State of Illinois
90th General Assembly
Legislation

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90_HB1577

      815 ILCS 120/6            from Ch. 17, par. 856
      815 ILCS 375/20           from Ch. 121 1/2, par. 580
      815 ILCS 375/24           from Ch. 121 1/2, par. 584
          Amends the Motor Vehicle Retail Installment Sales Act and
      the Illinois Fairness  in  Lending  Act.   Amends  the  Motor
      Vehicle  Retail Installment Sales Act to provide that parties
      shall have the rights and remedies provided  in  the  Uniform
      Commercial  Code  with  respect  to redemption of collateral.
      Provides that the holder may extend the period  during  which
      the  buyer  may  redeem  the  collateral  beyond  the 15 days
      allowed.  Provides that no person who violates  the  Act  may
      recover  any unpaid finance charge, delinquency or collection
      charge, or refinance charge (instead of no  recovery  of  any
      finance   charge,   delinquency   or  collection  charge,  or
      refinance charge). Amends the Illinois  Fairness  in  Lending
      Act  in  the  provisions  concerning  a financial institution
      repossessing a vehicle used as collateral.  Provides  that  a
      financial  institution may extend the period during which the
      borrower  may  redeem  the  collateral  beyond  the  15  days
      allowed. Makes other changes.  Effective immediately.
                                                    LRB9004331NTmbA
                                              LRB9004331NTmbA
 1        AN ACT concerning vehicles, amending named Acts.
 2        Be it enacted by the People of  the  State  of  Illinois,
 3    represented in the General Assembly:
 4        Section  3.   The  Illinois  Fairness  in  Lending Act is
 5    amended by changing Section 6 as follows:
 6        (815 ILCS 120/6) (from Ch. 17, par. 856)
 7        Sec. 6. Where  a  financial  institution,  other  than  a
 8    credit  union,  as  defined  in  Section  1.1 of the Illinois
 9    Credit Union Act, as now or hereafter amended, repossesses  a
10    motor  vehicle  that  was  used as a collateral and  which is
11    used  primarily  for  the  borrower's  personal,  family   or
12    household   purposes,   and  the  borrower  at  the  time  of
13    repossession has paid an amount equal to 30% or more  of  the
14    total  of  payments  due,  the  borrower may, within 15 days,
15    redeem the motor vehicle from the  financial  institution  by
16    tendering:
17        (a)  the  total  of  all  unpaid  amounts,  including any
18    unpaid  delinquency   or   deferral   charges   due   without
19    acceleration, and
20        (b)  performance necessary to cure any default other than
21    nonpayment of the amounts due; and
22        (c)  any   reasonable   cost  or  fees  incurred  by  the
23    financial institution in the retaking of the goods. Tender of
24    payment and performance pursuant to this Section restores  to
25    the  borrower  his rights under the loan as though no default
26    had  occurred.  The  borrower  has  a  right  to  redeem  the
27    collateral from the financial  institution  only  once  under
28    this Section. The financial institution may, in the financial
29    institution's sole discretion, extend the period during which
30    the  borrower  may  redeem  the collateral beyond the 15 days
31    allowed under this  Section,  and  the  extension  shall  not
                            -2-               LRB9004331NTmbA
 1    subject   the  financial  institution  to  liability  to  the
 2    borrower under the laws of this State.
 3        The financial institution must give written notice to the
 4    borrower,  within  3  days  of  the  repossession,   of   the
 5    borrower's  right  to  redeem the collateral pursuant to this
 6    Section. The written notice shall  be  in  substantially  the
 7    following form:
 8                 NOTICE OF RIGHT TO RECOVER VEHICLE
 9        Your  vehicle  car  was repossessed on (specify date) for
10    failure to make payments on the loan (or other reason).
11        Under Illinois law, because you have paid at least 30% of
12    the loan before repossession, you may  be  able  to  get  the
13    vehicle  car  back. You have the right to recover the vehicle
14    if car you must do the following within with 15 days  of  the
15    date of repossession:
16        1.   Make  payment of all back payments so
17             that you are current on the loan.       $...........
18        2.   Pay any late charge due.                $...........
19        3.   Pay the costs of repossession.          $...........
20             Total Amount Now Due                    $...........
21        Bring cash, a certified check  or  money  order  for  the
22    total  amount  now  due  that  is  listed above to our office
23    located at (specify address) by (specify date)  to  get  your
24    vehicle you car back.
25    (Source: P.A. 86-421.)
26        Section  5.   The  Motor Vehicle Retail Installment Sales
27    Act is amended by changing Sections 20 and 24 as follows:
28        (815 ILCS 375/20) (from Ch. 121 1/2, par. 580)
29        Sec. 20.  Unless otherwise limited by this  Act  Section,
30    the  parties  shall  have the rights and remedies provided in
31    Article 9 of the Uniform  Commercial  Code  with  respect  to
32    default, and disposition, and redemption of collateral.
                            -3-               LRB9004331NTmbA
 1        If  the  buyer has paid an amount equal to 60% or more of
 2    the deferred payment price at the time of his  default  under
 3    the  contract  and if the buyer, at the request of the holder
 4    and without legal proceedings, surrenders the  goods  to  the
 5    holder  in ordinary condition and free from malicious damage,
 6    the holder must, within a period of 5 days from the  date  of
 7    receipt  of  the goods at his place of business, elect either
 8    (a) to retain the goods and release the  buyer  from  further
 9    obligation  under the contract, or (b) to return the goods to
10    the buyer at the holder's expense and be limited to an action
11    to recover the balance of the indebtedness.
12        If the buyer has paid an amount equal to 30% or  more  of
13    the  deferred  payment price at the time of repossession, the
14    buyer shall have the right to may, within 15 days, redeem the
15    collateral from the holder within 15 days from  the  date  of
16    repossession  by  tendering  (a)   the  total  of  all unpaid
17    amounts, including any unpaid delinquency or deferral charges
18    due at the time of  tender,  without  acceleration,  and  (b)
19    performance   necessary   to  cure  any  default  other  than
20    nonpayment of the amounts due; and (c) any reasonable cost or
21    fees incurred by the holder in the  retaking  of  the  goods.
22    Tender  of  payment  and performance pursuant to this Section
23    restores to the buyer his rights under the contract as though
24    no default had occurred.  The buyer has a right to redeem the
25    collateral from the holder only once under this Section.  The
26    holder  may,  in  the  holder's  sole  discretion, extend the
27    period during which  the  buyer  may  redeem  the  collateral
28    beyond  the  15  days  allowed  under  this  Section, and the
29    extension shall not subject the holder to  liability  to  the
30    buyer under the laws of this State.
31        The  holder must give written notice to the buyer, within
32    3 days of the repossession, of the buyer's  right  to  redeem
33    the  collateral pursuant to this Section.  The written notice
34    shall be in substantially the following form:
                            -4-               LRB9004331NTmbA
 1                 NOTICE OF RIGHT TO RECOVER VEHICLE
 2        Your vehicle car was repossessed on  (specify  date)  for
 3    failure to make payments on the contract (or other reason).
 4        Under Illinois law, because you have paid at least 30% of
 5    the  deferred  payment  price before repossession, you may be
 6    able to get the vehicle car back.   You  have  the  right  to
 7    recover  the  vehicle if car you must do the following within
 8    15 days of the date of repossession:
 9        1.  Make payment of all back payments so
10          that you are current on the contract.            $
11        2.  Pay any late charges due.                      $
12        3.  Pay the costs of repossession.                 $
13             TOTAL AMOUNT NOW DUE                          $
14        Bring cash, a certified check or a money  order  for  the
15    total  amount  now  due  that  is  listed above to our office
16    located at (specify address) by (specify date)  to  get  your
17    vehicle car back.
18    (Source: P.A. 83-302.)
19        (815 ILCS 375/24) (from Ch. 121 1/2, par. 584)
20        Sec. 24.
21        (a)  Any person who knowingly violates this Act is guilty
22    of a Class A misdemeanor.
23        (b)  No  person who violates this Act, except as a result
24    of an accident or bona fide error of computation, may recover
25    any unpaid finance  charge,  any  delinquency  or  collection
26    charge,  or  any  refinance  charge  in  connection  with the
27    related retail installment contract.
28    (Source: P.A. 77-2266.)
29        Section 99.  Effective date.  This Act takes effect  upon
30    becoming law.

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