97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB5387

 

Introduced 2/15/2012, by Rep. Linda Chapa LaVia

 

SYNOPSIS AS INTRODUCED:
 
See Index

    Amends the Currency Exchange Act, the Consumer Installment Loan Act, and the Payday Loan Reform Act. Provides that a business licensed under one of those Acts may offer any product or service that is permitted under any of those Acts, so long as the business is licensed under the appropriate Act. Further amends the Currency Exchange Act. Provides that a licensee who holds more than one community currency exchange license may hold the aggregate minimum liquid funds required for all the licensee's locations in a single account in the licensee's name. Further amends the Consumer Installment Loan Act. Provides that the Director of Financial Institutions may fine a licensee an amount not exceeding $500 (now, $10,000) per violation. Provides that an examination of the books and records of a licensee by the Director shall take no more than 4 hours to complete and must occur during a single business day. Repeals provisions concerning a limited purpose branch and the prohibition against accepting certain checks. Makes other changes. Further amends the Payday Loan Reform Act. Provides that an examination of the books and records of a licensee by the Secretary of Financial and Professional Regulation shall take no more than 4 hours to complete and must occur during a single business day. Provides that a licensee must pay an annual fee of $450 (now $1,000). Provides that the Secretary may fine a licensee an amount not exceeding $500 (now, $10,000) per violation. Provides that the Secretary may approve the conduct of other businesses in a licensee's place of business, unless the Secretary finds that the conduct will conceal or facilitate evasion of violation of the Act. Repeals a provision concerning the superiority of the Act over any other State financial regulation laws. Makes other changes.


LRB097 20089 PJG 65459 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB5387LRB097 20089 PJG 65459 b

1    AN ACT concerning regulation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Currency Exchange Act is amended by changing
5Sections 1, 3, and 7 and by adding Section 3.4 as follows:
 
6    (205 ILCS 405/1)  (from Ch. 17, par. 4802)
7    Sec. 1. Definitions; application of Act.
8    (a) For the purposes of this Act:
9    "Community currency exchange" means any person, firm,
10association, partnership, limited liability company, or
11corporation, except an ambulatory currency exchange as
12hereinafter defined, banks incorporated under the laws of this
13State and National Banks organized pursuant to the laws of the
14United States, engaged in the business or service of, and
15providing facilities for, cashing checks, drafts, money orders
16or any other evidences of money acceptable to such community
17currency exchange, for a fee or service charge or other
18consideration, or engaged in the business of selling or issuing
19money orders under his or their or its name, or any other money
20orders (other than United States Post Office money orders,
21Postal Telegraph Company money orders, or Western Union
22Telegraph Company money orders), or engaged in both such
23businesses, or engaged in performing any one or more of the

 

 

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1foregoing services.
2    "Department" means the Department of Financial and
3Professional Regulation.
4    "Director" means the Director of the Division of Financial
5Institutions of the Department of Financial and Professional
6Regulation.
7    "Division of Financial Institutions" means the Division of
8Financial Institutions of the Department of Financial and
9Professional Regulation.
10    "Ambulatory Currency Exchange" means any person, firm,
11association, partnership, limited liability company, or
12corporation, except banks organized under the laws of this
13State and National Banks organized pursuant to the laws of the
14United States, engaged in one or both of the foregoing
15businesses, or engaged in performing any one or more of the
16foregoing services, solely on the premises of the employer
17whose employees are being served.
18    "Location" when used with reference to an ambulatory
19currency exchange means the premises of the employer whose
20employees are or are to be served by an ambulatory currency
21exchange.
22    "Secretary" means the Secretary of Financial and
23Professional Regulation or a person authorized by the Secretary
24or this Act to act in the Secretary's stead. All references in
25this Act to the Secretary shall be deemed to include the
26Director, as a person authorized by the Secretary or this Act

 

 

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1to assume responsibility for the oversight of the functions of
2the Department relative to the regulatory supervision of
3community currency exchanges and ambulatory currency exchanges
4under this Act.
5    (b) Nothing in this Act shall be held to apply to any
6person, firm, association, partnership, limited liability
7company, or corporation who is engaged primarily in the
8business of transporting for hire, bullion, currency,
9securities, negotiable or non-negotiable documents, jewels or
10other property of great monetary value and who in the course of
11such business and only as an incident thereto, cashes checks,
12drafts, money orders or other evidences of money directly for,
13or for the employees of and with the funds of and at a cost only
14to, the person, firm, association, partnership, limited
15liability company, or corporation for whom he or it is then
16actually transporting such bullion, currency, securities,
17negotiable or non-negotiable documents, jewels, or other
18property of great monetary value, pursuant to a written
19contract for such transportation and all incidents thereof, nor
20shall it apply to any person, firm, association, partnership,
21limited liability company, or corporation engaged in the
22business of selling tangible personal property at retail who,
23in the course of such business and only as an incident thereto,
24cashes checks, drafts, money orders or other evidences of money
25and does not hold itself out as a check cashing service.
26(Source: P.A. 97-315, eff. 1-1-12.)
 

 

 

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1    (205 ILCS 405/3)  (from Ch. 17, par. 4804)
2    Sec. 3. Powers of community currency exchanges. No
3community or ambulatory currency exchange shall be permitted to
4accept money or evidences of money as a deposit to be returned
5to the depositor or upon the depositor's order. No community or
6ambulatory currency exchange shall be permitted to act as
7bailee or agent for persons, firms, partnerships, limited
8liability companies, associations or corporations to hold
9money or evidences thereof or the proceeds therefrom for the
10use and benefit of the owners thereof, and deliver such money
11or proceeds of evidence of money upon request and direction of
12such owner or owners. A community or ambulatory currency
13exchange is permitted to engage in, and charge a fee for, the
14following activities, either directly or as a third-party
15agent: (i) cashing of checks, drafts, money orders, or any
16other evidences of money acceptable to the currency exchange,
17(ii) selling or issuing money orders, (iii) obtaining reports,
18certificates, governmental permits, licenses, and vital
19statistics and the preparation of necessary applications to
20obtain the same, (iv) the sale and distribution of bond cards,
21(v) obtaining, distributing, providing, or selling: State
22vehicle registration renewals, title transfers and tax
23remittance forms, city vehicle licenses, and other
24governmental services, (vi) photocopying and sending and
25receiving facsimile transmissions, (vii) notary service either

 

 

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1by the proprietor of the currency exchange or any currency
2exchange employee, authorized by the State to act as a notary
3public, (viii) issuance of travelers checks obtained by the
4currency exchange from a banking institution under a trust
5receipt, (ix) accepting for payment utility and other
6companies' bills, (x) issuance and acceptance of any
7third-party debit, credit, or stored value card and loading or
8unloading, (xi) on-premises automated cash dispensing
9machines, (xii) sale of rolled coin and paper money, (xiii)
10exchange of foreign currency through a third-party, (xiv) sale
11of cards, passes, or tokens for public transit, (xv) providing
12mail box service, (xvi) sale of phone cards and other pre-paid
13telecommunication services, (xvii) on-premises public
14telephone, (xviii) sale of U.S. postage, (xix) money
15transmission through a licensed third-party money transmitter,
16(xx) sale of candy, gum, other packaged foods, soft drinks, and
17other products and services by means of on-premises vending
18machines, (xxi) any financial service, provided that the
19licensee holds any license required for that service, and
20(xxii) (xxi) other products and services as may be approved by
21the Secretary. Any community or ambulatory currency exchange
22may enter into agreements with any utility and other companies
23to act as the companies' agent for the acceptance of payment of
24utility and other companies' bills without charge to the
25customer and, acting under such agreement, may receipt for
26payments in the names of the utility and other companies. Any

 

 

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1community or ambulatory currency exchange may also receive
2payment of utility and other companies' bills for remittance to
3companies with which it has no such agency agreement and may
4charge a fee for such service but may not, in such cases, issue
5a receipt for such payment in the names of the utility and
6other companies. However, funds received by currency exchanges
7for remittance to utility and other companies with which the
8currency exchange has no agency agreement shall be forwarded to
9the appropriate utility and other companies by the currency
10exchange before the end of the next business day.
11    For the purpose of this Section, "utility and other
12companies" means any utility company and other company with
13which the currency exchange may or may not have a contractual
14agreement and for which the currency exchange accepts payments
15from consumers for remittance to the utility or other company
16for the payment of bills.
17(Source: P.A. 97-315, eff. 1-1-12.)
 
18    (205 ILCS 405/3.4 new)
19    Sec. 3.4. Other products or services. Notwithstanding any
20other law to the contrary, a currency exchange may offer any
21product or service that is permitted under the Consumer
22Installment Loan Act, the Payday Loan Reform Act, or the Sales
23Finance Agency Act, so long as the licensee is also licensed
24under the appropriate Act.
 

 

 

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1    (205 ILCS 405/7)  (from Ch. 17, par. 4814)
2    Sec. 7. Available funds; minimum amount. Each community
3currency exchange shall have, at all times, a minimum of $5,000
4of its own cash funds available for the uses and purposes of
5its business and said minimum sum shall be exclusive of and in
6addition to funds received for exchange or transfer; and in
7addition thereto each such licensee shall at all times have on
8hand an amount of liquid funds sufficient to pay on demand all
9outstanding money orders issued by it. Whenever the same
10licensee holds more than one community currency exchange
11license, the aggregate of the minimum liquid funds required
12under this Section for all of the licensee's locations may be
13held by the licensee in a single account in the licensee's
14name; provided that the total liquid funds equal a minimum of
15the number of the licensee's licenses multiplied by the minimum
16sum required for each location.
17    In the event a receiver is appointed in accordance with
18Section 15.1 of this Act, and the Secretary determines that the
19business of the currency exchange should be liquidated, and if
20it shall appear that the said minimum sum was not on hand or
21available at the time of the appointment of the receiver, then
22the receiver shall have the right to recover in any court of
23competent jurisdiction from the owner or owners of such
24currency exchange, or from the stockholders and directors
25thereof if such currency exchange was operated by a
26corporation, or from the members if the currency exchange was

 

 

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1operated as a limited liability company, said sum or that part
2thereof which was not on hand or available at the time of the
3appointment of such receiver. Nothing contained in this Section
4shall limit or impair the liability of any bonding or insurance
5company on any bond or insurance policy relating to such
6community currency exchange issued pursuant to the
7requirements of this Act, nor shall anything contained herein
8limit or impair such other rights or remedies as the receiver
9may otherwise have.
10(Source: P.A. 97-315, eff. 1-1-12.)
 
11    Section 10. The Consumer Installment Loan Act is amended by
12changing Sections 1, 9, and 10 and by adding Section 0.5 as
13follows:
 
14    (205 ILCS 670/0.5 new)
15    Sec. 0.5. Director of Financial Institutions; Secretary of
16Financial and Professional Regulation. All references in this
17Act to the Director of Financial Institutions are deemed, in
18appropriate contexts, to be the Secretary of Financial and
19Professional Regulation, or his or her designee.
 
20    (205 ILCS 670/1)  (from Ch. 17, par. 5401)
21    Sec. 1. License required to engage in business. No person,
22partnership, association, limited liability company, or
23corporation shall engage in the business of making loans of

 

 

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1money in a principal amount not exceeding $40,000, and charge,
2contract for, or receive on any such loan a greater rate of
3interest, discount, or consideration therefor than the lender
4would be permitted by law to charge if he were not a licensee
5hereunder, except as authorized by this Act after first
6obtaining a license from the Director of Financial Institutions
7(hereinafter called the Director). Notwithstanding any other
8law to the contrary, licensees may offer any product or service
9that is permitted under the Payday Loan Reform Act or the
10Currency Exchange Act, so long as the licensee is also licensed
11under the appropriate Act. No licensee, or employee or
12affiliate thereof, that is licensed under the Payday Loan
13Reform Act shall obtain a license under this Act except that a
14licensee under the Payday Loan Reform Act may obtain a license
15under this Act for the exclusive purpose and use of making
16title-secured loans, as defined in subsection (a) of Section 15
17of this Act and governed by Title 38, Section 110.300 of the
18Illinois Administrative Code. For the purpose of this Section,
19"affiliate" means any person or entity that directly or
20indirectly controls, is controlled by, or shares control with
21another person or entity. A person or entity has control over
22another if the person or entity has an ownership interest of
2325% or more in the other.
24(Source: P.A. 96-936, eff. 3-21-11; 97-420, eff. 1-1-12.)
 
25    (205 ILCS 670/9)  (from Ch. 17, par. 5409)

 

 

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1    Sec. 9. Fines, Suspension or Revocation of license.
2    (a) The Director may, after 10 days notice by registered
3mail to the licensee at the address set forth in the license,
4stating the contemplated action, and in general the particular
5grounds therefor, the action required by the licensee to
6correct the violation, and that the licensee has 30 days in
7which to correction the violation, fine such licensee, for the
8purpose of obtaining compliance with this Act, an amount not
9exceeding $500 $10,000 per violation type annually, but only
10after the licensee fails to correct the cause of the violation
11within 30 days after notification, or revoke or suspend any
12license issued hereunder if, on good cause shown, he or she
13finds that the : (1) The licensee has materially failed to
14comply with any provision of this Act or any order, decision,
15finding, rule, regulation or direction of the Director lawfully
16made pursuant to the authority of this Act. Any notice of a
17contemplated action by the Director under this Section that is
18based upon findings of an examination conducted under Section
1910 shall be served within 60 days after the date of the
20examination ; or (2) Any fact or condition exists which, if it
21had existed at the time of the original application for the
22license, clearly would have warranted the Director in refusing
23to issue the license.
24    (b) (Blank) The Director may fine, suspend, or revoke only
25the particular license with respect to which grounds for the
26fine, revocation or suspension occur or exist, but if the

 

 

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1Director shall find that grounds for revocation are of general
2application to all offices or to more than one office of the
3licensee, the Director shall fine, suspend, or revoke every
4license to which such grounds apply.
5    (c) (Blank).
6    (d) No revocation, suspension, or surrender of any license
7shall impair or affect the obligation of any pre-existing
8lawful contract between the licensee and any obligor.
9    (e) The Director may issue a new license to a licensee
10whose license has been revoked when facts or conditions which
11clearly would have warranted the Director in refusing
12originally to issue the license no longer exist.
13    (f) (Blank).
14    (g) In every case in which a license is suspended or
15revoked or an application for a license or renewal of a license
16is denied, the Director shall serve the licensee with notice of
17his or her action, including a statement of the reasons for his
18or her actions, either personally, or by certified mail, return
19receipt requested. Service by certified mail shall be deemed
20completed when the notice is deposited in the U.S. Mail.
21    (h) An order assessing a fine, an order revoking or
22suspending a license, or, an order denying renewal of a license
23shall take effect 15 business days after upon service of the
24order unless the licensee requests, in writing, within 15
25business 10 days after the date of service, a hearing. In the
26event a hearing is requested, the order shall be stayed until a

 

 

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1final administrative order is entered.
2    (i) If the licensee requests a hearing, the Director shall
3conduct schedule a hearing within 30 days after the request for
4a hearing unless otherwise agreed to by the parties. If the
5Director fails to conduct the hearing within 30 days after the
6date of service of a hearing request, the Director may take no
7further action against the licensee on the matter, and the
8issue shall be considered closed. The hearing shall be held at
9the time and place designated by the Director and agreed to by
10the licensee.
11    (j) The hearing shall be held at the time and place
12designated by the Director. The Director and any administrative
13law judge designated by him or her shall have the power to
14administer oaths and affirmations, subpoena witnesses and
15compel their attendance, take evidence, and require the
16production of books, papers, correspondence, and other records
17or information that he or she considers relevant or material to
18the inquiry.
19    (k) The costs for the administrative hearing shall be
20limited to $100 and shall be paid by the licensee set by rule.
21    (l) The Director shall have the authority to prescribe
22rules for the administration of this Section.
23(Source: P.A. 90-437, eff. 1-1-98.)
 
24    (205 ILCS 670/10)  (from Ch. 17, par. 5410)
25    Sec. 10. Investigation of conduct of business. For the

 

 

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1purpose of discovering violations of this Act or securing
2information lawfully required by it, the Director shall have
3the authority to schedule examinations of the books, records,
4and loan documents of each licensee at a time convenient to the
5licensee may at any time investigate the loans and business and
6examine the books, accounts, records, and files used therein,
7of every licensee and of every person, partnership,
8association, limited liability company, and corporation
9engaged in the business described in Section 1 of this Act,
10whether such person, partnership, association, limited
11liability company, or corporation shall act or claim to act as
12principal or agent or within or without the authority of this
13Act. For such purpose the Director shall have free access to
14the offices and places of business, books, accounts, papers,
15records, files, safes, and vaults of such persons,
16partnerships, associations, limited liability companies, and
17corporations. The Director may require the attendance of and
18examine under oath all persons whose testimony he or she may
19require relative to such loans or such business, and in such
20cases the Director shall have power to administer oaths to all
21persons called as witnesses; and the Director may conduct such
22examinations.
23    The Director shall make an examination of the affairs,
24business, office and records of each licensee at least once
25each year. No examination may take more than 4 hours to
26complete and must occur during a single business day. Remote

 

 

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1examinations are permitted by using information contained in
2the consumer reporting service. The licensee shall pay no more
3than $250 annually for all examinations under this Act The
4Director shall by rule and regulation set the fee to be charged
5for each examination day, including travel expenses for
6out-of-state licensed locations. The fee shall reasonably
7reflect actual costs. The Director shall also have authority to
8examine the books and records of any business made by a former
9licensee which is being liquidated, as the Director deems
10necessary, and may charge the examination fees otherwise
11required for licensees.
12(Source: P.A. 90-437, eff. 1-1-98.)
 
13    (205 ILCS 670/12.5 rep.)
14    (205 ILCS 670/19.2 rep.)
15    Section 15. The Consumer Installment Loan Act is amended by
16repealing Sections 12.5 and 19.2.
 
17    Section 20. The Payday Loan Reform Act is amended by
18changing Sections 2-55, 3-5, 4-5, and 4-10 and by adding
19Section 3-7 as follows:
 
20    (815 ILCS 122/2-55)
21    Sec. 2-55. Information, reporting, and examination.
22    (a) A licensee shall keep and use books, accounts, and
23records that will enable the Secretary to determine if the

 

 

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1licensee is complying with the provisions of this Act and
2maintain any other records as required by the Secretary.
3    (b) A licensee shall collect and maintain information
4annually for a report that shall disclose in detail and under
5appropriate headings:
6        (1) the total number of payday loans made during the
7    preceding calendar year;
8        (2) the total number of payday loans outstanding as of
9    December 31 of the preceding calendar year;
10        (3) the minimum, maximum, and average dollar amount of
11    payday loans made during the preceding calendar year;
12        (4) the average annual percentage rate and the average
13    term of payday loans made during the preceding calendar
14    year; and
15        (5) the total number of payday loans paid in full, the
16    total number of loans that went into default, and the total
17    number of loans written off during the preceding calendar
18    year.
19    The report shall be verified by the oath or affirmation of
20the owner, manager, or president of the licensee. The report
21must be filed with the Secretary no later than March 1 of the
22year following the year for which the report discloses the
23information specified in this subsection (b). The Secretary may
24impose upon the licensee a fine of $25 per day for each day
25beyond the filing deadline that the report is not filed.
26    (c) No later than July 31 of the second year following the

 

 

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1effective date of this Act, the Department shall publish a
2biennial report that contains a compilation of aggregate data
3concerning the payday lending industry and shall make the
4report available to the Governor, the General Assembly, and the
5general public.
6    (d) The Department shall have the authority to schedule
7conduct examinations of the books, records, and loan documents
8at a any time convenient to the licensee. No examination may
9take more than 4 hours to complete and must occur during a
10single business day. Remote examinations are permitted by using
11information contained in the consumer reporting service.
12(Source: P.A. 94-13, eff. 12-6-05.)
 
13    (815 ILCS 122/3-5)
14    Sec. 3-5. Licensure.
15    (a) A license to make a payday loan shall state the
16address, including city and state, at which the business is to
17be conducted and shall state fully the name of the licensee.
18The license shall be conspicuously posted in the place of
19business of the licensee and shall not be transferable or
20assignable.
21    (b) An application for a license shall be in writing and in
22a form prescribed by the Secretary. The Secretary may not issue
23a payday loan license unless and until the following findings
24are made:
25        (1) that the financial responsibility, experience,

 

 

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1    character, and general fitness of the applicant are such as
2    to command the confidence of the public and to warrant the
3    belief that the business will be operated lawfully and
4    fairly and within the provisions and purposes of this Act;
5    and
6        (2) that the applicant has submitted such other
7    information as the Secretary may deem necessary.
8    (c) A license shall be issued for no longer than one year,
9and no renewal of a license may be provided if a licensee has
10substantially violated this Act and has not cured the violation
11to the satisfaction of the Department.
12    (d) A licensee shall appoint, in writing, the Secretary as
13attorney-in-fact upon whom all lawful process against the
14licensee may be served with the same legal force and validity
15as if served on the licensee. A copy of the written
16appointment, duly certified, shall be filed in the office of
17the Secretary, and a copy thereof certified by the Secretary
18shall be sufficient evidence to subject a licensee to
19jurisdiction in a court of law. This appointment shall remain
20in effect while any liability remains outstanding in this State
21against the licensee. When summons is served upon the Secretary
22as attorney-in-fact for a licensee, the Secretary shall
23immediately notify the licensee by registered mail, enclosing
24the summons and specifying the hour and day of service.
25    (e) A licensee must pay an annual fee of $450 $1,000. In
26addition to the license fee, the reasonable expense of any

 

 

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1examination or hearing by the Secretary under any provisions of
2this Act shall be borne by the licensee, except that the
3licensee shall pay no more than $250 annually for all
4examinations under this Act and no more than $100 per hearing.
5If a licensee fails to renew its license by December 31, its
6license shall automatically expire; however, the Secretary, in
7his or her discretion, may reinstate an expired license upon:
8        (1) payment of the annual fee within 30 days of the
9    date of expiration; and
10        (2) proof of good cause for failure to renew.
11    (f) Not more than one place of business shall be maintained
12under the same license, but the Secretary may issue more than
13one license to the same licensee upon compliance with all the
14provisions of this Act governing issuance of a single license.
15The location, except those locations already in existence as of
16June 1, 2005, may not be within one mile of a horse race track
17subject to the Illinois Horse Racing Act of 1975, within one
18mile of a facility at which gambling is conducted under the
19Riverboat Gambling Act, within one mile of the location at
20which a riverboat subject to the Riverboat Gambling Act docks,
21or within one mile of any State of Illinois or United States
22military base or naval installation.
23    (g) Notwithstanding any other law to the contrary,
24licensees may offer any product or service that is permitted
25under the Consumer Installment Loan Act, the Currency Exchange
26Act, or the Sales Finance Agency Act, so long as the licensee

 

 

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1is also licensed under the appropriate Act No licensee shall
2conduct the business of making loans under this Act within any
3office, suite, room, or place of business in which (1) any
4loans are offered or made under the Consumer Installment Loan
5Act other than title secured loans as defined in subsection (a)
6of Section 15 of the Consumer Installment Loan Act and governed
7by Title 38, Section 110.330 of the Illinois Administrative
8Code or (2) any other business is solicited or engaged in
9unless the other business is licensed by the Department or, in
10the opinion of the Secretary, the other business would not be
11contrary to the best interests of consumers and is authorized
12by the Secretary in writing.
13    (g-5) (Blank) Notwithstanding subsection (g) of this
14Section, a licensee may obtain a license under the Consumer
15Installment Loan Act (CILA) for the exclusive purpose and use
16of making title secured loans, as defined in subsection (a) of
17Section 15 of CILA and governed by Title 38, Section 110.300 of
18the Illinois Administrative Code. A licensee may continue to
19service Consumer Installment Loan Act loans that were
20outstanding as of the effective date of this amendatory Act of
21the 96th General Assembly.
22    (h) The Secretary shall maintain a list of licensees that
23shall be available to interested consumers and lenders and the
24public. The Secretary shall maintain a toll-free number whereby
25consumers may obtain information about licensees. The
26Secretary shall also establish a complaint process under which

 

 

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1an aggrieved consumer may file a complaint against a licensee
2or non-licensee who violates any provision of this Act.
3(Source: P.A. 96-936, eff. 3-21-11.)
 
4    (815 ILCS 122/3-7 new)
5    Sec. 3-7. Other business.
6    (a) Upon application by the licensee and approval by the
7Secretary, the Secretary may approve the conduct of other
8businesses not specifically permitted by this Act in the
9licensee's place of business, unless the Secretary finds that
10the conduct will conceal or facilitate evasion or violation of
11this Act. The Secretary's approval shall be in writing and
12shall describe the other businesses which may be conducted in
13the licensed office.
14    (b) A licensee may, without notice to or approval of the
15Secretary, in addition to the business permitted by this Act,
16conduct the following business:
17        (1) the business of a sales finance agency as defined
18    in the Sales Finance Agency Act;
19        (2) the business of soliciting or selling any type of
20    insurance provided that all insurance transactions are
21    conducted in accordance with and are regulated under the
22    Illinois Insurance Code;
23        (3) the business of financing premiums for insurance;
24    and
25        (4) making loans pursuant to the Illinois Financial

 

 

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1    Services Development Act.
2    The Secretary shall make and enforce reasonable rules and
3regulations in accordance with the Illinois Administrative
4Procedure Act for the conduct of business under this Act in the
5same office with other businesses as may be necessary to
6prevent evasions or violations of this Act. The Secretary may
7investigate any business conducted in the licensed office to
8determine whether any evasion or violation of this Act has
9occurred.
 
10    (815 ILCS 122/4-5)
11    Sec. 4-5. Prohibited acts. A licensee or unlicensed person
12or entity making payday loans may not commit, or have committed
13on behalf of the licensee or unlicensed person or entity, any
14of the following acts:
15        (1) Threatening to use or using the criminal process in
16    this or any other state to collect on the loan.
17        (2) Using any device or agreement that would have the
18    effect of charging or collecting more fees or charges than
19    allowed by this Act, including, but not limited to,
20    entering into a different type of transaction with the
21    consumer.
22        (3) Engaging in unfair, deceptive, or fraudulent
23    practices in the making or collecting of a payday loan.
24        (4) Using or attempting to use the check provided by
25    the consumer in a payday loan as collateral for a

 

 

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1    transaction not related to a payday loan.
2        (5) Knowingly accepting payment in whole or in part of
3    a payday loan through the proceeds of another payday loan
4    provided by any licensee, except as provided in subsection
5    (c) of Section 2.5.
6        (6) Knowingly accepting any security, other than that
7    specified in the definition of payday loan in Section 1-10,
8    for a payday loan.
9        (7) Charging any fees or charges other than those
10    specifically authorized by this Act.
11        (8) Threatening to take any action against a consumer
12    that is prohibited by this Act or making any misleading or
13    deceptive statements regarding the payday loan or any
14    consequences thereof.
15        (9) Making a misrepresentation of a material fact by an
16    applicant for licensure in obtaining or attempting to
17    obtain a license.
18        (10) Including any of the following provisions in loan
19    documents required by subsection (b) of Section 2-20:
20            (A) a confession of judgment clause;
21            (B) a waiver of the right to a jury trial, if
22        applicable, in any action brought by or against a
23        consumer, unless the waiver is included in an
24        arbitration clause allowed under subparagraph (C) of
25        this paragraph (11);
26            (C) a mandatory arbitration clause that is

 

 

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1        oppressive, unfair, unconscionable, or substantially
2        in derogation of the rights of consumers; or
3            (D) a provision in which the consumer agrees not to
4        assert any claim or defense arising out of the
5        contract.
6        (11) Selling any insurance of any kind whether or not
7    sold in connection with the making or collecting of a
8    payday loan.
9        (12) Taking any power of attorney.
10        (13) Taking any security interest in real estate.
11        (14) Collecting a delinquency or collection charge on
12    any installment regardless of the period in which it
13    remains in default.
14        (15) Collecting treble damages on an amount owing from
15    a payday loan.
16        (16) Refusing, or intentionally delaying or
17    inhibiting, the consumer's right to enter into a repayment
18    plan pursuant to this Act.
19        (17) Charging for, or attempting to collect,
20    attorney's fees, court costs, or arbitration costs
21    incurred in connection with the collection of a payday
22    loan.
23        (18) Making a loan in violation of this Act.
24        (19) Garnishing the wages or salaries of a consumer who
25    is a member of the military.
26        (20) Failing to suspend or defer collection activity

 

 

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1    against a consumer who is a member of the military and who
2    has been deployed to a combat or combat-support posting.
3        (21) Contacting the military chain of command of a
4    consumer who is a member of the military in an effort to
5    collect on a payday loan.
6        (22) (Blank) Making or offering to make any loan other
7    than a payday loan or a title-secured loan, provided
8    however, that to make or offer to make a title-secured
9    loan, a licensee must obtain a license under the Consumer
10    Installment Loan Act.
11(Source: P.A. 96-936, eff. 3-21-11.)
 
12    (815 ILCS 122/4-10)
13    Sec. 4-10. Enforcement and remedies.
14    (a) The remedies provided in this Act are cumulative and
15apply to persons or entities subject to this Act.
16    (b) (Blank) Any material violation of this Act, including
17the commission of an act prohibited under Section 4-5,
18constitutes a violation of the Consumer Fraud and Deceptive
19Business Practices Act.
20    (c) If any provision of the written agreement described in
21subsection (b) of Section 2-20 violates this Act, then that
22provision is unenforceable against the consumer.
23    (d) Subject to the Illinois Administrative Procedure Act,
24the Secretary may hold hearings, make findings of fact,
25conclusions of law, issue cease and desist orders, have the

 

 

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1power to issue fines, for the purpose of obtaining compliance
2with this Act, of up to $500 $10,000 per violation type
3annually, but only after the licensee fails to correct the
4cause of the violation within 30 days after service of the
5notification described in subsection (f) of this Section, refer
6the matter to the appropriate law enforcement agency for
7prosecution under this Act, and suspend or revoke a license
8granted under this Act. All proceedings shall be open to the
9public.
10    (e) The Secretary may issue a cease and desist order to any
11licensee or other person doing business without the required
12license, when in the opinion of the Secretary the licensee or
13other person is violating or is about to violate any provision
14of this Act or any rule or requirement imposed in writing by
15the Department as a condition of granting any authorization
16permitted by this Act. The cease and desist order permitted by
17this subsection (e) may be issued prior to a hearing.
18    The Secretary shall serve notice of his or her action,
19including, but not limited to, a statement of the reasons for
20the action, either personally or by certified mail, return
21receipt requested. Service by certified mail shall be deemed
22completed when the notice is deposited in the U.S. Mail.
23    Within 10 days of service of the cease and desist order,
24the licensee or other person may request a hearing in writing.
25The Secretary shall schedule a hearing within 30 days after the
26request for a hearing unless otherwise agreed to by the

 

 

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1parties.
2    If it is determined that the Secretary had the authority to
3issue the cease and desist order, he or she may issue such
4orders as may be reasonably necessary to correct, eliminate, or
5remedy the conduct.
6    The powers vested in the Secretary by this subsection (e)
7are additional to any and all other powers and remedies vested
8in the Secretary by law, and nothing in this subsection (e)
9shall be construed as requiring that the Secretary shall employ
10the power conferred in this subsection instead of or as a
11condition precedent to the exercise of any other power or
12remedy vested in the Secretary.
13    (f) The Secretary may, after 10 days notice by registered
14mail to the licensee at the address set forth in the license
15stating the contemplated action, and in general the particular
16grounds therefore, the action required by the licensee to
17correct the violation, and that the licensee has 30 days in
18which to correct the violation, fine the licensee, for the
19purpose of obtaining compliance with this Act, an amount not
20exceeding $500 $10,000 per violation type annually, but only
21after the licensee fails to correct the cause of the violation
22within 30 days after notification, or revoke or suspend any
23license issued hereunder if, on good cause shown, he or she
24finds that: (1) the licensee has materially failed to comply
25with any provision of this Act or any order, decision, finding,
26rule, regulation, or direction of the Secretary lawfully made

 

 

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1pursuant to the authority of this Act. Any notice of a
2contemplated action by the Secretary under this subsection (f)
3that is based upon findings of an examination conducted under
4subsection (d) of Section 2-55 shall be served within 60 days
5after the date of the examination ; or (2) any fact or
6condition exists which, if it had existed at the time of the
7original application for the license, clearly would have
8warranted the Secretary in refusing to issue the license.
9    The Secretary may fine, suspend, or revoke only the
10particular license with respect to which grounds for the fine,
11revocation, or suspension occur or exist, but if the Secretary
12finds that grounds for revocation are of general application to
13all offices or to more than one office of the licensee, the
14Secretary shall fine, suspend, or revoke every license to which
15the grounds apply.
16    No revocation, suspension, or surrender of any license
17shall impair or affect the obligation of any pre-existing
18lawful contract between the licensee and any obligor.
19    The Secretary may issue a new license to a licensee whose
20license has been revoked when facts or conditions which clearly
21would have warranted the Secretary in refusing originally to
22issue the license no longer exist.
23    In every case in which a license is suspended or revoked or
24an application for a license or renewal of a license is denied,
25the Secretary shall serve the licensee with notice of his or
26her action, including a statement of the reasons for his or her

 

 

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1actions, either personally, or by certified mail, return
2receipt requested. Service by certified mail shall be deemed
3completed when the notice is deposited in the U.S. Mail.
4    An order assessing a fine, an order revoking or suspending
5a license, or an order denying renewal of a license shall take
6effect 15 business days after upon service of the order unless
7the licensee requests a hearing, in writing, within 15 business
810 days after the date of service. In the event a hearing is
9requested, the order shall be stayed until a final
10administrative order is entered.
11    If the licensee requests a hearing, the Secretary shall
12conduct schedule a hearing within 30 days after the request for
13a hearing unless otherwise agreed to by the parties. If the
14Secretary fails to conduct the hearing within 30 days after the
15date of service of a hearing request, the Secretary may take no
16further action against the licensee on the matter, and the
17issue shall be considered closed.
18    The hearing shall be held at the time and place designated
19by the Secretary and agreed to by the licensee. The Secretary
20and any administrative law judge designated by him or her shall
21have the power to administer oaths and affirmations, subpoena
22witnesses and compel their attendance, take evidence, and
23require the production of books, papers, correspondence, and
24other records or information that he or she considers relevant
25or material to the inquiry.
26    (g) The costs of administrative hearings conducted

 

 

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1pursuant to this Section are limited to $100 and shall be paid
2by the licensee.
3(Source: P.A. 94-13, eff. 12-6-05.)
 
4    (815 ILCS 122/4-45 rep.)
5    Section 25. The Payday Loan Reform Act is amended by
6repealing Section 4-45.

 

 

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1 INDEX
2 Statutes amended in order of appearance
3    205 ILCS 405/1from Ch. 17, par. 4802
4    205 ILCS 405/3from Ch. 17, par. 4804
5    205 ILCS 405/3.4 new
6    205 ILCS 405/7from Ch. 17, par. 4814
7    205 ILCS 670/0.5 new
8    205 ILCS 670/1from Ch. 17, par. 5401
9    205 ILCS 670/9from Ch. 17, par. 5409
10    205 ILCS 670/10from Ch. 17, par. 5410
11    205 ILCS 670/12.5 rep.
12    205 ILCS 670/19.2 rep.
13    815 ILCS 122/2-55
14    815 ILCS 122/3-5
15    815 ILCS 122/3-7 new
16    815 ILCS 122/4-5
17    815 ILCS 122/4-10
18    815 ILCS 122/4-45 rep.