093_SB1116enr

 
SB1116 Enrolled                      LRB093 11060 MBS 11764 b

 1        AN ACT in relation to financial matters.

 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 8 as follows:

 6        (205 ILCS 675/8) (from Ch. 17, par. 7008)
 7        Sec. 8.  Amendment of governing agreement.
 8        (a)  If  the  agreement governing a revolving credit plan
 9    so provides or allows, a financial  institution  may  at  any
10    time  or  from time to time amend the terms of such agreement
11    in accordance with the further provisions of this Section  8.
12    The financial institution shall notify each affected borrower
13    of  the  amendment  in  the manner set forth in the agreement
14    governing the plan and in compliance with the requirements of
15    the  Truth-in-Lending   Act   and   regulations   promulgated
16    thereunder, as in effect from time to time, if applicable.
17        (b)  Subject to subsection (c) below, if the terms of the
18    agreement  governing  the  plan,  as  originally  drawn or as
19    amended pursuant to this Section so  provide,  any  amendment
20    may, on and after the date upon which it becomes effective as
21    to  a  particular  borrower,  apply  to  all then outstanding
22    unpaid indebtedness in the borrower's account under the plan,
23    including any such indebtedness which shall have  arisen  out
24    of  purchases  made  or loans obtained prior to the effective
25    date of the amendment.
26        (c)  If such amendment has the effect of  increasing  the
27    interest  or  other  charges to be paid by the borrower,  the
28    financial institution shall mail or deliver to the  borrower,
29    at  least 30 days before the effective date of the amendment,
30    a clear and conspicuous written notice which shall:
31             (1)  describe the amendment and the existing term or
 
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 1        terms of the agreement affected by the amendment,
 2             (2)  set forth the effective date of the amendment,
 3             (3)  state whether or not the amendment  will  apply
 4        to   the   outstanding  unpaid  indebtedness  as  of  the
 5        effective date of the amendment,
 6             (4)  state that absent the borrower's written notice
 7        to the  financial  institution  within  30  days  of  the
 8        earlier  of  the  mailing  or  delivery  of the notice of
 9        amendment that the borrower does not agree to accept  the
10        amendment,  the amendment will become effective and apply
11        to the borrower's account, and
12             (5)  provide an address to which  the  borrower  may
13        send  notice of the borrower's election not to accept the
14        amendment and include  an  addressed  postcard  that  the
15        borrower may return to the financial institution for that
16        purpose.
17        (c-5)  If such amendment results in an unfavorable change
18    in  the  interest or other charges on a revolving credit plan
19    which: (i) relates to  a  change  in  the  borrower's  credit
20    standing,  (ii)  does not affect all or a substantial portion
21    of a class of the creditor's accounts,  and  (iii)  does  not
22    relate   to  inactivity,  default,  or  delinquency  on  that
23    revolving  credit  plan,  the  financial  institution   shall
24    include  in  the  notice  required  by subsection (c) of this
25    Section 8 a statement that is substantially  similar  to  the
26    following:
27                      Change in Credit Standing
28             The  amendment  to the terms of your account relates
29        to a change in your credit standing. The change  in  your
30        credit  standing  may  have  resulted  from  a default or
31        delinquency on other accounts  you  may  have,  or  other
32        adverse  changes  in your financial circumstances. If you
33        submit the enclosed postcard or otherwise notify us in  a
34        timely  manner as provided in this notice that you do not
 
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 1        accept the amendment, you will be able to  pay  off  your
 2        existing  balance  at  the  rate  in  effect prior to the
 3        amendment. However, in that  instance,  you  may  not  be
 4        eligible  to  obtain  additional  credit  under this plan
 5        after the effective date of the amendment. If you do  not
 6        provide  timely  notice  to us as provided in this notice
 7        that you do not accept the amendment,  the  amendment  to
 8        the terms of your account will become effective and apply
 9        to your account.
10        (c-10)  As  a  condition  to  the  effectiveness  of  the
11    borrower's  notice not to accept the amendment, the financial
12    institution may require the borrower  to  return  all  credit
13    devices.
14        Any  borrower  who  gives a timely notice electing not to
15    accept  the  amendment  shall  be  permitted   to   pay   the
16    outstanding  unpaid  indebtedness  in  the borrower's account
17    under the plan in accordance with the terms of the  agreement
18    governing the plan without giving effect to the amendment.
19        Notwithstanding  the  financial  institution's receipt of
20    the borrower's notice under item (4) that the  borrower  does
21    not  accept  the  amendment, the amendment shall be deemed to
22    have been accepted and effective with respect to the borrower
23    and the borrower's account if the borrower  uses  the  credit
24    device to obtain credit under the credit plan on or after the
25    effective  date  of the amendment, and the amendment shall be
26    deemed  effective  as  of  the  effective   date   originally
27    disclosed by the financial institution.
28        (d)  For  purposes  of  this Section, the following shall
29    not be deemed an amendment which has the effect of increasing
30    the interest to be paid by the borrower:
31             (1)  a decrease in the required amount  of  periodic
32        installment payments; and
33             (2)  a  change  from  a  daily  periodic  rate  to a
34        periodic rate other than daily, or from a  periodic  rate
 
SB1116 Enrolled             -4-      LRB093 11060 MBS 11764 b
 1        other  than daily to a daily periodic rate, provided that
 2        there is no resulting change  in  the  annual  percentage
 3        rate    as    determined    in    accordance   with   the
 4        Truth-in-Lending   Act   and   regulations    promulgated
 5        thereunder, as in effect from time to time.
 6    (Source: P.A. 88-531.)

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

 9        (815 ILCS 177/10)
10        Sec.  10.  Disclosure  requirements.   At  the   time   a
11    borrower   applies   for   a   refund  anticipation  loan,  a
12    facilitator shall disclose to the borrower on a document that
13    is separate from the loan application:
14             (1)  the refund anticipation loan fee schedule;
15             (1.5)  the Annual Percentage Rate utilizing a 10-day
16        time period;
17             (2)  the   estimated   fee   for    preparing    and
18        electronically filing a tax return;
19             (2.5)  the  total cost to the borrower for utilizing
20        a refund anticipation loan;
21             (3)  the estimated date that the loan proceeds  will
22        be paid to the borrower if the loan is approved;
23             (4)  that  the borrower is responsible for repayment
24        of the loan and related fees in the event the tax  refund
25        is not paid or not paid in full; and
26             (5)  the  availability  of electronic filing for the
27        income tax return of the borrower and  the  average  time
28        announced  by the federal Internal Revenue Service within
29        which the borrower can expect to receive a refund if  the
30        borrower's   return   is  filed  electronically  and  the
31        borrower does not obtain a refund anticipation loan.
32    (Source: P.A. 92-664, eff. 1-1-03.)
 
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 1        Section 99.  Effective date.  This Act  takes  effect  on
 2    January 1, 2004.