State of Illinois
91st General Assembly

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 1        AN ACT to amend the  Consumer  Installment  Loan  Act  by
 2    changing Section 20 and adding Section 16c.

 3        Be  it  enacted  by  the People of the State of Illinois,
 4    represented in the General Assembly:

 5        Section 5.  The Consumer Installment Loan Act is  amended
 6    by changing Section 20 and adding Section 16c as follows:

 7        (205 ILCS 670/16c new)
 8        Sec.   16c.  Payday  and  motor  vehicle  title  lenders;
 9    disclosure.
10        (a)  As used in this Section, "payday lender" or "lender"
11    means a lender that makes  loans  based  upon  proof  of  the
12    borrower's  continuing employment and the borrower's delivery
13    to the lender of a postdated check in an amount sufficient to
14    repay the loan and "motor vehicle title lender"  or  "lender"
15    means  a  lender  that  makes  loans  based upon proof of the
16    borrower's ownership of equity in a  motor  vehicle  and  the
17    borrower's  delivery to the lender of a postdated check in an
18    amount sufficient to repay the loan.
19        (b)  For the purpose of making  the  disclosure  required
20    under  this  Section,  any fee imposed for making the loan or
21    renewing, revolving, or rolling over the loan shall be deemed
22    interest on the loan.
23        (c)  In addition to the requirements  of  Section  16,  a
24    lender  must disclose to the borrower, in a manner consistent
25    with the requirements  of  the  Truth  in  Lending  Act,  the
26    interest  rates  charged  in  the  transaction  calculated as
27    required under subsection (b).

28        (205 ILCS 670/20) (from Ch. 17, par. 5426)
29        Sec. 20. Penalties for violation.
30        (a)  Any person who engages in  business  as  a  Consumer
                            -2-                LRB9104620JSpc
 1    Installment  Loan lender without the license required by this
 2    Act shall be guilty  of  a  Class  4  felony.  A  person  who
 3    violates  Section  16c  of  this  Act  is guilty of a Class A
 4    misdemeanor.
 5        (b)   The obligor, prior to the  expiration  of  2  years
 6    after  the  date  of  his last scheduled payment, may recover
 7    such reasonable attorney's fees and court costs as a    court
 8    may assess against such licensee or lender for a violation of
 9    Sections  1, 12, 15, 15a, 15b, 15d, 15e, 16, 17, 18, or 19.1.
10    The balance due under the terms of the loan contract shall be
11    reduced by the amount which the obligor is thus  entitled  to
12    recover.   A  bona  fide  error  by a licensee in calculating
13    charges or  rebates  is  not  a  violation  if  the  licensee
14    corrects the error within a reasonable time, after discovery.
15        (b-5)  A  license issued under this Act may be revoked if
16    the  licensee,  or  any  directors,  managers  of  a  limited
17    liability company, partners, or officer thereof is  convicted
18    of a felony.
19        (c)  No  provision of this Section imposing any liability
20    shall apply to any act done or omitted in conformity with any
21    rule or regulation or written interpretation thereof  by  the
22    Department  of  Financial  Institutions, notwithstanding that
23    after  such  act  or  omission  has  occurred,   such   rule,
24    regulation   or   interpretation  is  amended,  rescinded  or
25    determined by judicial or other authority to be  invalid  for
26    any reason.  All interpretations issued after January 1, 1998
27    must  be written and signed by the Department's Chief Counsel
28    and approved by the Director.
29    (Source: P.A. 90-437, eff. 1-1-98.)

30        Section 99.  Effective date.  This Act takes effect  upon
31    becoming law.

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