Full Text of HB1737 98th General Assembly
HB1737ham001 98TH GENERAL ASSEMBLY | Rep. Bill Mitchell Filed: 3/21/2013
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| 1 | | AMENDMENT TO HOUSE BILL 1737
| 2 | | AMENDMENT NO. ______. Amend House Bill 1737 by replacing | 3 | | everything after the enacting clause with the following:
| 4 | | "Section 5. The Payday Loan Reform Act is amended by | 5 | | changing Sections 1-10 and 2-5 as follows: | 6 | | (815 ILCS 122/1-10)
| 7 | | Sec. 1-10. Definitions. As used in this Act: | 8 | | "Check" means a "negotiable instrument", as defined in | 9 | | Article 3 of the Uniform Commercial Code, that is drawn on a | 10 | | financial institution. | 11 | | "Commercially reasonable method of verification" or | 12 | | "certified database" means a consumer reporting service | 13 | | database certified by the Department as effective in verifying | 14 | | that a proposed loan agreement is permissible under this Act, | 15 | | or, in the absence of the Department's certification, any | 16 | | reasonably reliable written verification by the consumer |
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| 1 | | concerning (i) whether the consumer has any outstanding payday | 2 | | loans, (ii) the principal amount of those outstanding payday | 3 | | loans, and (iii) whether any payday loans have been paid in | 4 | | full by the consumer in the preceding 7 days. | 5 | | "Consumer" means any natural person who, singly or jointly | 6 | | with another consumer, enters into a loan. | 7 | | "Consumer reporting service" means an entity that provides | 8 | | a database certified by the Department. | 9 | | "Department" means the Department of Financial and | 10 | | Professional Regulation. | 11 | | "Secretary" means the Secretary of Financial and | 12 | | Professional Regulation. | 13 | | "Gross monthly income" means monthly income as | 14 | | demonstrated by official documentation of the income, | 15 | | including, but not limited to, a pay stub or a receipt | 16 | | reflecting payment of government benefits, for the period 30 | 17 | | days prior to the date on which the loan is made. | 18 | | "Lender" and "licensee" mean any person or entity, | 19 | | including any affiliate or subsidiary of a lender or licensee, | 20 | | that offers or makes a payday loan, buys a whole or partial | 21 | | interest in a payday loan, arranges a payday loan for a third | 22 | | party, or acts as an agent for a third party in making a payday | 23 | | loan, regardless of whether approval, acceptance, or | 24 | | ratification by the third party is necessary to create a legal | 25 | | obligation for the third party, and includes any other person | 26 | | or entity if the Department determines that the person or |
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| 1 | | entity is engaged in a transaction that is in substance a | 2 | | disguised payday loan or a subterfuge for the purpose of | 3 | | avoiding this Act. | 4 | | "Loan agreement" means a written agreement between a lender | 5 | | and consumer to make a loan to the consumer, regardless of | 6 | | whether any loan proceeds are actually paid to the consumer on | 7 | | the date on which the loan agreement is made. | 8 | | "Member of the military" means a person serving in the | 9 | | armed forces of the United States, the Illinois National Guard, | 10 | | or any reserve component of the armed forces of the United | 11 | | States. "Member of the military" includes those persons engaged | 12 | | in (i) active duty, (ii) training or education under the | 13 | | supervision of the United States preliminary to induction into | 14 | | military service, or (iii) a period of active duty with the | 15 | | State of Illinois under Title 10 or Title 32 of the United | 16 | | States Code pursuant to order of the President or the Governor | 17 | | of the State of Illinois. | 18 | | "Outstanding balance" means the total amount owed by the | 19 | | consumer on a loan to a lender, including all principal, | 20 | | finance charges, fees, and charges of every kind. | 21 | | "Payday loan" or "loan" means a loan with a finance charge | 22 | | exceeding an annual percentage rate of 36% and with a term that | 23 | | does not exceed 120 days, including any transaction conducted | 24 | | via any medium whatsoever, including, but not limited to, | 25 | | paper, facsimile, Internet, or telephone, in which: | 26 | | (1) A lender accepts one or more checks dated on the |
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| 1 | | date written and agrees to hold them for a period of days | 2 | | before deposit or presentment, or accepts one or more | 3 | | checks dated subsequent to the date written and agrees to | 4 | | hold them for deposit; or | 5 | | (2) A lender accepts one or more authorizations to | 6 | | debit a consumer's bank account; or | 7 | | (3) A lender accepts an interest in a consumer's wages, | 8 | | including, but not limited to, a wage assignment. | 9 | | The term "payday loan" includes "installment payday loan", | 10 | | unless otherwise specified in
this Act. | 11 | | "Principal amount" means the amount received by the | 12 | | consumer from the lender due and owing on a loan, excluding any | 13 | | finance charges, interest, fees, or other loan-related | 14 | | charges. | 15 | | "Rollover" means to refinance, renew, amend, or extend a | 16 | | loan beyond its original term.
| 17 | | (Source: P.A. 96-936, eff. 3-21-11 .) | 18 | | (815 ILCS 122/2-5)
| 19 | | Sec. 2-5. Loan terms. | 20 | | (a) Without affecting the right of a consumer to prepay at | 21 | | any time without cost or penalty, no payday loan may have a | 22 | | minimum term of less than 13 days. | 23 | | (b) Except for an installment payday loan as defined in | 24 | | this Section,
no payday loan may be made to a consumer if the | 25 | | loan would result in the consumer being indebted to one or more |
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| 1 | | payday lenders for a period in excess of 45 consecutive days. | 2 | | Except as provided under subsection (c) of this Section and | 3 | | Section 2-40, if a consumer has or has had loans outstanding | 4 | | for a period in excess of 45 consecutive days, no payday lender | 5 | | may offer or make a loan to the consumer for at least 7 | 6 | | calendar days after the date on which the outstanding balance | 7 | | of all payday loans made during the 45 consecutive day period | 8 | | is paid in full. For purposes of this subsection, the term | 9 | | "consecutive days" means a series of continuous calendar days | 10 | | in which the consumer has an outstanding balance on one or more | 11 | | payday loans; however, if a payday loan is made to a consumer | 12 | | within 6 days or less after the outstanding balance of all | 13 | | loans is paid in full, those days are counted as "consecutive | 14 | | days" for purposes of this subsection. | 15 | | (c) Notwithstanding anything in this Act to the contrary, a | 16 | | payday loan
shall also include any installment loan otherwise | 17 | | meeting the definition of
payday loan contained in Section | 18 | | 1-10, but that has a term agreed by the
parties of not less | 19 | | than 112 days and not exceeding 180 days; hereinafter an
| 20 | | "installment payday loan". The following provisions shall | 21 | | apply:
| 22 | | (i) Any installment payday loan must be fully | 23 | | amortizing, with a finance
charge not exceeding an annual | 24 | | percentage rate of 36% calculated on the principal balances | 25 | | scheduled to be outstanding and
be repayable in | 26 | | substantially equal and consecutive installments, |
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| 1 | | according
to a payment schedule agreed by the parties with | 2 | | not less than 13 days and
not more than one month between | 3 | | payments; except that the first installment
period may be | 4 | | longer than the remaining installment periods by not more | 5 | | than
15 days, and the first installment payment may be | 6 | | larger than the remaining
installment payments by the | 7 | | amount of finance charges applicable to the
extra days. In | 8 | | calculating finance charges under this subsection, when | 9 | | the first installment period is longer than the remaining | 10 | | installment periods, the amount of the finance charges | 11 | | applicable to the extra days shall not be greater than | 12 | | $15.50 per $100 of the original principal balance divided | 13 | | by the number of days in a regularly scheduled installment | 14 | | period and multiplied by the number of extra days | 15 | | determined by subtracting the number of days in a regularly | 16 | | scheduled installment period from the number of days in the | 17 | | first installment period. | 18 | | (ii) An installment payday loan may be refinanced by a | 19 | | new installment
payday loan one time during the term of the | 20 | | initial loan; provided that the
total duration of | 21 | | indebtedness on the initial installment payday loan | 22 | | combined
with the total term of indebtedness of the new | 23 | | loan refinancing that initial
loan, shall not exceed 180 | 24 | | days. For purposes of this Act, a refinancing
occurs when | 25 | | an existing installment payday loan is paid from the | 26 | | proceeds of
a new installment payday loan. |
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| 1 | | (iii) In the event an installment payday loan is paid | 2 | | in full prior to
the date on which the last scheduled | 3 | | installment payment before maturity is
due, other than | 4 | | through a refinancing, no licensee may offer or make a | 5 | | payday
loan to the consumer for at least 2 calendar days | 6 | | thereafter. | 7 | | (iv) No installment payday loan may be made to a | 8 | | consumer if the loan would
result in the consumer being | 9 | | indebted to one or more payday lenders for a
period in | 10 | | excess of 180 consecutive days. The term "consecutive days" | 11 | | does not include the date on which a consumer makes the | 12 | | final installment payment. | 13 | | (d) (Blank). | 14 | | (e) No lender may make a payday loan to a consumer if the | 15 | | total of all payday loan payments coming due within the first | 16 | | calendar month of the loan, when combined with the payment | 17 | | amount of all of the consumer's other outstanding payday loans | 18 | | coming due within the same month, exceeds the lesser of: | 19 | | (1) $1,000; or | 20 | | (2) in the case of one or more payday loans, 25% of the | 21 | | consumer's gross monthly income; or | 22 | | (3) in the case of one or more installment payday | 23 | | loans, 22.5% of the consumer's gross monthly income; or | 24 | | (4) in the case of a payday loan and an installment | 25 | | payday loan, 22.5% of the consumer's gross monthly income. | 26 | | No loan shall be made to a consumer who has an outstanding |
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| 1 | | balance on 2 payday loans, except that, for a period of 12 | 2 | | months after the effective date of this amendatory Act of the | 3 | | 96th General Assembly, consumers with an existing CILA loan may | 4 | | be issued an installment loan issued under this Act from the | 5 | | company from which their CILA loan was issued. | 6 | | (e-5) No Except as provided in subsection (c)(i), no lender | 7 | | may impose a finance charge exceeding an annual percentage rate | 8 | | of 36% more than $15.50 per $100 loaned on any payday loan, or | 9 | | more than $15.50 per $100 on the initial principal balance and | 10 | | on the principal balances scheduled to be outstanding during | 11 | | any installment period on any installment payday loan. Except | 12 | | for installment payday loans and except as provided in Section | 13 | | 2-25, this charge is considered fully earned as of the date on | 14 | | which the loan is made. For purposes of determining the finance | 15 | | charge earned on an installment payday loan, the disclosed | 16 | | annual percentage rate shall be applied to the principal | 17 | | balances outstanding from time to time until the loan is paid | 18 | | in full, or until the maturity date, which ever occurs first. | 19 | | No finance charge may be imposed after the final scheduled | 20 | | maturity date. | 21 | | When any loan contract is paid in full, the licensee shall | 22 | | refund any unearned finance charge. The unearned finance charge | 23 | | that is refunded shall be calculated based on a method that is | 24 | | at least as favorable to the consumer as the actuarial method, | 25 | | as defined by the federal Truth in Lending Act. The sum of the | 26 | | digits or rule of 78ths method of calculating prepaid interest |
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| 1 | | refunds is prohibited. | 2 | | (f) A lender may not take or attempt to take an interest in | 3 | | any of the consumer's personal property to secure a payday | 4 | | loan. | 5 | | (g) A consumer has the right to redeem a check or any other | 6 | | item described in the definition of payday loan under Section | 7 | | 1-10 issued in connection with a payday loan from the lender | 8 | | holding the check or other item at any time before the payday | 9 | | loan becomes payable by paying the full amount of the check or | 10 | | other item.
| 11 | | (Source: P.A. 96-936, eff. 3-21-11; 97-421, eff. 1-1-12.)".
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