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Public Act 097-0849 |
SB1692 Enrolled | LRB097 06688 AEK 46774 b |
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AN ACT concerning business.
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Be it enacted by the People of the State of Illinois,
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represented in the General Assembly:
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Section 5. The Currency Exchange Act is amended by changing |
Section 3.1 as follows:
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(205 ILCS 405/3.1) (from Ch. 17, par. 4805)
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Sec. 3.1.
Nothing in this Act shall prevent a currency |
exchange from
rendering State or Federal income tax service; |
nor shall the rendering of
such service be considered a |
violation of this Act if such service be
rendered either by the |
proprietor, any of his employees, or a licensed, regulated tax |
service approved by the Internal Revenue Service. For the |
purpose of this Section, "tax service" does not mean to make or |
offer to make a refund anticipation loan as defined by the Tax |
Refund Anticipation Loan Reform Disclosure Act.
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(Source: P.A. 97-315, eff. 1-1-12.)
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Section 10. The Residential Mortgage License Act of 1987 is |
amended by changing Section 5-8 as follows: |
(205 ILCS 635/5-8) |
Sec. 5-8. Prepayment penalties. |
(a) No licensee may make, provide, or arrange a mortgage |
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loan with a prepayment
penalty unless the licensee offers the |
borrower a loan without a prepayment penalty, the
offer is in |
writing, and the borrower initials the offer to indicate that |
the borrower has
declined the offer. In addition, the licensee |
must disclose the discount in rate received in
consideration |
for a mortgage loan with the prepayment penalty. |
(b) If a borrower declines an offer required under |
subsection (a) of this Section, the licensee may include , |
except as prohibited by Section 30 of the High Risk Home Loan |
Act, a prepayment penalty that extends no longer than three |
years or the first change date or rate adjustment of a variable |
rate mortgage, whichever comes earlier, provided that, if a |
prepayment is made during the fixed rate period, the licensee |
shall receive an amount that is no more than: |
(1) 3% of the total loan amount if the prepayment is |
made within the first 12-month period following the date |
the loan was made; |
(2) 2% of the total loan amount if the prepayment is |
made within the second
12-month period following the date |
the loan was made; or |
(3) 1% of the total loan amount if the prepayment is |
made within the third 12-month period following the date |
the loan was made, if the fixed rate period
extends 3 |
years. |
(c) Notwithstanding any provision in this Section, |
prepayment penalties are prohibited in connection with the sale |
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or destruction of a dwelling secured by a residential mortgage |
loan.
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(d) This Section applies to loans made, refinanced, |
renewed, extended, or modified on or after the effective date |
of this amendatory Act of the 95th General Assembly.
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(Source: P.A. 95-691, eff. 6-1-08 .) |
Section 15. The High Risk Home Loan Act is amended by |
changing Sections 10, 30, 55, 80, and 145 and by adding |
Sections 35, 35.5, 80.5, 80.6, and 90.5 as follows:
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(815 ILCS 137/10)
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Sec. 10. Definitions. As used in this Act:
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"Approved credit counselor" means a credit counselor |
approved by the
Director of Financial Institutions.
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"Bona fide discount points" means loan discount points that |
are knowingly paid by the consumer for the purpose of reducing, |
and that in fact result in a bona fide reduction of, the
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interest rate or time price differential applicable to the |
mortgage. |
"Borrower" means a natural person who seeks or obtains a |
high risk
home loan.
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"Commissioner" means the Commissioner of the Office of |
Banks and Real
Estate.
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"Department" means the Department of Financial |
Institutions.
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"Director" means the Director of Financial Institutions.
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"Good faith" means honesty in fact in the conduct or |
transaction concerned.
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"High risk home loan"
means a consumer credit transaction, |
other than a reverse mortgage, that is secured by the |
consumer's principal dwelling if: home equity loan in which (i) |
at the time of origination, the annual
percentage rate
exceeds |
by more than 6 percentage points in the case of a first lien |
mortgage,
or
by more than 8 percentage points in the case of a |
junior mortgage, the average prime offer rate, as defined in |
Section 129C(b)(2)(B) of the federal Truth in Lending Act, for |
a comparable transaction as of the date on which the interest |
rate for the transaction is set, yield on
U.S. Treasury |
securities having comparable periods of maturity to the loan
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maturity as of the fifteenth day of the month immediately |
preceding the month
in
which the application for the loan is |
received by the lender or (ii) the loan documents permit the |
creditor to charge or collect prepayment fees or penalties more |
than 36 months after the transaction closing or such fees |
exceed, in the aggregate, more than 2% of the amount prepaid, |
or (iii) the total
points
and fees payable in connection with |
the transaction, other than bona fide third-party charges not |
retained by the mortgage originator, creditor, or an affiliate |
of the mortgage originator or creditor, by the consumer at or |
before closing will exceed (1) the greater
of
5% of the total |
loan amount in the case of a transaction for $20,000 or more or |
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(2) the lesser of 8% of the total loan amount or $1,000 (or |
such other dollar amount as prescribed by federal regulation |
pursuant to the federal Dodd-Frank Act) in the case of a |
transaction for less than $20,000, except that, with respect to |
all transactions, bona fide loan discount points may be |
excluded as provided for in Section 35 of this Act. or $800. |
The $800 figure shall be adjusted annually
on January 1 by the |
annual percentage change in the Consumer Price Index for
All |
Urban Consumers for all items published by the United States |
Department of
Labor.
"High risk home loan"
does
not include a |
loan that is made primarily for a business purpose unrelated to
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the
residential real property securing the loan or a consumer |
credit transaction made by a natural person who provides seller |
financing secured by a principal residence no more than 3 times |
in a 12-month period, provided such consumer credit transaction |
is not made by a person that has constructed or acted as a |
contractor for the construction of the residence in the |
ordinary course of business of such person or to an open-end |
credit plan
subject to
12 CFR 226 (2000, no subsequent |
amendments or editions are included) .
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"Home equity loan" means any loan secured by the borrower's |
primary
residence where the proceeds are not used as purchase |
money for the
residence.
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"Lender" means a natural or artificial person who |
transfers, deals in,
offers, or makes a high risk home loan. |
"Lender" includes, but is not limited
to,
creditors and
brokers |
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who transfer, deal in, offer, or make high risk home loans. |
"Lender"
does not include purchasers, assignees, or subsequent |
holders of high risk home
loans.
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"Office" means the Office of Banks and Real Estate.
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"Points and fees" means all items considered required to be |
disclosed as points and
fees under 12 CFR 226.32 (2000, or as |
initially amended pursuant to Section 1431 of the federal |
Dodd-Frank Act with no subsequent amendments or editions
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included , whichever is later ); the premium of any single |
premium credit life, credit disability,
credit
unemployment, |
or any other life or health insurance that is financed directly
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or
indirectly into the loan; and compensation paid directly or |
indirectly by a consumer or creditor to a
mortgage
broker from |
any source , including a broker that originates a loan in its |
own name in a
table-funded
transaction, not otherwise included |
in 12 CFR 226.4 ; the maximum prepayment fees and penalties that |
may be charged or collected under the terms of the credit |
transaction; all prepayment fees or penalties that are incurred |
by the consumer if the loan refinances a previous loan made or |
currently held by the same creditor or an affiliate of the |
creditor; and premiums or other charges payable at or before |
closing or financed directly or indirectly into the loan for |
any credit life, credit disability, credit unemployment, |
credit property, other accident, loss of income, life, or |
health insurance or payments directly or indirectly for any |
debt cancellation or suspension agreement or contract, except |
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that insurance premiums or debt cancellation or suspension fees |
calculated and paid in full on a monthly basis shall not be |
considered financed by the creditor. "Points and fees" does not |
include any insurance premium provided by an agency of the |
federal government or an agency of a state; any insurance |
premium paid by the consumer after closing; and any amount of a |
premium, charge, or fee that is not in excess of the amount |
payable under policies in effect at the time of origination |
under Section 203(c)(2)(A) of the National Housing Act (12 |
U.S.C. 1709(c)(2)(A)), provided that the premium, charge, or |
fee is required to be refundable on a pro-rated basis and the |
refund is automatically issued upon notification of the |
satisfaction of the underlying mortgage loan .
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"Reasonable" means fair, proper, just, or prudent under the |
circumstances.
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"Servicer" means any entity chartered under the Illinois |
Banking Act, the
Savings Bank Act, the Illinois Credit Union |
Act, or the Illinois Savings and
Loan Act of 1985 and any |
person or entity licensed under the Residential
Mortgage |
License Act of 1987, the Consumer Installment Loan Act, or the |
Sales
Finance Agency Act who
is responsible for the collection |
or remittance for, or has the right or
obligation to collect or |
remit for, any lender, note owner, or note holder or
for a |
licensee's own account, of payments, interest, principal, and |
trust items
(such as hazard
insurance and taxes on a |
residential mortgage loan) in accordance with the
terms of the |
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residential mortgage loan, including loan payment follow-up,
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delinquency loan follow-up, loan analysis, and any |
notifications to
the borrower that are necessary to enable the |
borrower to keep the loan current
and in good
standing.
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"Total loan amount" has the same meaning as that term is |
given in 12
CFR 226.32 and shall be calculated in accordance |
with the Federal Reserve
Board's Official Staff Commentary to |
that regulation.
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(Source: P.A. 93-561, eff. 1-1-04.)
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(815 ILCS 137/30)
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Sec. 30. No prepayment Prepayment penalty. A high risk home |
loan may not contain terms under which a consumer must pay a |
prepayment penalty for paying all or part of the principal |
before the date on which the principal is due. For purposes of |
this Section, any method of computing a refund of unearned |
scheduled interest is a prepayment penalty if it is less |
favorable to the consumer than the actuarial method as that |
term is defined by Section 933(d) of the federal Housing and |
Community Development Act of 1992, 15 U.S.C. 1615(d). For any |
loan that is subject to the
provisions of this Act and is not |
subject to the provisions of the Home
Ownership and Equity |
Protection Act of 1994, no lender shall make a high risk
home |
loan
that includes a penalty provision for payment made: (i) |
after the expiration of
the 36-month period following the date |
the loan was made; or (ii) that is more
than:
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(1) 3% of the total loan amount if the prepayment is |
made within the first
12-month period following the date |
the loan was made;
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(2) 2% of the total loan amount if the prepayment is |
made within the
second 12-month period following the date |
the loan was made; or
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(3) 1% of the total loan amount if the prepayment is |
made within the third
12-month period following the date |
the loan was made.
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(Source: P.A. 93-561, eff. 1-1-04.)
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(815 ILCS 137/35 new) |
Sec. 35. Bona fide discount points. For the purposes of |
determining whether the amount of points and fees meets the |
definition of "high risk home loan" under this Act, either the |
amounts described in paragraph (1) or (2) of this Section, but |
not both, shall be excluded: |
(1) Up to and including 2 bona fide discount points |
payable by the consumer in
connection with the mortgage, |
but only if the interest rate from which the mortgage's
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interest rate will be discounted does not exceed by more |
than one percentage point: |
(A) the average prime offer rate, as defined in |
Section 129C of the federal
Truth in Lending Act (15 |
U.S.C. 1639); or |
(B) if secured by a personal property loan, the |
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average rate on a loan in
connection with which |
insurance is provided under Title I of the National |
Housing
Act (12 U.S.C. 1702 et seq.). |
(2) Unless 2 bona fide discount points have been |
excluded under paragraph (1), up
to and including one bona |
fide discount point payable by the consumer in connection |
with
the mortgage, but only if the interest rate from which |
the mortgage's interest rate will be
discounted does not |
exceed by more than 2 percentage points: |
(A) the average prime offer rate, as defined in |
Section 129C of the federal
Truth in Lending Act (15 |
U.S.C. 1639); or |
(B) if secured by a personal property loan, the |
average rate on a loan in
connection with which |
insurance is provided under Title I of the National |
Housing
Act (12 U.S.C. 1702 et seq.). |
Paragraphs (1) and (2) shall not apply to discount points |
used to purchase an interest rate reduction unless the amount |
of the interest rate reduction purchased is reasonably |
consistent with established industry norms and practices for |
secondary mortgage market transactions. |
(815 ILCS 137/35.5 new) |
Sec. 35.5. No balloon payments. No high risk home loan may |
contain a scheduled payment that is more than twice as large as |
the average of earlier scheduled payments. This Section does |
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not apply when the payment schedule is adjusted to the seasonal |
or irregular income of the consumer.
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(815 ILCS 137/55)
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Sec. 55. Financing of points and fees. No lender shall |
transfer, deal in, offer, or make a high risk home loan that
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finances , directly or indirectly, any points and fees . No |
lender shall transfer, deal in, offer, or make a high risk home |
loan that finances any prepayment fee or penalty payable by the |
consumer in a refinancing transaction if the creditor or an |
affiliate of the creditor is the noteholder of the note being |
refinanced in excess of 6% of the total loan amount .
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(Source: P.A. 93-561, eff. 1-1-04.)
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(815 ILCS 137/80)
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Sec. 80. Late payment fee. A lender shall not transfer, |
deal in, offer,
or make a high risk home loan that provides for |
a late payment fee, except
under
the following conditions:
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(1) the late payment fee shall not be in excess of 4% |
5% of the amount
of the payment past due;
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(2) the late payment fee shall only be assessed for a |
payment past
due for 15 days or more;
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(3) the late payment fee shall not be imposed more than |
once with
respect to a single late payment;
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(4) a late payment fee that the lender has collected |
shall be
reimbursed if the borrower presents proof of |
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having made a timely
payment; and
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(5) a lender shall treat each payment as posted on the |
same
business day as it was received by the lender, |
servicer, or lender's agent
or at the address provided to |
the borrower by the lender, servicer, or
lender's agent for |
making payments.
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(Source: P.A. 93-561, eff. 1-1-04.)
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(815 ILCS 137/80.5 new) |
Sec. 80.5. Coordination with subsequent late fees. If a |
payment is otherwise a full payment for the applicable period, |
is paid on its due date or within an applicable grace period, |
and the only delinquency or insufficiency of payment is |
attributable to any late fee or delinquency charge assessed on |
any earlier payment, no late fee or delinquency charge may be |
imposed on the payment. |
(815 ILCS 137/80.6 new) |
Sec. 80.6. Failure to make installment payment. If, in the |
case of a loan agreement the terms of which provide that any |
payment shall first be applied to any past principal balance, |
the consumer fails to make an installment payment and the |
consumer subsequently resumes making installment payments but |
has not paid all past due installments, the creditor may impose |
a separate late payment charge or fee for any principal due |
(without deduction due to late fees or related fees) until the |
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default is cured. |
(815 ILCS 137/90.5 new) |
Sec. 90.5. Modification and deferral fees prohibited. A |
lender, successor in interest, assignee, or any agent of any of |
the foregoing may not charge a consumer any fee to modify, |
renew, extend, or amend a high risk home loan or to defer any |
payment due under the terms of the loan.
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(815 ILCS 137/145)
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Sec. 145. Subterfuge prohibited. No lender, with the intent |
to avoid the
application or provisions of this Act, shall (i) |
divide a loan transaction into
separate parts , or (ii) |
structure a loan transaction as an open-end credit plan or |
another form of loan, or (iii) perform any other subterfuge.
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(Source: P.A. 93-561, eff. 1-1-04.)
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Section 20. The Tax Refund Anticipation Loan Disclosure Act |
is amended by changing Sections 1, 5, 10, and 15 and by adding |
Sections 25, 30, 35, and 40 as follows:
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(815 ILCS 177/1)
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Sec. 1. Short title. This Act may be cited as the Tax |
Refund
Anticipation
Loan Reform
Disclosure Act.
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(Source: P.A. 92-664, eff. 1-1-03.)
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(815 ILCS 177/5)
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Sec. 5. Definitions. The following definitions apply in |
this Act:
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"Consumer" means any natural person who, singly or jointly |
with another consumer, is solicited for, applies for, or |
receives the proceeds of a refund anticipation loan or refund |
anticipation check. |
"Creditor" means any person who makes a refund anticipation |
loan or who takes an assignment of a refund anticipation loan. |
"Facilitator" means a person who
individually or in |
conjunction or cooperation
with
another person : (i) solicits |
the execution of makes a refund anticipation loan , processes, |
receives, or
accepts for delivery an
application or agreement |
for a refund anticipation loan or refund anticipation check; |
(ii) services or collects
upon , issues a check in payment of |
refund
anticipation
loan or refund anticipation check; |
proceeds, or (iii) in any other manner facilitates acts to |
allow the making of a refund
anticipation loan or refund |
anticipation check . If there is no third party facilitator |
because a creditor directly solicits the execution of, |
receives, or accepts an application or agreement for a refund |
anticipation loan or refund anticipation check, that creditor |
shall be considered a facilitator.
"Facilitator" does not |
include a bank, savings bank, savings and loan association, or |
credit
union, or licensee under the Consumer Installment Loan |
Act operating under
the laws of the United States or this State |
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and does not include any person
who acts solely as an
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intermediary and does not deal with the public in the making of |
the refund
anticipation loan.
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"Person" means an individual, a firm, a partnership, an |
association, a corporation, or another entity. "Person" does |
not, however, mean a bank, savings bank, savings and loan |
association, or credit union operating under the laws of the |
United States or this State. |
"Refund anticipation check" means a check, stored value |
card, or other payment mechanism: (i) representing the proceeds |
of the consumer's tax refund; (ii) which was issued by a |
depository institution or other person that received a direct |
deposit of the consumer's tax refund or tax credits; and (iii) |
for which the consumer has paid a fee or other consideration |
for
such payment mechanism. |
"Borrower" means a person who receives the proceeds of a |
refund anticipation
loan.
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"Refund anticipation loan" means a loan that is secured by |
or that the creditor arranges arranged to be repaid directly |
from
the proceeds
of the consumer's a borrower's income tax |
refund or tax credits refunds . "Refund anticipation loan" also |
includes any sale, assignment, or purchase of a consumer's tax |
refund at a discount or for a fee, whether or not the consumer |
is required to repay the buyer or assignee if the Internal |
Revenue Service denies or reduces the consumer's tax refund.
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"Refund anticipation loan fee" means the charges, fees, or |
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other
consideration
charged or
imposed directly or indirectly |
by the creditor facilitator for the making of or in connection |
with a refund anticipation loan. This term includes any charge, |
fee, or other consideration for a deposit account, if the |
deposit account is used for receipt of the consumer's tax |
refund to repay the amount owed on the loan. A
"refund
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anticipation loan
fee" does not include charges, fees, or other |
consideration charged or imposed
in the ordinary
course of |
business by a facilitator for services that do not result in
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the making
of a loan,
including fees for tax return preparation |
and fees for electronic filing of tax
returns.
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"Refund anticipation loan interest rate" means the |
interest rate for a refund anticipation loan calculated as |
follows: the total amount of refund anticipation loan fees |
divided by the loan amount (minus any loan fees), then divided |
by the number of days in the loan term, then multiplied by 365 |
and expressed as a percentage. The total amount of the refund |
anticipation loan fee used in this calculation shall include |
all refund anticipation loan fees as defined in this Section. |
If a deposit account is established or maintained in whole or |
in part for the purpose of receiving the consumer's tax refund |
to repay the amount owed on a refund anticipation loan: (i) the |
maturity of the loan for the purpose of determining the refund |
anticipation loan interest rate shall be assumed to be the |
estimated date when the tax refund will be deposited in the |
deposit account; and (ii) any fee charged to the consumer for |
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such deposit account shall be considered a loan fee and shall |
be included in the calculation of the refund anticipation loan |
interest rate.
If no deposit account is established or |
maintained for the repayment of the loan, the maturity of the |
loan shall be assumed to be the estimated date when the tax |
refund is received by the creditor. |
(Source: P.A. 92-664, eff. 1-1-03.)
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(815 ILCS 177/10)
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Sec. 10. Disclosure requirements. At the time a consumer |
borrower applies for a
refund
anticipation loan or check , a |
facilitator shall disclose to the consumer borrower on a
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document that is separate from the loan application:
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(1) the fee for the refund anticipation loan or refund |
anticipation check fee schedule ;
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(1.5) for refund anticipation loans, disclosure of the |
refund anticipation loan interest rate. The refund |
anticipation loan interest rate shall be calculated as set |
forth in Section 5 the Annual Percentage Rate utilizing a |
10-day time period ;
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(2) the estimated fee for preparing and electronically |
filing a tax
return;
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(2.5) for refund anticipation loans, the total cost to |
the consumer borrower for utilizing a refund
anticipation |
loan;
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(3) for refund anticipation loans, the estimated date |
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that the loan proceeds will be paid to the consumer |
borrower
if the
loan
is approved;
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(4) for refund anticipation loans, that the consumer |
borrower is responsible for repayment of the loan and |
related
fees
in the
event the tax refund is not paid or not |
paid in full; and
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(5) for refund anticipation loans, the availability of |
electronic filing for the income tax return of the consumer
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borrower and
the average time announced by the federal |
Internal Revenue Service within which
the consumer
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borrower can expect to receive a refund if the consumer's |
borrower's return is filed
electronically and the consumer
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borrower does not obtain a refund anticipation loan.
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(Source: P.A. 92-664, eff. 1-1-03; 93-287, eff. 1-1-04.)
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(815 ILCS 177/15)
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Sec. 15. Posting of fee schedule and disclosures. Penalty. |
(a) A facilitator shall display a schedule showing the |
current fees for refund anticipation
loans, if refund |
anticipation loans are offered, or refund anticipation checks, |
if refund anticipation checks are offered, facilitated at the |
office. |
(b) A facilitator who offers refund anticipation loans |
shall display on each fee schedule examples of the refund |
anticipation loan
interest rates for refund anticipation loans |
of at least 5 different amounts, such as $300, $500, $1,000, |
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$1,500, $2,000, and $5,000. The refund anticipation loan |
interest rate shall be calculated as set forth in Section 5 of |
this Act. |
(c) A facilitator who offers refund anticipation loans |
shall also prominently display on each fee schedule: (i) a |
legend, centered,
in bold, capital letters, and in one-inch |
letters stating: "NOTICE CONCERNING REFUND
ANTICIPATION LOANS" |
and (ii) the following verbatim statement: "When you take out a
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refund anticipation loan, you are borrowing money against your |
tax refund. If your tax refund is
less than expected, you will |
still owe the entire amount of the loan. If your refund is |
delayed,
you may have to pay additional costs. YOU CAN GET YOUR |
REFUND IN 8 TO 15 DAYS
WITHOUT PAYING ANY EXTRA FEES AND TAKING |
OUT A LOAN. You can have your
tax return filed electronically |
and your refund direct deposited into your own financial |
institution account
without obtaining a loan or paying fees for |
an extra product.". |
(d) The postings required by this Section shall be made in |
no less than 28-point type on a
document measuring no less than |
16 inches by 20 inches. The postings required by this Section
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shall be displayed in a prominent location at each office where |
the facilitator is facilitating
refund anticipation loans. |
(e) A facilitator may not facilitate a refund anticipation |
loan or refund anticipation check unless (i) the disclosures |
required by this Section are displayed and (ii) the fee |
actually charged for the
refund anticipation loan or refund |
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anticipation check is the same as the fee displayed on the
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schedule. |
Any person who violates this Act is guilty of a petty
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offense and shall be fined $500 for each offense. In addition, |
a facilitator who
violates this
Act shall be liable to any |
aggrieved borrower in an amount equal to 3 times
the refund
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anticipation loan fee, plus a reasonable attorney's fee, in a |
civil action
brought in the
circuit court by the aggrieved |
borrower or by the Attorney General on behalf of
the aggrieved |
borrower.
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(Source: P.A. 92-664, eff. 1-1-03.)
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(815 ILCS 177/25 new) |
Sec. 25. Prohibited activities. No person, including any |
officer, agent, employee, or representative, shall: |
(a) Charge or impose any fee, charge, or other |
consideration in the making or facilitating of a refund |
anticipation loan or refund anticipation check apart from the |
fee charged by the creditor or financial institution that |
provides the loan or check. This prohibition does not include |
any charge or fee imposed by the facilitator to all of its |
customers, such as fees for tax return preparation, if the same |
fee in the same amount is charged to the customers who do not |
receive refund anticipation loans, refund anticipation checks, |
or any other tax related financial product. |
(b) Fail to comply with any provision of this Act. |
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(c) Directly or indirectly arrange for any third party to |
charge any interest, fee, or charge related to a refund |
anticipation loan or refund anticipation check, other than the |
refund anticipation loan or refund anticipation check fee |
imposed by the creditor, including but not limited to: (i) |
charges for insurance; (ii) attorneys fees or other collection |
costs; or (iii) check cashing. |
(d) Include any of the following provisions in any document |
provided or signed in connection with a refund anticipation |
loan or refund anticipation check, including the loan |
application or agreement: |
(i) A hold harmless clause; |
(ii) A waiver of the right to a jury trial, if |
applicable, in any action brought by or
against the |
consumer; |
(iii) Any assignment of wages or of other compensation |
for services; |
(iv) A provision in which the consumer agrees not to |
assert any claim or defense arising out of the contract, or |
to seek any remedies pursuant to Section 35 of this Act; |
(v) A waiver of any provision of this Act. Any such |
waiver shall be deemed null, void, and of no effect; |
(vi) A waiver of the right to injunctive, declaratory, |
or other equitable relief; or |
(vii) A provision requiring that any aspect of a |
resolution of a dispute between the
parties to the |
|
agreement be kept confidential. This provision shall not |
affect the right of the parties to agree that certain |
specified information is a trade secret or otherwise |
confidential, or to later agree, after the dispute arises, |
to keep a resolution confidential. |
(e) Take or arrange for a creditor to take a security |
interest in any property of the consumer other than the |
proceeds of the consumer's tax refund to secure payment of a |
refund anticipation loan. |
(f) Directly or indirectly, individually or in conjunction |
or cooperation with another person, engage in the collection of |
an outstanding or delinquent refund anticipation loan for any |
creditor or assignee, including soliciting the execution of, |
processing, receiving, or accepting an application or |
agreement for a refund anticipation loan or refund anticipation |
check that contains a provision permitting the creditor to |
repay, by offset or other means, an outstanding or delinquent |
refund anticipation loan for that creditor or any creditor from |
the proceeds of the consumer's tax refund. |
(g) Facilitate any loan that is secured by or that the |
creditor arranges to be repaid directly from the proceeds of |
the consumer's State tax refund from the Illinois State |
treasury. |
(815 ILCS 177/30 new) |
Sec. 30. Rate limits for non-bank refund anticipation |
|
loans. |
(a) No person shall make or facilitate a refund |
anticipation loan for which the refund anticipation loan |
interest rate is greater than 36% per annum. The refund |
anticipation loan interest rate shall be calculated as set |
forth in Section 5. Any refund anticipation loan for which the |
refund anticipation loan interest rate exceeds 36% per annum |
shall be void ab initio. |
(b) This Section does not apply to persons facilitating for |
or doing business as a bank, savings bank, savings and loan |
association, or credit union chartered under the laws of the |
United States or this State. |
(815 ILCS 177/35 new) |
Sec. 35. Applicability to certain entities. No obligation |
or prohibition imposed upon a creditor, a person, or a |
facilitator by this Act shall apply to a bank, savings bank, |
savings and loan association, or credit union operating under |
the laws of the United States or this State. |
(815 ILCS 177/40 new) |
Sec. 40. Violation. A violation of this Act constitutes an |
unlawful practice under the Consumer Fraud and Deceptive |
Business Practices Act. |
Section 25. The Interest Act is amended by changing Section |
|
4.1a as follows:
|
(815 ILCS 205/4.1a) (from Ch. 17, par. 6406)
|
Sec. 4.1a. Charges for and cost of the following items paid |
or
incurred by any lender in connection with any loan shall not |
be deemed
to be charges for or in connection with any loan of |
money referred to in
Section 6 of this Act, or charges by the |
lender as a consideration for
the loan referred to in this |
Section:
|
(a) hazard, mortgage or life insurance premiums, |
survey, credit
report, title insurance, abstract and |
attorneys' fees, recording
charges, escrow and appraisal |
fees, and similar charges.
|
(b) in the case of construction loans, in addition to |
the matters
referred to in clause (a) above, the actual |
cost incurred by the lender
for services for making |
physical inspections, processing payouts,
examining and |
reviewing contractors' and subcontractors' sworn
|
statements and waivers of lien and the like.
|
(c) in the case of any loan made pursuant to the |
provisions of the
Emergency Home Purchase Assistance Act of |
1974 (Section 313 of the
National Housing Act, Chapter B of |
Title 12 of the United States Code),
in addition to the |
matters referred to in paragraphs (a) and (b) of this
|
Section all charges required or allowed by the Government |
National
Mortgage Association, whether designated as |
|
processing fees, commitment
fees, loss reserve and |
marketing fees, discounts, origination fees or
otherwise |
designated.
|
(d) in the case of a single payment loan, made for a |
period of 6 months
or less, a regulated financial |
institution or licensed lender may contract
for and receive |
a maximum charge of $15 in lieu of interest. Such charge
|
may be collected when the loan is made, but only one such |
charge may be
contracted for, received, or collected for |
any such loan, including any
extension or renewal thereof.
|
(e) if the agreement governing the loan so provides, a |
charge not to
exceed the rate permitted under Section 3-806 |
of the Uniform Commercial
Code-Commercial Paper for any |
check, draft or order for the payment of
money submitted in |
accordance with said agreement which is unpaid or not
|
honored by a bank or other depository institution.
|
(f) if the agreement governing the loan so provides, |
for each loan
installment in default for a period of not |
less than 10 days, a charge in
an amount not in excess of |
5% of such loan installment. Only one
delinquency charge |
may be collected on any such loan installment regardless
of |
the period during which it remains in default. Payments |
timely received
by the lender under a written extension or |
deferral agreement shall not be
subject to any delinquency |
charge.
|
Notwithstanding items (k) and (l) of subsection (1) of |
|
Section 4 of this Act, the lender, in the case of any nonexempt |
residential mortgage loan, as defined in Section 1-4 of the |
Residential Mortgage License Act of 1987, other than a high |
risk home loan as defined in Section 10 of the High Risk Home |
Loan Act, shall have the right to include a prepayment penalty |
that extends no longer than the fixed rate period of a variable |
rate mortgage provided that, if a prepayment is made during the |
fixed rate period and not in connection with the sale or |
destruction of the dwelling securing the loan, the lender shall |
receive an amount that is no more than: |
(1) 3% of the total loan amount if the prepayment is |
made within the first 12-month period following the date |
the loan was made; |
(2) 2% of the total loan amount if the prepayment is |
made within the second
12-month period following the date |
the loan was made; or |
(3) 1% of the total loan amount if the prepayment is |
made within the third 12-month period following the date |
the loan was made, if the fixed rate period
extends 3 |
years.
|
This Section applies to loans made, refinanced, renewed, |
extended, or modified on or after the effective date of this |
amendatory Act of the 95th General Assembly.
|
Where there is a charge in addition to the stated rate of |
interest
payable directly or indirectly by the borrower and |
imposed directly or
indirectly by the lender as a consideration |
|
for the loan, or for or in
connection with the loan of money, |
whether paid or payable by the
borrower, the seller, or any |
other person on behalf of the borrower to
the lender or to a |
third party, or for or in connection with the loan of
money, |
other than as hereinabove in this Section provided, whether
|
denominated "points," "service charge," "discount," |
"commission," or
otherwise, and without regard to declining |
balances of principal which
would result from any required or |
optional amortization of the principal
of the loan, the rate of |
interest shall be calculated in the following
manner:
|
The percentage of the principal amount of the loan |
represented by all
of such charges shall first be computed, |
which in the case of a loan
with an interest rate in excess of |
8% per annum secured by residential
real estate, other than |
loans described in paragraphs (e) and (f) of
Section 4, shall |
not exceed 3% of such principal amount. Said
percentage shall |
then be divided by the number of years and fractions
thereof of |
the period of the loan according to its stated maturity. The
|
percentage thus obtained shall then be added to the percentage |
of the
stated annual rate of interest.
|
(Source: P.A. 95-691, eff. 6-1-08 .)
|
Section 30. The Consumer Fraud and Deceptive Business |
Practices Act is amended by adding Section 2NNN as follows: |
(815 ILCS 505/2NNN new) |