093_HB2958

 
                                     LRB093 09343 JLS 09577 b

 1        AN ACT concerning certain lending practices.

 2        Be  it  enacted  by  the People of the State of Illinois,
 3    represented in the General Assembly:

 4        Section 5.  The Consumer Installment Loan Act is  amended
 5    by changing Section 20 and adding Section 16d as follows:

 6        (205 ILCS 670/16d new)
 7        Sec.   16d.  Payday  and  motor  vehicle  title  lenders;
 8    disclosure.
 9        (a)  As used in this Section, "payday lender" or "lender"
10    means a lender that makes  loans  based  upon  proof  of  the
11    borrower's  continuing employment and the borrower's delivery
12    to the lender of a postdated check in an amount sufficient to
13    repay the loan and "motor vehicle title lender"  or  "lender"
14    means  a  lender  that  makes  loans  based upon proof of the
15    borrower's ownership of equity in a  motor  vehicle  and  the
16    borrower's  delivery to the lender of a postdated check in an
17    amount sufficient to repay the loan.
18        (b)  For the purpose of making  the  disclosure  required
19    under  this  Section,  any fee imposed for making the loan or
20    renewing, revolving, or rolling over the loan shall be deemed
21    interest on the loan.
22        (c)  In addition to the requirements  of  Section  16,  a
23    lender  must disclose to the borrower, in a manner consistent
24    with the requirements  of  the  Truth  in  Lending  Act,  the
25    interest  rates  charged  in  the  transaction  calculated as
26    required under subsection (b).
27        (d)  A lender may not renew or rollover a loan subject to
28    this Section more than 3 times during any 12-month period

29        (205 ILCS 670/20) (from Ch. 17, par. 5426)
30        Sec. 20. Penalties for violation.
 
                            -2-      LRB093 09343 JLS 09577 b
 1        (a)  Any person who engages in  business  as  a  Consumer
 2    Installment  Loan lender without the license required by this
 3    Act shall be guilty  of  a  Class  4  felony.  A  person  who
 4    violates  Section  16d  of  this  Act  is guilty of a Class A
 5    misdemeanor.
 6        (b)   The obligor, prior to the  expiration  of  2  years
 7    after  the  date  of  his last scheduled payment, may recover
 8    such reasonable attorney's fees and court costs as a    court
 9    may assess against such licensee or lender for a violation of
10    Sections  1, 12, 15, 15a, 15b, 15d, 15e, 16, 17, 18, or 19.1.
11    The balance due under the terms of the loan contract shall be
12    reduced by the amount which the obligor is thus  entitled  to
13    recover.   A  bona  fide  error  by a licensee in calculating
14    charges or  rebates  is  not  a  violation  if  the  licensee
15    corrects the error within a reasonable time, after discovery.
16        (b-5)  A  license issued under this Act may be revoked if
17    the  licensee,  or  any  directors,  managers  of  a  limited
18    liability company, partners, or officer thereof is  convicted
19    of a felony.
20        (c)  No  provision of this Section imposing any liability
21    shall apply to any act done or omitted in conformity with any
22    rule or regulation or written interpretation thereof  by  the
23    Department  of  Financial  Institutions, notwithstanding that
24    after  such  act  or  omission  has  occurred,   such   rule,
25    regulation   or   interpretation  is  amended,  rescinded  or
26    determined by judicial or other authority to be  invalid  for
27    any reason.  All interpretations issued after January 1, 1998
28    must  be written and signed by the Department's Chief Counsel
29    and approved by the Director.
30    (Source: P.A. 90-437, eff. 1-1-98.)

31        Section 99.  Effective date.  This Act takes effect  upon
32    becoming law.