Full Text of HB5833 94th General Assembly
HB5833 94TH GENERAL ASSEMBLY
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94TH GENERAL ASSEMBLY
State of Illinois
2005 and 2006 HB5833
Introduced 09/21/06, by Rep. Edward J. Acevedo SYNOPSIS AS INTRODUCED: |
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Amends the Consumer Installment Loan Act. Provides provisions concerning consumer protections, prohibited acts, required disclosures, and members of the military for loans under the Act with a finance charge exceeding an annual percentage rate of 36% for which the lender accepts any of the following as security for the loan: (1) one or more checks dated on the date written with an agreement to hold them for a period of days before deposit or presentment or one or more checks dated subsequent to the date written with an agreement to hold them for deposit; (2) one or more authorizations to debit a consumer's bank account; or (3) an interest in a consumer's wages, including, but not limited to, a wage assignment.
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A BILL FOR
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HB5833 |
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LRB094 21348 MJR 59696 b |
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| AN ACT concerning regulation.
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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 Consumer Installment Loan Act is amended by | 5 |
| adding Section 12.10 as follows: | 6 |
| (205 ILCS 670/12.10 new)
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| Sec. 12.10. Consumer loans; Consumer protections; | 8 |
| prohibited acts; required disclosures; members of the | 9 |
| military.
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| (a) This Section applies to any loan under this Act with a | 11 |
| finance charge exceeding an annual percentage rate of 36% for | 12 |
| which the lender accepts any of the following as security for | 13 |
| the loan: | 14 |
| (1) One or more checks dated on the date written with | 15 |
| an agreement to hold them for a period of days before | 16 |
| deposit or presentment or one or more checks dated | 17 |
| subsequent to the date written with an agreement to hold | 18 |
| them for deposit. | 19 |
| (2) One or more authorizations to debit a consumer's | 20 |
| bank account. | 21 |
| (3) An interest in a consumer's wages, including, but | 22 |
| not limited to, a wage assignment. | 23 |
| (b) A lender making a loan under this Section must use a | 24 |
| consumer reporting service database certified under Article 2 | 25 |
| of the Payday Loan Reform Act to verify that the loan would be | 26 |
| allowed under the Payday Loan Reform Act. No loan under this | 27 |
| Section may be made if the consumer has an existing loan made | 28 |
| under the Payday Loan Reform Act, if the consumer is in a | 29 |
| repayment plan under the Payday Loan Reform Act, or if the | 30 |
| consumer is in a cooling-off period under the Payday Loan | 31 |
| Reform Act, and no loan under this Section may be used to pay | 32 |
| off an existing loan made under the Payday Loan Reform Act.
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| (c) A lender making a loan under this Section must itemize | 2 |
| all fees and interest on the loan document. Other than a | 3 |
| one-time, non-sufficient funds fee of no more than $25, no | 4 |
| additional fees or penalties may be charged. The database fee | 5 |
| incurred when a loan is executed may not be passed on to the | 6 |
| consumer. Interest on the loan must stop accruing at the date | 7 |
| of default.
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| (d) A lender making a loan under this Section may not do | 9 |
| any of the following: | 10 |
| (1) Threaten to use or use the criminal process
in this | 11 |
| or any other state to collect on the loan. | 12 |
| (2) Include any of the following provisions in the loan | 13 |
| documents: | 14 |
| (A) A confession of judgment clause. | 15 |
| (B) A waiver of the right to a jury trial, if
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| applicable, in any action brought by or against the | 17 |
| consumer, unless the waiver is included in an allowed | 18 |
| arbitration clause. | 19 |
| (C) A mandatory arbitration clause that is | 20 |
| oppressive, unfair, unconscionable, or substantially | 21 |
| in derogation of the rights of consumers. | 22 |
| (D) A provision in which the consumer agrees not
to | 23 |
| assert any claim or defense arising out of the | 24 |
| contract. | 25 |
| (3) Take any security interest in real estate. | 26 |
| (4) Charge for or attempt to collect attorney's fees, | 27 |
| court costs, or arbitration costs incurred in connection | 28 |
| with the collection of a loan under this Section. | 29 |
| (e) Before a consumer loan is made, a lender shall deliver | 30 |
| to the consumer a pamphlet prepared by the Secretary that does | 31 |
| all of the following: | 32 |
| (1) Explains, in simple English and Spanish, all of
the | 33 |
| consumer's rights and responsibilities in a consumer loan | 34 |
| transaction. | 35 |
| (2) Includes a toll-free number to the Secretary's
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| office to handle concerns or provide information about |
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| whether a lender is licensed, whether complaints have been | 2 |
| filed with the Secretary, and the resolution of those | 3 |
| complaints. | 4 |
| (3) Provides information regarding the availability
of | 5 |
| debt management services. | 6 |
| (f) A lender making a loan under this Section shall provide | 7 |
| consumers with a written agreement that may be kept by the | 8 |
| consumer. The written agreement must include the following | 9 |
| information in English and in the language in which the loan | 10 |
| was negotiated: | 11 |
| (1) the name and address of the lender making the
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| consumer loan and the name and title of the individual | 13 |
| employee who signs the agreement on behalf of the licensee; | 14 |
| (2) disclosures required by the federal Truth in
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| Lending Act; | 16 |
| (3) a clear description of the consumer's payment
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| obligations under the loan; | 18 |
| (4) the following statement, in at least 14-point
bold | 19 |
| typeface: "You cannot be prosecuted in criminal court to | 20 |
| collect this loan.". The information required to be | 21 |
| disclosed under this subdivision (4) must be conspicuously | 22 |
| disclosed in the loan document and must be located | 23 |
| immediately preceding the signature of the consumer; and | 24 |
| (5) the following statement, in at least 14-point
bold | 25 |
| typeface:
"WARNING: This loan is not intended to meet | 26 |
| long-term
financial needs. This loan should be used only to | 27 |
| meet short-term cash needs. The cost of your loan may be | 28 |
| higher than loans offered by other lending institutions. | 29 |
| This loan is regulated by the Department of Financial and | 30 |
| Professional Regulation.". | 31 |
| (g) The following shall apply to loans under this Section | 32 |
| made to members of the military:
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| (1) A lender may not garnish the wages or salaries of a | 34 |
| consumer who is a member of the military. | 35 |
| (2) In addition to any rights and obligations provided | 36 |
| under the federal Servicemembers Civil Relief Act, a lender |
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| shall suspend and defer collection activity against a | 2 |
| consumer who is a member of the military and who has been | 3 |
| deployed to a combat or combat-support posting for the | 4 |
| duration of the deployment. | 5 |
| (3) A lender may not knowingly contact the military | 6 |
| chain of command of a consumer who is a member of the | 7 |
| military in an effort to collect on a consumer loan. | 8 |
| (4) A lender must honor the terms of any repayment plan | 9 |
| that they have entered into with a consumer, including a | 10 |
| repayment agreement negotiated through military counselors | 11 |
| or third-party credit counselors. |
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