)         Any statement of the payment schedule for a loan in an advertisement must show the proceeds of the loan exclusive of the finance charge and indicate the number and amount of the weekly, biweekly, semimonthly, or monthly installments required to pay the loan contract.  The total of the installments must be sufficient to pay the total of the proceeds and finance charge for the loan according to the payment schedule.  When a payment schedule is used, it must disclose the Annual Percentage Rate for each amount of loan advertised, using that term.

 

h)         If the advertisement includes an offer of insurance, the advertisement must disclose the type of insurance offered and whether or not the installments include the cost of the insurance.

 

i)          The licensee shall not advertise the conduct of business other than at the license location or other location approved by the Director.

 

j)          On a finding that an advertisement is false, misleading, or deceptive, the Director may issue a cease and desist order and may issue an order imposing a fine, suspension, or revocation.

 

(Source:  Amended at 47 Ill. Reg. 9271, effective June 20, 2023)

 

Section 110.200  Business Practices

 

a)         Unless otherwise authorized by the Act, no other business may be conducted at the licensed location unless authorized in writing by the Director.  The Director’s authorization to conduct other businesses at the licensed location shall be referred to as an Other Business Authorization.  The Director's authorization will be predicated upon the licensee's agreeing to the following:

 

1)         That the authorization will not conceal nor facilitate concealment of an evasion of the Act;

 

2)         To comply with any State or federal statute or regulation;

 

3)         To obtain any license or registration required by a federal, State, or local government agency to engage in the other business authorized;

 

4)         That the Division may examine all records and investigate any or all transactions of the licensee;

 

5)         The Director retains the right, upon notice and opportunity to be heard, to alter, amend or revoke an Other Business Authorization;

 

6)         That, if any federal or State statute or regulation enacted after the authorization prohibits the activity, the authorization shall become null and void immediately;

 

7)         At the time of making the request for the authorization, the licensee shall pay to the Director a nonrefundable Other Business Authorization Request fee of $300;

 

8)         At the time of renewing the annual license, the licensee shall pay to the Director the sum of $100 as a renewal fee for each Other Business Authorization.  Regardless of the number of licensed locations, only one fee per Other Business Authorization is required to be remitted.

 

b)         No person who is an obligor of a licensee may become a surety or co-maker for one or more obligors of the same licensee, if the obligor’s aggregate direct or contingent liability is in excess of maximum principal amounts specified in Section 15 of the Act.

 

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

 

d)         No penalty charge other than provided by the Act or this Part shall be imposed by the licensee in the event of prepayment of the principal of the obligation, in whole or in part.

 

e)         Loans secured by real estate made under the Act shall disclose on the face of the contract that the loan is being made pursuant to the Consumer Installment Loan Act.

 

(Source:  Amended at 47 Ill. Reg. 9271, effective June 20, 2023)

 

Section 110.210  Examinations

 

a)         The Division may examine all records and investigate any or all transactions in the office of the licensee and shall charge the licensee $1,200 for each examiner day or portion of an examiner day.

 

b)         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 that is regulated or licensed by the Division.  A separate charge shall be made for each examiner day or portion of an examiner day.

 

c)         The Division may conduct an examination for the purpose of verifying that the licensee has taken necessary actions to correct violations of the Act and/or this Part and shall charge the licensee $1,500 for each examiner day or portion of an examiner day.

 

(Source:  Amended at 47 Ill. Reg. 9271, effective June 20, 2023)

 

Section 110.215  Remittances

 

a)         Licensees shall forward all remittances to the Division, at any address designated by the Director.

 

b)         All fees and charges shall be remitted in the form deemed acceptable by the Department.

 

(Source:  Repealed at 46 Ill. Reg. 6519, effective August 1, 2022; added at 47 Ill. Reg. 9271, effective June 20, 2023)

 

Section 110.216  Small Consumer Loans; Charges Permitted (Repealed)

 

(Source:  Repealed at 46 Ill. Reg. 6519, effective August 1, 2022)

 

Section 110.220  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 violence or physical harm to an obligor, their family or their property;

 

b)         Threatening arrest or criminal prosecution when no basis for that action lawfully exists;

 

c)         Threatening the seizure, attachment, and sale of an obligor's property when that 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 the 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 is given 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 their 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 their family;

 

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

 

i)          Disclosing or threatening to disclose information concerning the existence of a debt 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 that 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 that addition.

 

(Source:  Amended at 47 Ill. Reg. 9271, effective June 20, 2023)

 

Section 110.225  Verification of Amount Owing

 

Upon written request by either the obligor or the obligor's appointed designee to obtain the amount owing to satisfy the loan in full, the licensee shall provide the following information in a form agreed to in the loan contract no later than 3 business days after receiving the request:

 

a)         Net amount owing as of the date of response;

 

b)         For interest-bearing loans, the per diem interest that will accrue for every day after the response;

 

c)         For precomputed loans, the date that the amount owing, as stated in the response, will expire.

 

(Source:  Amended at 47 Ill. Reg. 9271, effective June 20, 2023)

 

Section 110.230  Wage Assignments

 

a)         A wage assignment may only be taken from any employed obligor.  An "obligor", as the word is used in this Part, includes co-makers or sureties as well as the person actually receiving the money.  Any wage assignment must comply with all applicable federal and State law.

 

b)         Any loan that is a transaction in which the licensee accepts a wage assignment must meet the requirements of this Act, the requirements of the Illinois Wage Assignment Act, and the requirements of 16 C.F.R. 444.2(a)(3)(i)(2003) (no subsequent amendments or editions are included).  A violation of this Section constitutes a material violation of the Consumer Installment Loan Act.

 

(Source:  Amended at 47 Ill. Reg. 9271, effective June 20, 2023)

 

Section 110.235  Relocation

 

a)         Whenever a licensee desires to change the licensed place of business to a location other than that set forth in the license and the proposed site is 15 miles or less from the current location, the licensee shall provide the Director with the following at least ten days prior to the relocation in the format prescribed by the Director:

 

1)         A written notice providing the complete address of the new location;

 

2)         Photographs of both the exterior and interior of the new location;

 

3)         A written sworn statement that the new location will not share the premises with that of another business and the exact distance in miles between the existing location and new location; and

 

4)         A relocation fee of $500.

 

b)         A relocation in excess of 15 miles requires the prior approval of the Director in addition to the information required in subsection (a).

 

(Source:  Amended at 47 Ill. Reg. 9271, effective June 20, 2023)

 

Section 110.236  Name Change

 

Whenever the licensee desires to amend the name of the licensed business, the licensee shall submit to the Division, within 15 days after amending the name, the following in the format prescribed by the Director:

 

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:  Amended at 47 Ill. Reg. 9271, effective June 20, 2023)

 

Section 110.240  Hearing Procedures

 

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

 

(Source:  Amended at 46 Ill. Reg. 17939, effective October 27, 2022)

 

Section 110.250  Limited Purpose Branch

 

A licensee applying for a limited purpose branch shall submit to the Division the following:

 

a)         A written application in the form prescribed by the Director.

 

b)         Fee as prescribed by the Act.

 

c)         Photograph of proposed site and a description of the location, including any other business conducted there.

 

d)         Written statements:

 

1)         that no other activity shall be conducted at the site, including, but not limited to, accepting payments, servicing the accounts, or collections; and

 

2)         that the proposed site shall not be within 1,000 feet of a facility operated by an inter-track wagering licensee or an organization licensee subject to the Illinois Horse Racing Act of 1975, or casino or riverboat subject to the Illinois Gambling Act, or within 1,000 feet of the location at which the riverboat docks.

 

e)         Any additional information that the Director may require.

 

(Source:  Amended at 47 Ill. Reg. 9271, effective June 20, 2023)

 

Section 110.260  Off-Site Records

 

With the Director's prior written approval, the licensee may retain records at a location other than the licensed location.  The licensee shall make a written request that shall include the following:

 

a)         Address of off-site location.

 

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

 

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

 

d)         At the Director's discretion, the examination may be conducted at either the licensed location or the off-site location.

 

e)         The licensee shall pay for all examination expenses in accordance with Section 10 of the Act.

 

(Source:  Amended at 47 Ill. Reg. 9271, effective June 20, 2023)

 

Section 110.265  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 Division;

 

e)         A statement that the licensee will pay all examination expenses in accordance with Section 10 of the Act;

 

f)         Written consent of servicer for the Division to conduct its examination; and

 

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

 

(Source:  Amended at 47 Ill. Reg. 9271, effective June 20, 2023)

 

Section 110.270  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 9 of the Act, the Director may issue orders reasonably necessary to correct, eliminate or remedy the situation. (Section 20.5 of the Act)

 

(Source:  Amended at 47 Ill. Reg. 9271, effective June 20, 2023)

 

Section 110.280  Gross Monthly Income Verification − Official Documentation (Repealed)

 

(Source:  Repealed at 47 Ill. Reg. 9271, effective June 20, 2023)

 

Section 110.290  Consumer Service

 

a)         For the purposes of this Part, "certified database" or "database" means the consumer reporting service database established pursuant to the Payday Loan Reform Act [815 ILCS 122].

 

b)         The Division shall approve a database as a method of reporting loans as required by Section 17.5 of the Act and by the Payday Loan Reform Act.  Upon approving a database, the Department shall provide reasonable notice to all lenders identifying the approved database.

 

c)         Except as otherwise provided in this Section, all personally identifiable information regarding any prospective obligor or obligor obtained by way of the approved database and maintained by the Department is strictly confidential and shall be exempt from disclosure under Section 7(1)(c) of the Freedom of Information Act [5 ILCS 140].

 

d)         The certified database shall comply with all requirements of the Payday Loan Reform Act and associated Payday Loan Reform Act rules (38 Ill. Adm. Code 210) and all requirements of the Consumer Installment Loan Act.

 

e)         A lender may rely on the information contained in the approved database as accurate and is not subject to any administrative penalty or liability as a result of relying on inaccurate information contained in the database.

 

f)         The database provider shall meet all qualifications outlined in the Payday Loan Reform Act.

 

g)         The surety bond required by 815 ILCS 122/2-17 shall also secure the faithful performance of the database’s obligations under the Consumer Installment Loan Act.

 

h)         For any loan other than a title-secured loan the licensee shall enter the following information into the certified database within 90 days after the loan is made:

 

1)         Obligor's Social Security Number, Alien Identification Number, or other official identification number, as approved by the USA Patriot Act rules and regulations (see 31 CFR 1020.220(a)(2)(i)(A)(4)(ii)), issued by a foreign government or government in the United States;

 

2)         Principal amount of the loan;

 

3)         Total of payments;

 

4)         Whether the loan is precomputed or interest-bearing;

 

5)         Maturity date of the loan;

 

6)         Date of the loan;

 

7)         Number and amount of scheduled payments;

 

8)         Zip code of obligor and any co-maker;

 

9)         Security taken;

 

10)         APR;

 

11)         PLPA APR;

 

12)         Whether the loan pays off any prior loan; and

 

13)         Any additional information the Director may require.

 

i)          The licensee shall update the certified database within 90 days if any of the following events occur:

 

1)         Missed payment;

 

2)         Late payment fee charged;

 

3)         Licensee accelerates the loan or otherwise deems the loan immediately due in full;

 

4)         Paying the loan in full;

 

5)         Closing of the loan;

 

6)         Writing off the loan;

 

7)         Involuntary repossession of any security;

 

8)         Voluntary surrender of any security;

 

9)         Sale of any security;

 

10)        Return of any security to consumer; or

 

11)        Any other event as the Director may require.

 

j)          The certified database provider shall indemnify the licensee against all claims and actions arising from illegal or willful or wanton acts on the part of the certified database provider.  The certified database provider may charge a fee not to exceed $1 for each loan entered into the certified database under subsection (b).  The database provider shall not charge any additional fees or charges to the licensee.

 

k)         A licensee who submits information to a certified database provider in accordance with this Section shall not be liable to any person for any subsequent release or disclosure of that information by the certified database provider, the Department, or any other person acquiring possession of the information, regardless of whether the subsequent release or disclosure was lawful, authorized, or intentional.

 

l)          To the extent the certified database becomes unavailable to a licensee as a result of some event or events outside the control of the licensee including, but not limited to, unavailability due to the certified database being unable to accept information from the licensee or the certified database is decertified, the requirements of this Section and Section 17.5 of the Act shall not be enforceable by the Department until such time as the certified database becomes available.

 

(Source:  Amended at 47 Ill. Reg. 9271, effective June 20, 2023)

SUBPART B: TITLE-SECURED LENDING

 

Section 110.300  Definitions

 

"Motor vehicle" shall mean a motor vehicle as defined in the Illinois Vehicle Code [625 ILCS 5/1-146].

 

"Title-secured lender" shall mean any licensee engaged in making any title-secured loans.

 

"Title-secured loan" shall mean a loan made pursuant to the Act and in which at commencement, an obligor provides to the licensee, as security for the loan, physical possession of the obligor's title to a motor vehicle.  "Title-secured loan" means only a loan secured by a motor vehicle title which a consumer has possessed (physically or the electronic equivalent) at any time prior to the making of the loan, free and clear of any lienholder.  "Title-secured loan" does not include:

 

Any loan or credit transaction that is expressly intended to finance the purchase of motor vehicle or other item.

 

Any loan or credit transaction that is expressly intended to re-finance a transaction which financed the purchase of a motor vehicle or other item.

 

"Title-secured loan" includes loan or credit transactions that include motor vehicle title as a security and is intended to refinance a prior title-secured loan.  A licensee may rely on a consumer’s signed representation or certification that the motor vehicle title provided has never been held by the consumer free and clear. The certification that the motor vehicle title has never been held free and clear must include:

 

Date

 

State

 

City

 

Loan Number

 

Year and Make of Vehicle

 

Model of Vehicle

 

VIN

 

Certification from the consumer that:

 

The consumer has pledged to Lender the above Motor Vehicle as security for the requested loan; and

 

The consumer has never held the title to the above Motor Vehicle free and clear of any lienholder.

 

Signed acknowledgement that the consumer agrees that Lender will rely on the above certifications in connection with the requested loan. 

 

(Source:  Amended at 47 Ill. Reg. 9271, effective June 20, 2023)

 

Section 110.310  Applicability of Rule

 

This Subpart B, as well as Subpart A, shall apply to any title-secured lender as defined in Section 110.300 of this Part.

 

(Source:  Amended at 33 Ill. Reg. 4142_____, effective__________)

 

Section 110.320  Application for License (Repealed)

 

(Source:  Repealed at 45 Ill. Reg. 6519, effective August 1, 2022)

 

Section 110.330  Renewal of License (Repealed)

 

(Source:  Repealed at 45 Ill. Reg. 6519, effective August 1, 2022)

 

Section 110.340  Loan Terms

 

a)         Beginning August 1, 2023, any required rebate of finance charge for a precomputed title-secured loan 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 C.F.R. 226).  The required rebate shall not be calculated using the Rule of 78s.

 

b)         Title-secured loans must be fully amortized and repayable in substantially equal installments.

 

(Source:  Amended at 47 Ill. Reg. 9271, effective June 20, 2023)

 

Section 110.350  Release of Lien

 

a)         A title-secured lender must immediately take into possession the registered electronic or physical title evidencing the obligor's ownership in the motor vehicle and shall note on the face of the loan agreement the vehicle's make, model, year of manufacture and vehicle identification number.

 

b)         Within 24 hours after payment in full of the amount due under the agreement, the licensee must move to release any filed or recorded liens, provide evidence of the release of lien to the obligor, and return the title to the obligor or cause the title to be returned to the obligor.  If payment has been made by a personal or business check, the licensee may delay the release of lien or return of title by 5 business days for the purpose of confirming availability of funds.

 

(Source:  Amended at 47 Ill. Reg. 9271, effective June 20, 2023)

 

Section 110.360  Availability of Debt Management Services

 

a)         Before entering into a title-secured loan agreement, licensee must give to the obligor a pamphlet, approved by the Director, describing the availability of debt management services and the obligor's rights and responsibilities in the transaction.

 

b)         Each title-secured loan agreement and refinancing agreement executed by a licensee shall include a statement, which shall be initialed by the obligor, as follows: "I have received from (name of lender) a toll free number from the Department of Financial and Professional Regulation-Division Financial Institutions that I can call for information regarding debt management services."

 

c)         At the time a title-secured lender conveys any written notice to an obligor indicating the obligor is in arrears or that the obligor is in default, the lender shall include with the notice a statement indicating a toll free number of the Division that the obligor may contact for the purpose of the obligor receiving information from the Division regarding debt management services.  The form and method of providing the information shall be subject to approval of the Division.

 

(Source:  Amended at 33 Ill. Reg. 4142, effective April 1, 2009)

 

Section 110.370  Lending Limits and Refinancing

 

a)         No title-secured loan shall be made in an amount that the scheduled principal and interest payment for any one monthly payment on the loan exceeds 22.5% of the obligor's gross monthly income.

 

b)         The loan agreement shall advise the obligor that matters involving improprieties in the making of the loan or in loan collection practices may be referred to the Division and shall prominently disclose the Division's address and telephone number, and website.

 

(Source:  Amended at 47 Ill. Reg. 9271, effective June 20, 2023)

 

Section 110.380  Second Notice

 

At the time a title-secured lender conveys a second notice to an obligor indicating the obligor is in arrears or any notice that the obligor is in default for a debt issued by the lender under the Act, the licensee shall include with the notice a statement indicating a telephone number of the Division that the obligor may contact for the purpose of the obligor receiving information from the Division regarding debt management services for assisting the obligor.  The form and method of the notice provided by lenders shall be subject to approval by the Director.

 

(Source:  Amended at 33 Ill. Reg. 4142, effective April 1, 2009)

 

Section 110.390  Possession of Vehicle

 

a)         Unless otherwise provided for in the loan agreement, a lender shall not take or retain possession of the keys (or a copy of the keys) to a motor vehicle used to secure a title-secured loan.

 

b)         No title-secured lender may take possession of a vehicle without first giving a minimum of 72 hours notice to the obligor, unless expressly prohibited by other law; affording the obligor the opportunity to make the vehicle available to the lender at a place, date, and time reasonably convenient to the lender and obligor; and permitting the obligor to remove any personal belongings from the vehicle without charge or additional cost to the obligor.  Notice may be provided to an obligor in any form agreed to by an obligor for general loan communications, so long as the licensee reasonably believes the notice will provide the obligor adequate opportunity to act upon their rights under this subsection (b).

 

c)         Possession measures shall be in accordance with Section 19.1 of the Consumer Installment Loan Act.

 

d)         No title-secured lender may take possession of a motor vehicle for a loan default or delinquency and lease the vehicle back to the obligor.

 

(Source:  Amended at 47 Ill. Reg. 9271, effective June 20, 2023)

 

Section 110.400  Loan Proceeds

 

A lender must issue the proceeds of a title-secured loan in the form of a check drawn on the licensee's bank account, in cash, by electric fund transfer or by money order.  When the proceeds are issued in the form of a check drawn on the lender's bank account or by money order, the lender may not charge a fee for cashing the check or money order if cashing service is offered at the location. When the proceeds are issued in cash, the lender must provide the obligor with a written verification of the cash transaction and shall maintain a record of the transaction.

 

(Source:  Amended at 47 Ill. Reg. 9271, effective June 20, 2023)

 

Section 110.410  Security Interest

 

a)         A title-secured lender shall not take a security interest in any of the obligor's property other than the obligor's motor vehicle title, as tendered to the lender at the time of the making of the loan.  

 

b)         Notwithstanding subsection (a), a title-secured lender may accept an agreement for repayment by preauthorized electronic transfers but may not condition an extension of credit on repayment by preauthorized electronic transfer.

 

(Source:  Amended at 47 Ill. Reg. 9271, effective June 20, 2023)

 

Section 110.420  Approved Database

 

a)         Lender Input into Database

 

1)         Within 90 days after a title-secured loan is made, the lender shall enter into the approved database the following information:

 

A)        Obligor's Social Security Number, Alien Identification Number, or other official identification number, as approved by the USA Patriot Act rules and regulations (see 31 CFR 1020.220(a)(2)(i)(A)(4)(ii)), issued by a foreign government or government in the United States;

 

B)        Principal amount of the loan;

 

C)        Total of payments;

 

D)        Term of the loan and the maturity date of the loan;

 

E)        Date the loan was executed;

 

F)         Scheduled number and amount of payments;

 

G)        Zip code of obligor and any co-maker;

 

H)        Any security taken;

 

I)         APR;

 

J)         PLPA APR;

 

K)        Vehicle identification number of security;

 

L)        Whether the loan pays off any prior loan;

 

M)       Whether the loan is interest-bearing or precomputed; and

 

N)        Any additional information the Director may require.

 

2)         The lender shall update the approved database within 90 days if any of the following events occur:

 

A)        Paying the loan in full;

 

B)        Return of any security;

 

C)        Closing the loan;

 

D)        Writing off the loan;

 

E)        Missed payment;

 

F)         Late payment fee charged;

 

G)        Voluntary surrender of any security;

 

H)        Involuntary repossession of any security;

 

I)         Sale of any security;

 

J)         Licensee accelerates the loan or otherwise deems the loan immediately due in full; or

 

K)        Any other transaction the Director may require.

 

b)         All personally identifiable information regarding any consumer obtained by way of the certified database and maintained by the Department is strictly confidential and shall be exempt from disclosure under Section 7(1)(c) of the Freedom of Information Act.

 

(Source:  Amended at 47 Ill. Reg. 9271, effective June 20, 2023)

 

Section 110.430  Gross Monthly Income Verification

 

a)         Prior to making a title-secured loan, the lender must obtain from the obligor one or more of the following types of documentation to verify the gross monthly income of the obligor as required by Section 110.370(a).

 

1)         A copy of the prospective obligor's most recent official pay stub or official payroll receipt;

 

2)         A copy of the prospective obligor's most recent W2 or tax return, along with reasonable evidence that the prospective obligor has access to the same income in the 30 days before the origination date of the loan;

 

3)         Signed and verifiable documentation prepared by the provider of the income, dated no more than 30 days before the origination date of the loan;

 

4)         A contract that provides for funds to have been paid to the prospective obligor within the 30 days prior to the origination date of the loan, and documentation reflecting that the funds have actually been paid;

 

5)         A copy of the prospective obligor's most recent official receipt documenting payment of government or pension benefits to the obligor for the benefit of the obligor; or

 

6)         A commercially reasonable method of income verification not prohibited, in writing, by the Department. A licensee may only use the commercially reasonable method of income verification for purposes of verifying an obligor’s gross monthly income or underwriting the loan requested.

 

b)         A licensee may not use information collected in the process of income verification for any other purpose, including, but not limited to, marketing.

 

(Source:  Amended at 46 Ill. Reg. 6519, effective August 1, 2022)

SUBPART C: MORTGAGE LENDING

 

Section 110.500  Definitions (Repealed)

 

(Source:  Repealed at 30 Ill. Reg. 12558, effective July 7, 2006)

 

Section 110.505  Applicability of Rule (Repealed)

 

(Source:  Repealed at 30 Ill. Reg. 12558, effective July 7, 2006)

 

Section 110.510  Good Faith Requirements (Repealed)

 

(Source:  Repealed at 30 Ill. Reg. 12558, effective July 7, 2006)

 

Section 110.515  Fraudulent or Deceptive Practices (Repealed)

 

(Source:  Repealed at 30 Ill. Reg. 12558, effective July 7, 2006)

 

Section 110.520  Prohibited Refinances (Repealed)

 

(Source:  Repealed at 30 Ill. Reg. 12558, effective July 7, 2006)

 

Section 110.525  Negative Amortization (Repealed)

 

(Source:  Repealed at 30 Ill. Reg. 12558, effective July 7, 2006)

 

Section 110.530  Negative Equity  (Repealed)

 

(Source:  Repealed at 30 Ill. Reg. 12558, effective July 7, 2006)

 

Section 110.535  Balloon Payments (Repealed)

 

(Source:  Repealed at 30 Ill. Reg. 12558, effective July 7, 2006)

 

Section 110.540  Financing of Certain Points and Fees (Repealed)

 

(Source:  Repealed at 30 Ill. Reg. 12558, effective July 7, 2006)

 

Section 110.545  Financing of Single Premium Insurance Products (Repealed)

 

(Source:  Repealed at 30 Ill. Reg. 12558, effective July 7, 2006)

 

Section 110.550  Lending Without Due Regard to Ability to Repay (Repealed)

 

(Source:  Repealed at 30 Ill. Reg. 12558, effective July 7, 2006)

 

Section 110.555  Verification of Ability to Repay (Repealed)

 

(Source:  Repealed at 30 Ill. Reg. 12558, effective July 7, 2006)

 

Section 110.560  Payments to Contractors (Repealed)

 

(Source:  Repealed at 30 Ill. Reg. 12558, effective July 7, 2006)

 

Section 110.565  Counseling Prior to Perfecting Foreclosure (Repealed)

 

(Source:  Repealed at 30 Ill. Reg. 12558, effective July 7, 2006)

 

Section 110.570  Mortgage Awareness Program (Repealed)

 

(Source:  Repealed at 30 Ill. Reg. 12558, effective July 7, 2006)

 

Section 110.575  Offer of Mortgage Awareness Program (Repealed)

 

(Source:  Repealed at 30 Ill. Reg. 12558, effective July 7, 2006)

 

Section 110.580  Third Party Review (Repealed)

 

(Source:  Repealed at 30 Ill. Reg. 12558, effective July 7, 2006)







Section 110.APPENDIX A   Estimated Monthly Income and Expenses Worksheet (Repealed)

 

(Source:  Repealed at 30 Ill. Reg. 12558, effective July 7, 2006)




Section 110.APPENDIX B   Mortgage Ratio Worksheet (Repealed)

 

(Source:  Repealed at 30 Ill. Reg. 12558, effective July 7, 2006)




 

 

Section 110.APPENDIX C   Disclosure of 36% Rate Cap   

 

DISCLOSURE OF 36% RATE CAP

 

A lender shall not contract for or receive charges exceeding a 36% annual percentage rate on the unpaid balance of the amount financed for a loan, as calculated under the Illinois Predatory Loan Prevention Act (PLPA APR)

 

Any loan with a PLPA APR over 36% is null and void, such that no person or entity shall have any right to collect, attempt to collect, receive, or retain any principal, fee, interest, or charges related to the loan.

 

The annual percentage rate disclosed in any loan contract may be lower than the PLPA APR.

 

 

 

_________________________________________

Borrower Signature

 

 

_________________________________________

Co-Borrower Signature (If Applicable)

 

(Source:  Added at 46 Ill. Reg. 6519, effective August 1, 2022)

 

Section 110.TABLE A  Illinois Rule of 78 Fractions for Rebating Charges According to Number of Months Originally Contracted For and Number of Months Prepaid in Full for Contracts of 2 to 120 Months (Repealed)

 

(Source:  Repealed at 30 Ill. Reg. 12558, effective July 7, 2006)

 

Section 110.TABLE B  Rule of 78 Percentage Rebate Table (Repealed)

 

(Source:  Repealed at 30 Ill. Reg. 12558, effective July 7, 2006)