SB3480 104TH GENERAL ASSEMBLY

LRB104 16720 SPS 30126 b

104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
SB3480

Introduced 2/5/2026, by Sen. Mike Simmons

SYNOPSIS AS INTRODUCED:

New Act
815 ILCS 505/2MMMM new

Creates the Payday Advance Consumer Protection Act. Provides that no person shall engage in the business of providing payday advance services without licensure under the Act. Provides that the Division of Financial Institutions of the Department of Financial and Professional Regulation shall administer the Act. Sets forth requirements for initial licensure; renewals; revocations; grounds for discipline; and administrative procedures. Provides that any payday advance provider that offers payday advance services to a consumer in the State shall comply with specified consumer protection provisions. Provides that a violation of the Act constitutes an unlawful practice under the Consumer Fraud and Deceptive Business Practices Act. Amends the Consumer Fraud and Deceptive Business Practices Act to make a conforming change. Effective July 1, 2027.

A BILL FOR

AN ACT concerning business.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 1. Short title. This Act may be cited as the Payday Advance Consumer Protection Act.

Section 5. Definitions. As used in this Act:

"Applicant" means a person who has submitted an application for a license under this Act.

"Consumer" means any natural person who has applied for or received proceeds.

"Department" means the Department of Financial and Professional Regulation.

"Division" means the Division of Financial Institutions of the Department of Financial and Professional Regulation.

"Earned but unpaid income" means a consumer's net unpaid income, unpaid wages, unpaid government benefits, or other distributions of any kind that a consumer has earned or is otherwise entitled to receive, and which the provider has reasonably determined are owed to the consumer. "Earned but unpaid income" includes, without limitation, government benefits, salary, wages, compensation, or other income earned on an hourly, project-based, piecework, salaried, or other basis, and through services rendered as an independent contractor.

"Fees" means any money or other consideration paid, directly or indirectly, by a consumer to a payday advance provider in the process of, or connected to, obtaining payday advance services. "Fees" include, but are not limited to, transaction fees, fees for the expedited delivery of funds, subscription or membership fees, the cost of ancillary products, and voluntary payments. "Fees" do not include any payment, fee, or other consideration paid by an obligor unless the payment, fee, or other consideration comes indirectly from a consumer.

"Multistate licensing system" means any third-party, multistate licensing system used by the Secretary for licensing, examinations, or any other regulatory purpose under this Act.

"Obligor" or "employer" means either a W-2-issuing employer, or any other person who is not an employer but who is contractually obligated to pay the consumer a sum of money on an hourly, project-based, piecework, or any other basis for labor or services provided by the consumer to or on behalf of the obligor.

"Payday advance provider" or "provider" means a person that is engaged in the business of providing payday advance services.

"Payday advance annual percentage rate" means a measure of the cost of proceeds, expressed as a yearly rate, that relates the amount and timing of value received by the consumer to the amount and timing of payments made.

"Payday advance services" means the business of:

(1) delivering proceeds to consumers based on earned but unpaid income;

(2) making attempts to collect fees and proceeds from consumers; or

(3) making attempts to collect proceeds, payments, fees, or other consideration from obligors.

"Person" means any individual, or a partnership, joint venture, trust, estate, firm, corporation, cooperative society or association, or any other form of business association or legal entity. "Person" includes the employees, owners, agents, managers, members, principals, and directors of a person.

"Proceeds" means a payment that a payday advance provider has advanced to a consumer based on the consumer's earned but unpaid income.

"Secretary" means the Secretary of Financial and Professional Regulation or the Secretary's designee, including the Director of the Division of Financial Institutions.

"Voluntary payment" means a payment amount of the consumer's choosing paid by the consumer to the payday advance provider or connected to receiving payday advance services. "Voluntary payment" includes, but is not limited to, tips, gifts, gratuities, and donations.

Section 10. Administration by the Division of Financial Institutions. This Act shall be administered by the Division on behalf of the Secretary.

Section 15. Licensure requirement. No person shall engage in the business regulated by this Act without licensure under this Act. Any person who provides payday advance services without the license required by this Act shall be guilty of a Class 4 felony. The Secretary shall be empowered to investigate any person the Secretary believe may require licensure under this Act, including, but not limited to, compelling production of testimony, books, records, written reports or answers to questions, or any other information necessary for the Secretary to determine whether the person requires licensure.

Section 20. Applicability.

(a) Except as otherwise provided in this Section, this Act applies to any person that offers or provides payday advance services in this State.

(b) The provisions of this Act apply to any person that seeks to evade its applicability by any device, subterfuge, or pretense whatsoever.

(c) The provisions of this Act apply to any person that facilitates or aids or abets a violation of this Act.

(d) Banks, savings banks, savings and loan associations, credit unions, and insurance companies organized, chartered, or holding a certificate of authority to do business under the laws of this State, any other state, or under the laws of the United States are exempt from the provisions of this Act.

Section 25. Licensee name. No person engaged in the business regulated by this Act shall operate the business under a name other than the real names of the entity and individuals conducting business. The business may, as authorized by the Secretary, also operate under an assumed corporate name under the Business Corporation Act of 1983, an assumed limited liability company name under the Limited Liability Company Act, or an assumed business name under the Assumed Business Name Act.

Section 30. Application process; investigation; fees.

(a) The Secretary may issue a license to a person after the person completes the following:

(1) the filing of an application for licensure with the Secretary or the multistate licensing system, as approved by the Secretary;

(2) the filing with the Secretary or the multistate licensing system, as approved by the Secretary, of a listing of judgments entered against, and bankruptcy petitions by, the applicant for the preceding 10 years;

(3) the payment, in certified funds, of investigation and application fees, the total of which shall be in an amount equal to $2,500, unless changed by the Secretary in accordance with subsection (b) of Section 55; and

(4) the filing of an audited balance sheet, including all footnotes prepared by a certified public accountant in accordance with generally accepted accounting principles and generally accepted auditing standards; notwithstanding the requirements of this subsection, an applicant that is a subsidiary may submit audited consolidated financial statements of its parent, intermediary parent, or ultimate parent as long as the consolidated statements are supported by consolidating statements that include the applicant's financial statement; if the consolidating statements are unaudited, the applicant's chief financial officer shall attest to the applicant's financial statements disclosed in the consolidating statements.

(b) The Secretary may, for good cause shown, waive or modify the requirements of paragraph (4) of subsection (a).

(c) Upon receipt of the license, a payday advance provider licensee shall be authorized to engage in the business regulated by this Act. The license shall remain in full force and effect until it expires, is surrendered by the licensee, or is revoked or suspended.

(d) The Secretary may impose conditions on a license if the Secretary determines that those conditions are necessary or appropriate. The conditions shall be imposed in writing and shall continue in effect for the period prescribed by the Secretary.

Section 35. Application form.

(a) Application for a payday advance provider license must be made in accordance with this Act and in accordance with requirements of the multistate licensing system, if required by the Secretary. The application shall be in writing, under oath, and on a form obtained from and prescribed by the Secretary. The Secretary may require part or all of the application to be submitted electronically, with attestation, to the multistate licensing system.

(b) The application shall contain the name and complete business and residential address or addresses of the applicant. The application shall also include a description of the activities of the applicant in such detail and for such periods as the Secretary may require, including the following:

(1) an affirmation that the applicant and its members, directors, or principals, as may be appropriate, are at least 18 years of age;

(2) information as to the name, complete business address, complete residential address, character, fitness, financial and business responsibility, background, experience, and criminal record of any:

(A) person, including an ultimate equitable owner, that directly or indirectly owns or controls 10% or more of any class of stock of the applicant;

(B) person, including an ultimate equitable owner that is not a depository institution, as defined in Section 17.50 of the Savings Bank Act, that lends, provides, or infuses, directly or indirectly, in any way, funds to or into an applicant in an amount equal to or more than 10% of the applicant's net worth;

(C) person, including an ultimate equitable owner that controls, directly or indirectly, the election of 25% or more of the members of the board of directors of an applicant;

(D) person, including an ultimate equitable owner that the Secretary finds influences the management of the applicant;

(E) directors of an applicant; and

(F) principal officers of an applicant; and

(3) other information as required by the Secretary to assess whether the applicant and its owners, officers, and directors have the financial responsibility, financial condition, business experience, character, and general fitness to justify the confidence of the public and that the applicant and its owners, officers, and directors are fit, willing, and able to carry on the proposed business in a lawful and fair manner.

Section 40. Payday advance provider license application and issuance.

(a) Applicants for a license shall apply in a form prescribed by the Secretary. The form may be changed or updated by the Secretary to carry out the purposes of this Act.

(b) In order to fulfill the purposes of this Act, the Secretary is authorized to establish relationships or contracts with a multistate licensing system or other persons to collect and maintain records and process fees related to licensees or other persons subject to this Act.

(c) In connection with an application for licensing, the applicant, owners, officers, and directors of an applicant may be required, at a minimum, to furnish to the Secretary or the multistate licensing system information concerning the identity of the owners, officers, and directors of the applicant, including personal history and experience in a form prescribed by the Secretary or the multistate licensing system including, but not limited to:

(1) a complete and accurate copy of an independent credit report obtained from a consumer reporting agency as described in Section 603(p) of the Fair Credit Reporting Act (15 U.S.C. 1681a(p)); and

(2) information related to any administrative, civil, or criminal findings by any governmental jurisdiction.

(d) For the purposes of this Section, and to reduce the points of contact that the Secretary may have to maintain, the Secretary may use a multistate licensing system as a channeling agent for requesting and distributing information to and from any source.

(e) Each application shall be accompanied by averments as determined by the Secretary to fulfill the purposes of this Act.

Section 45. Refusal to issue license. The Secretary may refuse to issue or renew a license if:

(1) the Secretary determines that the applicant has not complied with a provision of this Act, its implementing rules, or other laws that apply to the applicant;

(2) the Secretary determines that there is substantial continuity between the applicant and any violator of this Act, its implementing rules, or other laws that apply to the applicant or related violator; and

(3) the Secretary determines that the applicant or its owners, officers, or directors do not have the financial responsibility, financial condition, business experience, character, and general fitness to justify the confidence of the public and that the license applicant and its owners, officers, and directors are fit, willing, and able to carry on the proposed business in a lawful and fair manner.

Section 50. License issuance and renewal.

(a) Licensees shall apply to renew their license every calendar year. Licensees may submit properly completed renewal application forms and filing fees 60 days before the license expiration date. To be deemed timely, the completed renewal application forms and filing fees must be received by the Secretary at least 30 days before the license expiration date.

(b) It shall be the responsibility of each licensee to accomplish timely renewal of its license. Absent a written extension from the Department and payment of any late fees required by the Department, a license shall expire on the license expiration date if a licensee fails to timely submit a properly completed renewal application form and fees.

(c) No activity regulated by this Act shall be conducted by a licensee whose license has expired. The Secretary may, within the Secretary's discretion, reinstate an expired license upon payment of the renewal fee, payment of a reactivation fee equal to five times the renewal fee, submission of a completed renewal application, and an affidavit of good cause for late renewal.

Section 55. Fees.

(a) The persons regulated by this Act shall bear the expenses of administering this Act, including investigations and examinations provided for in this Act. The Secretary may establish fees by rule or modify fees in at least the following categories:

(1) application and renewal fees;

(2) examination and investigation fees;

(3) contingent fees; and

(4) other fees as may be required to administer this Act.

(b) The Secretary may modify any fees established by this Act by rule beginning one year after the effective date of this Act.

Section 60. Functions; powers; duties. The functions, powers, and duties of the Secretary shall include, but are not limited to:

(1) to issue or refuse to issue any license or renewal;

(2) to impose fines, revoke, or suspend for cause any license issued under this Act;

(3) to impose fines for any unlicensed activity under this Act;

(4) to keep records of all licenses issued under this Act;

(5) to receive, consider, investigate, and act upon complaints made by any person in connection with any payday advance provider licensee in this State or unlicensed payday advance services activity of any person;

(6) to prescribe the forms of and receive:

(A) applications for licenses and renewals; and

(B) all reports and all books and records required to be made by any licensee under this Act, including annual audited financial statements if required by the Secretary and annual reports of payday advance provider activity;

(7) to adopt rules necessary and proper for the administration of this Act, to protect consumers, obligors, and to promote fair competition;

(8) to subpoena documents and witnesses and compel attendance and production, to administer oaths, and to require the production of any books, papers, or other materials relevant to any inquiry authorized by this Act or its implementing rules;

(9) to issue orders against any person if the Secretary has reasonable cause to believe that an unsafe, unsound, or unlawful practice has occurred, is occurring, or is about to occur; if any person is violating, or is about to violate any law, rule, or written agreement with the Secretary; or for the purpose of administering the provisions of this Act and any rule adopted in accordance with this Act;

(10) to address any inquiries to any licensee, or the owners, officers, or directors thereof, in relation to its activities and conditions, or any other matter connected with its affairs, and it shall be the duty of any licensee or person so addressed to promptly reply in writing to those inquiries and to require reports from any licensee at any time the Secretary may deem desirable;

(11) to examine the books and records of every licensee under this Act or any person requiring a license or who the Secretary reasonably believes may require a license at any time interval reasonably determined appropriate by the Secretary;

(12) to enforce provisions of this Act and rules adopted under this Act;

(13) to levy fees including, but not limited to, contingent fees, assessments, examination fees, licensing fees, fines, and charges for services performed in administering this Act;

(14) to issue refunds to licensees within one year of any overpayment for good cause shown;

(15) to appoint examiners, supervisors, experts, and special assistants as needed to effectively and efficiently administer this Act;

(16) to conduct hearings for the purpose of carrying out the purposes of this Act;

(17) to exercise visitorial power over a licensee;

(18) to enter into cooperative agreements with state regulatory authorities of other states to provide for examination of corporate offices or branches in those states, participate in joint examinations with other regulators, and to accept reports of the examinations;

(19) to assign an examiner or examiners to monitor the affairs of a licensee with whatever frequency the Secretary determines appropriate and to charge the licensee for reasonable and necessary expenses of the Secretary if in the opinion of the Secretary an emergency exists or appears likely to occur;

(20) to impose civil penalties of up to $1,000 per day against a licensee for failing to respond to a regulatory request or reporting requirement; and

(21) to enter into agreements in connection with a multistate licensing system.

Section 65. Financial Institutions Fund. All moneys received by the Secretary under this Act shall be paid into the Financial Institutions Fund. The amounts deposited into that Fund shall be used for the ordinary and contingent expenses of the Department. Nothing in this Act shall prevent paying expenses involving salaries, retirement, social security, and State-paid insurance of State employees, or any other expenses incurred under this Act by appropriation from the General Revenue Fund, PIC Fund, or any other fund.

Section 70. Examination; prohibited activities.

(a) The Secretary shall examine the business affairs of a licensee under this Act as often as the Secretary deems necessary and proper. The Secretary may adopt rules with respect to the frequency and manner of examination. The Secretary shall appoint a suitable person to perform the examination. The Secretary and the Secretary's appointees may examine the entire books, records, documents, and operations of each licensee and its subsidiary, affiliate, or agent, and may examine any of the licensee's or its subsidiaries', owners', affiliates', or agents' officers, directors, employees, and agents under oath. The examination fee shall be $1,200 per day, unless changed by the Secretary in accordance with subsection (b) of Section 55. The licensee shall also cover all travel expenses of the Department.

(b) Affiliates of a licensee shall be subject to examination by the Secretary on the same terms as the licensee, but only when reports from or examination of a licensee finds evidence of unlawful activity between a licensee and affiliate benefiting, affecting, or deriving from the activities regulated by this Act.

(c) The expenses of any examination of the licensee or its affiliates shall be borne by the licensee and assessed by the Secretary as may be established by rule.

(d) All confidential supervisory information collected by the Department in the course of an examination or investigation of a licensee or applicant, including, but not limited to, any complaint against a licensee filed with the Department and information collected to investigate any complaint, shall be maintained for the confidential use of the Department and shall not be disclosed other than in the course of a formal hearing as determined by the Department or as authorized by this Act or rule. All confidential supervisory information, shall belong to the Secretary's office and may not be disclosed to anyone other than the licensee, law enforcement officials, or other regulatory agencies that have an appropriate regulatory interest as determined by the Secretary, or to a party presenting a lawful subpoena to the Department. The Secretary may, through the Attorney General, immediately appeal to the court of jurisdiction the disclosure of the confidential supervisory information and seek a stay of the subpoena pending the outcome of the appeal. Reports required of licensees by the Secretary under this Act and results of examinations performed by the Secretary under this Act shall be the property of only the Secretary, but may be shared with the licensee. Any person demanded to produce the Department's confidential supervisory information whether by subpoena, order, or other judicial or administrative process, must withhold production of the confidential supervisory information and must notify the Secretary of the demand. The Secretary is authorized to intervene for the purpose of enforcing the limitations of this Section or seeking the withdrawal or termination of the attempt to compel production of the confidential supervisory information. The Secretary may impose any conditions and limitations on the disclosure of confidential supervisory information that are necessary to protect the confidentiality of that information. The Secretary may condition a decision to disclose confidential supervisory information on entry of a protective order by the court or administrative tribunal presiding in the particular case or on a written agreement of confidentiality. In a case in which a protective order or agreement has already been entered between parties other than the Secretary, the Secretary may nevertheless condition approval for release of confidential supervisory information upon the inclusion of additional or amended provisions in the protective order. The Secretary may authorize a party who obtained the records for use in one case to provide them to another party in another case, subject to any conditions that the Secretary may impose on either or both parties. The requester shall promptly notify other parties to a case of the release of confidential supervisory information obtained and, upon entry of a protective order, shall provide copies of confidential supervisory information to the other parties.

Section 75. Subpoena power of the Secretary.

(a) The Secretary shall have the power to issue and to serve subpoenas and subpoenas duces tecum to compel the attendance of witnesses and the production of all books, accounts, records, and other documents and materials relevant to an examination or investigation. The Secretary, or the Secretary's duly authorized representative, shall have the power to administer oaths and affirmations to any person.

(b) If a person does not comply with the Secretary's subpoena or subpoena duces tecum, the Secretary may, through the Attorney General, petition the circuit court of the county in which the subpoenaed person resides or has its principal place of business for an order requiring the subpoenaed person to testify and to comply with the subpoena duces tecum. The court may grant injunctive relief restraining the person from engaging in activity regulated by this Act. The court may grant other relief, including, but not limited to, the restraint, by injunction or appointment of a receiver, of any transfer, pledge, assignment, or other disposition of the person's assets, concealment, destruction, or other disposition of books, accounts, records, or other documents and materials as the court deems appropriate, until the person has fully complied with the subpoena or subpoena duces tecum and the Secretary has completed an investigation or examination.

(c) If it appears to the Secretary that the compliance with a subpoena or subpoena duces tecum issued or caused to be issued by the Secretary under this Section is essential to an investigation or examination, the Secretary, in addition to the other remedies provided for in this Act, may, through the Attorney General, apply for relief to the circuit court of the county in which the subpoenaed person resides or has its principal place of business. The court shall direct the issuance of an order against the subpoenaed person requiring sufficient bond conditioned on compliance with the subpoena or subpoena duces tecum. The court shall cause to be endorsed on the order a suitable amount of bond or payment under which the person named be freed, having a due regard to the nature of the case.

(d) In addition, the Secretary may, through the Attorney General, seek a writ of attachment or an equivalent order from the circuit court having jurisdiction over the person who has refused to obey a subpoena, who has refused to give testimony, or who has refused to produce the matters described in the subpoena duces tecum.

Section 80. Reports required of licensee. Every licensee shall produce to the Department written reports or answers to questions in the time and manner requested by the Secretary.

Section 85. Suspension; revocation of licenses; fines and other discipline.

(a) The Secretary may enter an order imposing one or more of the following penalties:

(1) revocation of license;

(2) suspension of a license subject to reinstatement upon satisfying all reasonable conditions the Secretary may specify;

(3) placement of the licensee or applicant on probation for a period of time and subject to all reasonable conditions as the Secretary may specify;

(4) issuance of a reprimand;

(5) imposition of a civil penalty not to exceed $25,000 for each count of separate offense;

(6) restitution, refunds, or any other relief necessary to protect consumers; and

(7) denial of a license.

(b) Grounds for penalties include:

(1) when a person has violated or aided another to violate, any provisions of this Act, any rule adopted by the Secretary, or any other law, rule, or regulation of this State, any other state, or the United States;

(2) that any fact or condition exists that, if it had existed at the time of the original application for the license, would have warranted the Secretary in refusing to issue the original license;

(3) that a licensee that is not an individual has acted or failed to act in a way that would be cause for suspending or revoking a license to an individual;

(4) that a person engaged in unsafe, unsound, unfair, deceptive, or abusive business practices related to the activity covered by this Act;

(5) that a person has been adjudicated guilty of a crime against the law of this State, any other state, or of the United States involving moral turpitude, abusive, deceptive, fraudulent, or dishonest dealing;

(6) that a final judgment has been entered against a person in a civil action upon grounds of abusive conduct, conversion, fraud, misrepresentation, or deceit;

(7) that a person made a material misstatement in its application for licensure or any other communication to the Secretary;

(8) that a person has demonstrated by course of conduct, negligence or incompetence in performing any act for which it is required to hold a license under this Act;

(9) that a person has failed to advise the Secretary in writing of any changes to the information submitted on the person's most recent application for license within 30 days after the change;

(10) that a licensee failed to submit to periodic examination by the Secretary as required by this Act or failed to maintain, preserve, and keep available for examination all books, accounts, or other documents required by the provisions of this Act and rules adopted under this Act;

(11) that a person failed to account or deliver to any person any property, such as any money, fund, deposit, check, draft, or other document or thing of value, that has come into the person's possession and that is not the person's property or that the person is not in law or equity entitled to retain, under the circumstances and at the time which has been agreed upon or is required by law or, in the absence of a fixed time, upon demand of the person for the accounting and delivery;

(12) that a person failed to disburse funds in accordance with agreements or law;

(13) that a person had a license, or the equivalent, to practice any profession, occupation, other industry or activity requiring licensure revoked, suspended, disciplined, or otherwise acted against, including the denial of licensure by a licensing authority of this State or another state, territory, or country for fraud, dishonest dealing, misrepresentations, incompetence, conversion, any act of moral turpitude or any other grounds that would constitute grounds for discipline under this Act;

(14) that a person licensed under this Act failed to timely notify the Department that the person has been disciplined by a licensing authority of this State or another state;

(15) that a person engaged in activities regulated by the Act without a current, active license unless specifically exempted by this Act;

(16) that a person failed to timely pay any fee, charge, or fine assessed under this Act; and

(17) that a person refused, obstructed, or evaded an investigation, written report or information request, or examination authorized under this Act or failed to comply with timeframes for response as set by the Secretary, or refused, obstructed, or evaded compliance with the Secretary's subpoena or subpoena duces tecum or failed to comply with timeframes for response as set by the Secretary.

(c) No license shall be suspended or revoked, except as provided in this Section, or any licensee be fined, without notice of their right to a hearing.

(d) The Secretary may suspend any license for a period not exceeding 90 days pending investigation for good cause shown that an emergency exists.

(e) No revocation, suspension, or surrender of any license shall impair or affect the obligation of any pre-existing lawful contract between the licensee and any person. The Secretary's approval of a licensee's application to surrender its license shall not affect the licensee's civil or criminal liability for acts committed prior to surrender. Surrender of a license does not entitle the licensee to a return of any part of the fee for initial licensure or any part of the fee for annual license renewal.

(f) Every license issued under this Act shall remain in force and effect until the license expires, is surrendered, is revoked, or is suspended in accordance with the provisions of this Act. The Secretary shall have authority, in the Secretary's sole discretion, to reinstate a suspended license or to issue a new license to a licensee whose license has been revoked or surrendered if no fact or condition then exists which would have warranted the Secretary in refusing originally to issue that license under this Act.

(g) If the Secretary imposes discipline authorized by this Section, the Secretary shall execute a written order to that effect. The Secretary shall serve a copy of the order upon the person. The Secretary shall serve the person with notice of the order, including a statement of the reasons for the order, either personally, or by certified mail. Service by certified mail shall be deemed completed when the notice is deposited in the U.S. Mail.

(h) An order assessing a fine, an order imposing conditions upon a license, an order revoking or suspending a license, or an order denying renewal of a license shall take effect upon service of the order unless the licensee serves the Department with a written request for a hearing in the manner required by the notice within 20 days after the date of service of the order. If a person requests a hearing, the order shall be stayed from its date of service until the Department enters a final administrative order.

If the licensee requests a hearing, the Secretary shall schedule a preliminary hearing within 90 days after the request for a hearing unless otherwise agreed to by the parties.

The preliminary hearing shall be held at the time and place designated by the Secretary. The Secretary and any administrative law judge designated by the Secretary shall have the power to administer oaths and affirmations, subpoena witnesses and compel attendance, take evidence, and require the production of books, papers, correspondence, and other records or information that the Secretary considers relevant or material to the inquiry.

(i) The costs of administrative hearings conducted under this Section shall be paid by the licensee or other person subject to the hearing.

(j) A licensee and other persons subject to this Act shall be subject to the disciplinary actions specified in this Act for any violations conducted by any officer, director, shareholder, joint venture, partner, owner, including, but not limited to, ultimate equitable owner.

Section 90. Investigation of complaints. The Secretary may investigate any complaints and inquiries made concerning this Act and any licensees or persons the Secretary believes may require a license under this Act. Each licensee or person the Secretary believes may require a license under this Act shall open the licensee or person's books, records, documents, and offices, wherever situated, to the Secretary as needed to facilitate the investigations.

Section 95. Additional investigation and examination authority. In addition to any authority allowed under this Act, the Secretary shall have the authority to conduct investigations and examinations as follows:

(1) For purposes of initial licensing, license renewal, license suspension, license conditioning, license probation, license revocation or termination, or general or specific inquiry or investigation to determine compliance with this Act, the Secretary shall have the authority to access, receive, and use any books, accounts, records, files, documents, information, or evidence, including, but not limited to, the following:

(A) criminal, civil, licensure, and administrative history information, including non-conviction data as specified in the Criminal Identification Act;

(B) personal history and experience information, including independent credit reports obtained from a consumer reporting agency described in Section 603(p) of the federal Fair Credit Reporting Act; and

(C) any other documents, information, or evidence the Secretary deems relevant to the inquiry or investigation, regardless of the location, possession, control, or custody of the documents, information, or evidence.

(2) For the purposes of investigating violations or complaints arising under this Act or for the purposes of examination, the Secretary may review, investigate, or examine any licensee, individual, or person subject to this Act as often as necessary in order to carry out the purposes of this Act. The Secretary may direct, subpoena, or order the attendance of, and examine under oath all persons; and order any person to produce records, files, written reports or answers to questions, and any other documents the Secretary deems relevant to an inquiry.

(3) Each person subject to this Act shall make available to the Secretary upon request the books and records relating to the operations of the person subject to this Act. The Secretary shall have access to those books and records and may interview the owners, officers, principals, employees, independent contractors, agents, vendors, and customers of any licensee or person subject to this Act.

(4) Each person subject to this Act shall make or compile written reports or answers to questions or prepare other information as directed by the Secretary to carry out the purposes of this Section, including, but not limited to:

(A) accounting compilations;

(B) information lists and data concerning transactions in a format prescribed by the Secretary; or

(C) other information deemed necessary to carry out the purposes of this Section.

(5) In making any examination or investigation authorized by this Act, the Secretary may control access to any documents and records of the licensee or person under examination or investigation. The Secretary may take possession of the documents and records or otherwise take constructive control of the documents. During the period of control, no person shall remove or alter any of the documents or records, except pursuant to a court order or with the consent of the Secretary. Unless the Secretary has reasonable grounds to believe the documents or records of the licensee have been or are at risk of being altered or destroyed for purposes of concealing a violation of this Act, the licensee or owner of the documents and records shall have access to the documents or records as necessary to conduct its ordinary business affairs.

(6) In order to carry out the purposes of this Section, the Secretary may:

(A) retain attorneys, accountants, or other professionals and specialists as examiners, auditors, or investigators to conduct or assist in the conduct of examinations or investigations;

(B) enter into agreements or relationships with other government officials or regulatory associations to protect consumers, improve efficiencies, and reduce regulatory burden by sharing resources, standardized or uniform methods or procedures, and documents, records, information, or evidence obtained under this Section;

(C) use, hire, contract, or employ publicly or privately available analytical systems, methods, or software to examine or investigate the licensee, individual, or person subject to this Act;

(D) accept and rely on examination or investigation reports made by other government officials, within or outside this State; or

(E) accept audit reports made by an independent certified public accountant for the person subject to this Act and incorporate the audit report in the report of the examination, report of investigation, or other writing of the Secretary.

(7) The authority of this Section shall remain in effect, whether a person subject to this Act acts or claims to act under any licensing or registration law of this State or claims to act without authority.

(8) No licensee or person subject to investigation or examination under this Section may knowingly withhold, alter, abstract, remove, mutilate, destroy, hide, or conceal any books, records, computer records, or other information or take actions designed to delay or complicate review of records.

Section 100. Confidentiality. To promote more effective regulation, protect consumers, and reduce regulatory burden through inter-regulator sharing of confidential supervisory information:

(1) The privacy or confidentiality of any information or material provided to the multistate licensing system, including all privileges arising under federal or state court rules and law, shall continue to apply to the information or material after the information or material has been disclosed to the multistate licensing system. Information and material may be shared with the multistate licensing system, federal and state regulatory officials with relevant oversight authority, and law enforcement without the loss of privilege or the loss of confidentiality protections.

(2) The Secretary is authorized to enter into agreements or sharing arrangements with other governmental agencies, the Conference of State Bank Supervisors, and other associations representing governmental agencies.

(3) Information or material that is privileged or confidential under this Act as determined by the Secretary shall not be subject to the following:

(A) disclosure under any State law governing the disclosure to the public of information held by an officer or an agency of the State; or

(B) subpoena, discovery, or admission into evidence, in any private civil action or administrative process except as authorized by the Secretary.

(4) Any other law relating to the disclosure of confidential supervisory information that is inconsistent with this Act shall be superseded by the requirements of this Section to the extent the other law provides less confidentiality or a weaker privilege for information that is privileged or confidential under this Act.

(5) Confidential or privileged information received from the multistate licensing system, another licensing body, federal and state regulatory officials, or law enforcement shall be protected to the same extent as the Secretary's confidential and privileged information is protected under this Act. The Secretary may also protect from disclosure confidential or privileged information that would be exempt from disclosure to the extent it is held directly by the multistate licensing system, another licensing body, federal and state regulatory officials, or law enforcement.

Section 105. Rules.

(a) In addition to the powers as may be prescribed by this Act and the Financial Institutions Code, the Secretary may adopt rules consistent with the purposes of this Act, including, but not limited to:

(1) rules in connection with the activities of persons subject to this Act as may be necessary and appropriate for the protection of consumers and obligors in this State;

(2) rules as may be necessary and appropriate to define improper, deceptive, unfair, abusive or fraudulent business practices in connection with providing payday advance services;

(3) rules that define terms used in this Act and as may be necessary and appropriate to interpret and implement this Act;

(4) rules as may be necessary to promote competition and price transparency; and

(5) rules as may be necessary for the enforcement of this Act.

(b) The Secretary is authorized and empowered to make specific rulings, demands, and findings deemed necessary for the proper conduct of the payday advance provider industry.

Section 110. Appeal and review.

(a) The Secretary may, in accordance with the Illinois Administrative Procedure Act, adopt rules to provide for review within the Department of the Secretary's decisions affecting the rights of persons under this Act. The review shall provide for, at a minimum:

(1) appointment of a hearing officer;

(2) appropriate procedural rules, specific deadlines for filings, and standards of evidence and of proof; and

(3) provisions for apportioning costs among parties to the appeal.

(b) All final agency determinations of appeals to decisions of the Secretary may be reviewed in accordance with and under the provisions of the Administrative Review Law. Appeals from all final orders and judgments entered by a court in review of any final administrative decision of the Secretary or of any final agency review of a decision of the Secretary may be taken as in other civil cases.

Section 115. Licensure fees.

(a) The nonrefundable fee for initial licensure shall be $2,500, unless changed by the Secretary in accordance with subsection (b) of Section 55.

(b) The nonrefundable fee for annual license renewal shall be $2,500, unless changed by the Secretary in accordance with subsection (b) of Section 55.

(c) The Department shall impose a contingent fee sufficient to cover its operating expenses in administering this Act not otherwise covered by all other revenue collected under this Act. Each licensee shall pay to the Division its pro rata share, based on number or volume of transactions or revenue, of the cost for administration of the Act that exceeds other fees listed in this Section, as estimated by the Division, for the current year and any deficit actually incurred in the administration of the Act in prior years.

Section 120. Cease and Desist Order.

(a) The Secretary may issue a cease and desist order to any licensee or person doing business without the required license, when in the opinion of the Secretary the licensee or other person has violated, is violating, or is about to violate any provision of this Act or any rule adopted by the Department under this Act or any requirement imposed in writing by the Department as a condition of granting any authorization permitted by this Act. The cease and desist order authorized by this Section may be issued prior to a hearing.

(b) The Secretary shall serve notice of the Secretary's order, either personally or by certified mail. Service by certified mail shall be deemed completed when the notice is deposited in the U.S. Mail. The Secretary's notice shall include a statement of the reasons for the action.

(c) Within 15 days after service of the cease and desist order, the person subject to the order may request a hearing in writing. The Secretary shall schedule a preliminary hearing within 60 days after the request for a hearing unless the parties agree to a later date.

(d) If it is determined that the Secretary had the authority to issue the cease and desist order, the Secretary may issue the orders as may be reasonably necessary to correct, eliminate, deter, or remedy the conduct described in the order and resulting harms.

(e) The powers vested in the Secretary by this Section are additional to all other powers and remedies vested in the Secretary by any law. Nothing in this Section shall be construed as requiring that the Secretary must employ the power conferred in this subsection instead of or as a condition precedent to the exercise of any other power or remedy vested in the Secretary.

Section 125. Injunction. The Secretary may maintain an action in the name of the people of the State of Illinois through the Attorney General and may apply for an injunction in the circuit court to enjoin a person from violating this Act or its implementing rules. The Court, in its discretion, may exercise all powers necessary, including, but not limited to: injunction; revocation, forfeiture or suspension of any license, charter, franchise, certificate or other evidence of authority of any person to do business in this State; appointment of a receiver; dissolution of domestic corporations or association suspension or termination of the right of foreign corporations or associations to do business in this State; and restitution. The Attorney General may request and the Court may impose a civil penalty in a sum not to exceed $50,000 per violation against any person found by the Court to have engaged in any method, act, or practice declared unlawful under this Act.

Section 130. Requirements to provide payday advance services. Any payday advance provider that offers payday advance services to a consumer in this State shall comply with the following:

(1) The provider shall not provide a consumer with proceeds that are greater than 50% of the consumer's expected earned but unpaid income on the date of scheduled repayment.

(2) All proceeds must be provided on a non-recourse basis to the consumer.

(3) The provider shall maintain and perform reasonable underwriting procedures.

(4) The provider shall ensure that its methodology for determining the availability and amount of proceeds, as well as for calculating earned but unpaid income, complies with the Equal Credit Opportunity Act, and any rules adopted by the Department.

(5) The delivery of the proceeds to a consumer shall not create a future wage assignment on the part of the consumer.

(6) A provider may not request or rely on a credit score, report, or other score in order to determine the consumer's eligibility for proceeds or engage in any credit reporting related to the transaction except as authorized by this Act, by rule, or required by law.

(7) A provider shall collect the proceeds and fees in compliance with this Act and rules adopted under this Act.

(8) A provider's terms of service shall expressly provide that the delivery of the proceeds shall not create a future wage assignment on the part of the consumer, and shall expressly state that the provider may not request or rely on a credit score, report, or other score to determine the consumer's eligibility for proceeds or engage in any credit reporting related to the transaction except as authorized this Act, by rule, or as required by law. The terms of service shall expressly provide that a provider shall only be permitted to collect the proceeds and fees in compliance with this Act and rules adopted under this Act.

(9) A provider shall maintain and adequately staff a toll-free telephone and a written electronic messaging system to respond to inquiries. A written electronic messaging system may be an email address.

(10) Contemporaneous with or before delivery of proceeds to a consumer the provider shall provide a written receipt to the consumer containing the following information:

(A) the amount of the proceeds;

(B) a list of fees that will be charged to or have been paid by the consumer;

(C) the date on which the provider will attempt to collect outstanding proceeds;

(D) the toll-free telephone number for customer assistance and information on the written electronic messaging system; and

(E) information on how to file a complaint with the Department.

(11) The amount of the proceeds delivered by the provider to the consumer, and any fees permitted under this Act, may be collected from a consumer within the timeframe agreed upon by the provider and consumer, which shall not exceed 30 days after the date that the proceeds are delivered to the consumer. A provider may collect the proceeds and fees from an obligor at any time agreed to between the provider and the obligor.

(12) A provider may not attempt to debit the proceeds from a consumer more than one time for any particular transaction absent express written consent of the consumer for one additional debit. A provider may only request express written consent from a consumer for an additional debit after the provider's first debit attempt fails. a provider may not accept written consent for additional debits in the contract for payday advance services.

(13) Before providing proceeds to a consumer, a provider must conspicuously disclose to the consumer that the proceeds are provided on a non-recourse basis and provide a brief explanation of the meaning of "non-recourse basis".

(14) Except as authorized by this Act, by rule, or otherwise required by law, the provider shall not report a consumer's repayment or failed repayment of proceeds to any person other than the consumer, including, but not limited to, a consumer credit reporting agency or a debt collector.

(15) No portion of the proceeds may be used to settle or pay down prior proceeds. No proceeds may roll over or be structured in any way to create any continuing obligation on the part of a consumer.

(16) No provider shall provide any payday advance services to a consumer unless the consumer has earned but unpaid income.

(17) The provider shall document the basis for its determination that the consumer has earned but unpaid income.

(18) A provider shall allow a consumer to cancel a transaction at any time before distribution of the proceeds without incurring any fee.

(19) If a provider solicits a tip, gratuity, or donation from the consumer, the provider must (i) conspicuously disclose or cause to be disclosed to the consumer that any tip, gratuity or donation paid by the consumer does not inure to the direct benefit of any specific employee of the provider or any other person; and (ii) conspicuously provide a simple, conspicuous option for the consumer to select zero as an amount for the tip, gratuity or donation.

(20) The provider shall reimburse the consumer for the full amount of any overdraft or insufficient funds fee imposed on a consumer that was caused by the provider attempting to seek payment of any outstanding proceeds or fees on a date before the date of collection disclosed to the consumer or in an amount greater than that disclosed to the consumer. The reimbursement shall occur within 3 days after receiving credible information about the fees.

(21) The provider shall reimburse the consumer for any amount that the provider incorrectly debited from a consumer or obligor within 3 days after determining the error or receiving credible information about the error, whichever is sooner.

(22) The provider shall reimburse the consumer for the full amount of any charges or late fees the consumer incurs because of an erroneous debit amount, or because of the provider debiting before the agreed time. The reimbursement shall occur within 3 days after determining the error or receiving credible information about the error, whichever is sooner.

(23) The provider shall not charge a late fee, deferral fee, interest, or any other penalty or charge for failure to pay outstanding proceeds or fees.

(24) The provider shall not enter any agreement with an obligor authorizing or requiring the provider to disclose any non-payment of the proceeds or fees by a consumer to the obligor or any other person except as authorized by this Act, by rule, or required by law.

(25) A provider shall provide the contract, if any, its term of service, and all disclosures required by this Section in English and in the languages used to negotiate any agreement. The provider shall also conspicuously provide an option for consumer to receive the contract, if any, its term of service, and all disclosures required by this Section in any language used by the provider in its marketing or advertising materials.

(26) A provider must provide a copy of the contract, if any, the terms of service, and the disclosures required by this Section pertaining to a transaction to the consumer. The provider shall email the contract, if any, the terms of service and the disclosures by this Section pertaining to a transaction to a consumer if the consumer provides an email address.

Section 135. Non-recourse basis. Absent clear and convincing evidence of common law fraud by the consumer, no person shall initiate a collection action or sue a consumer, file a claim in a bankruptcy proceeding, make a credit report, assign a right to collect, or otherwise attempt to collect proceeds or fees from a consumer if a provider is unable to collect proceeds or fees from a consumer in the manner permitted by this Act.

Section 140. Privacy. A provider shall not sell, share, or otherwise disclose information that is solicited or collected from a consumer or obligor in relation to providing payday advance services to any person except as required to comply with this Act, by rule, or other law. A provider shall not disclose to an obligor any failure of a consumer to pay the proceeds or the fees unless required by law to do so. A provider shall not purchase data of any kind about consumers from an obligor for which it contracts to provide payday advance services.

Section 145. Payments to obligors. A provider shall not share fees with or provide compensation to an obligor.

Section 150. Maximum number of transactions and fees.

(a) A provider shall not enter into more than 2 transactions for proceeds with a consumer in any calendar month or more than 12 transactions with a consumer in any calendar year.

(b) A payday advance provider shall not contract for or receive fees exceeding a 36% payday advance annual percentage rate on the unpaid balance of the proceeds. The payday advance annual percentage rate shall be determined in accordance with either the actuarial method or the United States Rule method. The method for determining the payday advance annual percentage rate shall be disclosed in the terms of service or contract with the consumer.

(c) Any payment, fee, or other consideration paid by an obligor shall not be included in the payday advance annual percentage rate unless the payment, fee, or other consideration directly or indirectly comes from a consumer.

Section 155. Payments from obligors. A provider may collect the proceeds and fees, money, or other payments from the obligor with the express authorization of the consumer. A provider who collects the proceeds or any fees, money, or other consideration of any kind from an obligor may not collect the same proceeds or any fees from a consumer. The provider and obligor may agree to any mutually agreeable repayment terms of the proceeds and fees so long as any payment, fee, or other consideration from the obligor does not come directly or indirectly from the consumer and does not create any legal liability of any kind for a consumer. Any collection efforts against an obligor shall not state or imply that a consumer has defaulted or is in any way responsible for the missed payments, fees, or other consideration by the obligor.

Section 160. Other payors. A provider may only receive payment of the proceeds and fees from the consumer or obligor as authorized by this act or by rule. a provider shall not receive the proceeds or fees from any other person.

Section 165. Annual report. No later than March 1 of each year, each licensee shall file an annual report with the Secretary which includes the following for the prior calendar year:

(1) gross revenue received from consumers in this State relating to payday advance services;

(2) gross revenue received from any person in this State related to payday advance services covered by this Act;

(3) gross revenue received from any obligor in this State related to payday advance services covered by this Act.

(4) total number of transactions conducted in this State;

(5) total dollar amount of proceeds provided to consumers in this State;

(6) total dollar amount of fees collected from consumers in this State;

(7) total number of unique consumers served in this State;

(8) total number of unique obligors under contract in this State;

(9) the median, average, and standard deviation of the number of payday advance transactions per unique consumer in this State;

(10) the total number of failed proceeds transfers covered by this Act;

(11) the total number of consumers affected by at least one failed proceeds transfer covered by this Act;

(12) the total number of failed debit attempts to recover from proceeds covered by this Act;

(13) the total number of consumers affected by at least one failed debit attempt to recover proceeds in this State; and

(14) any other information requested on the annual report form questionnaire issued by the Secretary.

Section 170. Prohibition on referrals. A provider shall not refer or direct any consumer to any other consumer lender or lending product.

Section 175. Prohibition on repayment of proceeds from sources other than earned but unpaid income from a consumer. A provider shall only be permitted to collect proceeds or fees from a consumer through a debit of the consumer's bank account in compliance with the provisions of this Act and rules adopted under this Act. It shall be a violation of this Act for the provider to steer or direct a consumer to repay the proceeds through any other method or to steer or direct the consumer to repay the proceeds through funds other than earned but unpaid income. Notwithstanding the requirements of this Section, collection from obligors, as authorized by this Act, shall not violate this Section.

Section 180. Action for damages.

(a) A claim of violation of this Act or its implementing rules may be asserted in a civil action. Additionally, a prevailing consumer or obligor may be awarded reasonable attorney's fees and court costs.

(b) The action may be commenced in the county in which the provider against whom it is brought resides, has its principal place of business, or is doing business, or in the county where the transaction or any substantial portion thereof occurred.

(c) In addition to actual damages or injunctive relief, the Court may award statutory damages of $1,000 for each violation of this Act or its implementing rules.

(d) A provider shall not prohibit any consumer from pursuing the remedies available under this Section as a condition of providing proceeds.

Section 185. Violations.

(a) Nothing in this Act shall be construed to restrict the exercise of powers or the performance of the duties of the Attorney General that the Attorney General is authorized to exercise or perform by law.

(b) A violation of this Act constitutes an unlawful practice under the Consumer Fraud and Deceptive Business Practices Act. All remedies, penalties, and authority granted to the Attorney General by the Consumer Fraud and Deceptive Business Practices Act shall be available to the Attorney General for the enforcement of this Act.

Section 190. Surety bond.

(a) An applicant for a license shall post and a licensee must maintain with the Secretary a bond or bonds issued by corporations qualified to do business as surety companies in this State.

(b) The applicant or licensee shall post a bond in a minimum amount of $100,000. The minimum bond amount may be modified by rule. If the Secretary finds at any time that a bond is of insufficient size, is insecure, exhausted, or otherwise doubtful, an additional bond in the amount as determined by the Secretary shall be filed by the licensee within 30 days after written demand therefor by the Director.

(c) The bond must be in a form satisfactory to the Secretary and shall run to the State of Illinois for the benefit of any claimant against the applicant or licensee with respect to any activity regulated by this Act, including unpaid fees, fines, or penalties owed to the Department. A claimant damaged by a breach of the conditions of a bond shall have a right to action upon the bond for damages suffered thereby and may bring suit directly on the bond, or the Secretary may bring suit on behalf of the claimant.

Section 195. Liberal construction and purpose. The purpose of this Act is to regulate payday advance providers and protect consumers and obligors. This Act shall be liberally construed to protect consumers and obligors.

Section 900. The Consumer Fraud and Deceptive Business Practices Act is amended by adding Section 2MMMM as follows:

(815 ILCS 505/2MMMM new)

Sec. 2MMMM. Violations of the Payday Advance Consumer Protection Act. Any person who violates the Payday Advance Consumer Protection Act commits an unlawful practice within the meaning of this Act.

Section 997. Severability. If any provision of this Act or the application of the provision is held invalid, the invalidity shall not affect other provisions or applications of the Act which can be given effect without the invalidated provision or application.

Section 999. Effective date. This Act takes effect July 1, 2027.