Illinois General Assembly - Full Text of HB5284
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Full Text of HB5284  98th General Assembly




State of Illinois
2013 and 2014


Introduced , by Rep. C.D. Davidsmeyer


815 ILCS 122/2-20

    Amends the Payday Loan Reform Act. Provides that the Department of Financial and Professional Regulation shall develop a short video depicting the manner in which compound interest works and setting forth statutorily required disclosures. Requires the video to be available in Spanish and English and to be presented to payday loan customers at the time of a transaction.

LRB098 17723 JLS 52840 b






HB5284LRB098 17723 JLS 52840 b

1    AN ACT concerning business.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 5. The Payday Loan Reform Act is amended by
5changing Section 2-20 as follows:
6    (815 ILCS 122/2-20)
7    Sec. 2-20. Required disclosures.
8    (a) Before a payday loan is made, a lender shall deliver to
9the consumer a pamphlet prepared by the Secretary that:
10        (1) explains, in simple English and Spanish, all of the
11    consumer's rights and responsibilities in a payday loan
12    transaction;
13        (2) includes a toll-free number to the Secretary's
14    office to handle concerns or provide information about
15    whether a lender is licensed, whether complaints have been
16    filed with the Secretary, and the resolution of those
17    complaints; and
18        (3) provides information regarding the availability of
19    debt management services.
20    (b) Lenders shall provide consumers with a written
21agreement that may be kept by the consumer. The written
22agreement must include the following information in English and
23in the language in which the loan was negotiated:



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1        (1) the name and address of the lender making the
2    payday loan, and the name and title of the individual
3    employee who signs the agreement on behalf of the lender;
4        (2) disclosures required by the federal Truth in
5    Lending Act;
6        (3) a clear description of the consumer's payment
7    obligations under the loan;
8        (4) the following statement, in at least 14-point bold
9    type face: "You cannot be prosecuted in criminal court to
10    collect this loan." The information required to be
11    disclosed under this subdivision (4) must be conspicuously
12    disclosed in the loan document and shall be located
13    immediately preceding the signature of the consumer; and
14        (5) the following statement, in at least 14-point bold
15    type face:
16        "WARNING: This loan is not intended to meet long-term
17    financial needs. This loan should be used only to meet
18    short-term cash needs. The cost of your loan may be higher
19    than loans offered by other lending institutions. This loan
20    is regulated by the Department of Financial and
21    Professional Regulation."
22    (c) The following notices in English and Spanish must be
23conspicuously posted by a lender in each location of a business
24providing payday loans:
25        (1) A notice that informs consumers that the lender
26    cannot use the criminal process against a consumer to



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1    collect any payday loan.
2        (2) The schedule of all finance charges to be charged
3    on loans with an example of the amounts that would be
4    charged on a $100 loan payable in 13 days, a $400 loan
5    payable in 30 days, and an installment payday loan of $400
6    payable on a monthly basis over 180 days, giving the
7    corresponding annual percentage rate.
8        (3) In one-inch bold type, a notice to the public in
9    the lending area of each business location containing the
10    following statement:
11        "WARNING: This loan is not intended to meet long-term
12    financial needs. This loan should be used only to meet
13    short-term cash needs. The cost of your loan may be higher
14    than loans offered by other lending institutions. This loan
15    is regulated by the Department of Financial and
16    Professional Regulation."
17        (4) In one-inch bold type, a notice to the public in
18    the lending area of each business location containing the
19    following statement:
20        "INTEREST-FREE REPAYMENT PLAN: If you still owe on one
21    or more payday loans, other than an installment payday
22    loan, after 35 days, you are entitled to enter into a
23    repayment plan. The repayment plan will give you at least
24    55 days to repay your loan in installments with no
25    additional finance charges, interest, fees, or other
26    charges of any kind."



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1    (d) The Department shall develop, in cooperation with one
2or more trade associations that represent lenders, a video
3making the disclosures required under this Section. The video
4shall contain an explanation of the manner in which compound
5interest works.
6    The video shall be no longer than 15 minutes in length. The
7video shall be made available in both Spanish and English.
8    A lender shall display to the consumer at the time of the
9transaction the video created under this Section. The display
10shall be made on screen having a diagonal measurement of not
11less than 19 inches. The consumer shall select the language in
12which the video is presented.
13    The Department, in cooperation with one or more trade
14associations that represent lenders, may revise and update the
15video at any time.
16    The Department may adopt rules necessary to implement this
18    The cost of any video developed under this subsection shall
19be paid only from moneys available from the collection of
20license fees under this Act.
21(Source: P.A. 96-936, eff. 3-21-11.)