093_HB2543ham001

 










                                     LRB093 03657 LRD 12126 a

 1                    AMENDMENT TO HOUSE BILL 2543

 2        AMENDMENT NO.     .  Amend House Bill  2543  on  page  1,
 3    line 5, by replacing "Section" with "Sections 15 and"; and

 4    on page 1, by inserting the following after line 5:

 5        "(205 ILCS 670/15) (from Ch. 17, par. 5415)
 6        Sec. 15. Charges permitted.
 7        (a)  Every  licensee  may  lend  a  principal  amount not
 8    exceeding $40,000 $25,000 and may charge,  contract  for  and
 9    receive  thereon  interest  at  the  rate  agreed upon by the
10    licensee and the borrower, subject to the provisions of  this
11    Act.
12        (b)  For  purpose  of  this  Section, the following terms
13    shall have the meanings ascribed herein.
14        "Applicable interest" for  a  precomputed  loan  contract
15    means  the  amount  of  interest attributable to each monthly
16    installment period.  It is computed as  if  each  installment
17    period  were one month and any interest charged for extending
18    the first installment period beyond  one  month  is  ignored.
19    The applicable interest for any monthly installment period is
20    that  portion of the precomputed interest that bears the same
21    ratio to the  total  precomputed  interest  as  the  balances
22    scheduled to be outstanding during that month bear to the sum
 
                            -2-      LRB093 03657 LRD 12126 a
 1    of all scheduled monthly outstanding balances in the original
 2    contract.
 3        "Interest-bearing loan" means a loan in which the debt is
 4    expressed  as  a  principal  amount  plus interest charged on
 5    actual  unpaid  principal  balances  for  the  time  actually
 6    outstanding.
 7        "Precomputed loan" means a loan  in  which  the  debt  is
 8    expressed  as  the  sum of the original principal amount plus
 9    interest  computed  actuarially  in  advance,  assuming   all
10    payments will be made when scheduled.
11        (c)  Loans may be interest-bearing or precomputed.
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
15    be  considered 1/30th of a month when calculation is made for
16    a fraction of a month.  A month shall be 1/12th of a year.  A
17    calendar month is that period from a given date in one  month
18    to  the  same  numbered  date  in the following month, and if
19    there is no same numbered  date,  to  the  last  day  of  the
20    following  month.  When a period of time includes a month and
21    a  fraction  of  a  month,  the  fraction  of  the  month  is
22    considered to follow the whole month.   In  the  alternative,
23    for  interest-bearing loans, the licensee may charge interest
24    at the rate of 1/365th of the agreed annual rate for each day
25    actually elapsed.
26        (e)  With respect to interest-bearing loans:
27             (1)  Interest shall be computed on unpaid  principal
28        balances  outstanding  from  time  to  time, for the time
29        outstanding, until fully paid.   Each  payment  shall  be
30        applied   first  to  the  accumulated  interest  and  the
31        remainder of the payment applied to the unpaid  principal
32        balance;  provided  however,  that  if  the amount of the
33        payment is insufficient to pay the accumulated  interest,
34        the  unpaid  interest  continues to accumulate to be paid
 
                            -3-      LRB093 03657 LRD 12126 a
 1        from the proceeds of subsequent payments and is not added
 2        to the principal balance.
 3             (2)  Interest shall not be  payable  in  advance  or
 4        compounded.  However, if part or all of the consideration
 5        for  a  new loan contract is the unpaid principal balance
 6        of a prior loan, then the principal amount payable  under
 7        the  new  loan  contract  may include any unpaid interest
 8        which has accrued.  The unpaid  principal  balance  of  a
 9        precomputed  loan  is  the  balance  due  after refund or
10        credit of unearned interest as provided in paragraph (f),
11        clause (3).  The resulting loan contract shall be  deemed
12        a new and separate loan transaction for all purposes.
13             (3)  Loans  may  be  payable  as  agreed between the
14        parties, including  payment  at  irregular  times  or  in
15        unequal  amounts  and  rates  that may vary with an index
16        that is independently verifiable and beyond  the  control
17        of the licensee.
18             (4)  The  lender  or  creditor  may, if the contract
19        provides, collect a delinquency or collection  charge  on
20        each installment in default for a period of not less than
21        10  days in an amount not exceeding 5% of the installment
22        on installments in excess of $200, or $10 on installments
23        of $200 or less, but only one delinquency and  collection
24        charge  may be collected on any installment regardless of
25        the period during which it remains in default.
26        (f)  With respect to precomputed loans:
27             (1)  Loans shall be repayable in substantially equal
28        and consecutive monthly  installments  of  principal  and
29        interest  combined,  except  that  the  first installment
30        period may be longer than one month by not more  than  15
31        days,  and  the  first  installment payment amount may be
32        larger than the  remaining  payments  by  the  amount  of
33        interest charged for the extra days; and provided further
34        that  monthly installment payment dates may be omitted to
 
                            -4-      LRB093 03657 LRD 12126 a
 1        accommodate borrowers with seasonal income.
 2             (2)  Payments may be applied to the  combined  total
 3        of  principal  and precomputed interest until the loan is
 4        fully paid.  Payments shall be applied in  the  order  in
 5        which they become due, except that any insurance proceeds
 6        received  as a result of any claim made on any insurance,
 7        unless sufficient to prepay the contract in full, may  be
 8        applied  to  the  unpaid  installments  of  the  total of
 9        payments in inverse order.
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
20        the date of the loan to the date of prepayment, and shall
21        refund  or  credit  the  obligor  with the balance of the
22        total interest contracted for.  If the  maturity  of  the
23        loan  is  accelerated  for  any  reason  and  judgment is
24        entered, the licensee shall credit the borrower with  the
25        same refund as if prepayment in full had been made on the
26        date the judgement is entered.
27             (4)  The  lender  or  creditor  may, if the contract
28        provides, collect a delinquency or collection  charge  on
29        each installment in default for a period of not less than
30        10  days in an amount not exceeding 5% of the installment
31        on installments in excess of $200, or $10 on installments
32        of $200 or less, but only one delinquency  or  collection
33        charge  may be collected on any installment regardless of
34        the period during which it remains in default.
 
                            -5-      LRB093 03657 LRD 12126 a
 1             (5)  If the parties agree in writing, either in  the
 2        loan   contract  or  in  a  subsequent  agreement,  to  a
 3        deferment of wholly unpaid installments, a  licensee  may
 4        grant  a  deferment and may collect a deferment charge as
 5        provided in this  Section.   A  deferment  postpones  the
 6        scheduled due date of the earliest unpaid installment and
 7        all  subsequent  installments as originally scheduled, or
 8        as  previously  deferred,  for  a  period  equal  to  the
 9        deferment period.  The deferment period  is  that  period
10        during  which  no  installment is scheduled to be paid by
11        reason of the deferment.  The deferment charge for a  one
12        month  period  may not exceed the applicable interest for
13        the installment period immediately following the due date
14        of the last undeferred payment.  A  proportionate  charge
15        may  be  made  for  deferment for periods of more or less
16        than one month.  A deferment charge is  earned  pro  rata
17        during  the  deferment  period and is fully earned on the
18        last day of the  deferment  period.   Should  a  loan  be
19        prepaid  in  full during a deferment period, the licensee
20        shall credit to the obligor  a  refund  of  the  unearned
21        deferment  charge  in  addition  to  any  other refund or
22        credit made for prepayment of the loan in full.
23             (6)  If two or more installments are delinquent  one
24        full  month  or more on any due date, and if the contract
25        so provides, the licensee may reduce the  unpaid  balance
26        by   the  refund  credit  which  would  be  required  for
27        prepayment in full on the due date  of  the  most  recent
28        maturing  installment in default. Thereafter, and in lieu
29        of any other default or  deferment  charges,  the  agreed
30        rate  of  interest  may  be charged on the unpaid balance
31        until fully paid.
32             (7)  Fifteen days after  the  final  installment  as
33        originally  scheduled  or deferred, the licensee, for any
34        loan contract which has not previously been converted  to
 
                            -6-      LRB093 03657 LRD 12126 a
 1        interest-bearing  under  paragraph  (f),  clause (6), may
 2        compute and charge  interest  on  any  balance  remaining
 3        unpaid, including unpaid default or deferment charges, at
 4        the  agreed  rate  of  interest until fully paid.  At the
 5        time of payment of said final installment,  the  licensee
 6        shall  give  notice  to  the  obligor stating any amounts
 7        unpaid.
 8    (Source: P.A. 90-437, eff. 1-1-98.)".