Illinois General Assembly - Full Text of SB1116
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Full Text of SB1116  93rd General Assembly

SB1116sam003 93rd General Assembly



                                     LRB093 11060 DRJ 14433 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 14433 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        to the  financial  institution  within  30  days  of  the
21        earlier  of  the  mailing  or  delivery  of the notice of
22        amendment that the borrower does not agree to accept  the
23        amendment,  the amendment will become effective and apply
24        to the borrower's account, and
25             (5)  provide an address to which  the  borrower  may
26        send  notice of the borrower's election not to accept the
27        amendment and include  an  addressed  postcard  that  the
28        borrower may return to the financial institution for that
29        purpose.
30        (c-5)  If such amendment results in an unfavorable change
31    in  the  interest or other charges on a revolving credit plan
32    which: (i) relates to  a  change  in  the  borrower's  credit
33    standing,  (ii)  does not affect all or a substantial portion
34    of a class of the creditor's accounts,  and  (iii)  does  not
                            -3-      LRB093 11060 DRJ 14433 a
 1    relate   to  inactivity,  default,  or  delinquency  on  that
 2    revolving  credit  plan,  the  financial  institution   shall
 3    include  in  the  notice  required  by subsection (c) of this
 4    Section 8 a statement that is substantially  similar  to  the
 5    following:
 6                      Change in Credit Standing
 7             The  amendment  to the terms of your account relates
 8        to a change in your credit standing. The change  in  your
 9        credit  standing  may  have  resulted  from  a default or
10        delinquency on other accounts  you  may  have,  or  other
11        adverse  changes  in your financial circumstances. If you
12        submit the enclosed postcard or otherwise notify us in  a
13        timely  manner as provided in this notice that you do not
14        accept the amendment, you will be able to  pay  off  your
15        existing  balance  at  the  rate  in  effect prior to the
16        amendment. However, in that  instance,  you  may  not  be
17        eligible  to  obtain  additional  credit  under this plan
18        after the effective date of the amendment. If you do  not
19        provide  timely  notice  to us as provided in this notice
20        that you do not accept the amendment,  the  amendment  to
21        the terms of your account will become effective and apply
22        to your account.
23        (c-10)  As  a  condition  to  the  effectiveness  of  the
24    borrower's  notice not to accept the amendment, the financial
25    institution may require the borrower  to  return  all  credit
26    devices.
27        Any  borrower  who  gives a timely notice electing not to
28    accept  the  amendment  shall  be  permitted   to   pay   the
29    outstanding  unpaid  indebtedness  in  the borrower's account
30    under the plan in accordance with the terms of the  agreement
31    governing the plan without giving effect to the amendment.
32        Notwithstanding  the  financial  institution's receipt of
33    the borrower's notice under item (4) that the  borrower  does
34    not  accept  the  amendment, the amendment shall be deemed to
                            -4-      LRB093 11060 DRJ 14433 a
 1    have been accepted and effective with respect to the borrower
 2    and the borrower's account if the borrower  uses  the  credit
 3    device to obtain credit under the credit plan on or after the
 4    effective  date  of the amendment, and the amendment shall be
 5    deemed  effective  as  of  the  effective   date   originally
 6    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
                            -5-      LRB093 11060 DRJ 14433 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  on
15    January 1, 2004.".