Full Text of HB5177 101st General Assembly
HB5177 101ST GENERAL ASSEMBLY |
| | 101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020 HB5177 Introduced , by Rep. Daniel Didech SYNOPSIS AS INTRODUCED: |
| 815 ILCS 636/25 | | 815 ILCS 636/45 | |
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Amends the Motor Vehicle Leasing Act. Provides that a lessee is not liable for charges for the early termination of a lease agreement if the lessee has died before the end of the lease.
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| | 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 Motor Vehicle Leasing Act is amended by | 5 | | changing Sections 25 and 45 as follows:
| 6 | | (815 ILCS 636/25)
| 7 | | Sec. 25. Requirements for a consumer lease.
| 8 | | (a) A consumer lease shall be in writing and signed by the | 9 | | lessor and the
lessee.
| 10 | | (b) The printed portion of the consumer lease, other than | 11 | | directions
for completion of the consumer lease, shall be | 12 | | printed in a size equal to at
least eight-point type. The
| 13 | | consumer lease shall contain the following items printed or | 14 | | written in a
conspicuous manner:
| 15 | | (1) At the top of the consumer lease, in at least | 16 | | 10-point bold
capitalized type, the words "MOTOR VEHICLE | 17 | | LEASE AGREEMENT".
| 18 | | (2) If physical damage or liability insurance coverage | 19 | | for
bodily injury and property damage caused to others is | 20 | | not included in the
consumer lease, a notice in at least | 21 | | 10-point bold capitalized type,
substantially similar to | 22 | | the following: "NO PHYSICAL DAMAGE OR LIABILITY
INSURANCE | 23 | | COVERAGE FOR BODILY INJURY OR PROPERTY DAMAGE CAUSED TO |
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| 1 | | OTHERS IS
INCLUDED IN THIS LEASE."
| 2 | | (3) Directly above the acknowledgement permitted by | 3 | | subsection
(c) of this Section to appear above the space | 4 | | reserved for the lessee's
signature, a written notice | 5 | | substantially similar to the following:
| 6 | | "NOTICE TO THE LESSEE: This is a lease. You have no
| 7 | | ownership rights in the vehicle unless and until you | 8 | | exercise your
option to purchase the vehicle, if this | 9 | | lease contains a purchase
option. Do not sign this | 10 | | lease before you read it. Early termination
may require | 11 | | you to pay a substantial amount. You are entitled to a
| 12 | | completed copy of this lease when you sign it."
| 13 | | (4) If the lease contains a provision imposing a fee or | 14 | | penalty for early termination of the lease, a notice in at | 15 | | least 10-point bold capitalized type stating: "THE LESSEE | 16 | | IS NOT LIABLE FOR AN EARLY TERMINATION FEE IF THE LESSEE | 17 | | HAS DIED BEFORE THE END OF THE LEASE.". | 18 | | (c) The lessor shall deliver to the lessee a completed copy | 19 | | of the
consumer lease signed by the lessor. Any acknowledgement | 20 | | by the lessee of
delivery of a copy of the consumer lease shall | 21 | | be conspicuous and shall appear
directly above the space | 22 | | reserved for the lessee's signature.
| 23 | | (d) The consumer lease shall contain the names of the | 24 | | lessor and the
lessee, the place of business of the lessor, the | 25 | | residence or place of business
of the lessee as specified by | 26 | | the lessee, and a description of the vehicle,
including its |
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| 1 | | make, model year, model, and, if known, the vehicle's
| 2 | | identification number or marks.
| 3 | | (e) The consumer lease shall contain the following:
| 4 | | (1) All items required to be disclosed by the Consumer | 5 | | Leasing
Act and, in addition, the following items if the | 6 | | items or substantially
similar items are not required to be | 7 | | disclosed by the Consumer Leasing Act.
| 8 | | (2) The capitalized cost, identified as "capitalized | 9 | | cost", and
a descriptive explanation such as "the agreed | 10 | | upon amount determined at lease
inception for all items and | 11 | | services included in the lease".
| 12 | | (3) Any capitalized cost reduction, using the term | 13 | | "capitalized
cost reduction".
| 14 | | (4) The adjusted capitalized cost, using the term | 15 | | "adjusted
capitalized cost" and a descriptive explanation, | 16 | | as applicable, such as "the
agreed upon amount which serves | 17 | | as the basis for determining the base lease
payment. If you | 18 | | are not in default, this amount plus any applicable early
| 19 | | termination charges determines your maximum early | 20 | | termination obligation".
| 21 | | (5) If the lessee is not permitted to terminate the | 22 | | lease at
any time, the consumer lease shall contain a | 23 | | conspicuous statement setting
forth any prohibitions upon | 24 | | the lessee's ability to terminate the consumer
lease at any | 25 | | time before the end of the scheduled term.
| 26 | | (6) The vehicle's residual value, using the term |
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| 1 | | "residual value".
| 2 | | (f) (1) (A) Any insurance for which a charge is included in | 3 | | the
consumer lease shall be issued by an insurance | 4 | | company authorized to do that
kind of insurance | 5 | | business in this
State.
| 6 | | (B) The lessee shall have the privilege of | 7 | | purchasing the
insurance from an agent or broker of the | 8 | | lessee's own selection and of
selecting an insurance | 9 | | company acceptable to the lessor provided, however,
| 10 | | that the inclusion of the insurance premium in the | 11 | | consumer lease when the
lessee selects the agent, | 12 | | broker, or company shall be optional with the lessor
| 13 | | and in such case the lessor or assignee shall have no | 14 | | obligation to send or
cause to be sent to the lessee a | 15 | | copy of the insurance policy.
| 16 | | (2) If the policy of liability insurance or other
| 17 | | insurance on the vehicle is canceled, any unearned | 18 | | insurance premium refund
received by the holder shall be | 19 | | either (i) refunded to the lessee or (ii)
credited, | 20 | | together with the unearned portion of the lease charge | 21 | | applicable
thereto, to the lessee's obligations, | 22 | | including, without limitation, to the
final maturing lease | 23 | | payments or, at the holder's option, to the obligations of
| 24 | | the lessee upon early or scheduled termination except to | 25 | | the extent applied
toward payment for similar insurance | 26 | | protecting the interests of the lessee and
the holder or |
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| 1 | | either of them, provided that no such credit or refund
need | 2 | | be made if the amount thereof would be less than one | 3 | | dollar.
| 4 | | (3) The amount, if any, included as a charge for group | 5 | | credit
insurance, liability insurance, or other insurance | 6 | | on the vehicle shall not
exceed the premiums permitted by | 7 | | law for the insurance. If the group credit
or other | 8 | | insurance is canceled, the refund for unearned insurance | 9 | | premiums
received by the holder shall be either (i) | 10 | | refunded to the lessee or (ii)
credited, together with the | 11 | | unearned portion of the lease charge applicable
thereto, | 12 | | either to the lessee's obligations, including, without | 13 | | limitation, to
the final maturing lease payments or, at the | 14 | | holder's option, to the
obligations of the lessee upon | 15 | | early or scheduled termination, provided that no
such | 16 | | credit or refund need be made if the amount thereof would | 17 | | be less than one
dollar.
| 18 | | (g) If the lessee is obligated under the consumer lease to | 19 | | maintain
insurance on the vehicle and if subsequent to the | 20 | | execution of the consumer
lease the lessee fails to maintain | 21 | | the required insurance, the holder, at its
option, may buy | 22 | | insurance insuring substantially the same risks for either the
| 23 | | interest of the lessee and the holder or the interest of either | 24 | | of them. Any
amount paid by the holder for insurance may be the | 25 | | subject of a lease charge
from the date the amount was paid by | 26 | | the holder, as though the amount was part
of the capitalized |
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| 1 | | cost, shall be subject to the default provisions of the
| 2 | | consumer lease and shall be repayable by the lessee to the | 3 | | lessor as provided
in the consumer lease. Nothing in this | 4 | | subsection shall prevent the
holder from pursuing any other | 5 | | remedy for default set forth in the consumer
lease or provided | 6 | | by law.
| 7 | | (h) (1) The holder may, if the consumer lease so provides, | 8 | | collect
a late charge on each lease payment in default for a | 9 | | period of 10 days in the
amount or amounts agreed to in the | 10 | | consumer lease.
| 11 | | (2) The holder may not assess or collect a late charge | 12 | | under
paragraph (1) of this subsection when the only | 13 | | delinquency is late charges
assessed on an earlier lease | 14 | | payment or payments.
| 15 | | (3) The consumer lease may provide that in the event of | 16 | | default
by the lessee, the lessee shall pay collection | 17 | | costs, court costs, and, where
the consumer lease is | 18 | | referred to an attorney not a salaried employee of the
| 19 | | holder for collection, reasonable attorneys' fees.
| 20 | | (i) No consumer lease shall be signed by any party thereto | 21 | | when it
contains blank spaces to be filled in after it has been | 22 | | signed except that, if
delivery of the vehicle is not made at | 23 | | the time of the execution of the
consumer lease, the vehicle's | 24 | | identifying numbers or marks or similar
information and the due | 25 | | date of the first payment may be inserted in the
consumer lease | 26 | | after its execution. The lessee's written acknowledgement,
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| 1 | | conforming to the requirements of subsection (c) of this | 2 | | Section, of delivery
of a copy of the consumer lease shall be | 3 | | conclusive proof of the delivery of a
copy of the consumer | 4 | | lease and of compliance with this subsection in any action
or | 5 | | proceeding by or against the holder, lessor, or an assignee of | 6 | | the consumer
lease without
knowledge to the contrary at the | 7 | | time of the assignment.
| 8 | | (j) Notwithstanding any contrary provision of this Act or | 9 | | other
laws of this State, (a) a holder may purchase, sell, or | 10 | | otherwise acquire or
transfer an interest in a consumer lease | 11 | | or a vehicle subject to a consumer
lease, on such terms and | 12 | | conditions and for such price as may be mutually
agreed upon, | 13 | | and (b) no filing of the sale or transfer, no notice to the | 14 | | lessee
of the sale or transfer, and no requirement that the | 15 | | holder be deprived of
dominion over payments due under the | 16 | | consumer lease or over the vehicle if
repossessed by or | 17 | | returned to the holder shall be necessary to the validity of
a | 18 | | written sale or transfer of a consumer lease as against | 19 | | creditors,
subsequent purchasers, pledgees, mortgagees, or | 20 | | encumbrancers of the holder.
| 21 | | (k) Unless the lessee has notice of actual or intended sale | 22 | | or
transfer of a consumer lease, payment thereunder made by the | 23 | | lessee to the last
known holder of the consumer lease shall be | 24 | | binding upon all subsequent
holders or assignees. A person who | 25 | | sells or transfers a lease and thereafter
receives payment from | 26 | | the lessee shall forward the payment in the form in
which it |
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| 1 | | was received to the person to whom the lease had been sold or
| 2 | | transferred, unless the person to whom the lease has been sold | 3 | | or
transferred agrees in writing
that the person who sells or | 4 | | transfers the lease may retain the payment.
| 5 | | (l) (1) Upon written request from the lessee, the holder | 6 | | shall
give or forward to the lessee a written statement of the | 7 | | dates and amounts of
the periodic lease payments that have been | 8 | | received by the holder under the
consumer lease and the total | 9 | | amount of the remaining periodic lease payments.
Any amounts in | 10 | | the statement that are estimated shall be identified as
| 11 | | estimated. A lessee shall be given a written receipt for any | 12 | | payment made in
cash.
| 13 | | (2) Upon written request from a lessee who is then | 14 | | entitled to
terminate the consumer lease early, the holder | 15 | | shall give or forward to the
lessee a written statement of | 16 | | the lessee's projected early termination
obligation under | 17 | | the consumer lease without consideration on the value of | 18 | | the
vehicle.
| 19 | | (3) No charge shall be imposed on the lessee for | 20 | | preparation by
the holder of the lease of a single | 21 | | statement under paragraph (1) or (2) in a
12-month period. | 22 | | A holder may
impose a reasonable fee, not to exceed $20 per | 23 | | statement, for the preparation
of additional early | 24 | | termination statements in a 12-month period, provided that
| 25 | | the charge has been disclosed to the lessee either orally | 26 | | or in writing.
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| 1 | | (m) No consumer lease shall contain any of the following | 2 | | provisions:
| 3 | | (1) In the absence of the lessee's default, the holder | 4 | | may,
arbitrarily and without reasonable cause, accelerate | 5 | | the maturity of any part
or all of the amount owing | 6 | | thereon.
| 7 | | (2) A power of attorney is given to confess judgment or | 8 | | an
assignment of wages is given.
| 9 | | (3) The lessee waives any right of action against the | 10 | | holder
for any illegal act committed in the collection of | 11 | | payments under the consumer
lease or in the repossession of | 12 | | the vehicle.
| 13 | | (4) The lessee executes a power of attorney appointing | 14 | | the
holder or other person acting on behalf of the holder | 15 | | as the lessee's agent
in collection of payments under the | 16 | | consumer lease or in the repossession of
the vehicle, | 17 | | provided, however, that this paragraph shall
not prohibit | 18 | | the inclusion in a consumer lease of a limited power of | 19 | | attorney
or other provision authorizing the holder to | 20 | | execute in the lessee's name any
proofs of insurance claims | 21 | | or losses, titling and registration documents,
odometer | 22 | | statements, or for any other purpose properly associated | 23 | | with the
lease transaction or to endorse the lessee's name | 24 | | on any insurance settlement
or premium, rebate draft, | 25 | | refund, or check.
| 26 | | (5) The holder is relieved from liability for any legal |
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| 1 | | remedy
which the lessee may have had against the holder | 2 | | under the consumer lease, or
any separate instrument | 3 | | executed in connection therewith.
| 4 | | (6) The lessee waives any provision of this Act.
| 5 | | (n) Any provision prohibited by this Act shall be | 6 | | unenforceable but
shall not otherwise affect the validity of a | 7 | | consumer lease.
| 8 | | (Source: P.A. 89-625, eff. 1-1-97.)
| 9 | | (815 ILCS 636/45)
| 10 | | Sec. 45. Restriction on early termination liability.
| 11 | | (a) The lessee shall have the right to terminate the | 12 | | consumer lease
at any time after the lessee has made 12 full | 13 | | periodic lease payments for which
lease charges have been
| 14 | | accrued by the holder or, in the case of a single payment | 15 | | lease, at the
expiration of 12 months from the consummation of | 16 | | the lease. Nothing in this
Section shall be deemed to prohibit | 17 | | the holder from permitting the lessee to
terminate the consumer | 18 | | lease before the expiration of 12 months. A lessee may not be | 19 | | held liable for early termination fees if the lessee has died | 20 | | before the end of the lease.
| 21 | | (b) If a consumer lease is terminated early and there is no | 22 | | purchase
option or the lessee does not exercise a purchase | 23 | | option, the lessee's early
termination obligation may not | 24 | | exceed an amount equal to the sum of the
following:
| 25 | | (1) Any unpaid lease payments that accrued through the |
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| 1 | | date of
early termination.
| 2 | | (2) Any other unpaid amounts, other than excess mileage
| 3 | | charges, arising under the terms of the lease.
| 4 | | (3) Any official fees and taxes imposed in connection | 5 | | with
lease termination.
| 6 | | (4) A disposition fee in an amount set forth in the | 7 | | consumer lease.
| 8 | | (5) The reasonable costs of retaking, storing, | 9 | | preparing for
sale, and selling the vehicle, including | 10 | | reasonable attorneys' fees and
collection and court costs | 11 | | incurred by the lessor in recovering or securing
possession | 12 | | of the vehicle.
| 13 | | (6) The amount, if any, by which (i) the balance | 14 | | subject to
lease charge plus the lease charge earned in | 15 | | advance for the computational
period in which the early | 16 | | termination occurs, calculated in accordance with the
| 17 | | constant yield method or any other generally accepted lease | 18 | | accounting method
exceeds (ii) the realized value of the | 19 | | vehicle.
| 20 | | (7) Any other early termination charge expressly | 21 | | disclosed in
the consumer lease.
| 22 | | (c) As an alternative to the constant yield and other | 23 | | generally
accepted lease accounting methods of determining the | 24 | | depreciation amounts
accrued through the date of early | 25 | | termination of a precomputed lease
transaction, those amounts | 26 | | may be determined under paragraph (6) of subsection
(b) of this |
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| 1 | | Section by using a lease provision under which the lease charge | 2 | | is
calculated on the adjusted capitalized cost for the time | 3 | | outstanding
according to a generally
accepted actuarial | 4 | | method.
| 5 | | (d) This Section does not limit or restrict the manner of
| 6 | | calculating the lessee's early termination obligation, whether | 7 | | by way of
unamortized capitalized cost, discounted present | 8 | | value of remaining lease
payments, multiples of monthly | 9 | | payments, or otherwise.
| 10 | | (e) Any refundable security deposit or advance lease | 11 | | payment held by
the holder may be retained by the holder or | 12 | | lessor and shall be credited
against the
lessee's early | 13 | | termination obligation. The amount of the security deposit or
| 14 | | advance lease payment in excess of the amount of the lessee's | 15 | | early termination
obligation shall be returned to the lessee. | 16 | | The holder or lessor is not
obligated to pay
interest to the | 17 | | lessee on the security deposit.
| 18 | | (Source: P.A. 89-625, eff. 1-1-97.)
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