Full Text of HB5284 98th General Assembly
HB5284 98TH GENERAL ASSEMBLY |
| | 98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014 HB5284 Introduced , by Rep. C.D. Davidsmeyer SYNOPSIS AS INTRODUCED: |
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Amends the Payday Loan Reform Act. Provides that the Department of Financial and Professional Regulation shall develop a short video depicting the manner in which compound interest works and setting forth statutorily required disclosures. Requires the video to be available in Spanish and English and to be presented to payday loan customers at the time of a transaction.
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| | | FISCAL NOTE ACT MAY APPLY | |
| | A BILL FOR |
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| 1 | | AN ACT concerning business.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The Payday Loan Reform Act is amended by | 5 | | changing Section 2-20 as follows: | 6 | | (815 ILCS 122/2-20)
| 7 | | Sec. 2-20. Required disclosures. | 8 | | (a) Before a payday loan is made, a lender shall
deliver to | 9 | | the consumer a pamphlet prepared by the Secretary that:
| 10 | | (1) explains, in simple English and Spanish, all of the | 11 | | consumer's
rights and responsibilities in a payday loan | 12 | | transaction;
| 13 | | (2) includes a toll-free number to the Secretary's | 14 | | office to handle
concerns or provide information about | 15 | | whether a lender is licensed, whether
complaints have been | 16 | | filed with the Secretary, and the resolution of those
| 17 | | complaints; and
| 18 | | (3) provides information regarding the availability of | 19 | | debt
management services.
| 20 | | (b) Lenders shall provide consumers with a written | 21 | | agreement that may be kept by the
consumer. The written | 22 | | agreement must include the following information in
English and | 23 | | in the language in which the loan was negotiated:
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| 1 | | (1) the name and address of the lender making the | 2 | | payday loan, and the name and title of the individual | 3 | | employee who signs the
agreement on behalf of the lender;
| 4 | | (2) disclosures required by the federal Truth in | 5 | | Lending Act;
| 6 | | (3) a clear description of the consumer's payment | 7 | | obligations under
the loan;
| 8 | | (4) the following statement, in at least 14-point bold | 9 | | type face: "You
cannot be prosecuted in criminal court to | 10 | | collect this loan." The
information required to be | 11 | | disclosed under this subdivision (4) must be
conspicuously | 12 | | disclosed
in the loan document and shall be located | 13 | | immediately preceding
the signature of the consumer; and
| 14 | | (5) the following statement, in at least 14-point bold | 15 | | type face:
| 16 | | "WARNING: This loan is not intended to meet long-term | 17 | | financial needs. This
loan should be used only to meet | 18 | | short-term cash needs. The cost of your loan may be higher | 19 | | than loans offered by other lending
institutions. This loan | 20 | | is regulated by the Department of Financial
and | 21 | | Professional Regulation." | 22 | | (c) The following notices in English and Spanish must be | 23 | | conspicuously posted by a lender in each location of
a business | 24 | | providing payday loans:
| 25 | | (1) A notice that informs consumers that the lender | 26 | | cannot use the
criminal process against a consumer to |
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| 1 | | collect any payday loan.
| 2 | | (2) The schedule of all finance charges to be charged | 3 | | on loans with an
example of the amounts that would be | 4 | | charged on a $100 loan payable in 13
days, a $400 loan | 5 | | payable in 30 days, and an installment payday loan of
$400 | 6 | | payable on a monthly basis over 180 days, giving the | 7 | | corresponding annual
percentage rate.
| 8 | | (3) In one-inch bold type, a notice to the public in | 9 | | the lending
area of each business location containing the | 10 | | following
statement:
| 11 | | "WARNING: This loan is not intended to meet long-term | 12 | | financial needs. This
loan should be used only to meet | 13 | | short-term cash needs. The cost of your loan may be higher | 14 | | than loans offered by other lending
institutions. This loan | 15 | | is regulated by the Department of Financial
and | 16 | | Professional Regulation." | 17 | | (4) In one-inch bold type, a notice to the public in | 18 | | the lending area of each business location containing the | 19 | | following statement: | 20 | | "INTEREST-FREE REPAYMENT PLAN: If you still owe on one | 21 | | or more payday loans, other than an installment payday | 22 | | loan, after 35 days, you are entitled to enter into a | 23 | | repayment plan. The repayment plan will give you at least | 24 | | 55 days to repay your loan in installments with no | 25 | | additional finance charges, interest, fees, or other | 26 | | charges of any kind."
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| 1 | | (d) The Department shall develop, in cooperation with one | 2 | | or more trade associations that represent lenders, a video | 3 | | making the disclosures required under this Section. The video | 4 | | shall contain an explanation of the manner in which compound | 5 | | interest works. | 6 | | The video shall be no longer than 15 minutes in length. The | 7 | | video shall be made available in both Spanish and English. | 8 | | A lender shall display to the consumer at the time of the | 9 | | transaction the video created under this Section. The display | 10 | | shall be made on screen having a diagonal measurement of not | 11 | | less than 19 inches. The consumer shall select the language in | 12 | | which the video is presented. | 13 | | The Department, in cooperation with one or more trade | 14 | | associations that represent lenders, may revise and update the | 15 | | video at any time. | 16 | | The Department may adopt rules necessary to implement this | 17 | | subsection. | 18 | | The cost of any video developed under this subsection shall | 19 | | be paid only from moneys available from the collection of | 20 | | license fees under this Act. | 21 | | (Source: P.A. 96-936, eff. 3-21-11 .)
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