Rep. Sue Scherer

Filed: 3/23/2015

 

 


 

 


 
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1
AMENDMENT TO HOUSE BILL 3771

2    AMENDMENT NO. ______. Amend House Bill 3771 on page 8,
3immediately below line 19, by inserting the following:
 
4    "Section 10. The Payday Loan Reform Act is amended by
5changing Section 2-5 as follows:
 
6    (815 ILCS 122/2-5)
7    Sec. 2-5. Loan terms.
8    (a) Without affecting the right of a consumer to prepay at
9any time without cost or penalty, no payday loan may have a
10minimum term of less than 13 days.
11    (b) Except for an installment payday loan as defined in
12this Section, no payday loan may be made to a consumer if the
13loan would result in the consumer being indebted to one or more
14payday lenders for a period in excess of 45 consecutive days.
15Except as provided under subsection (c) of this Section and
16Section 2-40, if a consumer has or has had loans outstanding

 

 

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1for a period in excess of 45 consecutive days, no payday lender
2may offer or make a loan to the consumer for at least 7
3calendar days after the date on which the outstanding balance
4of all payday loans made during the 45 consecutive day period
5is paid in full. For purposes of this subsection, the term
6"consecutive days" means a series of continuous calendar days
7in which the consumer has an outstanding balance on one or more
8payday loans; however, if a payday loan is made to a consumer
9within 6 days or less after the outstanding balance of all
10loans is paid in full, those days are counted as "consecutive
11days" for purposes of this subsection.
12    (c) Notwithstanding anything in this Act to the contrary, a
13payday loan shall also include any installment loan otherwise
14meeting the definition of payday loan contained in Section
151-10, but that has a term agreed by the parties of not less
16than 112 days and not exceeding 180 days; hereinafter an
17"installment payday loan". The following provisions shall
18apply:
19        (i) Any installment payday loan must be fully
20    amortizing, with a finance charge calculated on the
21    principal balances scheduled to be outstanding and be
22    repayable in substantially equal and consecutive
23    installments, according to a payment schedule agreed by the
24    parties with not less than 13 days and not more than one
25    month between payments; except that the first installment
26    period may be longer than the remaining installment periods

 

 

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1    by not more than 15 days, and the first installment payment
2    may be larger than the remaining installment payments by
3    the amount of finance charges applicable to the extra days.
4    In calculating finance charges under this subsection, when
5    the first installment period is longer than the remaining
6    installment periods, the amount of the finance charges
7    applicable to the extra days shall not be greater than
8    $15.50 per $100 of the original principal balance divided
9    by the number of days in a regularly scheduled installment
10    period and multiplied by the number of extra days
11    determined by subtracting the number of days in a regularly
12    scheduled installment period from the number of days in the
13    first installment period.
14        (ii) An installment payday loan may be refinanced by a
15    new installment payday loan one time during the term of the
16    initial loan; provided that the total duration of
17    indebtedness on the initial installment payday loan
18    combined with the total term of indebtedness of the new
19    loan refinancing that initial loan, shall not exceed 180
20    days. For purposes of this Act, a refinancing occurs when
21    an existing installment payday loan is paid from the
22    proceeds of a new installment payday loan.
23        (iii) In the event an installment payday loan is paid
24    in full prior to the date on which the last scheduled
25    installment payment before maturity is due, other than
26    through a refinancing, no licensee may offer or make a

 

 

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1    payday loan to the consumer for at least 2 calendar days
2    thereafter.
3        (iv) No installment payday loan may be made to a
4    consumer if the loan would result in the consumer being
5    indebted to one or more payday lenders for a period in
6    excess of 180 consecutive days. The term "consecutive days"
7    does not include the date on which a consumer makes the
8    final installment payment.
9    (d) (Blank).
10    (e) No lender may make a payday loan to a consumer if the
11total of all payday loan payments coming due within the first
12calendar month of the loan, when combined with the payment
13amount of all of the consumer's other outstanding payday loans
14coming due within the same month, exceeds the lesser of:
15        (1) $1,000; or
16        (2) in the case of one or more payday loans, 25% of the
17    consumer's gross monthly income; or
18        (3) in the case of one or more installment payday
19    loans, 22.5% of the consumer's gross monthly income; or
20        (4) in the case of a payday loan and an installment
21    payday loan, 22.5% of the consumer's gross monthly income.
22    No loan shall be made to a consumer who has an outstanding
23balance on 2 payday loans, except that, for a period of 12
24months after the effective date of this amendatory Act of the
2596th General Assembly, consumers with an existing CILA loan may
26be issued an installment loan issued under this Act from the

 

 

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1company from which their CILA loan was issued.
2    (e-5) Except as provided in subsection (c)(i), no lender
3may charge more than $15.50 per $100 loaned on any payday loan,
4or more than $15.50 per $100 on the initial principal balance
5and on the principal balances scheduled to be outstanding
6during any installment period on any installment payday loan.
7Except for installment payday loans and except as provided in
8Section 2-25, this charge is considered fully earned as of the
9date on which the loan is made. For purposes of determining the
10finance charge earned on an installment payday loan, the
11disclosed annual percentage rate shall be applied to the
12principal balances outstanding from time to time until the loan
13is paid in full, or until the maturity date, which ever occurs
14first. No finance charge may be imposed after the final
15scheduled maturity date.
16    When any loan contract is paid in full, the licensee shall
17refund any unearned finance charge. The unearned finance charge
18that is refunded shall be calculated based on a method that is
19at least as favorable to the consumer as the actuarial method,
20as defined by the federal Truth in Lending Act. The sum of the
21digits or rule of 78ths method of calculating prepaid interest
22refunds is prohibited.
23    (f) A lender may not take or attempt to take an interest in
24any of the consumer's personal property to secure a payday
25loan.
26    (g) A consumer has the right to redeem a check or any other

 

 

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1item described in the definition of payday loan under Section
21-10 issued in connection with a payday loan from the lender
3holding the check or other item at any time before the payday
4loan becomes payable by paying the full amount of the check or
5other item.
6    (h) Notwithstanding any other provision of law to the
7contrary, no payday lender may charge more than 36% interest on
8any transaction.
9(Source: P.A. 96-936, eff. 3-21-11; 97-421, eff. 1-1-12.)".