Full Text of HB3192 102nd General Assembly
HB3192 102ND GENERAL ASSEMBLY |
| | 102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022 HB3192 Introduced 2/19/2021, by Rep. Jonathan Carroll SYNOPSIS AS INTRODUCED: |
| 10100SB1792enr., Sec. 15-1-5 | | 10100SB1792enr., Sec. 15-5-5 | | 205 ILCS 670/15 | from Ch. 17, par. 5415 | 205 ILCS 670/17.5 | |
|
If and only if Senate Bill 1792 of the 101st General Assembly becomes law, amends the Predatory Loan Prevention Act. In provisions concerning purpose and construction of the Predatory Loan Prevention Act, removes a reference to the Military Lending Act. In provisions concerning an annual percentage rate cap, provides that the annual percentage rate shall be calculated as such rate is calculated using the system for calculating the annual percentage rate under the federal Truth in Lending Act and Part 226 of Title 12 of the Code of Federal Regulations (rather than a military annual percentage rate). Amends the Consumer Installment Loan Act. Provides that licensees shall enter information regarding each loan that is repayable in less than 12 months into the certified database, and for every title-secured loan made, the licensee shall input information as provided in the Illinois Administrative Code. Defines "title-secured loan". Removes provisions concerning small consumer loans and the certified database. Removes a provision stating that all personally identifiable information regarding any consumer obtained by way of the certified database is strictly confidential and shall be exempt from disclosure under the Freedom of Information Act. Effective immediately or on the date Senate Bill 1792 of the 101st General Assembly takes effect, whichever is later.
|
| |
| | A BILL FOR |
|
| | | HB3192 | | LRB102 14899 BMS 22376 b |
|
| 1 | | AN ACT concerning regulation.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. If and only if Senate Bill 1792 of the 101st
| 5 | | General Assembly becomes law, then the Predatory Loan | 6 | | Prevention Act is amended by changing Sections 15-1-5 and | 7 | | 15-5-5 as follows:
| 8 | | (10100SB1792enr., Sec. 15-1-5)
| 9 | | Sec. 15-1-5. Purpose and construction. Illinois families | 10 | | pay over $500,000,000 per year in consumer installment, | 11 | | payday, and title loan fees. As reported by the Department in | 12 | | 2020, nearly half of Illinois payday loan borrowers earn less | 13 | | than $30,000 per year, and the average annual percentage rate | 14 | | of a payday loan is 297%. The purpose of this Act is to protect | 15 | | consumers from predatory loans consistent with federal law and | 16 | | the Military Lending Act which protects active duty members of | 17 | | the military . This Act shall be construed as a consumer | 18 | | protection law for all purposes. This Act shall be liberally | 19 | | construed to effectuate its purpose.
| 20 | | (Source: 10100SB1792enr.) | 21 | | (10100SB1792enr., Sec. 15-5-5)
| 22 | | Sec. 15-5-5. Rate cap. Notwithstanding any other provision |
| | | HB3192 | - 2 - | LRB102 14899 BMS 22376 b |
|
| 1 | | of law, for loans made or renewed on and after the effective | 2 | | date of this Act, a lender shall not contract for or receive | 3 | | charges exceeding a 36% annual percentage rate on the unpaid | 4 | | balance of the amount financed for a loan. For purposes of this | 5 | | Section, the annual percentage rate shall be calculated as | 6 | | such rate is calculated using the system for calculating an | 7 | | annual percentage rate under the federal Truth in Lending Act | 8 | | and Part 226 of Title 12 of the Code of Federal Regulations, a | 9 | | military annual percentage rate under Section 232.4 of Title | 10 | | 32 of the Code of Federal Regulations as in effect on the | 11 | | effective date of this Act. Nothing in this Act shall be | 12 | | construed to permit a person or entity to contract for or | 13 | | receive a charge exceeding that permitted by the Interest Act | 14 | | or other law.
| 15 | | (Source: 10100SB1792enr.)
| 16 | | Section 10. The Consumer Installment Loan Act is amended | 17 | | by changing Sections 15 and 17.5 as follows:
| 18 | | (205 ILCS 670/15) (from Ch. 17, par. 5415)
| 19 | | Sec. 15. Charges permitted.
| 20 | | (a) Every licensee may
lend a principal amount not | 21 | | exceeding $40,000 and , except as to small consumer loans as | 22 | | defined in this Section, may charge,
contract for ,
and receive | 23 | | thereon interest at an annual percentage rate of no more than | 24 | | 36%, subject to the provisions of this Act ; provided, however, |
| | | HB3192 | - 3 - | LRB102 14899 BMS 22376 b |
|
| 1 | | that the limitation on the annual percentage rate contained in | 2 | | this subsection (a) does not apply to title-secured loans, | 3 | | which are loans upon which interest is charged at an annual | 4 | | percentage rate exceeding 36%, in which, at commencement, an | 5 | | obligor provides to the licensee, as security for the loan, | 6 | | physical possession of the obligor's title to a motor vehicle, | 7 | | and upon which a licensee may charge, contract for, and | 8 | | receive thereon interest at the rate agreed upon by the | 9 | | licensee and borrower . For purposes of this Section, the | 10 | | annual percentage rate shall be calculated as such rate is | 11 | | calculated using the system for calculating an annual | 12 | | percentage rate under the federal Truth in Lending Act
and | 13 | | Part 226 of Title 12 of the Code of Federal Regulations, as in | 14 | | effect on the effective date of this amendatory Act of the | 15 | | 102nd General Assembly in accordance with the federal Truth in | 16 | | Lending Act .
| 17 | | (b) For purpose of this Section, the following terms shall | 18 | | have the
meanings ascribed herein.
| 19 | | "Applicable interest" for a precomputed loan contract | 20 | | means the amount of
interest attributable to each monthly | 21 | | installment period. It is computed
as if each installment | 22 | | period were one month and any interest charged for
extending | 23 | | the first installment period beyond one month is ignored. The
| 24 | | applicable interest for any monthly installment period is, for | 25 | | loans other than small consumer loans as defined in this | 26 | | Section, that portion of
the precomputed interest that bears |
| | | HB3192 | - 4 - | LRB102 14899 BMS 22376 b |
|
| 1 | | the same ratio to the total precomputed
interest as the | 2 | | balances scheduled to be outstanding during that month bear
to | 3 | | the sum of all scheduled monthly outstanding balances in the | 4 | | original
contract. With respect to a small consumer loan, the | 5 | | applicable interest for any installment period is that portion | 6 | | of the precomputed monthly installment account handling charge | 7 | | attributable to the installment period calculated based on a | 8 | | method at least as favorable to the consumer as the actuarial | 9 | | method, as defined by the federal Truth in Lending Act.
| 10 | | "Interest-bearing loan" means a loan in which the debt is
| 11 | | expressed as a principal amount plus interest charged on | 12 | | actual unpaid
principal balances for the time actually | 13 | | outstanding.
| 14 | | "Precomputed loan" means a loan in which the debt is | 15 | | expressed as the sum
of the original principal amount plus | 16 | | interest computed actuarially in
advance, assuming all | 17 | | payments will be made when scheduled.
| 18 | | "Small consumer loan" means a loan upon which interest is | 19 | | charged at an annual percentage rate exceeding 36% and with an | 20 | | amount financed of $4,000 or less. "Small consumer loan" does | 21 | | not include a title-secured loan as defined by subsection (a) | 22 | | of this Section or a payday loan as defined by the Payday Loan | 23 | | Reform Act. | 24 | | "Substantially equal installment" includes a last | 25 | | regularly scheduled payment that may be less than, but not | 26 | | more than 5% larger than, the previous scheduled payment |
| | | HB3192 | - 5 - | LRB102 14899 BMS 22376 b |
|
| 1 | | according to a disclosed payment schedule agreed to by the | 2 | | parties. | 3 | | (c) Loans may be interest-bearing or precomputed.
| 4 | | (d) To compute time for either interest-bearing or | 5 | | precomputed loans for
the calculation of interest and other | 6 | | purposes, a month shall be a calendar
month and a day shall be | 7 | | considered 1/30th of a month when calculation is
made for a | 8 | | fraction of a month. A month shall be 1/12th of a year. A
| 9 | | calendar month is that period from a given date in one month to | 10 | | the same
numbered date in the following month, and if there is | 11 | | no same numbered
date, to the last day of the following month. | 12 | | When a period of time
includes a month and a fraction of a | 13 | | month, the fraction of the month is
considered to follow the | 14 | | whole month. In the alternative, for
interest-bearing loans, | 15 | | the licensee may charge interest at the rate of
1/365th of the | 16 | | agreed annual rate for each day actually
elapsed.
| 17 | | (d-5) No licensee or other person may condition an | 18 | | extension of credit to a consumer on the consumer's repayment | 19 | | by preauthorized electronic fund transfers. Payment options, | 20 | | including, but not limited to, electronic fund transfers and | 21 | | Automatic Clearing House (ACH) transactions may be offered to | 22 | | consumers as a choice and method of payment chosen by the | 23 | | consumer. | 24 | | (e) With respect to interest-bearing loans:
| 25 | | (1) Interest shall be computed on unpaid principal | 26 | | balances outstanding
from time to time, for the time |
| | | HB3192 | - 6 - | LRB102 14899 BMS 22376 b |
|
| 1 | | outstanding, until fully paid. Each
payment shall be | 2 | | applied first to the accumulated interest and the
| 3 | | remainder of the payment applied to the unpaid principal | 4 | | balance; provided
however, that if the amount of the | 5 | | payment is insufficient to pay the
accumulated interest, | 6 | | the unpaid interest continues to accumulate to be
paid | 7 | | from the proceeds of subsequent payments and is not added | 8 | | to the principal
balance.
| 9 | | (2) Interest shall not be payable in advance or | 10 | | compounded. However, if
part or all of the consideration | 11 | | for a new loan contract is the unpaid
principal balance of | 12 | | a prior loan, then the principal amount payable under
the | 13 | | new loan contract may include any unpaid interest which | 14 | | has accrued.
The unpaid principal balance of a precomputed | 15 | | loan is the balance due
after refund or credit of unearned | 16 | | interest as provided in paragraph (f),
clause (3). The | 17 | | resulting loan contract shall be deemed a new and separate
| 18 | | loan transaction for all purposes.
| 19 | | (3) Loans must be fully amortizing and be repayable in | 20 | | substantially equal and consecutive weekly, biweekly, | 21 | | semimonthly, or monthly installments. Notwithstanding this | 22 | | requirement, rates may vary according to an
index that is | 23 | | independently verifiable and beyond the control of the | 24 | | licensee.
| 25 | | (4) The lender or creditor may, if the contract | 26 | | provides, collect a
delinquency or collection charge on |
| | | HB3192 | - 7 - | LRB102 14899 BMS 22376 b |
|
| 1 | | each installment in default for a period of
not less than | 2 | | 10 days in an amount not exceeding 5% of the installment on
| 3 | | installments in excess of $200, or $10 on installments of | 4 | | $200 or less, but
only
one delinquency and collection | 5 | | charge may be collected on any installment
regardless of | 6 | | the period during which it remains in default.
| 7 | | (f) With respect to precomputed loans:
| 8 | | (1) Loans shall be repayable in substantially equal | 9 | | and consecutive weekly, biweekly, semimonthly, or
monthly | 10 | | installments of principal and interest combined, except | 11 | | that the
first installment period may be longer than one | 12 | | month by not more than 15
days, and the first installment | 13 | | payment amount may be larger than the
remaining payments | 14 | | by the amount of interest charged for the extra days;
and | 15 | | provided further that monthly installment payment dates | 16 | | may be omitted
to accommodate borrowers with seasonal | 17 | | income.
| 18 | | (2) Payments may be applied to the combined total of | 19 | | principal and
precomputed interest until the loan is fully | 20 | | paid. Payments shall be
applied in the order in which they | 21 | | become due, except that any insurance
proceeds received as | 22 | | a result of any claim made on any insurance, unless
| 23 | | sufficient to prepay the contract in full, may be applied | 24 | | to the unpaid
installments of the total of payments in | 25 | | inverse order.
| 26 | | (3) When any loan contract is paid in full by cash, |
| | | HB3192 | - 8 - | LRB102 14899 BMS 22376 b |
|
| 1 | | renewal or
refinancing, or a new loan, one month or more | 2 | | before the final installment
due date, a licensee shall | 3 | | refund or credit the obligor with
the total of
the | 4 | | applicable interest for all fully unexpired installment | 5 | | periods, as
originally scheduled or as deferred, which | 6 | | follow the day of prepayment;
provided, if the prepayment | 7 | | occurs prior to the first installment due date,
the | 8 | | licensee may retain 1/30 of the applicable interest for a | 9 | | first
installment period of one month for each day from | 10 | | the date of the loan to
the date of prepayment, and shall | 11 | | refund or credit the obligor
with the
balance of the total | 12 | | interest contracted for. If the maturity of the loan
is | 13 | | accelerated for any reason and judgment is entered, the | 14 | | licensee shall
credit the borrower with the same refund as | 15 | | if prepayment in full had been
made on the date the | 16 | | judgement is entered.
| 17 | | (4) The lender or creditor may, if the contract | 18 | | provides, collect a
delinquency or collection charge on | 19 | | each installment in default for a period of
not less than | 20 | | 10 days in an amount not exceeding 5% of the installment on
| 21 | | installments in excess of $200, or $10 on installments of | 22 | | $200 or less, but
only
one delinquency or collection | 23 | | charge may be collected on any installment
regardless of | 24 | | the period during which it remains in default.
| 25 | | (5) If the parties agree in writing, either in the | 26 | | loan contract or in a
subsequent agreement, to a deferment |
| | | HB3192 | - 9 - | LRB102 14899 BMS 22376 b |
|
| 1 | | of wholly unpaid installments, a
licensee may grant a | 2 | | deferment and may collect a deferment charge as
provided | 3 | | in this Section. A deferment postpones the scheduled due | 4 | | date of
the earliest unpaid installment and all subsequent | 5 | | installments as
originally scheduled, or as previously | 6 | | deferred, for a period equal to the
deferment period. The | 7 | | deferment period is that period during which no
| 8 | | installment is scheduled to be paid by reason of the | 9 | | deferment. The
deferment charge for a one month period may | 10 | | not exceed the applicable
interest for the installment | 11 | | period immediately following the due date of
the last | 12 | | undeferred payment. A proportionate charge may be made for
| 13 | | deferment for periods of more or less than one month. A | 14 | | deferment charge
is earned pro rata during the deferment | 15 | | period and is fully earned on the
last day of the deferment | 16 | | period. Should a loan be prepaid in full during
a | 17 | | deferment period, the licensee shall credit to the obligor | 18 | | a
refund of the unearned deferment charge in addition to | 19 | | any other refund or
credit made for prepayment of the loan | 20 | | in full.
| 21 | | (6) If two or more installments are delinquent one | 22 | | full month or more on
any due date, and if the contract so | 23 | | provides, the licensee may reduce the
unpaid balance by | 24 | | the refund credit which would be required for prepayment
| 25 | | in full on the due date of the most recent maturing | 26 | | installment in default.
Thereafter, and in lieu of any |
| | | HB3192 | - 10 - | LRB102 14899 BMS 22376 b |
|
| 1 | | other default or deferment charges, the
agreed rate of | 2 | | interest or, in the case of small consumer loans, interest | 3 | | at the rate of 18% per annum, may be charged on the unpaid | 4 | | balance until fully paid.
| 5 | | (7) Fifteen days after the final installment as | 6 | | originally scheduled or
deferred, the licensee, for any | 7 | | loan contract which has not previously been
converted to | 8 | | interest-bearing under paragraph (f), clause (6), may | 9 | | compute
and charge interest on any balance remaining | 10 | | unpaid, including unpaid
default or deferment charges, at | 11 | | the agreed rate of interest or, in the case of small | 12 | | consumer loans, interest at the rate of 18% per annum, | 13 | | until fully
paid. At the time of payment of said final | 14 | | installment, the licensee shall
give notice to the obligor | 15 | | stating any amounts unpaid.
| 16 | | (Source: P.A. 101-563, eff. 8-23-19.)
| 17 | | (205 ILCS 670/17.5) | 18 | | Sec. 17.5. Consumer reporting service. | 19 | | (a) For the purpose of this Section : , | 20 | | " Certified certified database" means the consumer | 21 | | reporting
service database established pursuant to the | 22 | | Payday Loan Reform
Act. | 23 | | "Title-secured loan" means a loan that is repayable in | 24 | | less than 12 months in which, at commencement, a consumer | 25 | | provides to the licensee physical possession of the |
| | | HB3192 | - 11 - | LRB102 14899 BMS 22376 b |
|
| 1 | | consumer's title to a motor vehicle as security for the | 2 | | loan. | 3 | | (b) (Blank). Within 90 days after making a small consumer | 4 | | loan, a licensee shall enter information about the loan into | 5 | | the certified database. | 6 | | (b-5) Licensees shall enter information regarding each | 7 | | loan that is repayable in less than 12 months into the | 8 | | certified database and shall follow the Department's related | 9 | | rules. | 10 | | (c) For every title-secured loan small consumer loan made, | 11 | | the licensee shall input information as provided in 38 Ill. | 12 | | Adm. Code 110.420. the following information into the | 13 | | certified database within 90 days after the loan is made: | 14 | | (i) the consumer's name and official identification | 15 | | number (for purposes of this Act, "official identification | 16 | | number" includes a Social Security Number, an Individual | 17 | | Taxpayer Identification Number, a Federal Employer | 18 | | Identification Number, an Alien Registration Number, or an | 19 | | identification number imprinted on a passport or consular | 20 | | identification document issued by a foreign government); | 21 | | (ii) the consumer's gross monthly income; | 22 | | (iii) the date of the loan; | 23 | | (iv) the amount financed; | 24 | | (v) the term of the loan; | 25 | | (vi) the acquisition charge; | 26 | | (vii) the monthly installment account handling charge; |
| | | HB3192 | - 12 - | LRB102 14899 BMS 22376 b |
|
| 1 | | (viii) the verification fee; | 2 | | (ix) the number and amount of payments; and | 3 | | (x) whether the loan is a first or subsequent | 4 | | refinancing of a prior small consumer loan. | 5 | | (d) (Blank). Once a loan is entered with the certified | 6 | | database, the certified database shall provide to the licensee | 7 | | a dated, time-stamped statement acknowledging the certified | 8 | | database's receipt of the information and assigning each loan | 9 | | a unique loan number. | 10 | | (e) (Blank). The licensee shall update the certified | 11 | | database within 90 days if any of the following events occur: | 12 | | (i) the loan is paid in full by cash; | 13 | | (ii) the loan is refinanced; | 14 | | (iii) the loan is renewed; | 15 | | (iv) the loan is satisfied in full or in part by | 16 | | collateral being sold after default; | 17 | | (v) the loan is cancelled or rescinded; or | 18 | | (vi) the consumer's obligation on the loan is | 19 | | otherwise discharged by the licensee. | 20 | | (f) (Blank). To the extent a licensee sells a product or | 21 | | service to a consumer, other than a small consumer loan, and | 22 | | finances any portion of the cost of the product or service, the | 23 | | licensee shall, in addition to and at the same time as the | 24 | | information inputted under subsection (d) of this Section, | 25 | | enter into the certified database: | 26 | | (i) a description of the product or service sold; |
| | | HB3192 | - 13 - | LRB102 14899 BMS 22376 b |
|
| 1 | | (ii) the charge for the product or service; and | 2 | | (iii) the portion of the charge for the product or | 3 | | service, if any, that is included in the amount financed | 4 | | by
a small consumer loan. | 5 | | (g) (Blank). The certified database provider shall | 6 | | indemnify the licensee against all claims and actions arising | 7 | | from illegal or willful or wanton acts on the part of the | 8 | | certified database provider. The certified database provider | 9 | | may charge a fee not to exceed $1 for each loan entered into | 10 | | the certified database under subsection (d) of this Section. | 11 | | The database provider shall not charge any additional fees or | 12 | | charges to the licensee. | 13 | | (h) (Blank). All personally identifiable information | 14 | | regarding any consumer obtained by way of the certified | 15 | | database and maintained by the Department is strictly | 16 | | confidential and shall be exempt from disclosure under | 17 | | subsection (c) of Section 7 of the Freedom of Information Act. | 18 | | (i) (Blank). A licensee who submits information to a | 19 | | certified database provider in accordance with this Section | 20 | | shall not be liable to any person for any subsequent release or | 21 | | disclosure of that information by the certified database | 22 | | provider, the Department, or any other person acquiring | 23 | | possession of the information, regardless of whether such | 24 | | subsequent release or disclosure was lawful, authorized, or | 25 | | intentional. | 26 | | (j) (Blank). To the extent the certified database becomes |
| | | HB3192 | - 14 - | LRB102 14899 BMS 22376 b |
|
| 1 | | unavailable to a licensee as a result of some event or events | 2 | | outside the control of the licensee or the certified database | 3 | | is decertified, the requirements of this Section and Section | 4 | | 17.4 of this Act are suspended until such time as the certified | 5 | | database becomes available.
| 6 | | (Source: P.A. 96-936, eff. 3-21-11; 97-813, eff. 7-13-12.) | 7 | | Section 99. Effective date. This Act takes effect upon | 8 | | becoming law or on the date Senate Bill 1792 of the 101st | 9 | | General Assembly takes effect, whichever is later.
|
|