97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB3935

 

Introduced 1/10/2012, by Rep. Greg Harris - Maria Antonia Berrios

 

SYNOPSIS AS INTRODUCED:
 
205 ILCS 670/20  from Ch. 17, par. 5426
815 ILCS 122/4-10

    Amends the Consumer Installment Loan Act. Provides that if any person who is not licensed under the Act makes a loan pursuant to the Act to an Illinois consumer, then the loan shall be null and void and the person who made the loan shall have no right to collect, receive, or retain any principal, interest, or charges related to the loan. Amends the Payday Loan Reform Act. Provides that if any lender who is not licensed under the Act makes a loan pursuant to the Act to an Illinois consumer, then the loan shall be null and void and the lender who made the loan shall have no right to collect, receive, or retain any principal, interest, or charges related to the loan. Effective January 1, 2013.


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A BILL FOR

 

HB3935LRB097 15548 AEK 60685 b

1    AN ACT concerning regulation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Consumer Installment Loan Act is amended by
5changing Section 20 as follows:
 
6    (205 ILCS 670/20)  (from Ch. 17, par. 5426)
7    Sec. 20. Penalties for violation.
8    (a) Any person who engages in business as a Consumer
9Installment Loan lender without the license required by this
10Act shall be guilty of a Class 4 felony.
11    (b) The obligor, prior to the expiration of 2 years after
12the date of his last scheduled payment, may recover such
13reasonable attorney's fees and court costs as a court may
14assess against such licensee or lender for a violation of
15Sections 1, 12, 15, 15a, 15b, 15d, 15e, 16, 17, 18, or 19.1.
16The balance due under the terms of the loan contract shall be
17reduced by the amount which the obligor is thus entitled to
18recover. A bona fide error by a licensee in calculating charges
19or rebates is not a violation if the licensee corrects the
20error within a reasonable time, after discovery.
21    (b-5) A license issued under this Act may be revoked if the
22licensee, or any directors, managers of a limited liability
23company, partners, or officer thereof is convicted of a felony.

 

 

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1    (c) No provision of this Section imposing any liability
2shall apply to any act done or omitted in conformity with any
3rule or regulation or written interpretation thereof by the
4Department of Financial Institutions, notwithstanding that
5after such act or omission has occurred, such rule, regulation
6or interpretation is amended, rescinded or determined by
7judicial or other authority to be invalid for any reason. All
8interpretations issued after January 1, 1998 must be written
9and signed by the Department's Chief Counsel and approved by
10the Director.
11    (d) Notwithstanding any other provision of this Section, if
12any person who does not have a license issued under this Act
13makes a loan pursuant to this Act to an Illinois consumer, then
14the loan shall be null and void and the person who made the
15loan shall have no right to collect, receive, or retain any
16principal, interest, or charges related to the loan.
17(Source: P.A. 90-437, eff. 1-1-98.)
 
18    Section 10. The Payday Loan Reform Act is amended by
19changing Section 4-10 as follows:
 
20    (815 ILCS 122/4-10)
21    Sec. 4-10. Enforcement and remedies.
22    (a) The remedies provided in this Act are cumulative and
23apply to persons or entities subject to this Act.
24    (b) Any material violation of this Act, including the

 

 

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1commission of an act prohibited under Section 4-5, constitutes
2a violation of the Consumer Fraud and Deceptive Business
3Practices Act.
4    (c) If any provision of the written agreement described in
5subsection (b) of Section 2-20 violates this Act, then that
6provision is unenforceable against the consumer.
7    (d) Subject to the Illinois Administrative Procedure Act,
8the Secretary may hold hearings, make findings of fact,
9conclusions of law, issue cease and desist orders, have the
10power to issue fines of up to $10,000 per violation, refer the
11matter to the appropriate law enforcement agency for
12prosecution under this Act, and suspend or revoke a license
13granted under this Act. All proceedings shall be open to the
14public.
15    (e) The Secretary may issue a cease and desist order to any
16licensee or other person doing business without the required
17license, when in the opinion of the Secretary the licensee or
18other person is violating or is about to violate any provision
19of this Act or any rule or requirement imposed in writing by
20the Department as a condition of granting any authorization
21permitted by this Act. The cease and desist order permitted by
22this subsection (e) may be issued prior to a hearing.
23    The Secretary shall serve notice of his or her action,
24including, but not limited to, a statement of the reasons for
25the action, either personally or by certified mail, return
26receipt requested. Service by certified mail shall be deemed

 

 

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1completed when the notice is deposited in the U.S. Mail.
2    Within 10 days of service of the cease and desist order,
3the licensee or other person may request a hearing in writing.
4The Secretary shall schedule a hearing within 30 days after the
5request for a hearing unless otherwise agreed to by the
6parties.
7    If it is determined that the Secretary had the authority to
8issue the cease and desist order, he or she may issue such
9orders as may be reasonably necessary to correct, eliminate, or
10remedy the conduct.
11    The powers vested in the Secretary by this subsection (e)
12are additional to any and all other powers and remedies vested
13in the Secretary by law, and nothing in this subsection (e)
14shall be construed as requiring that the Secretary shall employ
15the power conferred in this subsection instead of or as a
16condition precedent to the exercise of any other power or
17remedy vested in the Secretary.
18    (f) The Secretary may, after 10 days notice by registered
19mail to the licensee at the address set forth in the license
20stating the contemplated action and in general the grounds
21therefore, fine the licensee an amount not exceeding $10,000
22per violation, or revoke or suspend any license issued
23hereunder if he or she finds that:
24        (1) the licensee has failed to comply with any
25    provision of this Act or any order, decision, finding,
26    rule, regulation, or direction of the Secretary lawfully

 

 

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1    made pursuant to the authority of this Act; or
2        (2) any fact or condition exists which, if it had
3    existed at the time of the original application for the
4    license, clearly would have warranted the Secretary in
5    refusing to issue the license.
6    The Secretary may fine, suspend, or revoke only the
7particular license with respect to which grounds for the fine,
8revocation, or suspension occur or exist, but if the Secretary
9finds that grounds for revocation are of general application to
10all offices or to more than one office of the licensee, the
11Secretary shall fine, suspend, or revoke every license to which
12the grounds apply.
13    No revocation, suspension, or surrender of any license
14shall impair or affect the obligation of any pre-existing
15lawful contract between the licensee and any obligor.
16    The Secretary may issue a new license to a licensee whose
17license has been revoked when facts or conditions which clearly
18would have warranted the Secretary in refusing originally to
19issue the license no longer exist.
20    In every case in which a license is suspended or revoked or
21an application for a license or renewal of a license is denied,
22the Secretary shall serve the licensee with notice of his or
23her action, including a statement of the reasons for his or her
24actions, either personally, or by certified mail, return
25receipt requested. Service by certified mail shall be deemed
26completed when the notice is deposited in the U.S. Mail.

 

 

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1    An order assessing a fine, an order revoking or suspending
2a license, or an order denying renewal of a license shall take
3effect upon service of the order unless the licensee requests a
4hearing, in writing, within 10 days after the date of service.
5In the event a hearing is requested, the order shall be stayed
6until a final administrative order is entered.
7    If the licensee requests a hearing, the Secretary shall
8schedule a hearing within 30 days after the request for a
9hearing unless otherwise agreed to by the parties.
10    The hearing shall be held at the time and place designated
11by the Secretary. The Secretary and any administrative law
12judge designated by him or her shall have the power to
13administer oaths and affirmations, subpoena witnesses and
14compel their attendance, take evidence, and require the
15production of books, papers, correspondence, and other records
16or information that he or she considers relevant or material to
17the inquiry.
18    (g) The costs of administrative hearings conducted
19pursuant to this Section shall be paid by the licensee.
20    (h) Notwithstanding any other provision of this Section, if
21a lender who does not have a license issued under this Act
22makes a loan pursuant to this Act to an Illinois consumer, then
23the loan shall be null and void and the lender who made the
24loan shall have no right to collect, receive, or retain any
25principal, interest, or charges related to the loan.
26(Source: P.A. 94-13, eff. 12-6-05.)
 

 

 

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1    Section 99. Effective date. This Act takes effect January
21, 2013.