State of Illinois
91st General Assembly

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 1        AN ACT to amend the Financial Institutions Code by adding
 2    Section 19.

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

 5        Section 5.  The Financial Institutions Code is amended by
 6    adding Section 19 as follows:

 7        (20 ILCS 1205/19 new)
 8        Sec. 19.  Payday loan study.
 9        (a)  The Department shall conduct a study of the business
10    of   making   payday   loans.   The  study  shall  include  a
11    determination of the  number  and  location  of  institutions
12    engaged in payday loan transactions and the annual percentage
13    rate  of  interest and amount of other charges imposed by the
14    institutions for payday loans. The study shall also include a
15    profile of the  borrowers  who  obtain  payday  loans.   This
16    profile  shall  disclose  whether the borrowers are unable to
17    get a loan from  other  sources  and  whether  the  borrowers
18    constitute  a  captive  market for lenders.  In addition, the
19    study shall determine  whether  rates  and  fees  charged  by
20    lenders are excessive and whether the lenders engage in sharp
21    loan  practices.  "Payday loan" means a loan made by licensee
22    under the Consumer Installment Loan Act for  a  term  of  not
23    more  than  30  days  in  a  transaction whereby the licensee
24    receives from the borrower a check postdated to the  maturity
25    date  of  the  loan  in  an  amount  that fully satisfies the
26    borrower's obligation to the licensee.
27        (b)  The  Department  shall  report  its   findings   and
28    recommendations  to  the  General  Assembly  by September 15,
29    1999. The report  shall  include  a  discussion  of  problems
30    payday  loan  practices  cause for borrowers and consumers in
31    general.
                            -2-               LRB9103612JSpcA
 1        Section 99.  Effective date.  This Act takes effect  upon
 2    becoming law.

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