102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
SB4241

 

Introduced 11/14/2022, by Sen. Jacqueline Y. Collins and Ann Gillespie

 

SYNOPSIS AS INTRODUCED:
 
205 ILCS 510/2  from Ch. 17, par. 4652
815 ILCS 123/15-1-5
815 ILCS 123/15-1-10
815 ILCS 123/15-5-10
815 ILCS 123/15-10-5

    Amends the Pawnbroker Regulation Act. Clarifies that it shall be unlawful for any pawnbroker to charge or collect a greater benefit or percentage upon money advanced, and for the use and forbearance thereof, than permitted under the Predatory Loan Prevention Act. Amends the Predatory Loan Prevention Act. Provides that the definition of "loan" includes transactions subject to the Pawnbroker Regulation Act. Provides that it is a violation of the Act for any person or entity to solicit, broker, or otherwise engage in any other activity intended to facilitate or result in, or that in fact facilitates or results in, the origination of a loan that violates the Act. Provides that it is a violation of the Act for any person or entity to advertise or cause to be advertised a loan that violates the Act. Provides that a violation of the Act by a person or entity licensed under the Pawnbroker Regulation Act shall subject the person or entity to discipline in accordance with that Act. Makes other changes. Effective June 1, 2023.


LRB102 29457 SPS 41458 b

 

 

A BILL FOR

 

SB4241LRB102 29457 SPS 41458 b

1    AN ACT concerning business.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Pawnbroker Regulation Act is amended by
5changing Section 2 as follows:
 
6    (205 ILCS 510/2)  (from Ch. 17, par. 4652)
7    Sec. 2. Pursuant to Section 15-10-30 of the Predatory Loan
8Prevention Act, it It shall be unlawful for any pawnbroker to
9charge or collect a greater benefit or percentage upon money
10advanced, and for the use and forbearance thereof, than
11permitted under Section 15-5-5 of the Predatory Loan
12Prevention Act than the rate of 3% per month. Nothing in this
13Section shall be construed so as to conflict with the law
14pertaining to usury and the person receiving money so advanced
15may hold such moneys to pay any fees in addition to interest as
16herein provided.
17    Each pawnbroker, when making a loan under this Section,
18must disclose in printed form on the pawn contract the
19following information to the persons receiving the loan:
20        (1) the amount of money advanced, which must be
21    designated as the amount financed;
22        (2) the maturity date of the pawn, which must be at
23    least 30 days after the date of the pawn;

 

 

SB4241- 2 -LRB102 29457 SPS 41458 b

1        (3) the total pawn interest and service charge payable
2    on the maturity date, which must be designated as the
3    finance charge;
4        (4) the total of payments that must be paid to redeem
5    the pledged goods on the maturity date, which must be
6    designated as the total of payments; and
7        (5) the annual percentage rate, computed according to
8    the regulations adopted by the Board of Governors of the
9    Federal Reserve System under the Federal Truth in Lending
10    Act.
11    The changes made to this Section by this amendatory Act of
12the 102nd General Assembly shall be construed as being
13declaratory of existing law and not as a new enactment. The
14changes made to this Section by this amendatory Act of the
15102nd General Assembly apply to actions commenced or pending
16on or after the effective date of this amendatory Act of the
17102nd General Assembly Each pawnbroker may contract for and
18receive a monthly finance charge including interest and fees
19not to exceed one-fifth of the loan amount, as set forth
20herein, for appraising, investigating title, storing and
21insuring the collateral, closing the loan, making daily
22reports to local law enforcement officers including enhanced
23computerized reporting, complying with regulatory
24requirements, and for other expenses and losses of every
25nature whatsoever and for all other services. Such fees, when
26made and collected, shall not be deemed interest for any

 

 

SB4241- 3 -LRB102 29457 SPS 41458 b

1purpose of law.
2(Source: P.A. 90-477, eff. 7-1-98.)
 
3    Section 10. The Predatory Loan Prevention Act is amended
4by changing Sections 15-1-5, 15-1-10, 15-5-10, and 15-10-5 as
5follows:
 
6    (815 ILCS 123/15-1-5)
7    Sec. 15-1-5. Purpose and construction. Illinois families
8pay over $500,000,000 per year in consumer installment,
9payday, and title loan fees. As reported by the Department in
102020, nearly half of Illinois payday loan borrowers earn less
11than $30,000 per year, and the average annual percentage rate
12of a payday loan is 297%. The purpose of this Act is to protect
13consumers from all types of predatory loans, including, but
14not limited to, the types of loans covered under consistent
15with federal law and the federal Military Lending Act, which
16protects active duty members of the military and their
17dependents. This Act shall be construed as a consumer
18protection law for all purposes. The changes made to this
19Section by this amendatory Act of the 102nd General Assembly
20shall be construed as being declaratory of existing law and
21not as a new enactment. The changes made to this Section by
22this amendatory Act of the 102nd General Assembly apply to
23actions commenced or pending on or after the effective date of
24this amendatory Act of the 102nd General Assembly. This Act

 

 

SB4241- 4 -LRB102 29457 SPS 41458 b

1shall be liberally construed to effectuate its purpose.
2(Source: P.A. 101-658, eff. 3-23-21.)
 
3    (815 ILCS 123/15-1-10)
4    Sec. 15-1-10. Definitions. As used in this Act:
5    "Consumer" means any natural person, including consumers
6acting jointly.
7    "Department" means the Department of Financial and
8Professional Regulation.
9    "Lender" means any person or entity, including any
10affiliate or subsidiary of a lender, that offers or makes a
11loan, buys a whole or partial interest in a loan, arranges a
12loan for a third party, or acts as an agent for a third party
13in making a loan, regardless of whether approval, acceptance,
14or ratification by the third party is necessary to create a
15legal obligation for the third party, and includes any other
16person or entity if the Department determines that the person
17or entity is engaged in a transaction that is in substance a
18disguised loan or a subterfuge for the purpose of avoiding
19this Act.
20    "Person" means any natural person.
21    "Secretary" means the Secretary of Financial and
22Professional Regulation or a person authorized by the
23Secretary.
24    "Loan" means money or credit provided to a consumer in
25exchange for the consumer's agreement to a certain set of

 

 

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1terms, including, but not limited to, any finance charges,
2interest, or other conditions. "Loan" includes closed-end and
3open-end credit, retail installment sales contracts, motor
4vehicle retail installment sales contracts, transactions
5subject to the Pawnbroker Regulation Act, and any transaction
6conducted via any medium whatsoever, including, but not
7limited to, paper, facsimile, Internet, or telephone. "Loan"
8does not include a commercial loan.
9(Source: P.A. 101-658, eff. 3-23-21.)
 
10    (815 ILCS 123/15-5-10)
11    Sec. 15-5-10. Violation.
12    (a) Any loan made in violation of this Act is null and void
13and no person or entity shall have any right to collect,
14attempt to collect, receive, or retain any principal, fee,
15interest, or charges related to the loan.
16    (b) It is a violation of this Act for any person or entity
17to solicit, broker, or otherwise engage in any other activity
18intended to facilitate or result in, or that in fact
19facilitates or results in, the origination of a loan that
20violates Section 15-5-5 of this Act.
21    (c) It is a violation of this Act for any person or entity
22to advertise or cause to be advertised a loan that violates
23Section 15-5-5 of this Act.
24(Source: P.A. 101-658, eff. 3-23-21.)
 

 

 

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1    (815 ILCS 123/15-10-5)
2    Sec. 15-10-5. Enforcement and remedies.
3    (a) The remedies provided in this Act are cumulative and
4apply to persons or entities subject to this Act.
5    (b) Any violation of this Act, including the commission of
6an act prohibited under Article 5, constitutes a violation of
7the Consumer Fraud and Deceptive Business Practices Act.
8    (c) Subject to the Illinois Administrative Procedure Act,
9the Secretary may hold hearings, make findings of fact,
10conclusions of law, issue cease and desist orders, have the
11power to issue fines of up to $10,000 per violation, and refer
12the matter to the appropriate law enforcement agency for
13prosecution under this Act. All proceedings shall be open to
14the public.
15    (d) The Secretary may issue a cease and desist order to any
16person or entity, when in the opinion of the Secretary the
17person or entity is violating or is about to violate any
18provision of this Act. The cease and desist order permitted by
19this subsection (d) may be issued prior to a hearing.
20    The Secretary shall serve notice of the action, including,
21but not limited to, a statement of the reasons for the action,
22either personally or by certified mail. Service by certified
23mail shall be deemed completed when the notice is deposited in
24the U.S. Mail.
25    Within 10 days of service of the cease and desist order,
26the person or entity may request a hearing in writing.

 

 

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1    If it is determined that the Secretary had the authority
2to issue the cease and desist order, the Secretary may issue
3such orders as may be reasonably necessary to correct,
4eliminate, or remedy the conduct.
5    The powers vested in the Secretary by this subsection (d)
6are additional to any and all other powers and remedies vested
7in the Secretary by law, and nothing in this subsection (d)
8shall be construed as requiring that the Secretary shall
9employ the power conferred in this subsection instead of or as
10a condition precedent to the exercise of any other power or
11remedy vested in the Secretary.
12    (e) After 10 days' notice by certified mail to the person
13or entity stating the contemplated action and in general the
14grounds therefor, the Secretary may fine the person or entity
15an amount not exceeding $10,000 per violation if the person or
16entity has failed to comply with any provision of this Act or
17any order, decision, finding, rule, regulation, or direction
18of the Secretary lawfully made in accordance with the
19authority of this Act. Service by certified mail shall be
20deemed completed when the notice is deposited in the U.S.
21Mail.
22    (f) A violation of this Act by a person or entity licensed
23under another Act including, but not limited to, the
24Pawnbroker Regulation Act, the Consumer Installment Loan Act,
25the Payday Loan Reform Act, and the Sales Finance Agency Act
26shall subject the person or entity to discipline in accordance

 

 

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1with the Act or Acts under which the person or entity is
2licensed.
3(Source: P.A. 101-658, eff. 3-23-21.)
 
4    Section 99. Effective date. This Act takes effect June 1,
52023.