Sen. Kimberly A. Lightford
Filed: 5/4/2010
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1 | AMENDMENT TO HOUSE BILL 537
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2 | AMENDMENT NO. ______. Amend House Bill 537, AS AMENDED, by | ||||||
3 | replacing everything after the enacting clause with the | ||||||
4 | following:
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5 | "Section 5. The Consumer Installment Loan Act is amended by | ||||||
6 | changing Sections 1 and 15 and by adding Sections 17.1, 17.2, | ||||||
7 | 17.3, 17.4, 17.5, and 19.2 as follows:
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8 | (205 ILCS 670/1) (from Ch. 17, par. 5401)
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9 | Sec. 1. License required to engage in business. No person, | ||||||
10 | partnership, association, limited liability
company, or | ||||||
11 | corporation shall engage in
the business of making loans of | ||||||
12 | money in a principal amount not
exceeding $40,000 $25,000 , and | ||||||
13 | charge, contract for, or receive on any
such loan a
greater | ||||||
14 | rate of interest, discount, or consideration therefor than the
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15 | lender would be permitted by law to charge if he were not a | ||||||
16 | licensee
hereunder, except as authorized by this Act after |
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1 | first obtaining a license
from the Director of Financial | ||||||
2 | Institutions (hereinafter called the Director). No licensee, | ||||||
3 | or employee or affiliate thereof, that is licensed under the | ||||||
4 | Payday Loan Reform Act shall obtain a license under this Act | ||||||
5 | except that a licensee under the Payday Loan Reform Act may | ||||||
6 | obtain a license under this Act for the exclusive purpose and | ||||||
7 | use of making title-secured loans, as defined in subsection (a) | ||||||
8 | of Section 15 of this Act and governed by Title 38, Section | ||||||
9 | 110.300 of the Illinois Administrative Code.
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10 | (Source: P.A. 89-400, eff. 8-20-95; 90-437, eff. 1-1-98.)
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11 | (205 ILCS 670/15) (from Ch. 17, par. 5415)
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12 | Sec. 15. Charges permitted.
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13 | (a) Every licensee may
lend a principal amount not | ||||||
14 | exceeding $40,000 and , except as to small consumer loans as | ||||||
15 | defined in this Section, may charge,
contract for
and receive | ||||||
16 | thereon interest at an annual percentage the rate of no more | ||||||
17 | than 36% agreed upon
by
the licensee and the borrower , subject | ||||||
18 | to the provisions of this Act ; provided, however, that the | ||||||
19 | limitation on the annual percentage rate contained in this | ||||||
20 | subsection (a) does not apply to title-secured loans, which are | ||||||
21 | loans upon which interest is charged at an annual percentage | ||||||
22 | rate exceeding 36%, in which, at commencement, an obligor | ||||||
23 | provides to the licensee, as security for the loan, physical | ||||||
24 | possession of the obligor's title to a motor vehicle, and upon | ||||||
25 | which a licensee may charge, contract for, and receive thereon |
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1 | interest at the rate agreed upon by the licensee and borrower. | ||||||
2 | For purposes of this Section, the annual percentage rate shall | ||||||
3 | be calculated in accordance with the federal Truth in Lending | ||||||
4 | Act .
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5 | (b) For purpose of this Section, the following terms shall | ||||||
6 | have the
meanings ascribed herein.
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7 | "Applicable interest" for a precomputed loan contract | ||||||
8 | means the amount of
interest attributable to each monthly | ||||||
9 | installment period. It is computed
as if each installment | ||||||
10 | period were one month and any interest charged for
extending | ||||||
11 | the first installment period beyond one month is ignored. The
| ||||||
12 | applicable interest for any monthly installment period is , for | ||||||
13 | loans other than small consumer loans as defined in this | ||||||
14 | Section, that portion of
the precomputed interest that bears | ||||||
15 | the same ratio to the total precomputed
interest as the | ||||||
16 | balances scheduled to be outstanding during that month bear
to | ||||||
17 | the sum of all scheduled monthly outstanding balances in the | ||||||
18 | original
contract. With respect to a small consumer loan, the | ||||||
19 | applicable interest for any installment period is that portion | ||||||
20 | of the precomputed monthly installment account handling charge | ||||||
21 | attributable to the installment period calculated based on a | ||||||
22 | method at least as favorable to the consumer as the actuarial | ||||||
23 | method, as defined by the federal Truth in Lending Act.
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24 | "Interest-bearing loan" means a loan in which the debt is
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25 | expressed as a principal amount plus interest charged on actual | ||||||
26 | unpaid
principal balances for the time actually outstanding.
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1 | "Precomputed loan" means a loan in which the debt is | ||||||
2 | expressed as the sum
of the original principal amount plus | ||||||
3 | interest computed actuarially in
advance, assuming all | ||||||
4 | payments will be made when scheduled.
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5 | "Small consumer loan" means a loan upon which interest is | ||||||
6 | charged at an annual percentage rate exceeding 36% and with an | ||||||
7 | amount financed of $4,000 or less. "Small consumer loan" does | ||||||
8 | not include a title-secured loan as defined by subsection (a) | ||||||
9 | of this Section or a payday loan as defined by the Payday Loan | ||||||
10 | Reform Act. | ||||||
11 | (c) Loans may be interest-bearing or precomputed.
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12 | (d) To compute time for either interest-bearing or | ||||||
13 | precomputed loans for
the calculation of interest and other | ||||||
14 | purposes, a month shall be a calendar
month and a day shall be | ||||||
15 | considered 1/30th of a month when calculation is
made for a | ||||||
16 | fraction of a month. A month shall be 1/12th of a year. A
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17 | calendar month is that period from a given date in one month to | ||||||
18 | the same
numbered date in the following month, and if there is | ||||||
19 | no same numbered
date, to the last day of the following month. | ||||||
20 | When a period of time
includes a month and a fraction of a | ||||||
21 | month, the fraction of the month is
considered to follow the | ||||||
22 | whole month. In the alternative, for
interest-bearing loans, | ||||||
23 | the licensee may charge interest at the rate of
1/365th of the | ||||||
24 | agreed annual rate for each day actually
elapsed.
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25 | (d-5) No financial institution or other person may | ||||||
26 | condition an extension of credit to a consumer on the |
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1 | consumer's repayment by preauthorized electronic fund | ||||||
2 | transfers. Payment options, including, but not limited to, | ||||||
3 | electronic fund transfers and Automatic Clearing House (ACH) | ||||||
4 | transactions may be offered to consumers as a choice and method | ||||||
5 | of payment chosen by the consumer. | ||||||
6 | (e) With respect to interest-bearing loans:
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7 | (1) Interest shall be computed on unpaid principal | ||||||
8 | balances outstanding
from time to time, for the time | ||||||
9 | outstanding, until fully paid. Each
payment shall be | ||||||
10 | applied first to the accumulated interest and the
remainder | ||||||
11 | of the payment applied to the unpaid principal balance; | ||||||
12 | provided
however, that if the amount of the payment is | ||||||
13 | insufficient to pay the
accumulated interest, the unpaid | ||||||
14 | interest continues to accumulate to be
paid from the | ||||||
15 | proceeds of subsequent payments and is not added to the | ||||||
16 | principal
balance.
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17 | (2) Interest shall not be payable in advance or | ||||||
18 | compounded. However, if
part or all of the consideration | ||||||
19 | for a new loan contract is the unpaid
principal balance of | ||||||
20 | a prior loan, then the principal amount payable under
the | ||||||
21 | new loan contract may include any unpaid interest which has | ||||||
22 | accrued.
The unpaid principal balance of a precomputed loan | ||||||
23 | is the balance due
after refund or credit of unearned | ||||||
24 | interest as provided in paragraph (f),
clause (3). The | ||||||
25 | resulting loan contract shall be deemed a new and separate
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26 | loan transaction for all purposes.
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1 | (3) Loans must be fully amortizing and be repayable in | ||||||
2 | substantially equal and consecutive weekly, biweekly, | ||||||
3 | semimonthly, or monthly installments. Notwithstanding this | ||||||
4 | requirement, may be payable as agreed between the parties, | ||||||
5 | including payment
at irregular times or in unequal amounts | ||||||
6 | and rates that may vary according to with an
index that is | ||||||
7 | independently verifiable and beyond the control of the | ||||||
8 | licensee.
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9 | (4) The lender or creditor may, if the contract | ||||||
10 | provides, collect a
delinquency or collection charge on | ||||||
11 | each installment in default for a period of
not less than | ||||||
12 | 10 days in an amount not exceeding 5% of the installment on
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13 | installments in excess of $200, or $10 on installments of | ||||||
14 | $200 or less, but
only
one delinquency and collection | ||||||
15 | charge may be collected on any installment
regardless of | ||||||
16 | the period during which it remains in default.
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17 | (f) With respect to precomputed loans:
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18 | (1) Loans shall be repayable in substantially equal and | ||||||
19 | consecutive weekly, biweekly, semimonthly, or
monthly | ||||||
20 | installments of principal and interest combined, except | ||||||
21 | that the
first installment period may be longer than one | ||||||
22 | month by not more than 15
days, and the first installment | ||||||
23 | payment amount may be larger than the
remaining payments by | ||||||
24 | the amount of interest charged for the extra days;
and | ||||||
25 | provided further that monthly installment payment dates | ||||||
26 | may be omitted
to accommodate borrowers with seasonal |
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1 | income.
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2 | (2) Payments may be applied to the combined total of | ||||||
3 | principal and
precomputed interest until the loan is fully | ||||||
4 | paid. Payments shall be
applied in the order in which they | ||||||
5 | become due, except that any insurance
proceeds received as | ||||||
6 | a result of any claim made on any insurance, unless
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7 | sufficient to prepay the contract in full, may be applied | ||||||
8 | to the unpaid
installments of the total of payments in | ||||||
9 | inverse order.
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10 | (3) When any loan contract is paid in full by cash, | ||||||
11 | renewal or
refinancing, or a new loan, one month or more | ||||||
12 | before the final installment
due date, a licensee shall | ||||||
13 | refund or credit the obligor with
the total of
the | ||||||
14 | applicable interest for all fully unexpired installment | ||||||
15 | periods, as
originally scheduled or as deferred, which | ||||||
16 | follow the day of prepayment;
provided, if the prepayment | ||||||
17 | occurs prior to the first installment due date,
the | ||||||
18 | licensee may retain 1/30 of the applicable interest for a | ||||||
19 | first
installment period of one month for each day from the | ||||||
20 | date of the loan to
the date of prepayment, and shall | ||||||
21 | refund or credit the obligor
with the
balance of the total | ||||||
22 | interest contracted for. If the maturity of the loan
is | ||||||
23 | accelerated for any reason and judgment is entered, the | ||||||
24 | licensee shall
credit the borrower with the same refund as | ||||||
25 | if prepayment in full had been
made on the date the | ||||||
26 | judgement is entered.
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1 | (4) The lender or creditor may, if the contract | ||||||
2 | provides, collect a
delinquency or collection charge on | ||||||
3 | each installment in default for a period of
not less than | ||||||
4 | 10 days in an amount not exceeding 5% of the installment on
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5 | installments in excess of $200, or $10 on installments of | ||||||
6 | $200 or less, but
only
one delinquency or collection charge | ||||||
7 | may be collected on any installment
regardless of the | ||||||
8 | period during which it remains in default.
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9 | (5) If the parties agree in writing, either in the loan | ||||||
10 | contract or in a
subsequent agreement, to a deferment of | ||||||
11 | wholly unpaid installments, a
licensee may grant a | ||||||
12 | deferment and may collect a deferment charge as
provided in | ||||||
13 | this Section. A deferment postpones the scheduled due date | ||||||
14 | of
the earliest unpaid installment and all subsequent | ||||||
15 | installments as
originally scheduled, or as previously | ||||||
16 | deferred, for a period equal to the
deferment period. The | ||||||
17 | deferment period is that period during which no
installment | ||||||
18 | is scheduled to be paid by reason of the deferment. The
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19 | deferment charge for a one month period may not exceed the | ||||||
20 | applicable
interest for the installment period immediately | ||||||
21 | following the due date of
the last undeferred payment. A | ||||||
22 | proportionate charge may be made for
deferment for periods | ||||||
23 | of more or less than one month. A deferment charge
is | ||||||
24 | earned pro rata during the deferment period and is fully | ||||||
25 | earned on the
last day of the deferment period. Should a | ||||||
26 | loan be prepaid in full during
a deferment period, the |
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1 | licensee shall credit to the obligor a
refund of the | ||||||
2 | unearned deferment charge in addition to any other refund | ||||||
3 | or
credit made for prepayment of the loan in full.
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4 | (6) If two or more installments are delinquent one full | ||||||
5 | month or more on
any due date, and if the contract so | ||||||
6 | provides, the licensee may reduce the
unpaid balance by the | ||||||
7 | refund credit which would be required for prepayment
in | ||||||
8 | full on the due date of the most recent maturing | ||||||
9 | installment in default.
Thereafter, and in lieu of any | ||||||
10 | other default or deferment charges, the
agreed rate of | ||||||
11 | interest or, in the case of small consumer loans, interest | ||||||
12 | at the rate of 18% per annum, may be charged on the unpaid | ||||||
13 | balance until fully paid.
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14 | (7) Fifteen days after the final installment as | ||||||
15 | originally scheduled or
deferred, the licensee, for any | ||||||
16 | loan contract which has not previously been
converted to | ||||||
17 | interest-bearing under paragraph (f), clause (6), may | ||||||
18 | compute
and charge interest on any balance remaining | ||||||
19 | unpaid, including unpaid
default or deferment charges, at | ||||||
20 | the agreed rate of interest or, in the case of small | ||||||
21 | consumer loans, interest at the rate of 18% per annum, | ||||||
22 | until fully
paid. At the time of payment of said final | ||||||
23 | installment, the licensee shall
give notice to the obligor | ||||||
24 | stating any amounts unpaid.
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25 | (Source: P.A. 93-264, eff. 1-1-04.)
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1 | (205 ILCS 670/17.1 new) | ||||||
2 | Sec. 17.1. Small consumer loans; definition. Sections | ||||||
3 | 17.1, 17.2, 17.3, 17.4, and 17.5 of this Act apply exclusively | ||||||
4 | to small consumer loans as defined in Section 15 of this Act. | ||||||
5 | (205 ILCS 670/17.2 new)
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6 | Sec. 17.2. Small consumer loans; charges permitted. | ||||||
7 | (a) With respect to a small consumer loan of $1,500 or | ||||||
8 | less: | ||||||
9 | (1) A licensee may charge, contract for and receive | ||||||
10 | interest at an annual percentage rate of no more than 99% | ||||||
11 | calculated in accordance with the federal Truth in Lending | ||||||
12 | Act. | ||||||
13 | (2) A licensee may charge an acquisition charge not to | ||||||
14 | exceed 10% of the amount financed. The acquisition charge | ||||||
15 | is in lieu of the fee permitted under Section 15d(5) and is | ||||||
16 | fully earned at the time the loan is made and shall not be | ||||||
17 | subject to refund. | ||||||
18 | (b) With respect to a small consumer loan over $1,500: | ||||||
19 | (1) A licensee may charge the following finance | ||||||
20 | charges: | ||||||
21 | (A) an acquisition charge for making the original | ||||||
22 | loan, not to exceed $100; for purposes of this | ||||||
23 | subsection (b), "original loan" means a loan in which | ||||||
24 | none of the proceeds are used by the licensee to pay | ||||||
25 | off the outstanding balance of another small consumer |
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1 | loan made to the same consumer by the same licensee or | |||||||||||||||||||||||||||||||||||||||||||||||||
2 | any employee or affiliate of the licensee; | |||||||||||||||||||||||||||||||||||||||||||||||||
3 | (B) an acquisition charge for the first time that | |||||||||||||||||||||||||||||||||||||||||||||||||
4 | an original loan is refinanced, not to exceed $50; | |||||||||||||||||||||||||||||||||||||||||||||||||
5 | (C) an acquisition charge for any subsequent | |||||||||||||||||||||||||||||||||||||||||||||||||
6 | refinancing not to exceed $25; for purposes of this | |||||||||||||||||||||||||||||||||||||||||||||||||
7 | subsection (b), "refinancing" occurs when an existing | |||||||||||||||||||||||||||||||||||||||||||||||||
8 | small consumer loan is satisfied and replaced by a new | |||||||||||||||||||||||||||||||||||||||||||||||||
9 | small consumer loan made to the same consumer by the | |||||||||||||||||||||||||||||||||||||||||||||||||
10 | same licensee or any employee or affiliate of the | |||||||||||||||||||||||||||||||||||||||||||||||||
11 | licensee; and | |||||||||||||||||||||||||||||||||||||||||||||||||
12 | (D) a monthly installment account handling charge, | |||||||||||||||||||||||||||||||||||||||||||||||||
13 | not to exceed the following amounts: | |||||||||||||||||||||||||||||||||||||||||||||||||
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15 | (2) The acquisition charge is in lieu of the fee | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
16 | permitted under Section 15d(5) and is fully earned at the | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
17 | time the loan is made and shall not be subject to refund; | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
18 | except that, if the loan is paid in full within the first | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
19 | 60 days of the loan term, the first $25 of the acquisition | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
20 | charge may be retained by the licensee and the remainder of | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
21 | the acquisition charge shall be refunded at a rate of | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
22 | one-sixtieth of the remainder of the acquisition charge per | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
23 | day, beginning on the day after the date of the prepayment | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
24 | and ending on the sixtieth day after the loan was made. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
25 | (3) In no event shall the annual percentage rate on the |
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1 | loan transaction as calculated in accordance with the | ||||||
2 | federal Truth in Lending Act exceed 99%. | ||||||
3 | (c) In addition to the charges permitted in subsections (a) | ||||||
4 | and (b) of this Section, a licensee may charge a consumer a fee | ||||||
5 | not to exceed $1 to cover the licensee's cost of submitting | ||||||
6 | loan information into the consumer reporting service, as | ||||||
7 | required under Section 17.5 of this Act. Only one such fee may | ||||||
8 | be collected by the licensee with respect to a particular loan. | ||||||
9 | (d) When any loan contract is paid in full by cash, | ||||||
10 | renewal, or refinancing, or a new loan, the licensee shall | ||||||
11 | refund any unearned interest or unearned portion of the monthly | ||||||
12 | installment account handling charge, whichever is applicable. | ||||||
13 | The unearned interest or unearned portion of the monthly | ||||||
14 | installment account handling charge that is refunded shall be | ||||||
15 | calculated based on a method that is at least as favorable to | ||||||
16 | the consumer as the actuarial method, as defined by the federal | ||||||
17 | Truth in Lending Act. The sum of the digits or rule of 78ths | ||||||
18 | method of calculating prepaid interest refunds is prohibited. | ||||||
19 | (e) The maximum acquisition charges that are expressed as | ||||||
20 | flat dollar amounts under this Section shall be subject to an | ||||||
21 | annual adjustment as of the first day of each year following | ||||||
22 | the effective date of this amendatory Act of the 96th General | ||||||
23 | Assembly equal to the percentage change in the Consumer Price | ||||||
24 | Index compiled by the Bureau of Labor Statistics, United States | ||||||
25 | Department of Labor, or, if that index is canceled or | ||||||
26 | superseded, the index chosen by the Bureau of Labor Statistics |
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1 | as most accurately reflecting the changes in the purchasing | ||||||
2 | power of the dollar for consumers, or, if no such index is | ||||||
3 | chosen by the Bureau of Labor Statistics, the index chosen by | ||||||
4 | the Department as most accurately reflecting the changes in the | ||||||
5 | purchasing power of the dollar for consumers. The adjusted | ||||||
6 | amounts shall take effect on July 1 of the year of the | ||||||
7 | computations. | ||||||
8 | (205 ILCS 670/17.3 new) | ||||||
9 | Sec. 17.3. Small consumer loans; terms. | ||||||
10 | (a) A small consumer loan shall be fully amortizing and be | ||||||
11 | repayable in its entirety in a minimum of 6 substantially equal | ||||||
12 | and consecutive payments with a period of not less than 180 | ||||||
13 | days to maturity. | ||||||
14 | (b) No licensee, or employee or affiliate thereof, may | ||||||
15 | extend to or have open with a consumer more than one small | ||||||
16 | consumer loan at any time; provided, however, that loans | ||||||
17 | acquired by a licensee from another licensee are not included | ||||||
18 | within this prohibition. | ||||||
19 | (c) A licensee is prohibited from refinancing a small | ||||||
20 | consumer loan during the first 75 days of the loan term. For | ||||||
21 | purposes of this Act, a refinancing occurs when an existing | ||||||
22 | small consumer loan is satisfied and replaced by a new small | ||||||
23 | consumer loan made to the same consumer by the same licensee or | ||||||
24 | any employee or affiliate of the licensee. | ||||||
25 | (d) Except for the deferment charge permitted by item (5) |
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1 | of subsection (f) of Section 15, a licensee is prohibited from | ||||||
2 | collecting any fee, charge, or remuneration of any sort for | ||||||
3 | renewing, amending, or extending a small consumer loan beyond | ||||||
4 | its original term. | ||||||
5 | (e) Before entering into a small consumer loan agreement, a | ||||||
6 | licensee must provide to the consumer a pamphlet, prepared by | ||||||
7 | the Director, describing general information about consumer | ||||||
8 | credit and about the consumer's rights and responsibilities in | ||||||
9 | a small consumer loan transaction. Each small consumer loan | ||||||
10 | agreement executed by a licensee shall include a statement, | ||||||
11 | located just above the signature line for the consumer, and | ||||||
12 | shall provide as follows: "In addition to agreeing to the terms | ||||||
13 | of this agreement, I acknowledge, by my signature below, | ||||||
14 | receipt from (name of lender) a pamphlet regarding small | ||||||
15 | consumer loans.". | ||||||
16 | (f) Each small consumer loan agreement entered into between | ||||||
17 | a licensee and a consumer shall include a notification, in such | ||||||
18 | loan agreement, of a toll-free number furnished by the | ||||||
19 | Department of Financial and Professional Regulation, Division | ||||||
20 | of Financial Institutions that the consumer may contact for the | ||||||
21 | purpose of receiving information from the Division regarding | ||||||
22 | credit or assistance with credit problems. | ||||||
23 | (205 ILCS 670/17.4 new) | ||||||
24 | Sec. 17.4. Small consumer loans; loan amount. A licensee | ||||||
25 | is prohibited from making a small consumer loan to a consumer |
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1 | if the total of all payments to be made in any month on the loan | ||||||
2 | exceeds 22.5% of the consumer's gross monthly income, as | ||||||
3 | demonstrated by official documentation of the income, | ||||||
4 | including, but not limited to, the consumer's most recent pay | ||||||
5 | stub, receipt reflecting payment of government benefits, or | ||||||
6 | other official documentation. "Official documentation" | ||||||
7 | includes tax returns and documentation prepared by the source | ||||||
8 | of the income. A statement by the consumer is not official | ||||||
9 | documentation. | ||||||
10 | (205 ILCS 670/17.5 new) | ||||||
11 | Sec. 17.5. Consumer reporting service. | ||||||
12 | (a) For the purpose of this Section, "certified database" | ||||||
13 | means the consumer reporting
service database established | ||||||
14 | pursuant to the Payday Loan Reform
Act. | ||||||
15 | (b) Within 90 days after making a small consumer loan, a | ||||||
16 | licensee shall enter information about the loan into the | ||||||
17 | certified database. | ||||||
18 | (c) For every small consumer loan made, the licensee shall | ||||||
19 | input the following information into the certified database | ||||||
20 | within 90 days after the loan is made: | ||||||
21 | (i) the consumer's name and official identification | ||||||
22 | number (for purposes of this Act, "official identification | ||||||
23 | number" includes a Social Security Number, an Individual | ||||||
24 | Taxpayer Identification Number, a Federal Employer | ||||||
25 | Identification Number, an Alien Registration Number, or an |
| |||||||
| |||||||
1 | identification number imprinted on a passport or consular | ||||||
2 | identification document issued by a foreign government); | ||||||
3 | (ii) the consumer's gross monthly income; | ||||||
4 | (iii) the date of the loan; | ||||||
5 | (iv) the amount financed; | ||||||
6 | (v) the term of the loan; | ||||||
7 | (vi) the acquisition charge; | ||||||
8 | (vii) the monthly installment account handling charge; | ||||||
9 | (viii) the verification fee; | ||||||
10 | (ix) the number and amount of payments; and | ||||||
11 | (x) whether the loan is a first or subsequent | ||||||
12 | refinancing of a prior small consumer loan. | ||||||
13 | (d) Once a loan is entered with the certified database, the | ||||||
14 | certified database shall provide to the licensee a dated, | ||||||
15 | time-stamped statement acknowledging the certified database's | ||||||
16 | receipt of the information and assigning each loan a unique | ||||||
17 | loan number. | ||||||
18 | (e) The licensee shall update the certified database within | ||||||
19 | 90 days if any of the following events occur: | ||||||
20 | (i) the loan is paid in full by cash; | ||||||
21 | (ii) the loan is refinanced; | ||||||
22 | (iii) the loan is renewed; | ||||||
23 | (iv) the loan is satisfied in full or in part by | ||||||
24 | collateral being sold after default; | ||||||
25 | (v) the loan is cancelled or rescinded; or | ||||||
26 | (vi) the consumer's obligation on the loan is otherwise |
| |||||||
| |||||||
1 | discharged by the licensee. | ||||||
2 | (f) To the extent a licensee sells a product or service to | ||||||
3 | a consumer, other than a small consumer loan, and finances any | ||||||
4 | portion of the cost of the product or service, the licensee | ||||||
5 | shall, in addition to and at the same time as the information | ||||||
6 | inputted under subsection (d) of this Section, enter into the | ||||||
7 | certified database: | ||||||
8 | (i) a description of the product or service sold; | ||||||
9 | (ii) the charge for the product or service; and | ||||||
10 | (iii) the portion of the charge for the product or | ||||||
11 | service, if any, that is included in the amount financed by
| ||||||
12 | a small consumer loan. | ||||||
13 | (g) The certified database provider shall indemnify the | ||||||
14 | licensee against all claims and actions arising from illegal or | ||||||
15 | willful or wanton acts on the part of the certified database | ||||||
16 | provider. The certified database provider may charge a fee not | ||||||
17 | to exceed $1 for each loan entered into the certified database | ||||||
18 | under subsection (d) of this Section. The database provider | ||||||
19 | shall not charge any additional fees or charges to the | ||||||
20 | licensee. | ||||||
21 | (h) All personally identifiable information regarding any | ||||||
22 | consumer obtained by way of the certified database and | ||||||
23 | maintained by the Department is strictly confidential and shall | ||||||
24 | be exempt from disclosure under provision (i) of item (b) of | ||||||
25 | subsection (1) of Section 7 of the Freedom of Information Act. | ||||||
26 | (i) A licensee who submits information to a certified |
| |||||||
| |||||||
1 | database provider in accordance with this Section shall not be | ||||||
2 | liable to any person for any subsequent release or disclosure | ||||||
3 | of that information by the certified database provider, the | ||||||
4 | Department, or any other person acquiring possession of the | ||||||
5 | information, regardless of whether such subsequent release or | ||||||
6 | disclosure was lawful, authorized, or intentional. | ||||||
7 | (j) To the extent the certified database becomes | ||||||
8 | unavailable to a licensee as a result of some event or events | ||||||
9 | outside the control of the licensee or the certified database | ||||||
10 | is decertified, the requirements of this Section and Section | ||||||
11 | 17.4 of this Act are suspended until such time as the certified | ||||||
12 | database becomes available. | ||||||
13 | (205 ILCS 670/19.2 new) | ||||||
14 | Sec. 19.2. Licensee; prohibition against accepting certain | ||||||
15 | checks. At the time a loan is made or within 20 days after a | ||||||
16 | loan is made, a licensee shall not (i) accept a check and agree | ||||||
17 | to hold it for a period of days before deposit or presentment | ||||||
18 | or (ii) accept a check dated subsequent to the date written. | ||||||
19 | Section 10. The Illinois Financial Services Development | ||||||
20 | Act is amended by changing Section 3 as follows:
| ||||||
21 | (205 ILCS 675/3) (from Ch. 17, par. 7003)
| ||||||
22 | Sec. 3. As used in this Section:
| ||||||
23 | (a) "Financial institution" means any bank with its
main |
| |||||||
| |||||||
1 | office or, after May 31, 1997, a branch in this State, any | ||||||
2 | state or
federal savings and loan
association or savings bank | ||||||
3 | with its main office or branch in this State,
any state or | ||||||
4 | federal credit
union with its main office in this State, and | ||||||
5 | any lender licensed under the
Consumer Installment Loan Act or | ||||||
6 | the Sales Finance Agency Act ; provided, however, that lenders | ||||||
7 | licensed under the Consumer Installment Loan Act or the Sales | ||||||
8 | Finance Agency Act are prohibited from charging interest in | ||||||
9 | excess of 36% per annum for any extension of credit under this | ||||||
10 | Act .
| ||||||
11 | (b) "Revolving credit plan" or "plan" means a plan | ||||||
12 | contemplating the
extension of credit under an account governed | ||||||
13 | by an agreement between a
financial institution and a borrower | ||||||
14 | who is a natural person pursuant to which:
| ||||||
15 | (1) The financial institution permits the borrower | ||||||
16 | and, if the agreement
governing the plan so provides, | ||||||
17 | persons acting on behalf of or with
authorization from the | ||||||
18 | borrower, from time to time to make purchases and to
obtain | ||||||
19 | loans by any means whatsoever, including use
of a credit | ||||||
20 | device primarily for personal, family or household | ||||||
21 | purposes;
| ||||||
22 | (2) the amounts of such purchases and loans are charged | ||||||
23 | to the
borrower's account under the revolving credit plan;
| ||||||
24 | (3) the borrower is required to pay the financial | ||||||
25 | institution the
amounts of all purchases and loans charged | ||||||
26 | to such borrower's account under
the plan but has the |
| |||||||
| |||||||
1 | privilege of paying such amounts outstanding from time
to | ||||||
2 | time in full or installments; and
| ||||||
3 | (4) interest may be charged and collected by the | ||||||
4 | financial institution
from time to time on the outstanding | ||||||
5 | unpaid indebtedness under such plan.
| ||||||
6 | (c) "Credit device" means any card, check, identification | ||||||
7 | code or other
means of identification contemplated by the | ||||||
8 | agreement governing the plan.
| ||||||
9 | (d) "Outstanding unpaid indebtedness" means on any day an | ||||||
10 | amount not in
excess of the total amount of purchases and loans | ||||||
11 | charged to the borrower's
account under the plan which is | ||||||
12 | outstanding and unpaid at the end of the day,
after adding the | ||||||
13 | aggregate amount of any new purchases and loans charged to
the | ||||||
14 | account as of that day and deducting the aggregate amount of | ||||||
15 | any
payments and credits applied to that indebtedness as of | ||||||
16 | that day and, if
the agreement governing the plan so provides, | ||||||
17 | may include the amount of any
billed and unpaid interest and | ||||||
18 | other charges.
| ||||||
19 | (Source: P.A. 89-208, eff. 9-29-95.)
| ||||||
20 | Section 15. The Payday Loan Reform Act is amended by | ||||||
21 | changing Sections 1-10, 2-5, 2-10, 2-15, 2-17, 2-20, 2-30, | ||||||
22 | 2-40, 2-45, 3-5, and 4-5 as follows: | ||||||
23 | (815 ILCS 122/1-10)
| ||||||
24 | Sec. 1-10. Definitions. As used in this Act: |
| |||||||
| |||||||
1 | "Check" means a "negotiable instrument", as defined in | ||||||
2 | Article 3 of the Uniform Commercial Code, that is drawn on a | ||||||
3 | financial institution. | ||||||
4 | "Commercially reasonable method of verification" or | ||||||
5 | "certified database" means a consumer reporting service | ||||||
6 | database certified by the Department as effective in verifying | ||||||
7 | that a proposed loan agreement is permissible under this Act, | ||||||
8 | or, in the absence of the Department's certification, any | ||||||
9 | reasonably reliable written verification by the consumer | ||||||
10 | concerning (i) whether the consumer has any outstanding payday | ||||||
11 | loans, (ii) the principal amount of those outstanding payday | ||||||
12 | loans, and (iii) whether any payday loans have been paid in | ||||||
13 | full by the consumer in the preceding 7 days. | ||||||
14 | "Consumer" means any natural person who, singly or jointly | ||||||
15 | with another consumer, enters into a loan. | ||||||
16 | "Consumer reporting service" means an entity that provides | ||||||
17 | a database certified by the Department. | ||||||
18 | "Department" means the Department of Financial and | ||||||
19 | Professional Regulation. | ||||||
20 | "Secretary" means the Secretary of Financial and | ||||||
21 | Professional Regulation. | ||||||
22 | "Gross monthly income" means monthly income as | ||||||
23 | demonstrated by official documentation of the income, | ||||||
24 | including, but not limited to, a pay stub or a receipt | ||||||
25 | reflecting payment of government benefits, for the period 30 | ||||||
26 | days prior to the date on which the loan is made. |
| |||||||
| |||||||
1 | "Lender" and "licensee" mean any person or entity, | ||||||
2 | including any affiliate or subsidiary of a lender or licensee, | ||||||
3 | that offers or makes a payday loan, buys a whole or partial | ||||||
4 | interest in a payday loan, arranges a payday loan for a third | ||||||
5 | party, or acts as an agent for a third party in making a payday | ||||||
6 | loan, regardless of whether approval, acceptance, or | ||||||
7 | ratification by the third party is necessary to create a legal | ||||||
8 | obligation for the third party, and includes any other person | ||||||
9 | or entity if the Department determines that the person or | ||||||
10 | entity is engaged in a transaction that is in substance a | ||||||
11 | disguised payday loan or a subterfuge for the purpose of | ||||||
12 | avoiding this Act. | ||||||
13 | "Loan agreement" means a written agreement between a lender | ||||||
14 | and consumer to make a loan to the consumer, regardless of | ||||||
15 | whether any loan proceeds are actually paid to the consumer on | ||||||
16 | the date on which the loan agreement is made. | ||||||
17 | "Member of the military" means a person serving in the | ||||||
18 | armed forces of the United States, the Illinois National Guard, | ||||||
19 | or any reserve component of the armed forces of the United | ||||||
20 | States. "Member of the military" includes those persons engaged | ||||||
21 | in (i) active duty, (ii) training or education under the | ||||||
22 | supervision of the United States preliminary to induction into | ||||||
23 | military service, or (iii) a period of active duty with the | ||||||
24 | State of Illinois under Title 10 or Title 32 of the United | ||||||
25 | States Code pursuant to order of the President or the Governor | ||||||
26 | of the State of Illinois. |
| |||||||
| |||||||
1 | "Outstanding balance" means the total amount owed by the | ||||||
2 | consumer on a loan to a lender, including all principal, | ||||||
3 | finance charges, fees, and charges of every kind. | ||||||
4 | "Payday loan" or "loan" means a loan with a finance charge | ||||||
5 | exceeding an annual percentage rate of 36% and with a term that | ||||||
6 | does not exceed 120 days, including any transaction conducted | ||||||
7 | via any medium whatsoever, including, but not limited to, | ||||||
8 | paper, facsimile, Internet, or telephone, in which: | ||||||
9 | (1) A lender accepts one or more checks dated on the | ||||||
10 | date written and agrees to hold them for a period of days | ||||||
11 | before deposit or presentment, or accepts one or more | ||||||
12 | checks dated subsequent to the date written and agrees to | ||||||
13 | hold them for deposit; or | ||||||
14 | (2) A lender accepts one or more authorizations to | ||||||
15 | debit a consumer's bank account; or | ||||||
16 | (3) A lender accepts an interest in a consumer's wages, | ||||||
17 | including, but not limited to, a wage assignment. | ||||||
18 | The term "payday loan" includes "installment payday loan", | ||||||
19 | unless otherwise specified in
this Act. | ||||||
20 | "Principal amount" means the amount received by the | ||||||
21 | consumer from the lender due and owing on a loan, excluding any | ||||||
22 | finance charges, interest, fees, or other loan-related | ||||||
23 | charges. | ||||||
24 | "Rollover" means to refinance, renew, amend, or extend a | ||||||
25 | loan beyond its original term.
| ||||||
26 | (Source: P.A. 94-13, eff. 12-6-05.) |
| |||||||
| |||||||
1 | (815 ILCS 122/2-5)
| ||||||
2 | Sec. 2-5. Loan terms. | ||||||
3 | (a) Without affecting the right of a consumer to prepay at | ||||||
4 | any time without cost or penalty, no payday loan may have a | ||||||
5 | minimum term of less than 13 days. | ||||||
6 | (b) Except for an installment payday loan as defined in | ||||||
7 | this Section,
no No payday loan may be made to a consumer if | ||||||
8 | the loan would result in the consumer being indebted to one or | ||||||
9 | more payday lenders for a period in excess of 45 consecutive | ||||||
10 | days. Except as provided under subsection (c) of this Section | ||||||
11 | and Section 2-40, if a consumer has or has had loans | ||||||
12 | outstanding for a period in excess of 45 consecutive days, no | ||||||
13 | payday lender may offer or make a loan to the consumer for at | ||||||
14 | least 7 calendar days after the date on which the outstanding | ||||||
15 | balance of all payday loans made during the 45 consecutive day | ||||||
16 | period is paid in full. For purposes of this subsection, the | ||||||
17 | term "consecutive days" means a series of continuous calendar | ||||||
18 | days in which the consumer has an outstanding balance on one or | ||||||
19 | more payday loans; however, if a payday loan is made to a | ||||||
20 | consumer within 6 days or less after the outstanding balance of | ||||||
21 | all loans is paid in full, those days are counted as | ||||||
22 | "consecutive days" for purposes of this subsection. | ||||||
23 | (c) Notwithstanding anything in this Act to the contrary, a | ||||||
24 | payday loan
shall also include any installment loan otherwise | ||||||
25 | meeting the definition of
payday loan contained in Section |
| |||||||
| |||||||
1 | 1-10, but that has a term agreed by the
parties of not less | ||||||
2 | than 112 days and not exceeding 180 days; hereinafter an
| ||||||
3 | "installment payday loan". The following provisions shall | ||||||
4 | apply:
| ||||||
5 | (i) Any installment payday loan must be fully | ||||||
6 | amortizing, with a finance
charge calculated on the | ||||||
7 | principal balances scheduled to be outstanding and
be | ||||||
8 | repayable in substantially equal and consecutive | ||||||
9 | installments, according
to a payment schedule agreed by the | ||||||
10 | parties with not less than 13 days and
not more than one | ||||||
11 | month between payments; except that the first installment
| ||||||
12 | period may be longer than the remaining installment periods | ||||||
13 | by not more than
15 days, and the first installment payment | ||||||
14 | may be larger than the remaining
installment payments by | ||||||
15 | the amount of finance charges applicable to the
extra days. | ||||||
16 | (ii) An installment payday loan may be refinanced by a | ||||||
17 | new installment
payday loan one time during the term of the | ||||||
18 | initial loan; provided that the
total duration of | ||||||
19 | indebtedness on the initial installment payday loan | ||||||
20 | combined
with the total term of indebtedness of the new | ||||||
21 | loan refinancing that initial
loan, shall not exceed 180 | ||||||
22 | days. For purposes of this Act, a refinancing
occurs when | ||||||
23 | an existing installment payday loan is paid from the | ||||||
24 | proceeds of
a new installment payday loan. | ||||||
25 | (iii) In the event an installment payday loan is paid | ||||||
26 | in full prior to
the date on which the last scheduled |
| |||||||
| |||||||
1 | installment payment before maturity is
due, other than | ||||||
2 | through a refinancing, no licensee may offer or make a | ||||||
3 | payday
loan to the consumer for at least 2 calendar days | ||||||
4 | thereafter. | ||||||
5 | (iv) No installment payday loan may be made to a | ||||||
6 | consumer if the loan would
result in the consumer being | ||||||
7 | indebted to one or more payday lenders for a
period in | ||||||
8 | excess of 180 consecutive days. | ||||||
9 | No lender may make a payday loan to a consumer if the total | ||||||
10 | principal amount of the loan, when combined with the principal | ||||||
11 | amount of all of the consumer's other outstanding payday loans, | ||||||
12 | exceeds $1,000 or 25% of the consumer's gross monthly income , | ||||||
13 | whichever is less. | ||||||
14 | (d) (Blank). No payday loan may be made to a consumer who | ||||||
15 | has an outstanding balance on 2 payday loans. | ||||||
16 | (e) No lender may make a payday loan to a consumer if the | ||||||
17 | total of all payday loan payments coming due within the first | ||||||
18 | calendar month of the loan, when combined with the payment | ||||||
19 | amount of all of the consumers other outstanding payday loans | ||||||
20 | coming due within the same month, exceeds the lesser of: | ||||||
21 | (1) $1,000; or | ||||||
22 | (2) in the case of one or more payday loans, 25% of the | ||||||
23 | consumer's gross monthly income; or | ||||||
24 | (3) in the case of one or more installment payday | ||||||
25 | loans, 22.5% of the consumer's gross monthly income; or | ||||||
26 | (4) in the case of a payday loan and an installment |
| |||||||
| |||||||
1 | payday loan, 22.5% of the consumer's gross monthly income. | ||||||
2 | No lender may charge more than $15.50 per $100 loaned on | ||||||
3 | any payday loan over the term of the loan. Except as | ||||||
4 | provided in Section 2-25, this charge is considered fully | ||||||
5 | earned as of the date on which the loan is made. | ||||||
6 | No loan shall be made to a consumer who has an outstanding | ||||||
7 | balance on 2 payday loans, except that, for a period of 12 | ||||||
8 | months after the effective date of this amendatory Act of the | ||||||
9 | 96th General Assembly, consumers with an existing CILA loan may | ||||||
10 | be issued an installment loan issued under this Act from the | ||||||
11 | company from which their CILA loan was issued. | ||||||
12 | (f) A lender may not take or attempt to take an interest in | ||||||
13 | any of the consumer's personal property to secure a payday | ||||||
14 | loan. | ||||||
15 | (g) A consumer has the right to redeem a check or any other | ||||||
16 | item described in the definition of payday loan under Section | ||||||
17 | 1-10 issued in connection with a payday loan from the lender | ||||||
18 | holding the check or other item at any time before the payday | ||||||
19 | loan becomes payable by paying the full amount of the check or | ||||||
20 | other item.
| ||||||
21 | (Source: P.A. 94-13, eff. 12-6-05.) | ||||||
22 | (815 ILCS 122/2-10)
| ||||||
23 | Sec. 2-10. Permitted fees. | ||||||
24 | (a) If there are insufficient funds to pay a check, | ||||||
25 | Automatic Clearing House (ACH) debit, or any other item |
| |||||||
| |||||||
1 | described in the definition of payday loan under Section 1-10 | ||||||
2 | on the day of presentment and only after the lender has | ||||||
3 | incurred an expense, a lender may charge a fee not to exceed | ||||||
4 | $25. Only one such fee may be collected by the lender with | ||||||
5 | respect to a particular check, ACH debit, or item even if it | ||||||
6 | has been deposited and returned more than once. A lender shall | ||||||
7 | present the check, ACH debit, or other item described in the | ||||||
8 | definition of payday loan under Section 1-10 for payment not | ||||||
9 | more than twice. A fee charged under this subsection (a) is a | ||||||
10 | lender's exclusive charge for late payment. | ||||||
11 | (a-5) A lender may charge a borrower a fee not to exceed $1 | ||||||
12 | for the
verification required under Section 2-15 of this Act. | ||||||
13 | Only one such fee may
be collected by the lender with respect | ||||||
14 | to a particular loan. | ||||||
15 | (b) Except for the finance charges described in Section 2-5 | ||||||
16 | and as specifically allowed by this Section, a lender may not | ||||||
17 | impose on a consumer any additional finance charges, interest, | ||||||
18 | fees, or charges of any sort for any purpose.
| ||||||
19 | (Source: P.A. 94-13, eff. 12-6-05.) | ||||||
20 | (815 ILCS 122/2-15)
| ||||||
21 | Sec. 2-15. Verification. | ||||||
22 | (a) Before entering into a loan agreement with a consumer, | ||||||
23 | a lender must use a commercially reasonable method of | ||||||
24 | verification to verify that the proposed loan agreement is | ||||||
25 | permissible under this Act. |
| |||||||
| |||||||
1 | (b) Within 6 months after the effective date of this Act, | ||||||
2 | the Department shall certify that one or more consumer | ||||||
3 | reporting service databases are commercially reasonable | ||||||
4 | methods of verification. Upon certifying that a consumer | ||||||
5 | reporting service database is a commercially reasonable method | ||||||
6 | of verification, the Department shall:
| ||||||
7 | (1) provide reasonable notice to all licensees | ||||||
8 | identifying the commercially reasonable methods of | ||||||
9 | verification that are available; and
| ||||||
10 | (2) immediately upon certification, require each | ||||||
11 | licensee to use a commercially reasonable method of | ||||||
12 | verification as a means of complying with subsection (a) of | ||||||
13 | this Section. | ||||||
14 | (c) Except as otherwise provided in this Section, all | ||||||
15 | personally identifiable information regarding any consumer | ||||||
16 | obtained by way of the certified database and maintained by the | ||||||
17 | Department is strictly confidential and shall be exempt from | ||||||
18 | disclosure under Section 7(1)(b)(i) of the Freedom of | ||||||
19 | Information Act. | ||||||
20 | (d) Notwithstanding any other provision of law to the | ||||||
21 | contrary, a consumer seeking a payday loan may make a direct | ||||||
22 | inquiry to the consumer reporting service to request a more | ||||||
23 | detailed explanation of the basis for a consumer reporting | ||||||
24 | service's determination that the consumer is ineligible for a | ||||||
25 | new payday loan. | ||||||
26 | (e) In certifying a commercially reasonable method of |
| |||||||
| |||||||
1 | verification, the Department shall ensure that the certified | ||||||
2 | database: | ||||||
3 | (1) provides real-time access through an Internet | ||||||
4 | connection or, if real-time access through an Internet | ||||||
5 | connection becomes unavailable to lenders due to a consumer | ||||||
6 | reporting service's technical problems incurred by the | ||||||
7 | consumer reporting service, through alternative | ||||||
8 | verification mechanisms, including, but not limited to, | ||||||
9 | verification by telephone; | ||||||
10 | (2) is accessible to the Department and to licensees in | ||||||
11 | order to ensure
compliance with this Act and in order to | ||||||
12 | provide any other information that the Department deems | ||||||
13 | necessary; | ||||||
14 | (3) requires licensees to input whatever information | ||||||
15 | is required by the Department; | ||||||
16 | (4) maintains a real-time copy of the required | ||||||
17 | reporting information that is available to the Department | ||||||
18 | at all times and is the property of the Department; | ||||||
19 | (5) provides licensees only with a statement that a | ||||||
20 | consumer is eligible or ineligible for a new payday loan | ||||||
21 | and a description of the reason for the determination; and | ||||||
22 | (6) contains safeguards to ensure that all information | ||||||
23 | contained in the database regarding consumers is kept | ||||||
24 | strictly confidential.
| ||||||
25 | (f) The licensee shall update the certified database by | ||||||
26 | inputting all information required under item (3) of subsection |
| |||||||
| |||||||
1 | (e): | ||||||
2 | (1) on the same day that a payday loan is made; | ||||||
3 | (2) on the same day that a consumer elects a repayment | ||||||
4 | plan, as provided in Section 2-40; and | ||||||
5 | (3) on the same day that a consumer's payday loan is | ||||||
6 | paid in full ,
including the refinancing of an installment | ||||||
7 | payday loan as permitted under subsection (c) of
Section | ||||||
8 | 2-5 . | ||||||
9 | (g) A licensee may rely on the information contained in the | ||||||
10 | certified database as accurate and is not subject to any | ||||||
11 | administrative penalty or liability as a result of relying on | ||||||
12 | inaccurate information contained in the database. | ||||||
13 | (h) The certified consumer reporting service shall | ||||||
14 | indemnify the licensee against all claims and actions arising | ||||||
15 | from illegal or willful or wanton acts on the part of the | ||||||
16 | certified consumer reporting service.
| ||||||
17 | (i) The certified consumer reporting service may charge a | ||||||
18 | verification
fee not to exceed $1 upon a loan being made or | ||||||
19 | entered into in the
database. The certified consumer reporting | ||||||
20 | service shall not charge any
additional fees or charges. | ||||||
21 | (Source: P.A. 94-13, eff. 12-6-05.) | ||||||
22 | (815 ILCS 122/2-17)
| ||||||
23 | Sec. 2-17. Consumer reporting services qualification and | ||||||
24 | bonding. | ||||||
25 | (a) Each consumer reporting service shall have at all times |
| |||||||
| |||||||
1 | a net worth of not less than $1,000,000 calculated in | ||||||
2 | accordance with generally accepted accounting principles. | ||||||
3 | (b) Each application for certification under this Act shall | ||||||
4 | be accompanied by a surety bond acceptable to the Department in | ||||||
5 | the amount of $1,000,000. The surety bond shall be in a form | ||||||
6 | satisfactory to the Department and shall run to the State of | ||||||
7 | Illinois for the benefit of any claimants against the consumer | ||||||
8 | reporting service to secure the faithful performance of its | ||||||
9 | obligations under this Act. The aggregate liability of the | ||||||
10 | surety may exceed the principal sum of the bond. Claimants | ||||||
11 | against the consumer reporting service may themselves bring | ||||||
12 | suit directly on the surety bond or the Department may bring | ||||||
13 | suit on behalf of claimants, either in one action or in | ||||||
14 | successive actions. | ||||||
15 | (c) The surety bond shall remain in effect until | ||||||
16 | cancellation, which may occur only after 90 days' written | ||||||
17 | notice to the Department. Cancellation shall not affect any | ||||||
18 | liability incurred or accrued during that period. | ||||||
19 | (d) The surety bond shall remain in place for 5 years after | ||||||
20 | the consumer reporting service ceases operation in the State. | ||||||
21 | (e) The surety bond proceeds and any cash or other | ||||||
22 | collateral posted as security by a consumer reporting service | ||||||
23 | shall be deemed by operation of law to be held in trust for any | ||||||
24 | claimants under this Act in the event of the bankruptcy of the | ||||||
25 | consumer reporting service. | ||||||
26 | (f) To the extent that any indemnity or fine exceeds the |
| |||||||
| |||||||
1 | amount of the surety bond described under this Section, the | ||||||
2 | consumer reporting service shall be liable for that amount. | ||||||
3 | (g) Each application for certification under this Act shall | ||||||
4 | be accompanied by a nonrefundable investigation fee of $2,500, | ||||||
5 | together with an initial certification fee of $1,000. | ||||||
6 | (h) On or before March 1 of each year, each consumer | ||||||
7 | reporting service qualified under this Section shall pay to the | ||||||
8 | Department a certification fee in the amount of $1,000.
| ||||||
9 | (i) Each consumer reporting service shall maintain at all | ||||||
10 | times an ID
Theft Red Flag Program that meets the standards | ||||||
11 | established by the Federal
Trade Commission's Red Flags Rule, | ||||||
12 | promulgated under the Fair and Accurate
Credit Transactions Act | ||||||
13 | of 2003. | ||||||
14 | (Source: P.A. 94-13, eff. 12-6-05.) | ||||||
15 | (815 ILCS 122/2-20)
| ||||||
16 | Sec. 2-20. Required disclosures. | ||||||
17 | (a) Before a payday loan is made, a lender shall
deliver to | ||||||
18 | the consumer a pamphlet prepared by the Secretary that:
| ||||||
19 | (1) explains, in simple English and Spanish, all of the | ||||||
20 | consumer's
rights and responsibilities in a payday loan | ||||||
21 | transaction;
| ||||||
22 | (2) includes a toll-free number to the Secretary's | ||||||
23 | office to handle
concerns or provide information about | ||||||
24 | whether a lender is licensed, whether
complaints have been | ||||||
25 | filed with the Secretary, and the resolution of those
|
| |||||||
| |||||||
1 | complaints; and
| ||||||
2 | (3) provides information regarding the availability of | ||||||
3 | debt
management services.
| ||||||
4 | (b) Lenders shall provide consumers with a written | ||||||
5 | agreement that may be kept by the
consumer. The written | ||||||
6 | agreement must include the following information in
English and | ||||||
7 | in the language in which the loan was negotiated:
| ||||||
8 | (1) the name and address of the lender making the | ||||||
9 | payday loan, and the name and title of the individual | ||||||
10 | employee who signs the
agreement on behalf of the lender;
| ||||||
11 | (2) disclosures required by the federal Truth in | ||||||
12 | Lending Act;
| ||||||
13 | (3) a clear description of the consumer's payment | ||||||
14 | obligations under
the loan;
| ||||||
15 | (4) the following statement, in at least 14-point bold | ||||||
16 | type face: "You
cannot be prosecuted in criminal court to | ||||||
17 | collect this loan." The
information required to be | ||||||
18 | disclosed under this subdivision (4) must be
conspicuously | ||||||
19 | disclosed
in the loan document and shall be located | ||||||
20 | immediately preceding
the signature of the consumer; and
| ||||||
21 | (5) the following statement, in at least 14-point bold | ||||||
22 | type face:
| ||||||
23 | "WARNING: This loan is not intended to meet long-term | ||||||
24 | financial needs. This
loan should be used only to meet | ||||||
25 | short-term cash needs. The cost of your loan may be higher | ||||||
26 | than loans offered by other lending
institutions. This loan |
| |||||||
| |||||||
1 | is regulated by the Department of Financial
and | ||||||
2 | Professional Regulation." | ||||||
3 | (c) The following notices in English and Spanish must be | ||||||
4 | conspicuously posted by a lender in each location of
a business | ||||||
5 | providing payday loans:
| ||||||
6 | (1) A notice that informs consumers that the lender | ||||||
7 | cannot use the
criminal process against a consumer to | ||||||
8 | collect any payday loan.
| ||||||
9 | (2) The schedule of all finance charges to be charged | ||||||
10 | on loans with an
example of the amounts that would be | ||||||
11 | charged on a $100 loan payable in 13
days , and a $400 loan | ||||||
12 | payable in 30 days, and an installment payday loan of
$400 | ||||||
13 | payable on a monthly basis over 180 days, giving the | ||||||
14 | corresponding annual
percentage rate.
| ||||||
15 | (3) In one-inch bold type, a notice to the public in | ||||||
16 | the lending
area of each business location containing the | ||||||
17 | following
statement:
| ||||||
18 | "WARNING: This loan is not intended to meet long-term | ||||||
19 | financial needs. This
loan should be used only to meet | ||||||
20 | short-term cash needs. The cost of your loan may be higher | ||||||
21 | than loans offered by other lending
institutions. This loan | ||||||
22 | is regulated by the Department of Financial
and | ||||||
23 | Professional Regulation." | ||||||
24 | (4) In one-inch bold type, a notice to the public in | ||||||
25 | the lending area of each business location containing the | ||||||
26 | following statement: |
| |||||||
| |||||||
1 | "INTEREST-FREE REPAYMENT PLAN: If you still owe on one | ||||||
2 | or more payday loans , other than an installment payday | ||||||
3 | loan, after 35 days, you are entitled to enter into a | ||||||
4 | repayment plan. The repayment plan will give you at least | ||||||
5 | 55 days to repay your loan in installments with no | ||||||
6 | additional finance charges, interest, fees, or other | ||||||
7 | charges of any kind."
| ||||||
8 | (Source: P.A. 94-13, eff. 12-6-05.) | ||||||
9 | (815 ILCS 122/2-30)
| ||||||
10 | Sec. 2-30. Rollovers prohibited. Rollover of a payday loan | ||||||
11 | by any lender is prohibited , except as provided in subsection | ||||||
12 | (c) of Section 2-5 . This Section does not prohibit entering | ||||||
13 | into a repayment plan, as provided under Section 2-40.
| ||||||
14 | (Source: P.A. 94-13, eff. 12-6-05.) | ||||||
15 | (815 ILCS 122/2-40)
| ||||||
16 | Sec. 2-40. Repayment plan. | ||||||
17 | (a) At the time a payday loan is made, the lender must | ||||||
18 | provide the consumer with a separate written notice signed by | ||||||
19 | the consumer of the consumer's right to request a repayment | ||||||
20 | plan. The written notice must comply with the requirements of | ||||||
21 | subsection (c). | ||||||
22 | (b) The loan agreement must include the following language | ||||||
23 | in at least 14-point bold type: IF YOU STILL OWE ON ONE OR MORE | ||||||
24 | PAYDAY LOANS AFTER 35 DAYS, YOU ARE ENTITLED TO ENTER INTO A |
| |||||||
| |||||||
1 | REPAYMENT PLAN. THE REPAYMENT PLAN WILL GIVE YOU AT LEAST 55 | ||||||
2 | DAYS TO REPAY YOUR LOAN IN INSTALLMENTS WITH NO ADDITIONAL | ||||||
3 | FINANCE CHARGES, INTEREST, FEES, OR OTHER CHARGES OF ANY KIND. | ||||||
4 | (c) At the time a payday loan is made, on the first page of | ||||||
5 | the loan agreement and in a separate document signed by the | ||||||
6 | consumer, the following shall be inserted in at least 14-point | ||||||
7 | bold type: I UNDERSTAND THAT IF I STILL OWE ON ONE OR MORE | ||||||
8 | PAYDAY LOANS AFTER 35 DAYS, I AM ENTITLED TO ENTER INTO A | ||||||
9 | REPAYMENT PLAN THAT WILL GIVE ME AT LEAST 55 DAYS TO REPAY THE | ||||||
10 | LOAN IN INSTALLMENTS WITH NO ADDITIONAL FINANCE CHARGES, | ||||||
11 | INTEREST, FEES, OR OTHER CHARGES OF ANY KIND. | ||||||
12 | (d) If the consumer has or has had one or more payday loans | ||||||
13 | outstanding for 35 consecutive days, any payday loan | ||||||
14 | outstanding on the 35th consecutive day shall be payable under | ||||||
15 | the terms of a repayment plan as provided for in this Section, | ||||||
16 | if the consumer requests the repayment plan. As to any loan | ||||||
17 | that becomes eligible for a repayment plan under this | ||||||
18 | subsection, the consumer has until 28 days after the default | ||||||
19 | date of the loan to request a repayment plan. Within 48 hours | ||||||
20 | after the request for a repayment plan is made, the lender must | ||||||
21 | prepare the repayment plan agreement and both parties must | ||||||
22 | execute the agreement. Execution of the repayment plan | ||||||
23 | agreement shall be made in the same manner in which the loan | ||||||
24 | was made and shall be evidenced in writing. | ||||||
25 | (e) The terms of the repayment plan for a payday loan must | ||||||
26 | include the following: |
| |||||||
| |||||||
1 | (1) The lender may not impose any charge on the | ||||||
2 | consumer for requesting or using a repayment plan. | ||||||
3 | Performance of the terms of the repayment plan extinguishes | ||||||
4 | the consumer's obligation on the loan. | ||||||
5 | (2) No lender shall charge the consumer any finance | ||||||
6 | charges, interest, fees, or other charges of any kind, | ||||||
7 | except a fee for insufficient funds, as provided under | ||||||
8 | Section 2-10.
| ||||||
9 | (3) The consumer shall be allowed to repay the loan in | ||||||
10 | at least 4 equal installments with at least 13 days between | ||||||
11 | installments, provided that the term of the repayment plan | ||||||
12 | does not exceed 90 days. The first payment under the | ||||||
13 | repayment plan shall not be due before at least 13 days | ||||||
14 | after the repayment plan is signed by both parties. The | ||||||
15 | consumer may prepay the amount due under the repayment plan | ||||||
16 | at any time, without charge or penalty. | ||||||
17 | (4) The length of time between installments may be | ||||||
18 | extended by the parties so long as the total period of | ||||||
19 | repayment does not exceed 90 days. Any such modification | ||||||
20 | must be in writing and signed by both parties. | ||||||
21 | (f) Notwithstanding any provision of law to the contrary, a | ||||||
22 | lender is prohibited from making a payday loan to a consumer | ||||||
23 | who has a payday loan outstanding under a repayment plan and | ||||||
24 | for at least 14 days after the outstanding balance of the loan | ||||||
25 | under the repayment plan and the outstanding balance of all | ||||||
26 | other payday loans outstanding during the term of the repayment |
| |||||||
| |||||||
1 | plan are paid in full. | ||||||
2 | (g) A lender may not accept postdated checks for payments | ||||||
3 | under a repayment plan. | ||||||
4 | (h) Notwithstanding any provision of law to the contrary, a | ||||||
5 | lender may voluntarily agree to enter into a repayment plan | ||||||
6 | with a consumer at any time.
If a consumer is eligible for a | ||||||
7 | repayment plan under subsection (d), any repayment agreement | ||||||
8 | constitutes a repayment plan under this Section and all | ||||||
9 | provisions of this Section apply to that agreement.
| ||||||
10 | (i) The provisions of this Section 2-40 do not apply to an | ||||||
11 | installment
payday loan, except for subsection (f) of this | ||||||
12 | Section. | ||||||
13 | (Source: P.A. 94-13, eff. 12-6-05.) | ||||||
14 | (815 ILCS 122/2-45)
| ||||||
15 | Sec. 2-45. Default. | ||||||
16 | (a) No legal proceeding of any kind, including, but not | ||||||
17 | limited to, a lawsuit or arbitration, may be filed or initiated | ||||||
18 | against a consumer to collect on a payday loan until 28 days | ||||||
19 | after the default date of the loan, or, in the case of a payday | ||||||
20 | loan under a repayment plan, for 28 days after the default date | ||||||
21 | under the terms of the repayment plan , or in the case of an
| ||||||
22 | installment payday loan, for 28 days after default in making a | ||||||
23 | scheduled
payment . | ||||||
24 | (b) Upon and after default, a lender shall not charge the | ||||||
25 | consumer any finance charges, interest, fees, or charges of any |
| |||||||
| |||||||
1 | kind, other than the insufficient fund fee described in Section | ||||||
2 | 2-10.
| ||||||
3 | (c) Notwithstanding whether a loan is or has been in | ||||||
4 | default, once the loan becomes subject to a repayment plan, the | ||||||
5 | loan shall not be construed to be in default until the default | ||||||
6 | date provided under the terms of the repayment plan.
| ||||||
7 | (Source: P.A. 94-13, eff. 12-6-05.) | ||||||
8 | (815 ILCS 122/3-5)
| ||||||
9 | Sec. 3-5. Licensure. | ||||||
10 | (a) A license to make a payday loan shall state the | ||||||
11 | address,
including city and state, at which
the business is to | ||||||
12 | be conducted and shall state fully the name of the licensee.
| ||||||
13 | The license shall be conspicuously posted in the place of | ||||||
14 | business of the
licensee and shall not be transferable or | ||||||
15 | assignable.
| ||||||
16 | (b) An application for a license shall be in writing and in | ||||||
17 | a form
prescribed by the Secretary. The Secretary may not issue | ||||||
18 | a payday loan
license unless and until the following findings | ||||||
19 | are made:
| ||||||
20 | (1) that the financial responsibility, experience, | ||||||
21 | character, and general
fitness of the applicant are such as | ||||||
22 | to command the confidence of the public
and to warrant the | ||||||
23 | belief that the business will be operated lawfully and
| ||||||
24 | fairly and within the provisions and purposes of this Act; | ||||||
25 | and
|
| |||||||
| |||||||
1 | (2) that the applicant has submitted such other | ||||||
2 | information as the
Secretary may deem necessary.
| ||||||
3 | (c) A license shall be issued for no longer than one year, | ||||||
4 | and no renewal
of a license may be provided if a licensee has | ||||||
5 | substantially violated this
Act and has not cured the violation | ||||||
6 | to the satisfaction of the Department.
| ||||||
7 | (d) A licensee shall appoint, in writing, the Secretary as | ||||||
8 | attorney-in-fact
upon whom all lawful process against the | ||||||
9 | licensee may be served with the
same legal force and validity | ||||||
10 | as if served on the licensee. A copy of the
written | ||||||
11 | appointment, duly certified, shall be filed in the office of | ||||||
12 | the
Secretary, and a copy thereof certified by the Secretary | ||||||
13 | shall be sufficient
evidence to subject a licensee to | ||||||
14 | jurisdiction in a court of law. This appointment shall remain | ||||||
15 | in effect while any liability remains
outstanding in this State | ||||||
16 | against the licensee. When summons is served upon
the Secretary | ||||||
17 | as attorney-in-fact for a licensee, the Secretary shall | ||||||
18 | immediately
notify the licensee by registered mail, enclosing | ||||||
19 | the summons and specifying
the hour and day of service.
| ||||||
20 | (e) A licensee must pay an annual fee of $1,000. In | ||||||
21 | addition to the
license fee, the reasonable expense of any | ||||||
22 | examination or hearing
by the Secretary under any provisions of | ||||||
23 | this Act shall be borne by
the licensee. If a licensee fails to | ||||||
24 | renew its license by December 31,
its license
shall | ||||||
25 | automatically expire; however, the Secretary, in his or her | ||||||
26 | discretion,
may reinstate an expired license upon:
|
| |||||||
| |||||||
1 | (1) payment of the annual fee within 30 days of the | ||||||
2 | date of
expiration; and
| ||||||
3 | (2) proof of good cause for failure to renew.
| ||||||
4 | (f) Not more than one place of business shall be maintained | ||||||
5 | under the
same license, but the Secretary may issue more than | ||||||
6 | one license to the same
licensee upon compliance with all the | ||||||
7 | provisions of this Act governing
issuance of a single license. | ||||||
8 | The location, except those locations already in
existence as of | ||||||
9 | June 1, 2005, may not be within one mile of a
horse race track | ||||||
10 | subject to the Illinois Horse Racing Act of 1975,
within one | ||||||
11 | mile of a facility at which gambling is conducted under the
| ||||||
12 | Riverboat Gambling Act, within one mile of the location at | ||||||
13 | which a
riverboat subject to the Riverboat Gambling Act docks, | ||||||
14 | or within one mile of
any State of Illinois or United States | ||||||
15 | military base or naval installation.
| ||||||
16 | (g) No licensee shall conduct the business of making loans | ||||||
17 | under this
Act within any office, suite, room, or place of | ||||||
18 | business in which (1) any loans are offered or made under the | ||||||
19 | Consumer Installment Loan Act other than title secured loans as | ||||||
20 | defined in subsection (a) of Section 15 of the Consumer | ||||||
21 | Installment Loan Act and governed by Title 38, Section 110.330 | ||||||
22 | of the Illinois Administrative Code or (2) any other
business | ||||||
23 | is solicited or engaged in unless the other business is | ||||||
24 | licensed by the Department or, in the opinion of the Secretary, | ||||||
25 | the
other business would not be contrary to the best interests | ||||||
26 | of consumers and
is authorized by the Secretary in writing.
|
| |||||||
| |||||||
1 | (g-5) Notwithstanding subsection (g) of this Section, a | ||||||
2 | licensee may obtain a license under the Consumer Installment | ||||||
3 | Loan Act (CILA) for the exclusive purpose and use of making | ||||||
4 | title secured loans, as defined in subsection (a) of Section 15 | ||||||
5 | of CILA and governed by Title 38, Section 110.300 of the | ||||||
6 | Illinois Administrative Code. A licensee may continue to | ||||||
7 | service Consumer Installment Loan Act loans that were | ||||||
8 | outstanding as of the effective date of this amendatory Act of | ||||||
9 | the 96th General Assembly. | ||||||
10 | (h) The Secretary shall maintain a list of licensees that | ||||||
11 | shall be
available to interested consumers and lenders and the | ||||||
12 | public. The Secretary
shall maintain a toll-free number whereby | ||||||
13 | consumers may obtain
information about licensees. The | ||||||
14 | Secretary shall also establish a complaint
process under which | ||||||
15 | an aggrieved consumer
may file a complaint against a licensee | ||||||
16 | or non-licensee who violates any
provision of this Act.
| ||||||
17 | (Source: P.A. 94-13, eff. 12-6-05.) | ||||||
18 | (815 ILCS 122/4-5)
| ||||||
19 | Sec. 4-5. Prohibited acts. A licensee or unlicensed person | ||||||
20 | or entity making payday
loans may not commit, or have committed | ||||||
21 | on behalf of the
licensee
or unlicensed person or entity, any | ||||||
22 | of the following acts: | ||||||
23 | (1) Threatening to use or using the criminal process in | ||||||
24 | this or any
other state to collect on the loan.
| ||||||
25 | (2) Using any device or agreement that would have the |
| |||||||
| |||||||
1 | effect of
charging or collecting more fees or charges than | ||||||
2 | allowed by this
Act, including, but not limited to, | ||||||
3 | entering into a different type of
transaction
with the | ||||||
4 | consumer.
| ||||||
5 | (3) Engaging in unfair, deceptive, or fraudulent | ||||||
6 | practices in the
making or collecting of a payday loan.
| ||||||
7 | (4) Using or attempting to use the check provided by | ||||||
8 | the consumer in
a payday loan as collateral for a | ||||||
9 | transaction not related to a payday loan.
| ||||||
10 | (5) Knowingly accepting payment in whole or in part of | ||||||
11 | a payday
loan through the proceeds of another payday loan | ||||||
12 | provided by any licensee , except
as provided in subsection | ||||||
13 | (c) of Section 2.5 .
| ||||||
14 | (6) Knowingly accepting any security, other than that | ||||||
15 | specified in the
definition of payday loan in Section 1-10, | ||||||
16 | for a payday loan.
| ||||||
17 | (7) Charging any fees or charges other than those | ||||||
18 | specifically
authorized by this Act.
| ||||||
19 | (8) Threatening to take any action against a consumer | ||||||
20 | that is
prohibited by this Act or making any misleading or | ||||||
21 | deceptive statements
regarding the payday loan or any | ||||||
22 | consequences thereof.
| ||||||
23 | (9) Making a misrepresentation of a material fact by an | ||||||
24 | applicant for licensure in
obtaining or attempting to | ||||||
25 | obtain a license.
| ||||||
26 | (10) Including any of the following provisions in loan |
| |||||||
| |||||||
1 | documents
required by subsection (b) of Section 2-20:
| ||||||
2 | (A) a confession of judgment clause;
| ||||||
3 | (B) a waiver of the right to a jury trial, if | ||||||
4 | applicable, in any action
brought by or against a | ||||||
5 | consumer, unless the waiver is included in an | ||||||
6 | arbitration clause allowed under
subparagraph (C) of | ||||||
7 | this paragraph (11);
| ||||||
8 | (C) a mandatory arbitration clause that is | ||||||
9 | oppressive, unfair,
unconscionable, or substantially | ||||||
10 | in derogation of the rights of consumers; or
| ||||||
11 | (D) a provision in which the consumer agrees not to | ||||||
12 | assert any claim
or defense arising out of the | ||||||
13 | contract.
| ||||||
14 | (11) Selling any insurance of any kind whether or not | ||||||
15 | sold in
connection with the making or collecting of a | ||||||
16 | payday loan.
| ||||||
17 | (12) Taking any power of attorney.
| ||||||
18 | (13) Taking any security interest in real estate.
| ||||||
19 | (14) Collecting a delinquency or collection charge on | ||||||
20 | any installment
regardless of the period in which it | ||||||
21 | remains in default.
| ||||||
22 | (15) Collecting treble damages on an amount owing from | ||||||
23 | a payday loan.
| ||||||
24 | (16) Refusing, or intentionally delaying or
| ||||||
25 | inhibiting, the consumer's right to enter into a repayment | ||||||
26 | plan pursuant to this
Act. |
| |||||||
| |||||||
1 | (17) Charging for, or attempting to
collect, | ||||||
2 | attorney's fees, court costs, or arbitration costs | ||||||
3 | incurred in connection with the
collection of a payday | ||||||
4 | loan. | ||||||
5 | (18) Making a loan in violation of this Act. | ||||||
6 | (19) Garnishing the wages or salaries of a consumer who | ||||||
7 | is a member of the military. | ||||||
8 | (20) Failing to suspend or defer collection activity | ||||||
9 | against a consumer who is a member of the military and who | ||||||
10 | has been deployed to a combat or combat-support posting. | ||||||
11 | (21) Contacting the military chain of command of a | ||||||
12 | consumer who is a member of the military in an effort to | ||||||
13 | collect on a payday loan.
| ||||||
14 | (22) Making or offering to make any loan other than a | ||||||
15 | payday loan or
a title-secured loan, provided however, that | ||||||
16 | to make or offer to make a
title-secured loan, a licensee | ||||||
17 | must obtain a license under the Consumer
Installment Loan | ||||||
18 | Act. | ||||||
19 | (Source: P.A. 94-13, eff. 12-6-05.)
| ||||||
20 | Section 99. Effective date. This Act takes effect 9 months | ||||||
21 | after becoming law.".
|