093_SB1116sam002











                                     LRB093 11060 DRJ 13523 a

 1                    AMENDMENT TO SENATE BILL 1116

 2        AMENDMENT NO.     .  Amend Senate Bill 1116 by  replacing
 3    the title with the following:
 4        "AN ACT in relation to financial matters."; and

 5    by  replacing  everything  after the enacting clause with the
 6    following:

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

 9        (205 ILCS 675/8) (from Ch. 17, par. 7008)
10        Sec. 8. Amendment of governing agreement.
11        (a)  If  the  agreement governing a revolving credit plan
12    so provides or allows, a financial  institution  may  at  any
13    time  or  from time to time amend the terms of such agreement
14    in accordance with the further provisions of this Section  8.
15    The financial institution shall notify each affected borrower
16    of  the  amendment  in  the manner set forth in the agreement
17    governing the plan and in compliance with the requirements of
18    the  Truth-in-Lending   Act   and   regulations   promulgated
19    thereunder, as in effect from time to time, if applicable.
20        (b)  Subject to subsection (c) below, if the terms of the
21    agreement  governing  the  plan,  as  originally  drawn or as
 
                            -2-      LRB093 11060 DRJ 13523 a
 1    amended pursuant to this Section so  provide,  any  amendment
 2    may, on and after the date upon which it becomes effective as
 3    to  a  particular  borrower,  apply  to  all then outstanding
 4    unpaid indebtedness in the borrower's account under the plan,
 5    including any such indebtedness which shall have  arisen  out
 6    of  purchases  made  or loans obtained prior to the effective
 7    date of the amendment.
 8        (c)  If such amendment has the effect of  increasing  the
 9    interest  or  other  charges to be paid by the borrower,  the
10    financial institution shall mail or deliver to the  borrower,
11    at  least 30 days before the effective date of the amendment,
12    a clear and conspicuous written notice which shall:
13             (1)  describe the amendment and the existing term or
14        terms of the agreement affected by the amendment,
15             (2)  set forth the effective date of the amendment,
16             (3)  state whether or not the amendment  will  apply
17        to   the   outstanding  unpaid  indebtedness  as  of  the
18        effective date of the amendment,
19             (4)  state that absent the borrower's written notice
20        in writing or by telephone to the  financial  institution
21        within  30 days of the earlier of the mailing or delivery
22        of the notice of amendment that  the  borrower  does  not
23        agree  to accept the amendment, the amendment will become
24        effective and apply to the borrower's account, and
25             (5)  provide an  address  and  telephone  number  to
26        which  the  borrower  may  send  or call in notice of the
27        borrower's election not  to  accept  the  amendment.  and
28        include  An  addressed postcard shall be included so that
29        the borrower may return it to the  financial  institution
30        for that purpose.
31        If   the  borrower  provides  notice  in  writing  or  by
32    telephone as described  in  paragraph  (4),  within  30  days
33    following  the effective date of the amendment, the amendment
34    shall be  revoked  as  of  the  end  of  the  30-day  period,
 
                            -3-      LRB093 11060 DRJ 13523 a
 1    permitting   the  borrower  to  pay  the  outstanding  unpaid
 2    indebtedness in the borrower's  account  under  the  plan  in
 3    accordance with the terms of the agreement governing the plan
 4    without giving effect to the amendment. As a condition to the
 5    effectiveness  of  the  borrower's  notice  not to accept the
 6    amendment, the financial institution may require the borrower
 7    to return all credit devices.
 8        Any borrower who gives a timely notice  electing  not  to
 9    accept   the   amendment   shall  be  permitted  to  pay  the
10    outstanding unpaid indebtedness  in  the  borrower's  account
11    under  the plan in accordance with the terms of the agreement
12    governing the plan without giving effect to the amendment.
13        Notwithstanding the financial  institution's  receipt  of
14    the  borrower's  notice under item (4) that the borrower does
15    not accept the amendment, the amendment shall  be  deemed  to
16    have been accepted and effective with respect to the borrower
17    and  the  borrower's  account if the borrower uses the credit
18    device to obtain credit under the credit plan on or after the
19    effective date of the amendment, and the amendment  shall  be
20    deemed   effective   as  of  the  effective  date  originally
21    disclosed by the financial institution.
22        (c-5)  If such amendment results in an unfavorable change
23    in the interest or other charges on a revolving credit  plan,
24    does  not  affect  all or a substantial portion of a class of
25    the creditor's accounts, and does not relate  to  inactivity,
26    default,  or  delinquency  as  to  the account, the financial
27    institution shall mail or deliver to the borrower,  at  least
28    30  days  before the effective date of the amendment, a clear
29    and conspicuous written notice that shall:
30             (1)  contain a statement of the action taken,
31             (2)  contain the name, address, and telephone number
32        of the creditor,
33             (3)  provide a statement of specific reasons for the
34        action  taken,
 
                            -4-      LRB093 11060 DRJ 13523 a
 1             (4)  state that  absent  the  borrower's  notice  in
 2        writing  or  by  telephone  to the financial institution,
 3        within 30 days of the earlier of the mailing or  delivery
 4        of  the  notice  of amendment, that the borrower does not
 5        agree to accept the amendment, the amendment will  become
 6        effective and apply to the borrower's account, and
 7             (5)  provide  an  address  and  telephone  number to
 8        which the borrower may send or  call  in  notice  of  the
 9        borrower's  election  not  to  accept  the  amendment. An
10        addressed postcard shall be included so that the borrower
11        may return it  to  the  financial  institution  for  that
12        purpose.
13        If   the  borrower  provides  notice  in  writing  or  by
14    telephone as described  in  paragraph  (4),  within  30  days
15    following  the effective date of the amendment, the amendment
16    shall be  revoked  as  of  the  end  of  the  30-day  period,
17    permitting   the  borrower  to  pay  the  outstanding  unpaid
18    indebtedness in the borrower's  account  under  the  plan  in
19    accordance with the terms of the agreement governing the plan
20    without giving effect to the amendment.
21        (c-10)  As  a  condition  to  the  effectiveness  of  the
22    borrower's notice not to accept the amendment:
23             (1)  the   financial  institution  may  require  the
24        borrower to return all credit devices;
25             (2)  any borrower who gives a timely notice electing
26        not to accept the amendment shall be permitted to pay the
27        outstanding unpaid indebtedness in the borrower's account
28        under the plan  in  accordance  with  the  terms  of  the
29        agreement governing the plan without giving effect to the
30        amendment; and
31             (3)  notwithstanding   the  financial  institution's
32        receipt of the borrower's notice under subdivision (c)(4)
33        or  (c-5)(4)  that  the  borrower  does  not  accept  the
34        amendment, the amendment shall be  deemed  to  have  been
 
                            -5-      LRB093 11060 DRJ 13523 a
 1        accepted and to be effective with respect to the borrower
 2        and  the  borrower's  account  if  the  borrower uses the
 3        credit device to obtain  credit  under  the  credit  plan
 4        after  30  days  following  the  effective  date, and the
 5        amendment shall be deemed effective as of  the  effective
 6        date originally disclosed by the financial institution.
 7        (d)  For  purposes  of  this Section, the following shall
 8    not be deemed an amendment which has the effect of increasing
 9    the interest to be paid by the borrower:
10             (1)  a decrease in the required amount  of  periodic
11        installment payments; and
12             (2)  a  change  from  a  daily  periodic  rate  to a
13        periodic rate other than daily, or from a  periodic  rate
14        other  than daily to a daily periodic rate, provided that
15        there is no resulting change  in  the  annual  percentage
16        rate    as    determined    in    accordance   with   the
17        Truth-in-Lending   Act   and   regulations    promulgated
18        thereunder, as in effect from time to time.
19    (Source: P.A. 88-531.)

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

22        (815 ILCS 177/10)
23        Sec.  10.  Disclosure  requirements.   At  the   time   a
24    borrower   applies   for   a   refund  anticipation  loan,  a
25    facilitator shall disclose to the borrower on a document that
26    is separate from the loan application:
27             (1)  the refund anticipation loan fee schedule;
28             (1.5)  the annual percentage rate utilizing a 10-day
29        time period;
30             (2)  the   estimated   fee   for    preparing    and
31        electronically filing a tax return;
32             (2.5)  the  total cost to the borrower for utilizing
 
                            -6-      LRB093 11060 DRJ 13523 a
 1        a refund anticipation loan;
 2             (3)  the estimated date that the loan proceeds  will
 3        be paid to the borrower if the loan is approved;
 4             (4)  that  the borrower is responsible for repayment
 5        of the loan and related fees in the event the tax  refund
 6        is not paid or not paid in full; and
 7             (5)  the  availability  of electronic filing for the
 8        income tax return of the borrower and  the  average  time
 9        announced  by the federal Internal Revenue Service within
10        which the borrower can expect to receive a refund if  the
11        borrower's   return   is  filed  electronically  and  the
12        borrower does not obtain a refund anticipation loan.
13    (Source: P.A. 92-664, eff. 1-1-03.)

14        Section 99.  Effective date.  This Act takes effect  upon
15    becoming law.".