Full Text of HB0292 95th General Assembly
HB0292 95TH GENERAL ASSEMBLY
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95TH GENERAL ASSEMBLY
State of Illinois
2007 and 2008 HB0292
Introduced 1/19/2007, by Rep. Monique D. Davis SYNOPSIS AS INTRODUCED: |
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815 ILCS 205/4.2 |
from Ch. 17, par. 6407 |
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Amends the Interest Act. Provides that no increase in the annual percentage rate of interest on a revolving credit arrangement for a credit card account, other than an increase due to the expiration of an introductory percentage rate of interest, may be made because of a late payment by the debtor, provided that the payment has been postmarked or entered electronically on or before the date that the payment was due. Provides that the exception for the increase in the annual percentage rate of interest on a revolving credit arrangement for a credit card account does not apply to late payments due to a check not being honored by the debtor's bank for insufficient funds.
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A BILL FOR
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HB0292 |
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LRB095 04633 LCT 24691 b |
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| AN ACT concerning business.
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| Be it enacted by the People of the State of Illinois,
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| represented in the General Assembly:
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| Section 5. The Interest Act is amended by changing Section | 5 |
| 4.2 as follows:
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| (815 ILCS 205/4.2) (from Ch. 17, par. 6407)
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| Sec. 4.2. Revolving credit; billing statements; | 8 |
| disclosures. On a
revolving credit which complies with | 9 |
| subparagraphs (a), (b),
(b-5), (c), (d) and (e) of this Section | 10 |
| 4.2, it is lawful for any bank that has its main office or, | 11 |
| after May 31, 1997,
a branch in this State, a state or federal | 12 |
| savings and
loan association with its main office in this | 13 |
| State, a state or federal
credit union with its main office in | 14 |
| this State, or a lender licensed under
the Consumer Finance | 15 |
| Act, the Consumer Installment Loan Act or the Sales
Finance | 16 |
| Agency Act, as such Acts are now and hereafter amended, to
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| receive or contract to receive and collect interest
in any | 18 |
| amount or at any rate agreed upon by the parties to the | 19 |
| revolving
credit arrangement. It is lawful for any other lender | 20 |
| to receive or contract
to receive and collect interest in an | 21 |
| amount not in excess of 1 1/2% per
month of either the average | 22 |
| daily unpaid balance of the principal of the
debt during the | 23 |
| billing cycle, or of the unpaid balance of the debt on
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HB0292 |
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LRB095 04633 LCT 24691 b |
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| approximately the same day of the billing cycle. If a lender | 2 |
| under a revolving
credit arrangement notifies the debtor at | 3 |
| least 30 days in advance of any
lawful increase in the amount | 4 |
| or rate of interest to be charged under
the revolving credit | 5 |
| arrangement, and the debtor, after the effective date
of such | 6 |
| notice, incurs new debt pursuant to the revolving credit
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| arrangement, the increased interest amount or rate may be | 8 |
| applied only to
any such new debt incurred under the revolving | 9 |
| credit arrangement.
For purposes of determining the balances to | 10 |
| which the increased interest
rate applies, all payments and | 11 |
| other credits may be deemed to be applied
to the balance | 12 |
| existing prior to the change in rate until that balance is
paid | 13 |
| in full. The face amount of the
drafts, items, orders for the | 14 |
| payment of money, evidences of debt, or
similar written | 15 |
| instruments received by the lender in connection with the
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| revolving credit, less the amounts applicable to principal from | 17 |
| time to
time paid thereon by the debtor, are the unpaid balance | 18 |
| of the debt upon
which the interest is computed. If the billing | 19 |
| cycle is not monthly, the
maximum interest rate for the billing | 20 |
| cycle is the percentage which bears
the same relation to the | 21 |
| monthly percentage provided for in the preceding
sentence as | 22 |
| the number of days in the billing cycle bears to 30. For the
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| purposes of the foregoing computation, a "month" is deemed to | 24 |
| be any time
of 30 consecutive days. In addition to the interest | 25 |
| charge provided for, it
is lawful to receive, contract for or | 26 |
| collect a charge not exceeding 25
cents for each transaction in |
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| which a loan or advance is made under the
revolving credit or | 2 |
| in lieu of this additional charge an annual fee for the
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| privilege of receiving and using the revolving credit in an | 4 |
| amount not
exceeding $20. In addition, with respect to | 5 |
| revolving credit secured by an
interest in real estate, it is | 6 |
| also lawful to receive, contract for or
collect fees lawfully
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| paid to any public officer or agency to record, file or release | 8 |
| the security,
and costs and disbursements actually incurred for | 9 |
| any title insurance,
title examination, abstract of title, | 10 |
| survey, appraisal, escrow fees, and fees
paid to a trustee in | 11 |
| connection with a trust deed.
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| (a) At or before the date a bill or statement is first | 13 |
| rendered to the
debtor under a revolving credit arrangement, | 14 |
| the lender must mail or
deliver to the debtor a written | 15 |
| description of the conditions under which a
charge for interest | 16 |
| may be made and the method, including the rate, of
computing | 17 |
| these interest charges. The rate of interest must be expressed | 18 |
| as
an annual percentage rate.
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| (b) If during any billing cycle any debit or credit entry | 20 |
| is made to a
debtor's revolving credit account, and if at the | 21 |
| end of that billing cycle
there is an unpaid balance owing to | 22 |
| the lender from the debtor, the lender
must give to the debtor | 23 |
| the following information within a reasonable time
after the | 24 |
| end of the billing cycle:
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| (i) the unpaid balance at the beginning of the billing | 26 |
| cycle;
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| (ii) the date and amount of all loans or advances made | 2 |
| during the
billing cycle, which information may be supplied | 3 |
| by enclosing a copy of the
drafts, items, orders for the | 4 |
| payment of money, evidences of debt or
similar written | 5 |
| instruments presented to the lender during the billing
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| cycle;
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| (iii) the payments by the debtor to the lender and any | 8 |
| other credits to
the debtor during the billing cycle;
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| (iv) the amount of interest and other charges, if any, | 10 |
| charged to the
debtor's account during the billing cycle;
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| (v) the amount which must be currently paid by the | 12 |
| debtor and the date
on which that amount must be paid in | 13 |
| order to avoid delinquency;
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| (vi) the total amount remaining unpaid at the end of | 15 |
| the billing cycle
and the right of the debtor to prepay | 16 |
| that amount in full without penalty; and
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| (vii) information required by (iv), (v) and (vi) must | 18 |
| be set forth in type of
equal size and equal | 19 |
| conspicuousness.
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| (b-5) In the case of any credit card account under a | 21 |
| revolving credit arrangement containing a universal default | 22 |
| provision, no increase in the annual percentage rate of | 23 |
| interest, other than an increase due to the expiration of any | 24 |
| introductory percentage rate of interest, applicable to the | 25 |
| account or any portion of an outstanding balance on the account | 26 |
| may be made to a credit card account because of a late payment, |
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| provided that the payment has been postmarked or entered | 2 |
| electronically on or before the date that the payment was due. | 3 |
| This subsection (b-5) shall not apply to late payments that | 4 |
| occur due to a check not being honored for insufficient funds | 5 |
| by the debtor's bank.
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| (c) The revolving credit arrangement may provide for the | 7 |
| payment by the
debtor and receipt by the lender of all costs | 8 |
| and disbursements, including
reasonable attorney's fees, | 9 |
| incurred by the lender in legal proceedings to
collect or | 10 |
| enforce the debt in the event of delinquency by the debtor or | 11 |
| in
the event of a breach of any obligation of the debtor under | 12 |
| the arrangement.
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| (d) The lender under a revolving credit arrangement may | 14 |
| provide credit
life insurance or credit accident and health | 15 |
| insurance, or both, with
respect to the debtor and may charge | 16 |
| the debtor therefor. Credit life
insurance and credit accident | 17 |
| and health insurance, and any charge therefor
made to the | 18 |
| debtor, shall comply with Article IX 1/2 of the Illinois
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| Insurance Code, as now or hereafter amended, and all lawful
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| requirements of the Director of Insurance
related thereto. This | 21 |
| insurance is in force with respect to each loan or
advance made | 22 |
| under a revolving credit arrangement as soon as the loan or
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| advance is made. The purchase of this insurance from an agent, | 24 |
| broker or
insurer specified by the lender may not be a | 25 |
| condition precedent to the
revolving credit arrangement or to | 26 |
| the making of any loan or advance thereunder.
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| (e) Whenever interest is contracted for or received under | 2 |
| this Section,
no amount in addition to the charges authorized | 3 |
| by this Act may be directly
or indirectly charged, contracted | 4 |
| for or received whether as interest,
service charges, costs of | 5 |
| investigations or enforcements or otherwise.
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| (f) The lender under a revolving credit arrangement must
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| compute at year end the total amount charged to the debtor's
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| account during the year, including service charges, finance | 9 |
| charges,
late charges and any other charges authorized by this | 10 |
| Act,
and upon request must furnish such information to the | 11 |
| debtor within
30 days after the end of the year, or if the | 12 |
| account has been
terminated during such year, may give such | 13 |
| requested information within
30 days after such termination. | 14 |
| The lender shall annually inform the debtor
of his right to | 15 |
| obtain such information.
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| (g) A lender who complies with the federal Truth in Lending | 17 |
| Act, amendments
thereto, and any regulations issued or which | 18 |
| may be issued thereunder, shall
be deemed to be in compliance | 19 |
| with the provisions of subparagraphs (a) and
(b) of this | 20 |
| Section.
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| (h) Anything in this Section 4.2 to the contrary | 22 |
| notwithstanding, if
the Congress of the United States or any | 23 |
| federal agency authorizes any
class of lenders to enter, within | 24 |
| limitations, into a revolving credit
arrangement secured by a | 25 |
| mortgage or deed of trust on residential real
property, any | 26 |
| person, firm, corporation or other entity, not otherwise
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HB0292 |
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LRB095 04633 LCT 24691 b |
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| prohibited by the Congress of the United States or any federal | 2 |
| agency from
entering into revolving credit arrangements | 3 |
| secured by a mortgage or deed
of trust on residential real | 4 |
| property, may enter into such arrangements
within the same | 5 |
| limitations.
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| (Source: P.A. 89-208, eff. 9-29-95.)
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