SB2176 Engrossed

LRB093 15938 RXD 41560 b






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    AN ACT concerning business transactions.

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


 
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    Section 5. The Illinois Fairness in Lending Act is amended  
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by changing Section 2 as follows:
 



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    (815 ILCS 120/2)  (from Ch. 17, par. 852)



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    Sec. 2. As used in this Act: 

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    (a) "Financial Institution" means any bank, credit union, 
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insurance company,
mortgage banking company, savings bank, 
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savings and loan
association, or other residential mortgage 
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lender which operates
or has a place of business in this State.

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    (b) "Person" means any natural person.

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    (c) "Varying the terms of a loan" includes, but is not 
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limited to the
following practices:


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        (1) Requiring a greater than average down payment than 
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is usual for the
particular type of a loan involved.


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        (2) Requiring a shorter period of amortization than is 
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usual for the
particular
type of loan involved.


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        (3) Charging a higher interest rate than is usual for 
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the particular type
of loan involved.


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        (4) An underappraisal of real estate or other item of 
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property offered as
security.

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    (d) "Equity stripping" means to assist a person in 
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obtaining a loan secured
by the person's principal residence 
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for the primary purpose of receiving fees
related to the 
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financing when (i) the loan decreased the person's equity in 
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the
principal residence and (ii) at the time the loan is made, 
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the financial
institution does not reasonably believe that the 
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person will be able to make
the scheduled payments to repay the 
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loan. "Equity
stripping" does not include reverse mortgages as 
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defined in Section 5a of the
Illinois Banking Act, Section 1-6a 
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of the Illinois Savings and Loan Act of
1985, or
subsection (3) 
 


 






SB2176 Engrossed
- 2 -
LRB093 15938 RXD 41560 b




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of Section 46 of the Illinois Credit Union Act.

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    (e) "Loan flipping" means to assist a person in refinancing 
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a loan secured by
the person's principal residence for the 
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primary purpose of receiving fees
related to the refinancing 
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when (i) the refinancing of the loan does not result in a

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results in no
tangible benefit to the person and (ii) at the 
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time the loan is made, the
financial institution does not 
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reasonably believe that the refinancing of the
loan will result 
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in a tangible benefit to the person.

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    (f) "Principal residence" means a person's primary 
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residence that is a
dwelling consisting of 4 or fewer family 
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units or that is in a dwelling
consisting of condominium or 
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cooperative units.

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(Source: P.A. 93-561, eff. 1-1-04.)