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Public Act 093-0287


 

Public Act 93-0287 of the 93rd General Assembly


Public Act 93-0287

SB1116 Enrolled                      LRB093 11060 MBS 11764 b

    AN ACT in relation to financial matters.

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

    Section  5.  The  Illinois Financial Services Development
Act is amended by changing Section 8 as follows:

    (205 ILCS 675/8) (from Ch. 17, par. 7008)
    Sec. 8.  Amendment of governing agreement.
    (a)  If the agreement governing a revolving  credit  plan
so  provides  or  allows,  a financial institution may at any
time or from time to time amend the terms of  such  agreement
in  accordance with the further provisions of this Section 8.
The financial institution shall notify each affected borrower
of the amendment in the manner set  forth  in  the  agreement
governing the plan and in compliance with the requirements of
the   Truth-in-Lending   Act   and   regulations  promulgated
thereunder, as in effect from time to time, if applicable.
    (b)  Subject to subsection (c) below, if the terms of the
agreement governing the  plan,  as  originally  drawn  or  as
amended  pursuant  to  this Section so provide, any amendment
may, on and after the date upon which it becomes effective as
to a particular  borrower,  apply  to  all  then  outstanding
unpaid indebtedness in the borrower's account under the plan,
including  any  such indebtedness which shall have arisen out
of purchases made or loans obtained prior  to  the  effective
date of the amendment.
    (c)  If  such  amendment has the effect of increasing the
interest or other charges to be paid  by  the  borrower,  the
financial  institution shall mail or deliver to the borrower,
at least 30 days before the effective date of the  amendment,
a clear and conspicuous written notice which shall:
         (1)  describe the amendment and the existing term or
    terms of the agreement affected by the amendment,
         (2)  set forth the effective date of the amendment,
         (3)  state  whether  or not the amendment will apply
    to  the  outstanding  unpaid  indebtedness  as   of   the
    effective date of the amendment,
         (4)  state that absent the borrower's written notice
    to  the  financial  institution  within  30  days  of the
    earlier of the mailing  or  delivery  of  the  notice  of
    amendment  that the borrower does not agree to accept the
    amendment, the amendment will become effective and  apply
    to the borrower's account, and
         (5)  provide  an  address  to which the borrower may
    send notice of the borrower's election not to accept  the
    amendment  and  include  an  addressed  postcard that the
    borrower may return to the financial institution for that
    purpose.
    (c-5)  If such amendment results in an unfavorable change
in the interest or other charges on a revolving  credit  plan
which:  (i)  relates  to  a  change  in the borrower's credit
standing, (ii) does not affect all or a  substantial  portion
of  a  class  of  the creditor's accounts, and (iii) does not
relate  to  inactivity,  default,  or  delinquency  on   that
revolving   credit  plan,  the  financial  institution  shall
include in the notice required  by  subsection  (c)  of  this
Section  8  a  statement that is substantially similar to the
following:
                  Change in Credit Standing
         The amendment to the terms of your  account  relates
    to  a  change in your credit standing. The change in your
    credit standing may  have  resulted  from  a  default  or
    delinquency  on  other  accounts  you  may have, or other
    adverse changes in your financial circumstances.  If  you
    submit  the enclosed postcard or otherwise notify us in a
    timely manner as provided in this notice that you do  not
    accept  the  amendment,  you will be able to pay off your
    existing balance at the  rate  in  effect  prior  to  the
    amendment.  However,  in  that  instance,  you may not be
    eligible to obtain  additional  credit  under  this  plan
    after  the effective date of the amendment. If you do not
    provide timely notice to us as provided  in  this  notice
    that  you  do  not accept the amendment, the amendment to
    the terms of your account will become effective and apply
    to your account.
    (c-10)  As  a  condition  to  the  effectiveness  of  the
borrower's notice not to accept the amendment, the  financial
institution  may  require  the  borrower to return all credit
devices.
    Any borrower who gives a timely notice  electing  not  to
accept   the   amendment   shall  be  permitted  to  pay  the
outstanding unpaid indebtedness  in  the  borrower's  account
under  the plan in accordance with the terms of the agreement
governing the plan without giving effect to the amendment.
    Notwithstanding the financial  institution's  receipt  of
the  borrower's  notice under item (4) that the borrower does
not accept the amendment, the amendment shall  be  deemed  to
have been accepted and effective with respect to the borrower
and  the  borrower's  account if the borrower uses the credit
device to obtain credit under the credit plan on or after the
effective date of the amendment, and the amendment  shall  be
deemed   effective   as  of  the  effective  date  originally
disclosed by the financial institution.
    (d)  For purposes of this Section,  the  following  shall
not be deemed an amendment which has the effect of increasing
the interest to be paid by the borrower:
         (1)  a  decrease  in the required amount of periodic
    installment payments; and
         (2)  a change  from  a  daily  periodic  rate  to  a
    periodic  rate  other than daily, or from a periodic rate
    other than daily to a daily periodic rate, provided  that
    there  is  no  resulting  change in the annual percentage
    rate   as   determined    in    accordance    with    the
    Truth-in-Lending    Act   and   regulations   promulgated
    thereunder, as in effect from time to time.
(Source: P.A. 88-531.)

    Section 10.  The Tax Refund Anticipation Loan  Disclosure
Act is amended by changing Section 10 as follows:

    (815 ILCS 177/10)
    Sec.   10.  Disclosure   requirements.   At  the  time  a
borrower  applies  for  a   refund   anticipation   loan,   a
facilitator shall disclose to the borrower on a document that
is separate from the loan application:
         (1)  the refund anticipation loan fee schedule;
         (1.5)  the Annual Percentage Rate utilizing a 10-day
    time period;
         (2)  the    estimated    fee   for   preparing   and
    electronically filing a tax return;
         (2.5)  the total cost to the borrower for  utilizing
    a refund anticipation loan;
         (3)  the  estimated date that the loan proceeds will
    be paid to the borrower if the loan is approved;
         (4)  that the 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
         (5)  the availability of electronic filing  for  the
    income  tax  return  of the borrower and the average time
    announced by the federal Internal Revenue Service  within
    which  the borrower can expect to receive a refund if the
    borrower's  return  is  filed  electronically   and   the
    borrower does not obtain a refund anticipation loan.
(Source: P.A. 92-664, eff. 1-1-03.)
    Section  99.   Effective  date.  This Act takes effect on
January 1, 2004.

Effective Date: 1/1/2004