093_HB2639

 
                                     LRB093 07178 JLS 07333 b

 1        AN ACT concerning financial services.

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

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

 6        (205 ILCS 675/5) (from Ch. 17, par. 7005)
 7        Sec. 5.  Interest charges.
 8        (a)  A  financial  institution  may  charge  and  collect
 9    interest  under a revolving credit plan on outstanding unpaid
10    indebtedness in the borrower's account under the plan at such
11    periodic percentage rate or rates as the agreement  governing
12    the plan provides or as established in the manner provided in
13    the agreement governing the plan.  If the agreement governing
14    the   revolving   credit   plan  so  provides,  the  periodic
15    percentage rate or rates of interest under such plan may vary
16    in accordance with a  schedule  or  formula.   Such  periodic
17    percentage  rate  or  rates may vary from time to time as the
18    rate determined in accordance with such schedule  or  formula
19    varies  and  such  periodic  percentage  rate or rates, as so
20    varied, may be made  applicable  to  all  outstanding  unpaid
21    indebtedness under the plan on or after the effective date of
22    such  variation,  including any such indebtedness arising out
23    of purchases made or loans obtained prior to  such  variation
24    in  the periodic percentage rate or rates.  If the applicable
25    periodic percentage rate under the  agreement  governing  the
26    plan is other than daily, periodic interest may be calculated
27    on  an  amount  not  in  excess of the average of outstanding
28    unpaid  indebtedness  for  the  applicable  billing   period,
29    determined   by   dividing   the  total  of  the  amounts  of
30    outstanding  unpaid  indebtedness  for  each   day   in   the
31    applicable  billing  period  by  the  number  of  days in the
 
                            -2-      LRB093 07178 JLS 07333 b
 1    billing period.  If the applicable periodic  percentage  rate
 2    under  the agreement governing the plan is monthly, a billing
 3    period shall be deemed to be a month or monthly if  the  last
 4    day  of  each billing period is on the same day of each month
 5    or does not vary by more that 4 days therefrom.
 6        (b)  If a  financial  institution  charges  and  collects
 7    interest  under a revolving credit plan on outstanding unpaid
 8    indebtedness in a borrower's account and  applies  more  than
 9    one  rate of interest to different amounts of indebtedness in
10    the borrower's account, the financial institution must  apply
11    any  payments  made by the borrower to amount of indebtedness
12    subject to the highest rate of interest.
13    (Source: P.A. 85-1432.)