Full Text of SB2619 94th General Assembly
SB2619sam001 94TH GENERAL ASSEMBLY
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Sen. Jacqueline Y. Collins
Filed: 2/28/2006
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| AMENDMENT TO SENATE BILL 2619
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| AMENDMENT NO. ______. Amend Senate Bill 2619 by replacing | 3 |
| everything after the enacting clause with the following:
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| "Section 1. Short title. This Act may be cited as the | 5 |
| Mortgage Steering Act. | 6 |
| Section 5. Definitions.
As used in this Act: | 7 |
| "Mortgage loan" means that term as it is defined in | 8 |
| subsection (f) of Section 1-4 of the Residential Mortgage | 9 |
| License Act of 1987. | 10 |
| "Borrower" means a person seeking a mortgage loan. | 11 |
| "Lender" means a natural or artificial person who | 12 |
| transfers, deals in, offers, brokers, or makes a residential | 13 |
| loan. "Lender" includes, but is not limited to, banks, savings | 14 |
| banks, savings and loan associations, credit unions, and | 15 |
| insurance companies organized, chartered, or holding a | 16 |
| certificate of authority to do business under the laws of this | 17 |
| State or any other state or under the laws of the United | 18 |
| States, or licensees under the Consumer Installment Loan Act or | 19 |
| the Residential Mortgage License Act of 1987.
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| Section 10. Steering. | 21 |
| (a) A lender shall not engage in steering. | 22 |
| (b) A lender engages in steering when the lender: | 23 |
| (1) directs or attempts to direct a borrower, because |
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| of that borrower's race, gender, disability, or national | 2 |
| origin, from applying for a mortgage loan where the | 3 |
| interest rates or fees are excessively higher than the | 4 |
| borrower could have at the time received from the lender | 5 |
| based on (A) the borrower's credit history, (B) the | 6 |
| borrower's capacity to repay the loan, and (C) the property | 7 |
| on which the loan is secured; or | 8 |
| (2) originates and closes a residential loan where the | 9 |
| interest rates or fees are excessively higher than the | 10 |
| borrower could have at the time received from the lender | 11 |
| based on (A) the borrower's credit history, (B) the | 12 |
| borrower's capacity to repay the loan, and (C) the property | 13 |
| on which the loan is secured, because of that borrower's | 14 |
| race, gender, age, disability, or national origin. | 15 |
| (c) Any lender who engages in steering violates this Act | 16 |
| and commits an unlawful practice within the meaning of this | 17 |
| Act. | 18 |
| Section 15. Notice; limiting liability. | 19 |
| (a) If a borrower could receive a significantly more | 20 |
| favorable interest rate or fees based on (A) the borrower's | 21 |
| credit history, (B) the borrower's capacity to repay the loan, | 22 |
| and (C) the property on which the loan is secured, but the | 23 |
| lender does not offer such a product, the lender shall not be | 24 |
| liable if it presents the following notice to the borrower for | 25 |
| the borrower's signature at the time the interest rate and fees | 26 |
| are given to the borrower: | 27 |
| "You may, based on (A) your credit history, (B) your | 28 |
| capacity to repay the loan, and (C) the property on which | 29 |
| the loan is secured, be eligible for a more favorable | 30 |
| interest rate or fees which we, the lender, do not offer. | 31 |
| This notice shall immunize the lender from liability under | 32 |
| the Mortgage Steering Act." |
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| Section 20. Enforcement. | 2 |
| (a) When it appears to the Attorney General that a lender | 3 |
| has engaged in, is engaging in, or is about to engage in any | 4 |
| practice declared to be unlawful by this Act; when the Attorney | 5 |
| General receives a written complaint from a consumer or | 6 |
| borrower of the commission of a practice declared to be | 7 |
| unlawful under this Act; or when he or she believes it to be in | 8 |
| the public interest that an investigation should be made to | 9 |
| ascertain whether a lender in fact has engaged in, is engaging | 10 |
| in or is about to engage in, any practice declared to be | 11 |
| unlawful by this Act, the Attorney General may: | 12 |
| (1) require that lender to file on such terms as he or | 13 |
| she prescribes a statement or report in writing under oath | 14 |
| or otherwise, as to all information as he or she may | 15 |
| consider necessary; | 16 |
| (2) examine under oath any person in connection with | 17 |
| the conduct; | 18 |
| (3) examine any record, book, document, account, or | 19 |
| paper as he or she may consider necessary; and | 20 |
| (4) pursuant to an order of the circuit court, impound | 21 |
| any record, book, document, account, or paper that is | 22 |
| produced in accordance with this Act, and retain it in his | 23 |
| or her possession until the completion of all proceedings | 24 |
| in connection with which it is produced. | 25 |
| (b) To accomplish the objectives and to carry out the | 26 |
| duties prescribed by this Act, the Attorney General, in | 27 |
| addition to other powers conferred upon him or her by this Act, | 28 |
| may issue subpoenas to any person, administer an oath or | 29 |
| affirmation to any person, conduct hearings in aid of any | 30 |
| investigation or inquiry, prescribe such forms and promulgate | 31 |
| such rules and regulations as may be necessary, which rules and | 32 |
| regulations shall have the force of law. | 33 |
| (c) Service by the Attorney General of any notice requiring | 34 |
| a person to file a statement or report, or of a subpoena upon |
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| any person, shall be made: | 2 |
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(1) personally by delivery of a duly executed copy | 3 |
| thereof to the person to be served, or if a person is not a | 4 |
| natural person, in the manner provided in the Code of Civil | 5 |
| Procedure when a complaint is filed; or | 6 |
| (2) by mailing by certified mail a duly executed copy | 7 |
| thereof to the person to be served at his or her last known | 8 |
| abode or principal place of business within this State. | 9 |
| (d) If any person fails or refuses to file any statement or | 10 |
| report, or obey any subpoena issued by the Attorney General, | 11 |
| the Attorney General may file a complaint in the circuit court | 12 |
| for the: | 13 |
| (1) granting of injunctive relief, restraining the | 14 |
| sale or advertisement of any mortgage by such persons, or | 15 |
| the conduct of any trade or commerce that is involved;
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| (2) vacating, annulling, or suspending of the | 17 |
| corporate charter of a corporation created by or under the | 18 |
| laws of this State or the revoking or suspending of the | 19 |
| certificate of authority to do business in this State of a | 20 |
| foreign corporation or the revoking or suspending of any | 21 |
| other licenses, permits, or certificates issued pursuant | 22 |
| to law to such person that are used to further the | 23 |
| allegedly unlawful practice; and | 24 |
| (3) granting of such other relief as may be required, | 25 |
| until the person files the statement or report, or obeys | 26 |
| the subpoena. | 27 |
| (e) In the administration of this Act, the Attorney General | 28 |
| may accept an Assurance of Voluntary Compliance with respect to | 29 |
| any method, act, or practice deemed to be in violation of this | 30 |
| Act from any lender who has engaged in, is engaging in, or was | 31 |
| about to engage in such method, act, or practice. Evidence of a | 32 |
| violation of an Assurance of Voluntary Compliance shall be | 33 |
| prima facie evidence of a violation of this Act in any | 34 |
| subsequent proceeding brought by the Attorney General against |
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| the alleged violator. | 2 |
| Section 25. Injunctive relief; restitution; and civil | 3 |
| penalties. | 4 |
| (a) Whenever the Attorney General has reason to believe | 5 |
| that any lender is using, has used, or is about to use any | 6 |
| method, act, or practice declared by this Act to be unlawful, | 7 |
| and that proceedings would be in the public interest, he or she | 8 |
| may bring an action in the name of the People of the State of | 9 |
| Illinois against such lender to restrain by preliminary or | 10 |
| permanent injunction the use of such method, act, or practice. | 11 |
| The court, in its discretion, may exercise all powers | 12 |
| necessary, including but not limited to: injunction; | 13 |
| revocation, forfeiture or suspension of any license, charter, | 14 |
| franchise, certificate, or other evidence of authority of any | 15 |
| person to do business in this State; appointment of a receiver; | 16 |
| dissolution of a domestic corporation or association or | 17 |
| suspension or termination of the right of a foreign corporation | 18 |
| or association to do business in this State; and restitution. | 19 |
| (b) In addition to the remedies provided herein, the | 20 |
| Attorney General may request and the court may impose a civil | 21 |
| penalty in a sum not to exceed $50,000 against any lender found | 22 |
| by the court to have engaged in any method, act, or practice | 23 |
| declared unlawful under this Act. | 24 |
| (c) In addition to any other civil penalty provided in this | 25 |
| Section, if a lender is found by the court to have engaged in | 26 |
| any method, act, or practice declared unlawful under this Act, | 27 |
| and the violation was committed against a person 65 years of | 28 |
| age or older, the court may impose an additional civil penalty | 29 |
| not to exceed $10,000 for each violation. | 30 |
| A civil penalty imposed under this subsection (c) shall be | 31 |
| paid to the State Treasurer who shall deposit the money in the | 32 |
| State treasury in a special fund designated the Elderly Victim | 33 |
| Fund. The Treasurer shall deposit such moneys into the Fund |
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| monthly. All of the moneys deposited into the Fund shall be | 2 |
| appropriated to the Department on Aging for grants to senior | 3 |
| centers in Illinois. | 4 |
| In determining whether to impose a civil penalty under this | 5 |
| subsection (c) and the amount of any penalty, the court shall | 6 |
| consider the following: | 7 |
| (1) Whether the defendant's conduct was in willful | 8 |
| disregard of the rights of the person 65 years of age or | 9 |
| older. | 10 |
| (2) Whether the defendant knew or should have known | 11 |
| that the defendant's conduct was directed to a person 65 | 12 |
| years of age or older. | 13 |
| (3) Whether the person 65 years of age or older was | 14 |
| substantially more vulnerable to the defendant's conduct | 15 |
| because of age, poor health, infirmity, impaired | 16 |
| understanding, restricted mobility, or disability, than | 17 |
| other persons. | 18 |
| (4) Any other factors the court deems appropriate. | 19 |
| (d) This Section applies if: (i) a court orders a party to | 20 |
| make payments to the Attorney General and the payments are to | 21 |
| be used for the operations of the Office of the Attorney | 22 |
| General; or (ii) a party agrees, in an Assurance of Voluntary | 23 |
| Compliance under this Act, to make payments to the Attorney | 24 |
| General for the operations of the Office of the Attorney | 25 |
| General. | 26 |
| (e) Moneys paid under any of the conditions described in | 27 |
| subsection (d) of this Section shall be deposited into the | 28 |
| Attorney General Court Ordered and Voluntary Compliance | 29 |
| Payment Projects Fund, which is created as a special fund in | 30 |
| the State treasury. Moneys in the Fund shall be used, subject | 31 |
| to appropriation, for the performance of any function | 32 |
| pertaining to the exercise of the duties of the Attorney | 33 |
| General, including but not limited to enforcement of any law of | 34 |
| this State and conducting public education programs; however, |
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| any moneys in the Fund that are required by the court or by an | 2 |
| agreement to be used for a particular purpose shall be used for | 3 |
| that purpose. | 4 |
| Section 30. Receiver powers. When a receiver is appointed | 5 |
| by the court pursuant to this Act, he or she shall have the | 6 |
| power to sue for, collect, receive, and take into his or her | 7 |
| possession all the goods and chattels, rights and credits, | 8 |
| moneys and effects, lands and tenements, books, records, | 9 |
| documents, papers, chooses in action, bills, notes, and | 10 |
| property of every description, derived by means of any practice | 11 |
| declared to be illegal and prohibited by this Act, including | 12 |
| property with which such property has been commingled if it | 13 |
| cannot be identified in kind because of such commingling, and | 14 |
| to sell, convey, and assign the same and hold and dispose of | 15 |
| the proceeds thereof under the direction of the court. Any | 16 |
| person who has suffered damages as a result of the use or | 17 |
| employment of any unlawful practices and submits proof to the | 18 |
| satisfaction of the court that he or she has in fact been | 19 |
| damaged may participate with general creditors in the | 20 |
| distribution of the assets to the extent he has sustained | 21 |
| out-of-pocket losses. In the case of a partnership or business | 22 |
| entity, the receiver shall settle the estate and distribute the | 23 |
| assets under the direction of the court. The court shall have | 24 |
| jurisdiction of all questions arising in such proceedings and | 25 |
| may make such orders and judgments therein as may be required. | 26 |
| Section 35. Termination of receivership. Subject to an | 27 |
| order of the court terminating the business affairs of any | 28 |
| lender after receivership proceedings held pursuant to this | 29 |
| Act, the provisions of this Act shall not bar any claim against | 30 |
| any person who has acquired any moneys or property, real or | 31 |
| personal, by means of any practice herein declared to be | 32 |
| unlawful. |
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| Section 40. Cost recovery. In any action brought under the | 2 |
| provisions of this Act, the Attorney General is entitled to | 3 |
| recover costs for the use of this State. | 4 |
| Section 45. Action for actual damages. | 5 |
| (a) Any person who suffers actual damage as a result of a | 6 |
| violation of this Act committed by a lender may bring an action | 7 |
| against such lender. The court, in its discretion, may award | 8 |
| actual economic damages or any other relief which the court | 9 |
| deems proper. | 10 |
| (b) Such action may be commenced in the county in which the | 11 |
| lender against whom it is brought has its principal place of | 12 |
| business, or is doing business, or in the county where the | 13 |
| transaction or any substantial portion thereof occurred. | 14 |
| (c) In any action brought by a person under this Act, the | 15 |
| court may grant injunctive relief where appropriate and may | 16 |
| award, in addition to the relief provided in this Act, | 17 |
| reasonable attorney's fees and costs to the prevailing | 18 |
| plaintiff. | 19 |
| (d) Upon commencement of any action brought under this | 20 |
| Section, the plaintiff shall mail a copy of the complaint or | 21 |
| other initial pleading to the Attorney General and, upon entry | 22 |
| of any judgment or order in the action, shall mail a copy of | 23 |
| such judgment or order to the Attorney General. | 24 |
| (e) Any action for damages under this Section shall be | 25 |
| forever barred unless commenced within 3 years after the cause | 26 |
| of action accrued; provided that, whenever any action is | 27 |
| brought by the Attorney General for a violation of this Act, | 28 |
| the running of the foregoing statute of limitations, with | 29 |
| respect to every private right of action for damages which is | 30 |
| based in whole or in part on any matter complained of in said | 31 |
| action by the Attorney General, shall be suspended during the | 32 |
| pendency thereof, and for one year thereafter. |
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| Section 50. Waiver. Any waiver or modification of the | 2 |
| rights, provisions, or remedies of this Act shall be void and | 3 |
| unenforceable. | 4 |
| Section 55. Additional remedies. The relief provided in | 5 |
| this Act is in addition to remedies otherwise available against | 6 |
| the same conduct under the common law or other statutes of this | 7 |
| State. | 8 |
| Section 60. Construction. This Act shall be liberally | 9 |
| construed to effect the purposes thereof.".
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