Full Text of HB1713 96th General Assembly
HB1713ham001 96TH GENERAL ASSEMBLY
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Rep. Julie Hamos
Filed: 4/1/2009
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LRB096 05321 MJR 25050 a |
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| AMENDMENT TO HOUSE BILL 1713
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| AMENDMENT NO. ______. Amend House Bill 1713 by replacing | 3 |
| everything after the enacting clause with the following:
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| "Section 5. The Consumer Installment Loan Act is amended by | 5 |
| changing Sections 1, 12, 15, and 15d and by adding Sections | 6 |
| 17.1, 17.2, 17.3, 17.4, 17.5, and 19.2 as follows:
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| (205 ILCS 670/1) (from Ch. 17, par. 5401)
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| Sec. 1. License required to engage in business. No person, | 9 |
| partnership, association, limited liability
company, or | 10 |
| corporation shall engage in
the business of making loans of | 11 |
| money in a principal amount not
exceeding $25,000, and charge, | 12 |
| contract for, or receive on any
such loan a
greater rate of | 13 |
| interest, discount, or consideration therefor than the
lender | 14 |
| would be permitted by law to charge if he were not a licensee
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| hereunder, except as authorized by this Act after first | 16 |
| obtaining a license
from the Director of Financial Institutions |
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| (hereinafter called the Director). No licensee, or employee or | 2 |
| affiliate thereof, shall be licensed under the Payday Loan | 3 |
| Reform Act.
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| (Source: P.A. 89-400, eff. 8-20-95; 90-437, eff. 1-1-98.)
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| (205 ILCS 670/12) (from Ch. 17, par. 5412)
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| Sec. 12. Other business.
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| (a) Upon application by the licensee, and approval by
the | 8 |
| Director, the Director may approve the conduct of other | 9 |
| businesses not
specifically permitted by this Act in the | 10 |
| licensee's place of business, unless
the Director finds that | 11 |
| such conduct will conceal or facilitate evasion or
violation of | 12 |
| this Act. Such approval shall be in writing and shall describe
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| the other businesses which may be conducted in the licensed | 14 |
| office.
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| (b) A licensee may without notice to and approval of the | 16 |
| Director, in
addition to the business permitted by this Act, | 17 |
| conduct the following business:
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| (1) The business of a sales finance agency as defined | 19 |
| in the Sales Finance
Agency Act.
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| (2) The business of soliciting or selling any type of | 21 |
| insurance provided
that all such insurance transactions | 22 |
| are conducted in accordance with and are
regulated under | 23 |
| the Illinois Insurance Code.
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| (3) The business of financing premiums for insurance.
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| (4) Making loans pursuant to the Financial Services |
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| Development Act.
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| The Director shall make and enforce such reasonable rules and
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| regulations for the conduct of business under this Act in the | 4 |
| same office
with other businesses as may be necessary to | 5 |
| prevent evasions or violations
of this Act. The Director may | 6 |
| investigate any business conducted in the
licensed office to | 7 |
| determine whether any evasion or violation of this Act has
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| occurred.
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| (Source: P.A. 90-437, eff. 1-1-98.)
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| (205 ILCS 670/15) (from Ch. 17, par. 5415)
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| Sec. 15. Charges permitted.
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| (a) This Section does not apply to small consumer loans, as | 13 |
| defined in Section 17.1 of this Act. | 14 |
| (b) Every licensee may
lend a principal amount not | 15 |
| exceeding $40,000 and may charge,
contract for
and receive | 16 |
| thereon interest at an annual percentage the rate of no more | 17 |
| than 36% agreed upon
by
the licensee and the borrower , subject | 18 |
| to the provisions of this Act ; provided, however that the | 19 |
| limitation on the annual percentage rate contained in this | 20 |
| subsection (b) does not apply to title-secured loans, which are | 21 |
| defined and governed by the Illinois Administrative Code. For | 22 |
| purposes of this subsection (b), the annual percentage rate | 23 |
| shall be calculated in accordance with the federal Truth in | 24 |
| Lending Act .
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| (c) (b) For purpose of this Section, the following terms |
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| shall have the
meanings ascribed herein.
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| "Applicable interest" for a precomputed loan contract | 3 |
| means the amount of
interest attributable to each monthly | 4 |
| installment period. It is computed
as if each installment | 5 |
| period were one month and any interest charged for
extending | 6 |
| the first installment period beyond one month is ignored. The
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| applicable interest for any monthly installment period is that | 8 |
| portion of
the precomputed interest that bears the same ratio | 9 |
| to the total precomputed
interest as the balances scheduled to | 10 |
| be outstanding during that month bear
to the sum of all | 11 |
| scheduled monthly outstanding balances in the original
| 12 |
| contract.
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| "Interest-bearing loan" means a loan in which the debt is
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| expressed as a principal amount plus interest charged on actual | 15 |
| unpaid
principal balances for the time actually outstanding.
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| "Precomputed loan" means a loan in which the debt is | 17 |
| expressed as the sum
of the original principal amount plus | 18 |
| interest computed actuarially in
advance, assuming all | 19 |
| payments will be made when scheduled.
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| (d) (c) Loans may be interest-bearing or precomputed.
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| (e) (d) To compute time for either interest-bearing or | 22 |
| precomputed loans for
the calculation of interest and other | 23 |
| purposes, a month shall be a calendar
month and a day shall be | 24 |
| considered 1/30th of a month when calculation is
made for a | 25 |
| fraction of a month. A month shall be 1/12th of a year. A
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| calendar month is that period from a given date in one month to |
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| the same
numbered date in the following month, and if there is | 2 |
| no same numbered
date, to the last day of the following month. | 3 |
| When a period of time
includes a month and a fraction of a | 4 |
| month, the fraction of the month is
considered to follow the | 5 |
| whole month. In the alternative, for
interest-bearing loans, | 6 |
| the licensee may charge interest at the rate of
1/365th of the | 7 |
| agreed annual rate for each day actually
elapsed.
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| (f) (e) With respect to interest-bearing loans:
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| (1) Interest shall be computed on unpaid principal | 10 |
| balances outstanding
from time to time, for the time | 11 |
| outstanding, until fully paid. Each
payment shall be | 12 |
| applied first to the accumulated interest and the
remainder | 13 |
| of the payment applied to the unpaid principal balance; | 14 |
| provided
however, that if the amount of the payment is | 15 |
| insufficient to pay the
accumulated interest, the unpaid | 16 |
| interest continues to accumulate to be
paid from the | 17 |
| proceeds of subsequent payments and is not added to the | 18 |
| principal
balance.
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| (2) Interest shall not be payable in advance or | 20 |
| compounded. However, if
part or all of the consideration | 21 |
| for a new loan contract is the unpaid
principal balance of | 22 |
| a prior loan, then the principal amount payable under
the | 23 |
| new loan contract may include any unpaid interest which has | 24 |
| accrued.
The unpaid principal balance of a precomputed loan | 25 |
| is the balance due
after refund or credit of unearned | 26 |
| interest as provided in paragraph (g) (f) ,
clause (3). The |
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| resulting loan contract shall be deemed a new and separate
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| loan transaction for all purposes.
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| (3) Loans must be fully amortizing and be repayable in | 4 |
| substantially equal and consecutive monthly installments. | 5 |
| Notwithstanding this requirement, may be payable as agreed | 6 |
| between the parties, including payment
at irregular times | 7 |
| or in unequal amounts and rates that may vary according to | 8 |
| with an
index that is independently verifiable and beyond | 9 |
| the control of the licensee.
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| (4) The lender or creditor may, if the contract | 11 |
| provides, collect a
delinquency or collection charge on | 12 |
| each installment in default for a period of
not less than | 13 |
| 10 days in an amount not exceeding 5% of the installment on
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| installments in excess of $200, or $10 on installments of | 15 |
| $200 or less, but
only
one delinquency and collection | 16 |
| charge may be collected on any installment
regardless of | 17 |
| the period during which it remains in default.
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| (g) (f) With respect to precomputed loans:
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| (1) Loans shall be repayable in substantially equal and | 20 |
| consecutive
monthly installments of principal and interest | 21 |
| combined, except that the
first installment period may be | 22 |
| longer than one month by not more than 15
days, and the | 23 |
| first installment payment amount may be larger than the
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| remaining payments by the amount of interest charged for | 25 |
| the extra days;
and provided further that monthly | 26 |
| installment payment dates may be omitted
to accommodate |
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| borrowers with seasonal income.
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| (2) Payments may be applied to the combined total of | 3 |
| principal and
precomputed interest until the loan is fully | 4 |
| paid. Payments shall be
applied in the order in which they | 5 |
| become due, except that any insurance
proceeds received as | 6 |
| a result of any claim made on any insurance, unless
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| sufficient to prepay the contract in full, may be applied | 8 |
| to the unpaid
installments of the total of payments in | 9 |
| inverse order.
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| (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 the | 20 |
| date of the loan to
the date of prepayment, and shall | 21 |
| refund or credit the obligor
with the
balance of the total | 22 |
| interest contracted for. If the maturity of the loan
is | 23 |
| accelerated for any reason and judgment is entered, the | 24 |
| licensee shall
credit the borrower with the same refund as | 25 |
| if prepayment in full had been
made on the date the | 26 |
| judgement is entered.
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| (4) The lender or creditor may, if the contract | 2 |
| provides, collect a
delinquency or collection charge on | 3 |
| each installment in default for a period of
not less than | 4 |
| 10 days in an amount not exceeding 5% of the installment on
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| installments in excess of $200, or $10 on installments of | 6 |
| $200 or less, but
only
one delinquency or collection charge | 7 |
| may be collected on any installment
regardless of the | 8 |
| period during which it remains in default.
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| (5) If the parties agree in writing, either in the loan | 10 |
| contract or in a
subsequent agreement, to a deferment of | 11 |
| wholly unpaid installments, a
licensee may grant a | 12 |
| deferment and may collect a deferment charge as
provided in | 13 |
| this Section. A deferment postpones the scheduled due date | 14 |
| of
the earliest unpaid installment and all subsequent | 15 |
| installments as
originally scheduled, or as previously | 16 |
| deferred, for a period equal to the
deferment period. The | 17 |
| deferment period is that period during which no
installment | 18 |
| is scheduled to be paid by reason of the deferment. The
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| deferment charge for a one month period may not exceed the | 20 |
| applicable
interest for the installment period immediately | 21 |
| following the due date of
the last undeferred payment. A | 22 |
| proportionate charge may be made for
deferment for periods | 23 |
| of more or less than one month. A deferment charge
is | 24 |
| earned pro rata during the deferment period and is fully | 25 |
| earned on the
last day of the deferment period. Should a | 26 |
| loan be prepaid in full during
a deferment period, the |
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| licensee shall credit to the obligor a
refund of the | 2 |
| unearned deferment charge in addition to any other refund | 3 |
| or
credit made for prepayment of the loan in full.
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| (6) If two or more installments are delinquent one full | 5 |
| month or more on
any due date, and if the contract so | 6 |
| provides, the licensee may reduce the
unpaid balance by the | 7 |
| refund credit which would be required for prepayment
in | 8 |
| full on the due date of the most recent maturing | 9 |
| installment in default.
Thereafter, and in lieu of any | 10 |
| other default or deferment charges, the
agreed rate of | 11 |
| interest may be charged on the unpaid balance until fully | 12 |
| paid.
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| (7) Fifteen days after the final installment as | 14 |
| originally scheduled or
deferred, the licensee, for any | 15 |
| loan contract which has not previously been
converted to | 16 |
| interest-bearing under paragraph (g) (f) , clause (6), may | 17 |
| compute
and charge interest on any balance remaining | 18 |
| unpaid, including unpaid
default or deferment charges, at | 19 |
| the agreed rate of interest until fully
paid. At the time | 20 |
| of payment of said final installment, the licensee shall
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| give notice to the obligor stating any amounts unpaid.
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| (Source: P.A. 93-264, eff. 1-1-04.)
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| (205 ILCS 670/15d) (from Ch. 17, par. 5419)
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| Sec. 15d. Extra charges prohibited; exceptions. | 25 |
| (a) This Section does not apply to small consumer loans, as |
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| defined in Section 17.1 of this Act. | 2 |
| (b) No amount in addition to the charges authorized by this | 3 |
| Act shall be
directly or indirectly charged, contracted for, or | 4 |
| received, except (1) lawful
fees paid to any public officer or | 5 |
| agency to record, file or release
security; (2) (i) costs and | 6 |
| disbursements actually incurred in connection
with a real | 7 |
| estate loan, for any title insurance, title examination, | 8 |
| abstract
of title, survey, or appraisal, or paid to a trustee | 9 |
| in connection with
a trust deed, and (ii) in connection with a | 10 |
| real estate loan those
charges authorized by Section 4.1a of | 11 |
| the Interest Act, whether called
"points" or otherwise, which | 12 |
| charges are imposed as a condition for making
the loan and are | 13 |
| not refundable in the event of prepayment of the loan;
(3) | 14 |
| costs and disbursements, including reasonable
attorney's fees, | 15 |
| incurred in legal proceedings to collect a loan or to
realize | 16 |
| on a security after default; (4) an amount not exceeding
$25,
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| plus any actual expenses incurred in connection with a check or | 18 |
| draft that is
not honored because of
insufficient or | 19 |
| uncollected funds or because no such account exists; and (5)
a | 20 |
| document preparation fee not to exceed $25 for obtaining and | 21 |
| reviewing credit
reports and preparation of other documents. | 22 |
| This
Section does not prohibit the
receipt of a commission, | 23 |
| dividend, charge, or other benefit by
the licensee or by
an | 24 |
| employee, affiliate, or associate of the licensee from the | 25 |
| insurance
permitted by Sections 15a and 15b of this Act or from | 26 |
| insurance in lieu of
perfecting a security interest provided |
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| that the premiums for such insurance do
not exceed the fees | 2 |
| that otherwise could be contracted for by the licensee
under | 3 |
| this Section. Obtaining any of the items
referred to in clause | 4 |
| (i) of item (2) of this Section through the licensee
or from | 5 |
| any person specified by the licensee shall not be a condition
| 6 |
| precedent to the granting of the loan.
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| (Source: P.A. 89-400, eff. 8-20-95; 90-437, eff. 1-1-98.)
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| (205 ILCS 670/17.1 new) | 9 |
| Sec. 17.1. Small consumer loans; definition. | 10 |
| (a) Sections 17.1, 17.2, 17.3, 17.4, and 17.5 of this Act | 11 |
| apply exclusively to small consumer loans as defined in this | 12 |
| Section. Except for Sections 15 and 15d of this Act, small | 13 |
| consumer loans shall be made subject to all other Sections of | 14 |
| this Act. | 15 |
| (b) "Small consumer loan" means a loan with a finance | 16 |
| charge exceeding an annual percentage rate of 36% and with an | 17 |
| amount financed of $3,000 or less. "Small consumer loan" does | 18 |
| not include a title-secured loan as defined by the Illinois | 19 |
| Administrative Code or a payday loan as defined by the Payday | 20 |
| Loan Reform Act. | 21 |
| (205 ILCS 670/17.2 new)
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| Sec. 17.2. Small consumer loans; charges permitted. | 23 |
| (a) For a small consumer loan, a licensee may charge the | 24 |
| following finance charges: |
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| (i) An acquisition charge for making the original loan, | 2 |
| not to exceed 10% of the amount financed or $100, whichever | 3 |
| is less; | 4 |
| (ii) An acquisition charge for the first time that the | 5 |
| original loan is refinanced , not to exceed 5% of the | 6 |
| amount financed or $50, whichever is less; | 7 |
| (iii) A monthly installment account handling charge, | 8 |
| not to exceed the following amounts: | |
9 | | Amount financed | Per month charge |
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10 | | $200 or less | $6.50 |
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11 | | $200.01 - $300 | $10.00 |
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12 | | $300.01 - $500 | $13.50 |
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13 | | $500.01 - $700 | $17.50 |
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14 | | $700.01 - $900 | $20.00 |
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15 | | $900.01 -$1,000 | $22.50 |
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16 | | $1,000.01 - $1,100 | $25.00 |
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17 | | $1,100.01 - $1,200 | $27.50 |
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18 | | $1,200.01 - $1,300 | $30.00 |
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19 | | $1,300.01 - $1,400 | $32.50 |
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20 | | $1,400.01 - $1,500 | $35.00 |
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21 | | $1,500.01 - $1,600 | $37.50 |
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22 | | $1,600.01 - $1,700 | $40.00 |
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23 | | $1,700.01 - $1,800 | $42.50 |
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24 | | $1,800.01 - $1,900 | $45.00 |
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25 | | $1,900.01 - $2,000 | $47.50 |
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| 1 | | $2,000.01 - $2,100 | $50.00 |
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2 | | $2,100.01 - $2,200 | $52.50 |
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3 | | $2,200.01 - $2,300 | $55.00 |
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4 | | $2,300.01 - $2,400 | $57.50 |
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5 | | $2,400.01 - $2,500 | $60.00 |
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6 | | $2,500.01 - $2,600 | $62.50 |
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7 | | $2,600.01 - $2,700 | $65.00 |
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8 | | $2,700.01 - $2,800 | $67.50 |
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9 | | $2,800.01 - $2,900 | $70.00 |
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10 | | $2,900.01 - $3,000 | $72.50 |
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| The "amount financed" on a refinanced loan for purposes | 12 |
| of calculating the monthly installment account handling | 13 |
| charge pursuant to this item (iii) shall not include any | 14 |
| acquisition charges or monthly installment account | 15 |
| handling charges on the prior small consumer loan that is | 16 |
| paid off as a result of the refinancing. | 17 |
| (b) A small consumer loan shall be fully amortizing and be | 18 |
| repayable in its entirety in a minimum of 6 substantially equal | 19 |
| and consecutive payments with a period of not less than 180 | 20 |
| days to maturity. | 21 |
| (c) On a small consumer loan, no other finance charge or | 22 |
| any other charge or fee is permitted except for the charges | 23 |
| permitted by this Section. | 24 |
| (d) The acquisition charge authorized in this Section shall | 25 |
| be fully earned at the time the loan is made and shall not be |
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| subject to refund; except that, if the loan is paid off within | 2 |
| the first 90 days, the first $10 of the acquisition charge | 3 |
| shall be retained by the licensee and the remainder of the | 4 |
| acquisition charge shall be refunded on a pro rata basis. | 5 |
| (e) A licensee may charge a consumer a fee not to exceed | 6 |
| $1.00 or the actual cost charged by the certified database | 7 |
| provider, whichever is greater, for the verification required | 8 |
| under Section 17.5 of this Act. Only one such fee may he | 9 |
| collected by the licensee with respect to a particular loan. | 10 |
| (f) If there are insufficient funds to pay a check, | 11 |
| Automatic Clearing House (ACH) debit, or any other form of | 12 |
| payment on the day of presentment and only after the licensee | 13 |
| has incurred an expense, a licensee may charge the fee | 14 |
| specified in subsection (4) of Section 15d(b) of this Act. Only | 15 |
| one such fee may be collected by the licensee with respect to a | 16 |
| particular check, ACH debit, or other payment item even if it | 17 |
| has been deposited and returned more than once. A licensee | 18 |
| shall present the check, ACH debit, or other payment item not | 19 |
| more than twice. | 20 |
| (g) The lender or creditor may, if the contract provides, | 21 |
| collect a delinquency or collection charge on each installment | 22 |
| in default for a period of not less than 15 days in an amount | 23 |
| not exceeding 2.5% of the installment, but only one delinquency | 24 |
| and collection charge may be collected on any installment | 25 |
| regardless of the period during which it remains in default. | 26 |
| (h) Upon the pay off of a small consumer loan, the licensee |
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| shall refund any unearned portion of the installment account | 2 |
| handling charge. The unearned portion of the installment | 3 |
| account handling charge that is refunded shall be calculated | 4 |
| based on a method which is at least as favorable to the | 5 |
| consumer as the actuarial method, as defined by the federal | 6 |
| Truth in Lending Act. The "sum of the digits" or "rule of | 7 |
| 78ths" method of calculating prepaid interest refunds is | 8 |
| prohibited. | 9 |
| (i) A licensee shall not be entitled to attorney's fees | 10 |
| incurred in legal proceedings to collect a small consumer loan | 11 |
| or to realize on a security after default. | 12 |
| (j) This Section does not prohibit the receipt of a | 13 |
| commission, dividend, charge, or other benefit by the licensee | 14 |
| or by an employee, affiliate, or associate of the licensee from | 15 |
| the insurance permitted by Sections 15a and 15b of this Act or | 16 |
| from insurance in lieu of perfecting a security interest. | 17 |
| (k) The monthly account handling charge is inclusive of all | 18 |
| fees and charges, other than the acquisition charge and | 19 |
| verification fee, including charges and fees for single premium | 20 |
| credit insurance and other ancillary products financed by the | 21 |
| licensee. | 22 |
| (205 ILCS 670/17.3 new) | 23 |
| Sec. 17.3. Small consumer loans; terms. | 24 |
| (a) Small consumer loans shall be fully amortized and be | 25 |
| repayable in substantially equal and consecutive installments. |
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| (b) A licensee is prohibited from making a small consumer | 2 |
| loan to a consumer who has or has had an outstanding small | 3 |
| consumer loan within the preceding 14 days, other than the | 4 |
| refinancing of the small consumer loan; provided, however, that | 5 |
| if a small consumer loan is refinanced within the first half of | 6 |
| the loan term, the licensee shall not be entitled to charge or | 7 |
| collect any acquisition charge. | 8 |
| (c) A licensee is prohibited from collecting any fee, | 9 |
| charge, or remuneration of any sort for renewing, amending, or | 10 |
| extending a small consumer loan beyond its original term. | 11 |
| (205 ILCS 670/17.4 new) | 12 |
| Sec. 17.4. Small consumer loans; loan amount. A licensee is | 13 |
| prohibited from making a small consumer loan to a consumer if | 14 |
| the total of all payments to be made in any month on the loan | 15 |
| exceeds 10% of the consumer's gross monthly income, as | 16 |
| demonstrated by official documentation of the income, | 17 |
| including, but not limited to, the consumer's most recent pay | 18 |
| stub or receipt reflecting payment of government benefits. | 19 |
| (205 ILCS 670/17.5 new) | 20 |
| Sec. 17.5. Verification. | 21 |
| (a) "Certified database" means the consumer reporting | 22 |
| service database established pursuant to the Payday Loan Reform | 23 |
| Act. | 24 |
| (b) Before making a small consumer loan to a consumer, the |
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| licensee shall use the certified database to verify that the | 2 |
| small consumer loan is permissible under this Act. | 3 |
| (c) The licensee shall input the following information into | 4 |
| the certified database to determine whether the small consumer | 5 |
| loan is permissible under this Act: | 6 |
| (i) consumer's name and Social Security Number or Alien | 7 |
| Identification Number; | 8 |
| (ii) consumer's complete billing address; | 9 |
| (iii) consumer's gross monthly income; | 10 |
| (iv) date of the loan; | 11 |
| (v) the amount financed; | 12 |
| (vi) cash paid directly to the consumer; | 13 |
| (vii) the term of the loan; | 14 |
| (viii) the acquisition charge; | 15 |
| (ix) the monthly installment account handling charge; | 16 |
| (x) the annual percentage rate disclosed to the | 17 |
| consumer pursuant to Section 16 of this Act; | 18 |
| (xi) the annual percentage rate, inclusive of all fees | 19 |
| and charges, including charges and fees for single premium | 20 |
| credit insurance and other ancillary products financed by | 21 |
| the licensee; | 22 |
| (xii) the verification fee; | 23 |
| (xiii) the number of payments; | 24 |
| (xiv) the total of all payments; | 25 |
| (xv) security for the loan, if any; and | 26 |
| (xvi) whether the loan is refinancing a prior small |
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LRB096 05321 MJR 25050 a |
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| consumer loan. | 2 |
| (d) The licensee shall update the certified database on the | 3 |
| same day that any of the following events occur: | 4 |
| (i) a payment is made, including the amount of the | 5 |
| payment and method of payment; | 6 |
| (ii) a late charge is imposed, including the amount of | 7 |
| the late charge; | 8 |
| (iii) an insufficient funds fee is imposed, including | 9 |
| the amount of the fee; | 10 |
| (iv) any finance charges are refunded, including the | 11 |
| amount of the refund; | 12 |
| (v) the loan is refinanced; | 13 |
| (vi) the security is returned; | 14 |
| (vii) the loan is closed due to the collateral being | 15 |
| sold after default; | 16 |
| (viii) the loan is cancelled or rescinded; or | 17 |
| (ix) the loan is written off. | 18 |
| (e) To the extent a licensee sells a product or service to | 19 |
| a consumer, other than a small consumer loan, and finances any | 20 |
| portion of the cost of the product or service, the licensee | 21 |
| shall enter into the certified database: | 22 |
| (i) a description of the product or service sold; | 23 |
| (ii) the charge for the product or service; | 24 |
| (iii) the schedule of payments for the product or | 25 |
| service; | 26 |
| (iv) the portion of the charge for the product or |
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LRB096 05321 MJR 25050 a |
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| service, if any, that is included in the amount financed | 2 |
| by_ a small consumer loan; and | 3 |
| (v) whether the product or service is refundable or | 4 |
| revocable. | 5 |
| (f) A licensee may rely on the information contained in the | 6 |
| certified database as accurate and is not subject to any | 7 |
| administrative penalty or liability as a result of relying on | 8 |
| inaccurate information contained in the database. | 9 |
| (g) The certified database shall indemnify the licensee | 10 |
| against all claims and actions arising from illegal or willful | 11 |
| or wanton acts on the part of the certified database. | 12 |
| (h) All personally identifiable information regarding any | 13 |
| consumer obtained by way of the certified database and | 14 |
| maintained by the Department is strictly confidential and shall | 15 |
| be exempt from disclosure under provision (i) of item (b) of | 16 |
| subsection (1) of Section 7 of the Freedom of Information Act. | 17 |
| (i) No later than July 31 of the second year following the | 18 |
| effective date of this amendatory Act of the 96th General, the | 19 |
| Department shall publish a biennial report that contains a | 20 |
| compilation of aggregate data concerning the products and | 21 |
| services described in subsection (e) of this Section and shall | 22 |
| make the report available to the Governor, the General | 23 |
| Assembly, and the general public. The report shall include, but | 24 |
| not be limited to, data concerning the prevalence of such | 25 |
| products and services and the extent to which they contribute | 26 |
| to the overall cost of the loan. |
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LRB096 05321 MJR 25050 a |
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| (205 ILCS 670/19.2 new) | 2 |
| Sec. 19.2. Licensee; prohibition against accepting certain | 3 |
| checks. At the time a loan is made or within 30 days after a | 4 |
| loan is made, a licensee shall not (i) accept a check and agree | 5 |
| to hold it for a period of days before deposit or presentment, | 6 |
| or (ii) accept a check dated subsequent to the date written. | 7 |
| Section 10. The Illinois Financial Services Development | 8 |
| Act is amended by changing Section 3 as follows:
| 9 |
| (205 ILCS 675/3) (from Ch. 17, par. 7003)
| 10 |
| Sec. 3. As used in this Section:
| 11 |
| (a) "Financial institution" means any bank with its
main | 12 |
| office or, after May 31, 1997, a branch in this State, any | 13 |
| state or
federal savings and loan
association or savings bank | 14 |
| with its main office or branch in this State,
and any state or | 15 |
| federal credit
union with its main office in this State , and | 16 |
| any lender licensed under the
Consumer Installment Loan Act or | 17 |
| the Sales Finance Agency Act .
| 18 |
| (b) "Revolving credit plan" or "plan" means a plan | 19 |
| contemplating the
extension of credit under an account governed | 20 |
| by an agreement between a
financial institution and a borrower | 21 |
| who is a natural person pursuant to which:
| 22 |
| (1) The financial institution permits the borrower | 23 |
| and, if the agreement
governing the plan so provides, |
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LRB096 05321 MJR 25050 a |
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| persons acting on behalf of or with
authorization from the | 2 |
| borrower, from time to time to make purchases and to
obtain | 3 |
| loans by any means whatsoever, including use
of a credit | 4 |
| device primarily for personal, family or household | 5 |
| purposes;
| 6 |
| (2) the amounts of such purchases and loans are charged | 7 |
| to the
borrower's account under the revolving credit plan;
| 8 |
| (3) the borrower is required to pay the financial | 9 |
| institution the
amounts of all purchases and loans charged | 10 |
| to such borrower's account under
the plan but has the | 11 |
| privilege of paying such amounts outstanding from time
to | 12 |
| time in full or installments; and
| 13 |
| (4) interest may be charged and collected by the | 14 |
| financial institution
from time to time on the outstanding | 15 |
| unpaid indebtedness under such plan.
| 16 |
| (c) "Credit device" means any card, check, identification | 17 |
| code or other
means of identification contemplated by the | 18 |
| agreement governing the plan.
| 19 |
| (d) "Outstanding unpaid indebtedness" means on any day an | 20 |
| amount not in
excess of the total amount of purchases and loans | 21 |
| charged to the borrower's
account under the plan which is | 22 |
| outstanding and unpaid at the end of the day,
after adding the | 23 |
| aggregate amount of any new purchases and loans charged to
the | 24 |
| account as of that day and deducting the aggregate amount of | 25 |
| any
payments and credits applied to that indebtedness as of | 26 |
| that day and, if
the agreement governing the plan so provides, |
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LRB096 05321 MJR 25050 a |
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| may include the amount of any
billed and unpaid interest and | 2 |
| other charges.
| 3 |
| (Source: P.A. 89-208, eff. 9-29-95.)
| 4 |
| Section 15. The Payday Loan Reform Act is amended by | 5 |
| changing Sections 2-5, 2-10, and 3-5 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 | 9 |
| any time without cost or penalty, no payday loan may have a | 10 |
| minimum term of less than 13 days. | 11 |
| (b) No payday loan may be made to a consumer if the loan | 12 |
| would result in the consumer being indebted to one or more | 13 |
| payday lenders for a period in excess of 45 consecutive days. | 14 |
| Except as provided under Section 2-40, if a consumer has or has | 15 |
| had loans outstanding for a period in excess of 45 consecutive | 16 |
| days, no payday lender may offer or make a loan to the consumer | 17 |
| for at least 7 calendar days after the date on which the | 18 |
| outstanding balance of all payday loans made during the 45 | 19 |
| consecutive day period is paid in full. For purposes of this | 20 |
| subsection, the term "consecutive days" means a series of | 21 |
| continuous calendar days in which the consumer has an | 22 |
| outstanding balance on one or more payday loans; however, if a | 23 |
| payday loan is made to a consumer within 6 days or less after | 24 |
| the outstanding balance of all loans is paid in full, those |
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LRB096 05321 MJR 25050 a |
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| days are counted as "consecutive days" for purposes of this | 2 |
| subsection. | 3 |
| (c) No lender may make a payday loan to a consumer if the | 4 |
| total principal amount of the loan, when combined with the | 5 |
| principal amount of all of the consumer's other outstanding | 6 |
| payday loans, exceeds $1,000 or 25% of the consumer's gross | 7 |
| monthly income, whichever is less.
| 8 |
| (d) No payday loan may be made to a consumer who has an | 9 |
| outstanding balance on 2 payday loans. | 10 |
| (e) No lender may charge more than $15.50 per $100 loaned | 11 |
| on any payday loan over the term of the loan. Except as | 12 |
| provided in Section 2-25, this charge is considered fully | 13 |
| earned as of the date on which the loan is made. | 14 |
| (f) A lender may not take or attempt to take an interest in | 15 |
| any of the consumer's personal property to secure a payday | 16 |
| loan. | 17 |
| (g) A consumer has the right to redeem a check or any other | 18 |
| item described in the definition of payday loan under Section | 19 |
| 1-10 issued in connection with a payday loan from the lender | 20 |
| holding the check or other item at any time before the payday | 21 |
| loan becomes payable by paying the full amount of the check or | 22 |
| other item.
| 23 |
| (h) No payday loan may be made to a consumer who has or has | 24 |
| had a small consumer loan, as defined by the Consumer | 25 |
| Installment Loan Act, within the preceding 14 days.
| 26 |
| (Source: P.A. 94-13, eff. 12-6-05.) |
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LRB096 05321 MJR 25050 a |
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| (815 ILCS 122/2-10)
| 2 |
| Sec. 2-10. Permitted fees. | 3 |
| (a) If there are insufficient funds to pay a check, | 4 |
| Automatic Clearing House (ACH) debit, or any other item | 5 |
| described in the definition of payday loan under Section 1-10 | 6 |
| on the day of presentment and only after the lender has | 7 |
| incurred an expense, a lender may charge a fee not to exceed | 8 |
| $25. Only one such fee may be collected by the lender with | 9 |
| respect to a particular check, ACH debit, or item even if it | 10 |
| has been deposited and returned more than once. A lender shall | 11 |
| present the check, ACH debit, or other item described in the | 12 |
| definition of payday loan under Section 1-10 for payment not | 13 |
| more than twice. A fee charged under this subsection (a) is a | 14 |
| lender's exclusive charge for late payment. | 15 |
| (b) A lender may charge a borrower a fee not to exceed | 16 |
| $1.00 or the actual cost charged by the certified database | 17 |
| provider, whichever is greater, for the verification required | 18 |
| under Section 2-15 of this Act. Only one such fee may be | 19 |
| collected by the lender with respect to a particular loan. | 20 |
| (c) (b) Except for the finance charges described in Section | 21 |
| 2-5 and as specifically allowed by this Section, a lender may | 22 |
| not impose on a consumer any additional finance charges, | 23 |
| interest, fees, or charges of any sort for any purpose.
| 24 |
| (Source: P.A. 94-13, eff. 12-6-05.) |
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| (815 ILCS 122/3-5)
| 2 |
| Sec. 3-5. Licensure. | 3 |
| (a) A license to make a payday loan shall state the | 4 |
| address,
including city and state, at which
the business is to | 5 |
| be conducted and shall state fully the name of the licensee.
| 6 |
| The license shall be conspicuously posted in the place of | 7 |
| business of the
licensee and shall not be transferable or | 8 |
| assignable.
| 9 |
| (b) An application for a license shall be in writing and in | 10 |
| a form
prescribed by the Secretary. The Secretary may not issue | 11 |
| a payday loan
license unless and until the following findings | 12 |
| are made:
| 13 |
| (1) that the financial responsibility, experience, | 14 |
| character, and general
fitness of the applicant are such as | 15 |
| to command the confidence of the public
and to warrant the | 16 |
| belief that the business will be operated lawfully and
| 17 |
| fairly and within the provisions and purposes of this Act; | 18 |
| and
| 19 |
| (2) that the applicant has submitted such other | 20 |
| information as the
Secretary may deem necessary.
| 21 |
| (c) A license shall be issued for no longer than one year, | 22 |
| and no renewal
of a license may be provided if a licensee has | 23 |
| substantially violated this
Act and has not cured the violation | 24 |
| to the satisfaction of the Department.
| 25 |
| (d) A licensee shall appoint, in writing, the Secretary as | 26 |
| attorney-in-fact
upon whom all lawful process against the |
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LRB096 05321 MJR 25050 a |
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| licensee may be served with the
same legal force and validity | 2 |
| as if served on the licensee. A copy of the
written | 3 |
| appointment, duly certified, shall be filed in the office of | 4 |
| the
Secretary, and a copy thereof certified by the Secretary | 5 |
| shall be sufficient
evidence to subject a licensee to | 6 |
| jurisdiction in a court of law. This appointment shall remain | 7 |
| in effect while any liability remains
outstanding in this State | 8 |
| against the licensee. When summons is served upon
the Secretary | 9 |
| as attorney-in-fact for a licensee, the Secretary shall | 10 |
| immediately
notify the licensee by registered mail, enclosing | 11 |
| the summons and specifying
the hour and day of service.
| 12 |
| (e) A licensee must pay an annual fee of $1,000. In | 13 |
| addition to the
license fee, the reasonable expense of any | 14 |
| examination or hearing
by the Secretary under any provisions of | 15 |
| this Act shall be borne by
the licensee. If a licensee fails to | 16 |
| renew its license by December 31,
its license
shall | 17 |
| automatically expire; however, the Secretary, in his or her | 18 |
| discretion,
may reinstate an expired license upon:
| 19 |
| (1) payment of the annual fee within 30 days of the | 20 |
| date of
expiration; and
| 21 |
| (2) proof of good cause for failure to renew.
| 22 |
| (f) Not more than one place of business shall be maintained | 23 |
| under the
same license, but the Secretary may issue more than | 24 |
| one license to the same
licensee upon compliance with all the | 25 |
| provisions of this Act governing
issuance of a single license. | 26 |
| The location, except those locations already in
existence as of |
|
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| June 1, 2005, may not be within one mile of a
horse race track | 2 |
| subject to the Illinois Horse Racing Act of 1975,
within one | 3 |
| mile of a facility at which gambling is conducted under the
| 4 |
| Riverboat Gambling Act, within one mile of the location at | 5 |
| which a
riverboat subject to the Riverboat Gambling Act docks, | 6 |
| or within one mile of
any State of Illinois or United States | 7 |
| military base or naval installation.
| 8 |
| (g) No licensee shall conduct the business of making loans | 9 |
| under this
Act within any office, suite, room, or place of | 10 |
| business in which any other
business is solicited or engaged in | 11 |
| unless the other business is licensed by the Department under | 12 |
| the Pawnbroker Regulation Act and or , in the opinion of the | 13 |
| Secretary, the
other business would not be contrary to the best | 14 |
| interests of consumers and
is authorized by the Secretary in | 15 |
| writing.
| 16 |
| (h) The Secretary shall maintain a list of licensees that | 17 |
| shall be
available to interested consumers and lenders and the | 18 |
| public. The Secretary
shall maintain a toll-free number whereby | 19 |
| consumers may obtain
information about licensees. The | 20 |
| Secretary shall also establish a complaint
process under which | 21 |
| an aggrieved consumer
may file a complaint against a licensee | 22 |
| or non-licensee who violates any
provision of this Act.
| 23 |
| (Source: P.A. 94-13, eff. 12-6-05.)".
|
|