Bill Amendment: IL SB1524 | 2019-2020 | 101st General Assembly
NOTE: For additional amemendments please see the Bill Drafting List
Bill Title: IL STUDENT LOAN INVESTMENT ACT
Status: 2019-08-26 - Public Act . . . . . . . . . 101-0586 [SB1524 Detail]
Download: Illinois-2019-SB1524-Senate_Amendment_001.html
Bill Title: IL STUDENT LOAN INVESTMENT ACT
Status: 2019-08-26 - Public Act . . . . . . . . . 101-0586 [SB1524 Detail]
Download: Illinois-2019-SB1524-Senate_Amendment_001.html
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1 | AMENDMENT TO SENATE BILL 1524
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2 | AMENDMENT NO. ______. Amend Senate Bill 1524 by replacing | ||||||
3 | everything after the enacting clause with the following:
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4 | "Section 1. Short title. This Act may be cited as the | ||||||
5 | Student Investment Account Act.
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6 | Section 5. Findings and purpose. The General Assembly finds | ||||||
7 | that it is vital for the State to combat the college-debt | ||||||
8 | crisis and increase access to post-secondary education for all | ||||||
9 | residents of this State. The purpose of this Act is to assist | ||||||
10 | qualified residents to attend and pay for post-secondary | ||||||
11 | education through a system of investment programs, which may | ||||||
12 | include income-sharing agreements, linked deposits, and | ||||||
13 | origination and refinancing of student loans.
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14 | Section 10. Definitions.
As used in this Act: | ||||||
15 | "Borrower" means an Illinois resident student who has |
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1 | received an education loan or an Illinois resident parent who | ||||||
2 | has received or agreed to pay an education loan, subject to | ||||||
3 | approval by the State Treasurer.
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4 | "Education loan" means a loan made to a borrower in | ||||||
5 | accordance with this Act to finance an Illinois resident | ||||||
6 | student's attendance at an institution of higher education. | ||||||
7 | "Income share agreement" means an agreement between a | ||||||
8 | participant and an eligible institution of higher education or | ||||||
9 | an income share agreement provider approved by the State | ||||||
10 | Treasurer in which the participant agrees to pay a percentage | ||||||
11 | of the participant's future earnings for a fixed period in | ||||||
12 | exchange for funds to pay for their post-secondary education.
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13 | "Income share agreement provider" means an organization | ||||||
14 | that allows income share agreement participants to fund their | ||||||
15 | education by means of an income share agreement. | ||||||
16 | "Institution of higher education" means a post-secondary | ||||||
17 | educational institution located in Illinois and approved by the | ||||||
18 | State Treasurer.
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19 | "Participant" means a resident student who enters into an | ||||||
20 | income share agreement for the purpose of funding the | ||||||
21 | participant's attendance at an institution of higher | ||||||
22 | education. | ||||||
23 | "Student Investment Account" means that portion of the | ||||||
24 | Treasurer's State Investment Portfolio described in Section | ||||||
25 | 15.
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1 | Section 15. Establishment of Student Investment Account. | ||||||
2 | The State Treasurer may allocate up to 5% of the Treasurer's | ||||||
3 | State Investment Portfolio to the Student Investment Account. | ||||||
4 | The 5% cap shall be calculated based on: (1) the balance of the | ||||||
5 | Treasurer's State Investment Portfolio at the inception of the | ||||||
6 | State's fiscal year; or (2) the average balance of the | ||||||
7 | Treasurer's State Investment Portfolio in the immediately | ||||||
8 | preceding 5 fiscal years, whichever number is greater.
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9 | Section 20. Earnings from Student Investment Account. | ||||||
10 | Earnings on the investments in the Student Investment Account | ||||||
11 | may be reinvested into the Student Investment Account without | ||||||
12 | being counted against the 5% cap under Section 15. Net earnings | ||||||
13 | on investments under this Act that are not reinvested shall be | ||||||
14 | deposited in the same manner as interest is deposited under | ||||||
15 | Section 4.1 of the State Finance Act. The General Assembly | ||||||
16 | shall prioritize any such funds deposited into the General | ||||||
17 | Revenue Fund towards appropriations to support higher | ||||||
18 | education in the State of Illinois.
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19 | Section 25. Operation of the Student Investment Account. | ||||||
20 | The State Treasurer may: originate, guarantee, acquire, and | ||||||
21 | service education loans; facilitate such arrangements between | ||||||
22 | borrowers and eligible lenders; and perform such other acts as | ||||||
23 | may be necessary or desirable in connection with the education | ||||||
24 | loans. The State Treasurer may receive, hold, and invest moneys |
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1 | paid into the Student Investment Account and take such other | ||||||
2 | actions as are necessary to operate the Student Investment | ||||||
3 | Account. The State Treasurer may invest in, and enter into | ||||||
4 | contracts with, institutions that provide education loans. The | ||||||
5 | State Treasurer may also: enter into income share agreements | ||||||
6 | with participants; facilitate such arrangements between | ||||||
7 | participants and eligible income share agreement providers; | ||||||
8 | and perform such other acts as may be necessary or desirable in | ||||||
9 | connection with such income share agreements. The State | ||||||
10 | Treasurer may also deposit funds with financial institutions | ||||||
11 | that provide education loans.
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12 | Section 30. Administration of the Student Investment | ||||||
13 | Account. The State Treasurer may enter into such contracts and | ||||||
14 | guarantee agreements as are necessary to operate the Student | ||||||
15 | Investment Account with eligible lenders, financial | ||||||
16 | institutions, institutions of higher education, income share | ||||||
17 | agreement providers, individuals, corporations, and qualified | ||||||
18 | income share agreement or loan origination and servicing | ||||||
19 | organizations and with any governmental entity, including the | ||||||
20 | Illinois Student Assistance Commission, and with any agency or | ||||||
21 | instrumentality of the United States. The State Treasurer is | ||||||
22 | authorized to establish specific criteria governing the | ||||||
23 | eligibility of entities to participate in its programs, the | ||||||
24 | making of income share agreements or education loans, | ||||||
25 | provisions for default, the establishment of default reserve |
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1 | funds, the purchase of default insurance, the provision of | ||||||
2 | prudent debt service reserves, and the furnishing by | ||||||
3 | participating entities of such additional guarantees of the | ||||||
4 | income share agreements or education loans as the State | ||||||
5 | Treasurer shall determine.
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6 | Section 35. Fees. The State Treasurer shall establish fees | ||||||
7 | to cover the costs of administration, recordkeeping, | ||||||
8 | marketing, and investment management related to the Student | ||||||
9 | Investment Account. The State Treasurer may pay eligible | ||||||
10 | lenders, income share agreement providers, financial | ||||||
11 | institutions, institutions of higher education, individuals, | ||||||
12 | corporations, qualified income share agreement or loan | ||||||
13 | origination and servicing organizations, governmental | ||||||
14 | entities, and any agencies or instrumentalities of the United | ||||||
15 | States an administrative fee in connection with services | ||||||
16 | provided pursuant to the Student Investment Account in such | ||||||
17 | amounts, at such times, and in such manner as may be prescribed | ||||||
18 | by the State Treasurer.
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19 | Section 40. Insurance. The State Treasurer or his or her | ||||||
20 | designee may charge and collect premiums for insurance on | ||||||
21 | income share agreements or education loans and other related | ||||||
22 | charges and pay such insurance premiums or a portion thereof | ||||||
23 | and other charges as are prudent.
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1 | Section 45. Wage deductions. The State Treasurer may deduct | ||||||
2 | from the salary, wages, commissions, and bonuses of any | ||||||
3 | employee in this State and, to the extent permitted by the laws | ||||||
4 | of the United States and individual states in which an employee | ||||||
5 | might reside, any employee outside the State of Illinois by | ||||||
6 | serving a notice of administrative wage garnishment on an | ||||||
7 | employer, in accordance with rules adopted by the State | ||||||
8 | Treasurer, for the recovery of an education loan debt or income | ||||||
9 | share agreement owned or serviced by the State Treasurer. Levy | ||||||
10 | must not be made until the State Treasurer has caused a demand | ||||||
11 | to be made on the employee, in a manner consistent with rules | ||||||
12 | adopted by the State Treasurer, such that the employee is | ||||||
13 | provided an opportunity to contest the existence or amount of | ||||||
14 | the income share agreement or education loan obligation.
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15 | Section 50. Investment policy. The State Treasurer shall | ||||||
16 | develop, publish, and implement one or more investment policies | ||||||
17 | covering the investment of moneys in accordance with this Act.
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18 | Section 55. Student Investment Account Administrative | ||||||
19 | Fund. The Student Investment Account Administrative Fund is | ||||||
20 | created as a non-appropriated separate and apart trust fund in | ||||||
21 | the State Treasury. Moneys in the Student Investment Account | ||||||
22 | Administrative Fund may be used by the State Treasurer to pay | ||||||
23 | expenses related to all aspects of operation and administration | ||||||
24 | of the Student Investment Account. The State Treasurer may |
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1 | deposit a portion of the earnings of the investments in the | ||||||
2 | Student Investment Account and a portion of any administrative | ||||||
3 | fees, and the proceeds thereof, collected pursuant to Section | ||||||
4 | 35 into the Student Investment Account Administrative Fund.
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5 | Section 60. Student Investment Account Loss Reserve Fund. | ||||||
6 | The Student Investment Account Loss Reserve Fund may be created | ||||||
7 | as a non-appropriated separate and apart trust fund in the | ||||||
8 | State Treasury. Moneys in the Student Investment Account Loss | ||||||
9 | Reserve Fund may be used by the State Treasurer to establish | ||||||
10 | loss reserve funds. The State Treasurer may deposit a portion | ||||||
11 | of the earnings of the investments in the Student Investment | ||||||
12 | Account and a portion of any administrative fees, and the | ||||||
13 | proceeds thereof, collected pursuant to Section 35 into the | ||||||
14 | Student Investment Account Loss Reserve Fund.
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15 | Section 65. Student Investment Account Assistance Fund. | ||||||
16 | The Student Investment Account Assistance Fund may be created | ||||||
17 | as a non-appropriated separate and apart trust fund in the | ||||||
18 | State Treasury. Moneys in the Student Investment Account | ||||||
19 | Assistance Fund may be used by the State Treasurer to provide | ||||||
20 | assistance to qualifying borrowers or income share agreement | ||||||
21 | participants. The State Treasurer may deposit a portion of the | ||||||
22 | earnings of the investments in the Student Investment Account | ||||||
23 | and a portion of any administrative fees, and the proceeds | ||||||
24 | thereof, collected pursuant to Section 35 into the Student |
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1 | Investment Account Assistance Fund.
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2 | Section 70. Rules. The State Treasurer may adopt rules he | ||||||
3 | or she deems necessary or desirable to implement and administer | ||||||
4 | this Act.
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5 | Section 900. The Deposit of State Moneys Act is amended by | ||||||
6 | changing Section 22.5 as follows:
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7 | (15 ILCS 520/22.5) (from Ch. 130, par. 41a)
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8 | (For force and effect of certain provisions, see Section 90 | ||||||
9 | of P.A. 94-79) | ||||||
10 | Sec. 22.5. Permitted investments. The State Treasurer may, | ||||||
11 | with the
approval of the Governor, invest and reinvest any | ||||||
12 | State money in the treasury
which is not needed for current | ||||||
13 | expenditures due or about to become due, in
obligations of the | ||||||
14 | United States government or its agencies or of National
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15 | Mortgage Associations established by or under the National | ||||||
16 | Housing Act, 12 1201
U.S.C. 1701 et seq., or
in mortgage | ||||||
17 | participation certificates representing undivided interests in
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18 | specified, first-lien conventional residential Illinois | ||||||
19 | mortgages that are
underwritten, insured, guaranteed, or | ||||||
20 | purchased by the Federal Home Loan
Mortgage Corporation or in | ||||||
21 | Affordable Housing Program Trust Fund Bonds or
Notes as defined | ||||||
22 | in and issued pursuant to the Illinois Housing Development
Act. | ||||||
23 | All such obligations shall be considered as cash and may
be |
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1 | delivered over as cash by a State Treasurer to his successor.
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2 | The State Treasurer may, with the approval of the Governor, | ||||||
3 | purchase
any state bonds with any money in the State Treasury | ||||||
4 | that has been set
aside and held for the payment of the | ||||||
5 | principal of and interest on the
bonds. The bonds shall be | ||||||
6 | considered as cash and may be delivered over
as cash by the | ||||||
7 | State Treasurer to his successor.
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8 | The State Treasurer may, with the approval of the Governor, | ||||||
9 | invest or
reinvest any State money in the treasury that is not | ||||||
10 | needed for
current expenditure due or about to become due, or | ||||||
11 | any money in the
State Treasury that has been set aside and | ||||||
12 | held for the payment of the
principal of and the interest on | ||||||
13 | any State bonds, in shares,
withdrawable accounts, and | ||||||
14 | investment certificates of savings and
building and loan | ||||||
15 | associations, incorporated under the laws of this
State or any | ||||||
16 | other state or under the laws of the United States;
provided, | ||||||
17 | however, that investments may be made only in those savings
and | ||||||
18 | loan or building and loan associations the shares and | ||||||
19 | withdrawable
accounts or other forms of investment securities | ||||||
20 | of which are insured
by the Federal Deposit Insurance | ||||||
21 | Corporation.
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22 | The State Treasurer may not invest State money in any | ||||||
23 | savings and
loan or building and loan association unless a | ||||||
24 | commitment by the savings
and loan (or building and loan) | ||||||
25 | association, executed by the president
or chief executive | ||||||
26 | officer of that association, is submitted in the
following |
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1 | form:
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2 | The .................. Savings and Loan (or Building | ||||||
3 | and Loan)
Association pledges not to reject arbitrarily | ||||||
4 | mortgage loans for
residential properties within any | ||||||
5 | specific part of the community served
by the savings and | ||||||
6 | loan (or building and loan) association because of
the | ||||||
7 | location of the property. The savings and loan (or building | ||||||
8 | and
loan) association also pledges to make loans available | ||||||
9 | on low and
moderate income residential property throughout | ||||||
10 | the community within
the limits of its legal restrictions | ||||||
11 | and prudent financial practices.
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12 | The State Treasurer may, with the approval of the Governor, | ||||||
13 | invest or
reinvest, at a price not to exceed par, any State | ||||||
14 | money in the treasury
that is not needed for current | ||||||
15 | expenditures due or about to become
due, or any money in the | ||||||
16 | State Treasury that has been set aside and
held for the payment | ||||||
17 | of the principal of and interest on any State
bonds, in bonds | ||||||
18 | issued by counties or municipal corporations of the
State of | ||||||
19 | Illinois.
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20 | The State Treasurer may, with the approval of the Governor, | ||||||
21 | invest or
reinvest any State money in the Treasury which is not | ||||||
22 | needed for current
expenditure, due or about to become due, or | ||||||
23 | any money in the State Treasury
which has been set aside and | ||||||
24 | held for the payment of the principal of and
the interest on | ||||||
25 | any State bonds, in participations in loans, the principal
of | ||||||
26 | which participation is fully guaranteed by an agency or |
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1 | instrumentality
of the United States government; provided, | ||||||
2 | however, that such loan
participations are represented by | ||||||
3 | certificates issued only by banks which
are incorporated under | ||||||
4 | the laws of this State or any other state
or under the laws of | ||||||
5 | the United States, and such banks, but not
the loan | ||||||
6 | participation certificates, are insured by the Federal Deposit
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7 | Insurance Corporation.
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8 | Whenever the total amount of vouchers presented to the | ||||||
9 | Comptroller under Section 9 of the State Comptroller Act | ||||||
10 | exceeds the funds available in the General Revenue Fund by | ||||||
11 | $1,000,000,000 or more, then the State Treasurer may invest any | ||||||
12 | State money in the Treasury, other than money in the General | ||||||
13 | Revenue Fund, Health Insurance Reserve Fund, Attorney General | ||||||
14 | Court Ordered and Voluntary Compliance Payment Projects Fund, | ||||||
15 | Attorney General Whistleblower Reward and Protection Fund, and | ||||||
16 | Attorney General's State Projects and Court Ordered | ||||||
17 | Distribution Fund, which is not needed for current | ||||||
18 | expenditures, due or about to become due, or any money in the | ||||||
19 | State Treasury which has been set aside and held for the | ||||||
20 | payment of the principal of and the interest on any State bonds | ||||||
21 | with the Office of the Comptroller in order to enable the | ||||||
22 | Comptroller to pay outstanding vouchers. At any time, and from | ||||||
23 | time to time outstanding, such investment shall not be greater | ||||||
24 | than $2,000,000,000. Such investment shall be deposited into | ||||||
25 | the General Revenue Fund or Health Insurance Reserve Fund as | ||||||
26 | determined by the Comptroller. Such investment shall be repaid |
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1 | by the Comptroller with an interest rate tied to the London | ||||||
2 | Interbank Offered Rate (LIBOR) or the Federal Funds Rate or an | ||||||
3 | equivalent market established variable rate, but in no case | ||||||
4 | shall such interest rate exceed the lesser of the penalty rate | ||||||
5 | established under the State Prompt Payment Act or the timely | ||||||
6 | pay interest rate under Section 368a of the Illinois Insurance | ||||||
7 | Code. The State Treasurer and the Comptroller shall enter into | ||||||
8 | an intergovernmental agreement to establish procedures for | ||||||
9 | such investments, which market established variable rate to | ||||||
10 | which the interest rate for the investments should be tied, and | ||||||
11 | other terms which the State Treasurer and Comptroller | ||||||
12 | reasonably believe to be mutually beneficial concerning these | ||||||
13 | investments by the State Treasurer. The State Treasurer and | ||||||
14 | Comptroller shall also enter into a written agreement for each | ||||||
15 | such investment that specifies the period of the investment, | ||||||
16 | the payment interval, the interest rate to be paid, the funds | ||||||
17 | in the Treasury from which the Treasurer will draw the | ||||||
18 | investment, and other terms upon which the State Treasurer and | ||||||
19 | Comptroller mutually agree. Such investment agreements shall | ||||||
20 | be public records and the State Treasurer shall post the terms | ||||||
21 | of all such investment agreements on the State Treasurer's | ||||||
22 | official website. In compliance with the intergovernmental | ||||||
23 | agreement, the Comptroller shall order and the State Treasurer | ||||||
24 | shall transfer amounts sufficient for the payment of principal | ||||||
25 | and interest invested by the State Treasurer with the Office of | ||||||
26 | the Comptroller under this paragraph from the General Revenue |
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1 | Fund or the Health Insurance Reserve Fund to the respective | ||||||
2 | funds in the Treasury from which the State Treasurer drew the | ||||||
3 | investment. Public Act 100-1107 This amendatory Act of the | ||||||
4 | 100th General Assembly shall constitute an irrevocable and | ||||||
5 | continuing authority for all amounts necessary for the payment | ||||||
6 | of principal and interest on the investments made with the | ||||||
7 | Office of the Comptroller by the State Treasurer under this | ||||||
8 | paragraph, and the irrevocable and continuing authority for and | ||||||
9 | direction to the Comptroller and Treasurer to make the | ||||||
10 | necessary transfers. | ||||||
11 | The State Treasurer may, with the approval of the Governor, | ||||||
12 | invest or
reinvest any State money in the Treasury that is not | ||||||
13 | needed for current
expenditure, due or about to become due, or | ||||||
14 | any money in the State Treasury
that has been set aside and | ||||||
15 | held for the payment of the principal of and
the interest on | ||||||
16 | any State bonds, in any of the following:
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17 | (1) Bonds, notes, certificates of indebtedness, | ||||||
18 | Treasury bills, or other
securities now or hereafter issued | ||||||
19 | that are guaranteed by the full faith
and credit of the | ||||||
20 | United States of America as to principal and interest.
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21 | (2) Bonds, notes, debentures, or other similar | ||||||
22 | obligations of the United
States of America, its agencies, | ||||||
23 | and instrumentalities.
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24 | (2.5) Bonds, notes, debentures, or other similar | ||||||
25 | obligations of a
foreign government, other than the | ||||||
26 | Republic of the Sudan, that are guaranteed by the full |
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1 | faith and credit of that
government as to principal and | ||||||
2 | interest, but only if the foreign government
has not | ||||||
3 | defaulted and has met its payment obligations in a timely | ||||||
4 | manner on
all similar obligations for a period of at least | ||||||
5 | 25 years immediately before
the time of acquiring those | ||||||
6 | obligations.
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7 | (3) Interest-bearing savings accounts, | ||||||
8 | interest-bearing certificates of
deposit, interest-bearing | ||||||
9 | time deposits, or any other investments
constituting | ||||||
10 | direct obligations of any bank as defined by the Illinois
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11 | Banking Act.
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12 | (4) Interest-bearing accounts, certificates of | ||||||
13 | deposit, or any other
investments constituting direct | ||||||
14 | obligations of any savings and loan
associations | ||||||
15 | incorporated under the laws of this State or any other | ||||||
16 | state or
under the laws of the United States.
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17 | (5) Dividend-bearing share accounts, share certificate | ||||||
18 | accounts, or
class of share accounts of a credit union | ||||||
19 | chartered under the laws of this
State or the laws of the | ||||||
20 | United States; provided, however, the principal
office of | ||||||
21 | the credit union must be located within the State of | ||||||
22 | Illinois.
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23 | (6) Bankers' acceptances of banks whose senior | ||||||
24 | obligations are rated in
the top 2 rating categories by 2 | ||||||
25 | national rating agencies and maintain that
rating during | ||||||
26 | the term of the investment.
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1 | (7) Short-term obligations of either corporations or | ||||||
2 | limited liability companies organized in the United
States | ||||||
3 | with assets exceeding $500,000,000 if (i) the obligations | ||||||
4 | are rated
at the time of purchase at one of the 3 highest | ||||||
5 | classifications established
by at least 2 standard rating | ||||||
6 | services and mature not later than 270
days from the date | ||||||
7 | of purchase, (ii) the purchases do not exceed 10% of
the | ||||||
8 | corporation's or the limited liability company's | ||||||
9 | outstanding obligations, (iii) no more than one-third of
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10 | the public agency's funds are invested in short-term | ||||||
11 | obligations of
either corporations or limited liability | ||||||
12 | companies, and (iv) the corporation or the limited | ||||||
13 | liability company has not been placed on the list of | ||||||
14 | restricted companies by the Illinois Investment Policy | ||||||
15 | Board under Section 1-110.16 of the Illinois Pension Code.
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16 | (7.5) Obligations of either corporations or limited | ||||||
17 | liability companies organized in the United States, that | ||||||
18 | have a significant presence in this State, with assets | ||||||
19 | exceeding $500,000,000 if: (i) the obligations are rated at | ||||||
20 | the time of purchase at one of the 3 highest | ||||||
21 | classifications established by at least 2 standard rating | ||||||
22 | services and mature more than 270 days, but less than 5 | ||||||
23 | years, from the date of purchase; (ii) the purchases do not | ||||||
24 | exceed 10% of the corporation's or the limited liability | ||||||
25 | company's outstanding obligations; (iii) no more than 5% of | ||||||
26 | the public agency's funds are invested in such obligations |
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1 | of corporations or limited liability companies; and (iv) | ||||||
2 | the corporation or the limited liability company has not | ||||||
3 | been placed on the list of restricted companies by the | ||||||
4 | Illinois Investment Policy Board under Section 1-110.16 of | ||||||
5 | the Illinois Pension Code. The authorization of the | ||||||
6 | Treasurer to invest in new obligations under this paragraph | ||||||
7 | shall expire on June 30, 2019. | ||||||
8 | (8) Money market mutual funds registered under the | ||||||
9 | Investment Company
Act of 1940, provided that the portfolio | ||||||
10 | of the money market mutual fund is
limited to obligations | ||||||
11 | described in this Section and to agreements to
repurchase | ||||||
12 | such obligations.
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13 | (9) The Public Treasurers' Investment Pool created | ||||||
14 | under Section 17 of
the State Treasurer Act or in a fund | ||||||
15 | managed, operated, and administered by
a bank.
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16 | (10) Repurchase agreements of government securities | ||||||
17 | having the meaning
set out in the Government Securities Act | ||||||
18 | of 1986, as now or hereafter amended or succeeded, subject | ||||||
19 | to the provisions
of that Act and the regulations issued | ||||||
20 | thereunder.
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21 | (11) Investments made in accordance with the | ||||||
22 | Technology Development
Act.
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23 | (12) Investments made in accordance with the Student | ||||||
24 | Investment Account Act. | ||||||
25 | For purposes of this Section, "agencies" of the United | ||||||
26 | States
Government includes:
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1 | (i) the federal land banks, federal intermediate | ||||||
2 | credit banks, banks for
cooperatives, federal farm credit | ||||||
3 | banks, or any other entity authorized
to issue debt | ||||||
4 | obligations under the Farm Credit Act of 1971 (12 U.S.C. | ||||||
5 | 2001
et seq.) and Acts amendatory thereto;
| ||||||
6 | (ii) the federal home loan banks and the federal home | ||||||
7 | loan
mortgage corporation;
| ||||||
8 | (iii) the Commodity Credit Corporation; and
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9 | (iv) any other agency created by Act of Congress.
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10 | The Treasurer may, with the approval of the Governor, lend | ||||||
11 | any securities
acquired under this Act. However, securities may | ||||||
12 | be lent under this Section
only in accordance with Federal | ||||||
13 | Financial Institution Examination Council
guidelines and only | ||||||
14 | if the securities are collateralized at a level sufficient
to | ||||||
15 | assure the safety of the securities, taking into account market | ||||||
16 | value
fluctuation. The securities may be collateralized by cash | ||||||
17 | or collateral
acceptable under Sections 11 and 11.1.
| ||||||
18 | (Source: P.A. 99-856, eff. 8-19-16; 100-1107, eff. 8-27-18; | ||||||
19 | revised 9-27-18.)
| ||||||
20 | Section 905. The Student Loan Servicing Rights Act is | ||||||
21 | amended by changing Section 1-5 as follows:
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22 | (110 ILCS 992/1-5)
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23 | Sec. 1-5. Definitions. As used in this Act: | ||||||
24 | "Applicant" means a person applying for a license pursuant |
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1 | to this Act. | ||||||
2 | "Borrower" or "student loan borrower" means a person who | ||||||
3 | has received or agreed to pay a student loan for his or her own | ||||||
4 | educational expenses. | ||||||
5 | "Cosigner" means a person who has agreed to share | ||||||
6 | responsibility for repaying a student loan with a borrower. | ||||||
7 | "Department" means the Department of Financial and | ||||||
8 | Professional Regulation. | ||||||
9 | "Division of Banking" means the Division of Banking of the | ||||||
10 | Department of Financial and Professional Regulation. | ||||||
11 | "Federal loan borrower eligible for referral to a repayment | ||||||
12 | specialist" means a borrower who possesses any of the following | ||||||
13 | characteristics: | ||||||
14 | (1) requests information related to options to reduce | ||||||
15 | or suspend his or her monthly payment; | ||||||
16 | (2) indicates that he or she is experiencing or | ||||||
17 | anticipates experiencing financial hardship, distress, or | ||||||
18 | difficulty making his or her payments; | ||||||
19 | (3) has missed 2 consecutive monthly payments; | ||||||
20 | (4) is at least 75 days delinquent; | ||||||
21 | (5) is enrolled in a discretionary forbearance for more | ||||||
22 | than 9 of the previous 12 months; | ||||||
23 | (6) has rehabilitated or consolidated one or more loans | ||||||
24 | out of default within the past 12 months; or | ||||||
25 | (7) has not completed a course of study, as reflected | ||||||
26 | in the servicer's records, or the borrower identifies |
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| |||||||
1 | himself or herself as not having completed a program of | ||||||
2 | study. | ||||||
3 | "Federal education loan" means any loan made, guaranteed, | ||||||
4 | or insured under Title IV of the federal Higher Education Act | ||||||
5 | of 1965. | ||||||
6 | "Income-driven payment plan certification" means the | ||||||
7 | documentation related to a federal student loan borrower's | ||||||
8 | income or financial status the borrower must submit to renew an | ||||||
9 | income-driven repayment plan. | ||||||
10 | "Income-driven repayment options" includes the | ||||||
11 | Income-Contingent Repayment Plan, the Income-Based Repayment | ||||||
12 | Plan, the Income-Sensitive Repayment Plan, the Pay As You Earn | ||||||
13 | Plan, the Revised Pay As You Earn Plan, and any other federal | ||||||
14 | student loan repayment plan that is calculated based on a | ||||||
15 | borrower's income. | ||||||
16 | "Licensee" means a person licensed pursuant to this Act. | ||||||
17 | "Other repayment plans" means the Standard Repayment Plan, | ||||||
18 | the Graduated Repayment Plan, the Extended Repayment Plan, or | ||||||
19 | any other federal student loan repayment plan not based on a | ||||||
20 | borrower's income. | ||||||
21 | "Private loan borrower eligible for referral to a repayment | ||||||
22 | specialist" means a borrower who possesses any of the following | ||||||
23 | characteristics: | ||||||
24 | (1) requests information related to options to reduce | ||||||
25 | or suspend his or her monthly payments; or | ||||||
26 | (2) indicates that he or she is experiencing or |
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| |||||||
1 | anticipates experiencing financial hardship, distress, or | ||||||
2 | difficulty making his or her payments. | ||||||
3 | "Requester" means any borrower or cosigner that submits a | ||||||
4 | request for assistance. | ||||||
5 | "Request for assistance" means all inquiries, complaints, | ||||||
6 | account disputes, and requests for documentation a servicer | ||||||
7 | receives from borrowers or cosigners. | ||||||
8 | "Secretary" means the Secretary of Financial and | ||||||
9 | Professional Regulation, or his or her designee, including the | ||||||
10 | Director of the Division of Banking of the Department of | ||||||
11 | Financial and Professional Regulation. | ||||||
12 | "Servicing" means: (1) receiving any scheduled periodic | ||||||
13 | payments from a student loan borrower or cosigner pursuant to | ||||||
14 | the terms of a student loan; (2) applying the payments of | ||||||
15 | principal and interest and such other payments with respect to | ||||||
16 | the amounts received from a student loan borrower or cosigner, | ||||||
17 | as may be required pursuant to the terms of a student loan; and | ||||||
18 | (3) performing other administrative services with respect to a | ||||||
19 | student loan. | ||||||
20 | "Student loan" or "loan" means any federal education loan | ||||||
21 | or other loan primarily for use to finance a postsecondary | ||||||
22 | education and costs of attendance at a postsecondary | ||||||
23 | institution, including, but not limited to, tuition, fees, | ||||||
24 | books and supplies, room and board, transportation, and | ||||||
25 | miscellaneous personal expenses. "Student loan" includes a | ||||||
26 | loan made to refinance a student loan. |
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| |||||||
1 | "Student loan" shall not include an extension of credit | ||||||
2 | under an open-end consumer credit plan, a reverse mortgage | ||||||
3 | transaction, a residential mortgage transaction, or any other | ||||||
4 | loan that is secured by real property or a dwelling. | ||||||
5 | "Student loan" shall not include an extension of credit | ||||||
6 | made by a postsecondary educational institution to a borrower | ||||||
7 | if one of the following apply: | ||||||
8 | (1) The term of the extension of credit is no longer | ||||||
9 | than the borrower's education program. | ||||||
10 | (2) The remaining, unpaid principal balance of the | ||||||
11 | extension of credit is less than $1,500 at the time of the | ||||||
12 | borrower's graduation or completion of the program. | ||||||
13 | (3) The borrower fails to graduate or successfully | ||||||
14 | complete his or her education program and has a balance due | ||||||
15 | at the time of his or her disenrollment from the | ||||||
16 | postsecondary institution. | ||||||
17 | "Student loan servicer" or "servicer" means any person | ||||||
18 | engaged in the business of servicing student loans. | ||||||
19 | "Student loan servicer" shall not include: | ||||||
20 | (1) a bank, savings bank, savings association, or | ||||||
21 | credit union organized under the laws of the State or any | ||||||
22 | other state or under the laws of the United States; | ||||||
23 | (2) a wholly owned subsidiary of any bank, savings | ||||||
24 | bank, savings association, or credit union organized under | ||||||
25 | the laws of the State or any other state or under the laws | ||||||
26 | of the United States; |
| |||||||
| |||||||
1 | (3) an operating subsidiary where each owner of the | ||||||
2 | operating subsidiary is wholly owned by the same bank, | ||||||
3 | savings bank, savings association, or credit union | ||||||
4 | organized under the laws of the State or any other state or | ||||||
5 | under the laws of the United States; | ||||||
6 | (4) the Illinois Student Assistance Commission and its | ||||||
7 | agents when the agents are acting on the Illinois Student | ||||||
8 | Assistance Commission's behalf; | ||||||
9 | (5) a public postsecondary educational institution or
| ||||||
10 | a private nonprofit postsecondary educational institution
| ||||||
11 | servicing a student loan it extended to the borrower; | ||||||
12 | (6) a licensed debt management service under the Debt
| ||||||
13 | Management Service Act, except to the extent that the
| ||||||
14 | organization acts as a subcontractor, affiliate, or
| ||||||
15 | service provider for an entity that is otherwise subject to | ||||||
16 | licensure under this Act; | ||||||
17 | (7) any collection agency licensed under the
| ||||||
18 | Collection Agency Act that is collecting post-default
| ||||||
19 | debt; | ||||||
20 | (8) in connection with its responsibilities as a | ||||||
21 | guaranty agency engaged in default aversion, a State or | ||||||
22 | nonprofit private institution or organization having an | ||||||
23 | agreement with the U.S. Secretary of Education under | ||||||
24 | Section 428(b) of the Higher Education Act (20 U.S.C. | ||||||
25 | 1078(B));
| ||||||
26 | (9) a State institution or a nonprofit private |
| |||||||
| |||||||
1 | organization designated by a governmental entity to make or | ||||||
2 | service student loans, provided in each case that the | ||||||
3 | institution or organization services fewer than 20,000 | ||||||
4 | student loan accounts of borrowers who reside in Illinois; | ||||||
5 | or
| ||||||
6 | (10) a law firm or licensed attorney that is collecting | ||||||
7 | post-default debt ; or . | ||||||
8 | (11) the State Treasurer. | ||||||
9 | (Source: P.A. 100-540, eff. 12-31-18; 100-635, eff. 12-31-18 .)
| ||||||
10 | Section 999. Effective date. This Act takes effect upon | ||||||
11 | becoming law.".
|