Illinois General Assembly - Full Text of HB3968
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Full Text of HB3968  102nd General Assembly


Sen. Jacqueline Y. Collins

Filed: 1/4/2023





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2    AMENDMENT NO. ______. Amend House Bill 3968 by replacing
3everything after the enacting clause with the following:
4    "Section 5. The Pawnbroker Regulation Act is amended by
5changing Section 2 as follows:
6    (205 ILCS 510/2)  (from Ch. 17, par. 4652)
7    Sec. 2. Pursuant to Section 15-10-30 of the Predatory Loan
8Prevention Act, it It shall be unlawful for any pawnbroker to
9charge or collect a greater benefit or percentage upon money
10advanced, and for the use and forbearance thereof, than
11permitted under Section 15-5-5 of the Predatory Loan
12Prevention Act than the rate of 3% per month. Nothing in this
13Section shall be construed so as to conflict with the law
14pertaining to usury and the person receiving money so advanced
15may hold such moneys to pay any fees in addition to interest as
16herein provided.



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1    Each pawnbroker, when making a loan under this Section,
2must disclose in printed form on the pawn contract the
3following information to the persons receiving the loan:
4        (1) the amount of money advanced, which must be
5    designated as the amount financed;
6        (2) the maturity date of the pawn, which must be at
7    least 30 days after the date of the pawn;
8        (3) the total pawn interest and service charge payable
9    on the maturity date, which must be designated as the
10    finance charge;
11        (4) the total of payments that must be paid to redeem
12    the pledged goods on the maturity date, which must be
13    designated as the total of payments; and
14        (5) the annual percentage rate, computed according to
15    the regulations adopted by the Board of Governors of the
16    Federal Reserve System under the Federal Truth in Lending
17    Act.
18    Each pawnbroker may contract for and receive a monthly
19finance charge including interest and fees not to exceed
20one-fifth of the loan amount, as set forth herein, for
21appraising, investigating title, storing and insuring the
22collateral, closing the loan, making daily reports to local
23law enforcement officers including enhanced computerized
24reporting, complying with regulatory requirements, and for
25other expenses and losses of every nature whatsoever and for
26all other services. Such fees, when made and collected, shall



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1not be deemed interest for any purpose of law.
2(Source: P.A. 90-477, eff. 7-1-98.)
3    Section 10. The Predatory Loan Prevention Act is amended
4by changing Sections 15-1-5, 15-1-10, 15-5-10, and 15-10-5 as
6    (815 ILCS 123/15-1-5)
7    Sec. 15-1-5. Purpose and construction. Illinois families
8pay over $500,000,000 per year in consumer installment,
9payday, and title loan fees. As reported by the Department in
102020, nearly half of Illinois payday loan borrowers earn less
11than $30,000 per year, and the average annual percentage rate
12of a payday loan is 297%. The purpose of this Act is to protect
13consumers from all types of predatory loans, including, but
14not limited to, the types of loans covered under consistent
15with federal law and the federal Military Lending Act, which
16protects active duty members of the military and their
17dependents. This Act shall be construed as a consumer
18protection law for all purposes. This Act shall be liberally
19construed to effectuate its purpose.
20(Source: P.A. 101-658, eff. 3-23-21.)
21    (815 ILCS 123/15-1-10)
22    Sec. 15-1-10. Definitions. As used in this Act:
23    "Consumer" means any natural person, including consumers



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1acting jointly.
2    "Department" means the Department of Financial and
3Professional Regulation.
4    "Lender" means any person or entity, including any
5affiliate or subsidiary of a lender, that offers or makes a
6loan, buys a whole or partial interest in a loan, arranges a
7loan for a third party, or acts as an agent for a third party
8in making a loan, regardless of whether approval, acceptance,
9or ratification by the third party is necessary to create a
10legal obligation for the third party, and includes any other
11person or entity if the Department determines that the person
12or entity is engaged in a transaction that is in substance a
13disguised loan or a subterfuge for the purpose of avoiding
14this Act.
15    "Person" means any natural person.
16    "Secretary" means the Secretary of Financial and
17Professional Regulation or a person authorized by the
19    "Loan" means money or credit provided to a consumer in
20exchange for the consumer's agreement to a certain set of
21terms, including, but not limited to, any finance charges,
22interest, or other conditions. "Loan" includes closed-end and
23open-end credit, retail installment sales contracts, motor
24vehicle retail installment sales contracts, transactions
25subject to the Pawnbroker Regulation Act, and any transaction
26conducted via any medium whatsoever, including, but not



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1limited to, paper, facsimile, Internet, or telephone. "Loan"
2does not include a commercial loan.
3(Source: P.A. 101-658, eff. 3-23-21.)
4    (815 ILCS 123/15-5-10)
5    Sec. 15-5-10. Violation.
6    (a) Any loan made in violation of this Act is null and void
7and no person or entity shall have any right to collect,
8attempt to collect, receive, or retain any principal, fee,
9interest, or charges related to the loan.
10    (b) It is a violation of this Act for any person or entity
11to solicit, broker, or otherwise engage in any other activity
12intended to facilitate or result in, or that in fact
13facilitates or results in, the origination of a loan that
14violates Section 15-5-5 of this Act.
15    (c) It is a violation of this Act for any person or entity
16to advertise or cause to be advertised a loan that violates
17Section 15-5-5 of this Act.
18(Source: P.A. 101-658, eff. 3-23-21.)
19    (815 ILCS 123/15-10-5)
20    Sec. 15-10-5. Enforcement and remedies.
21    (a) The remedies provided in this Act are cumulative and
22apply to persons or entities subject to this Act.
23    (b) Any violation of this Act, including the commission of
24an act prohibited under Article 5, constitutes a violation of



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1the Consumer Fraud and Deceptive Business Practices Act.
2    (c) Subject to the Illinois Administrative Procedure Act,
3the Secretary may hold hearings, make findings of fact,
4conclusions of law, issue cease and desist orders, have the
5power to issue fines of up to $10,000 per violation, and refer
6the matter to the appropriate law enforcement agency for
7prosecution under this Act. All proceedings shall be open to
8the public.
9    (d) The Secretary may issue a cease and desist order to any
10person or entity, when in the opinion of the Secretary the
11person or entity is violating or is about to violate any
12provision of this Act. The cease and desist order permitted by
13this subsection (d) may be issued prior to a hearing.
14    The Secretary shall serve notice of the action, including,
15but not limited to, a statement of the reasons for the action,
16either personally or by certified mail. Service by certified
17mail shall be deemed completed when the notice is deposited in
18the U.S. Mail.
19    Within 10 days of service of the cease and desist order,
20the person or entity may request a hearing in writing.
21    If it is determined that the Secretary had the authority
22to issue the cease and desist order, the Secretary may issue
23such orders as may be reasonably necessary to correct,
24eliminate, or remedy the conduct.
25    The powers vested in the Secretary by this subsection (d)
26are additional to any and all other powers and remedies vested



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1in the Secretary by law, and nothing in this subsection (d)
2shall be construed as requiring that the Secretary shall
3employ the power conferred in this subsection instead of or as
4a condition precedent to the exercise of any other power or
5remedy vested in the Secretary.
6    (e) After 10 days' notice by certified mail to the person
7or entity stating the contemplated action and in general the
8grounds therefor, the Secretary may fine the person or entity
9an amount not exceeding $10,000 per violation if the person or
10entity has failed to comply with any provision of this Act or
11any order, decision, finding, rule, regulation, or direction
12of the Secretary lawfully made in accordance with the
13authority of this Act. Service by certified mail shall be
14deemed completed when the notice is deposited in the U.S.
16    (f) A violation of this Act by a person or entity licensed
17under another Act including, but not limited to, the
18Pawnbroker Regulation Act, the Consumer Installment Loan Act,
19the Payday Loan Reform Act, and the Sales Finance Agency Act
20shall subject the person or entity to discipline in accordance
21with the Act or Acts under which the person or entity is
23(Source: P.A. 101-658, eff. 3-23-21.)
24    Section 99. Effective date. This Act takes effect upon
25becoming law.".