Bill Text: IL HB1737 | 2013-2014 | 98th General Assembly | Amended
Bill Title: Amends the Payday Loan Reform Act. Makes a technical change in a Section concerning the short title.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Failed) 2014-12-03 - Session Sine Die [HB1737 Detail]
Download: Illinois-2013-HB1737-Amended.html
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1 | AMENDMENT TO HOUSE BILL 1737
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2 | AMENDMENT NO. ______. Amend House Bill 1737 by replacing | ||||||
3 | everything after the enacting clause with the following:
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4 | "Section 5. The Payday Loan Reform Act is amended by | ||||||
5 | changing Sections 1-10 and 2-5 as follows:
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6 | (815 ILCS 122/1-10)
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7 | Sec. 1-10. Definitions. As used in this Act: | ||||||
8 | "Check" means a "negotiable instrument", as defined in | ||||||
9 | Article 3 of the Uniform Commercial Code, that is drawn on a | ||||||
10 | financial institution. | ||||||
11 | "Commercially reasonable method of verification" or | ||||||
12 | "certified database" means a consumer reporting service | ||||||
13 | database certified by the Department as effective in verifying | ||||||
14 | that a proposed loan agreement is permissible under this Act, | ||||||
15 | or, in the absence of the Department's certification, any | ||||||
16 | reasonably reliable written verification by the consumer |
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1 | concerning (i) whether the consumer has any outstanding payday | ||||||
2 | loans, (ii) the principal amount of those outstanding payday | ||||||
3 | loans, and (iii) whether any payday loans have been paid in | ||||||
4 | full by the consumer in the preceding 7 days. | ||||||
5 | "Consumer" means any natural person who, singly or jointly | ||||||
6 | with another consumer, enters into a loan. | ||||||
7 | "Consumer reporting service" means an entity that provides | ||||||
8 | a database certified by the Department. | ||||||
9 | "Department" means the Department of Financial and | ||||||
10 | Professional Regulation. | ||||||
11 | "Secretary" means the Secretary of Financial and | ||||||
12 | Professional Regulation. | ||||||
13 | "Gross monthly income" means monthly income as | ||||||
14 | demonstrated by official documentation of the income, | ||||||
15 | including, but not limited to, a pay stub or a receipt | ||||||
16 | reflecting payment of government benefits, for the period 30 | ||||||
17 | days prior to the date on which the loan is made. | ||||||
18 | "Lender" and "licensee" mean any person or entity, | ||||||
19 | including any affiliate or subsidiary of a lender or licensee, | ||||||
20 | that offers or makes a payday loan, buys a whole or partial | ||||||
21 | interest in a payday loan, arranges a payday loan for a third | ||||||
22 | party, or acts as an agent for a third party in making a payday | ||||||
23 | loan, regardless of whether approval, acceptance, or | ||||||
24 | ratification by the third party is necessary to create a legal | ||||||
25 | obligation for the third party, and includes any other person | ||||||
26 | or entity if the Department determines that the person or |
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1 | entity is engaged in a transaction that is in substance a | ||||||
2 | disguised payday loan or a subterfuge for the purpose of | ||||||
3 | avoiding this Act. | ||||||
4 | "Loan agreement" means a written agreement between a lender | ||||||
5 | and consumer to make a loan to the consumer, regardless of | ||||||
6 | whether any loan proceeds are actually paid to the consumer on | ||||||
7 | the date on which the loan agreement is made. | ||||||
8 | "Member of the military" means a person serving in the | ||||||
9 | armed forces of the United States, the Illinois National Guard, | ||||||
10 | or any reserve component of the armed forces of the United | ||||||
11 | States. "Member of the military" includes those persons engaged | ||||||
12 | in (i) active duty, (ii) training or education under the | ||||||
13 | supervision of the United States preliminary to induction into | ||||||
14 | military service, or (iii) a period of active duty with the | ||||||
15 | State of Illinois under Title 10 or Title 32 of the United | ||||||
16 | States Code pursuant to order of the President or the Governor | ||||||
17 | of the State of Illinois. | ||||||
18 | "Outstanding balance" means the total amount owed by the | ||||||
19 | consumer on a loan to a lender, including all principal, | ||||||
20 | finance charges, fees, and charges of every kind. | ||||||
21 | "Payday loan" or "loan" means a loan with a finance charge | ||||||
22 | exceeding an annual percentage rate of 36% and with a term that | ||||||
23 | does not exceed 120 days, including any transaction conducted | ||||||
24 | via any medium whatsoever, including, but not limited to, | ||||||
25 | paper, facsimile, Internet, or telephone, in which: | ||||||
26 | (1) A lender accepts one or more checks dated on the |
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1 | date written and agrees to hold them for a period of days | ||||||
2 | before deposit or presentment, or accepts one or more | ||||||
3 | checks dated subsequent to the date written and agrees to | ||||||
4 | hold them for deposit; or | ||||||
5 | (2) A lender accepts one or more authorizations to | ||||||
6 | debit a consumer's bank account; or | ||||||
7 | (3) A lender accepts an interest in a consumer's wages, | ||||||
8 | including, but not limited to, a wage assignment. | ||||||
9 | The term "payday loan" includes "installment payday loan", | ||||||
10 | unless otherwise specified in
this Act. | ||||||
11 | "Principal amount" means the amount received by the | ||||||
12 | consumer from the lender due and owing on a loan, excluding any | ||||||
13 | finance charges, interest, fees, or other loan-related | ||||||
14 | charges. | ||||||
15 | "Rollover" means to refinance, renew, amend, or extend a | ||||||
16 | loan beyond its original term.
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17 | (Source: P.A. 96-936, eff. 3-21-11 .)
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18 | (815 ILCS 122/2-5)
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19 | Sec. 2-5. Loan terms. | ||||||
20 | (a) Without affecting the right of a consumer to prepay at | ||||||
21 | any time without cost or penalty, no payday loan may have a | ||||||
22 | minimum term of less than 13 days. | ||||||
23 | (b) Except for an installment payday loan as defined in | ||||||
24 | this Section,
no payday loan may be made to a consumer if the | ||||||
25 | loan would result in the consumer being indebted to one or more |
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1 | payday lenders for a period in excess of 45 consecutive days. | ||||||
2 | Except as provided under subsection (c) of this Section and | ||||||
3 | Section 2-40, if a consumer has or has had loans outstanding | ||||||
4 | for a period in excess of 45 consecutive days, no payday lender | ||||||
5 | may offer or make a loan to the consumer for at least 7 | ||||||
6 | calendar days after the date on which the outstanding balance | ||||||
7 | of all payday loans made during the 45 consecutive day period | ||||||
8 | is paid in full. For purposes of this subsection, the term | ||||||
9 | "consecutive days" means a series of continuous calendar days | ||||||
10 | in which the consumer has an outstanding balance on one or more | ||||||
11 | payday loans; however, if a payday loan is made to a consumer | ||||||
12 | within 6 days or less after the outstanding balance of all | ||||||
13 | loans is paid in full, those days are counted as "consecutive | ||||||
14 | days" for purposes of this subsection. | ||||||
15 | (c) Notwithstanding anything in this Act to the contrary, a | ||||||
16 | payday loan
shall also include any installment loan otherwise | ||||||
17 | meeting the definition of
payday loan contained in Section | ||||||
18 | 1-10, but that has a term agreed by the
parties of not less | ||||||
19 | than 112 days and not exceeding 180 days; hereinafter an
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20 | "installment payday loan". The following provisions shall | ||||||
21 | apply:
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22 | (i) Any installment payday loan must be fully | ||||||
23 | amortizing, with a finance
charge not exceeding an annual | ||||||
24 | percentage rate of 36% calculated on the principal balances | ||||||
25 | scheduled to be outstanding and
be repayable in | ||||||
26 | substantially equal and consecutive installments, |
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1 | according
to a payment schedule agreed by the parties with | ||||||
2 | not less than 13 days and
not more than one month between | ||||||
3 | payments; except that the first installment
period may be | ||||||
4 | longer than the remaining installment periods by not more | ||||||
5 | than
15 days, and the first installment payment may be | ||||||
6 | larger than the remaining
installment payments by the | ||||||
7 | amount of finance charges applicable to the
extra days. In | ||||||
8 | calculating finance charges under this subsection, when | ||||||
9 | the first installment period is longer than the remaining | ||||||
10 | installment periods, the amount of the finance charges | ||||||
11 | applicable to the extra days shall not be greater than | ||||||
12 | $15.50 per $100 of the original principal balance divided | ||||||
13 | by the number of days in a regularly scheduled installment | ||||||
14 | period and multiplied by the number of extra days | ||||||
15 | determined by subtracting the number of days in a regularly | ||||||
16 | scheduled installment period from the number of days in the | ||||||
17 | first installment period. | ||||||
18 | (ii) An installment payday loan may be refinanced by a | ||||||
19 | new installment
payday loan one time during the term of the | ||||||
20 | initial loan; provided that the
total duration of | ||||||
21 | indebtedness on the initial installment payday loan | ||||||
22 | combined
with the total term of indebtedness of the new | ||||||
23 | loan refinancing that initial
loan, shall not exceed 180 | ||||||
24 | days. For purposes of this Act, a refinancing
occurs when | ||||||
25 | an existing installment payday loan is paid from the | ||||||
26 | proceeds of
a new installment payday loan. |
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1 | (iii) In the event an installment payday loan is paid | ||||||
2 | in full prior to
the date on which the last scheduled | ||||||
3 | installment payment before maturity is
due, other than | ||||||
4 | through a refinancing, no licensee may offer or make a | ||||||
5 | payday
loan to the consumer for at least 2 calendar days | ||||||
6 | thereafter. | ||||||
7 | (iv) No installment payday loan may be made to a | ||||||
8 | consumer if the loan would
result in the consumer being | ||||||
9 | indebted to one or more payday lenders for a
period in | ||||||
10 | excess of 180 consecutive days. The term "consecutive days" | ||||||
11 | does not include the date on which a consumer makes the | ||||||
12 | final installment payment. | ||||||
13 | (d) (Blank). | ||||||
14 | (e) No lender may make a payday loan to a consumer if the | ||||||
15 | total of all payday loan payments coming due within the first | ||||||
16 | calendar month of the loan, when combined with the payment | ||||||
17 | amount of all of the consumer's other outstanding payday loans | ||||||
18 | coming due within the same month, exceeds the lesser of: | ||||||
19 | (1) $1,000; or | ||||||
20 | (2) in the case of one or more payday loans, 25% of the | ||||||
21 | consumer's gross monthly income; or | ||||||
22 | (3) in the case of one or more installment payday | ||||||
23 | loans, 22.5% of the consumer's gross monthly income; or | ||||||
24 | (4) in the case of a payday loan and an installment | ||||||
25 | payday loan, 22.5% of the consumer's gross monthly income. | ||||||
26 | No loan shall be made to a consumer who has an outstanding |
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1 | balance on 2 payday loans, except that, for a period of 12 | ||||||
2 | months after the effective date of this amendatory Act of the | ||||||
3 | 96th General Assembly, consumers with an existing CILA loan may | ||||||
4 | be issued an installment loan issued under this Act from the | ||||||
5 | company from which their CILA loan was issued. | ||||||
6 | (e-5) No Except as provided in subsection (c)(i), no lender | ||||||
7 | may impose a finance charge exceeding an annual percentage rate | ||||||
8 | of 36% more than $15.50 per $100 loaned on any payday loan, or | ||||||
9 | more than $15.50 per $100 on the initial principal balance and | ||||||
10 | on the principal balances scheduled to be outstanding during | ||||||
11 | any installment period on any installment payday loan. Except | ||||||
12 | for installment payday loans and except as provided in Section | ||||||
13 | 2-25, this charge is considered fully earned as of the date on | ||||||
14 | which the loan is made. For purposes of determining the finance | ||||||
15 | charge earned on an installment payday loan, the disclosed | ||||||
16 | annual percentage rate shall be applied to the principal | ||||||
17 | balances outstanding from time to time until the loan is paid | ||||||
18 | in full, or until the maturity date, which ever occurs first. | ||||||
19 | No finance charge may be imposed after the final scheduled | ||||||
20 | maturity date. | ||||||
21 | When any loan contract is paid in full, the licensee shall | ||||||
22 | refund any unearned finance charge. The unearned finance charge | ||||||
23 | that is refunded shall be calculated based on a method that is | ||||||
24 | at least as favorable to the consumer as the actuarial method, | ||||||
25 | as defined by the federal Truth in Lending Act. The sum of the | ||||||
26 | digits or rule of 78ths method of calculating prepaid interest |
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1 | refunds is prohibited. | ||||||
2 | (f) A lender may not take or attempt to take an interest in | ||||||
3 | any of the consumer's personal property to secure a payday | ||||||
4 | loan. | ||||||
5 | (g) A consumer has the right to redeem a check or any other | ||||||
6 | item described in the definition of payday loan under Section | ||||||
7 | 1-10 issued in connection with a payday loan from the lender | ||||||
8 | holding the check or other item at any time before the payday | ||||||
9 | loan becomes payable by paying the full amount of the check or | ||||||
10 | other item.
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11 | (Source: P.A. 96-936, eff. 3-21-11; 97-421, eff. 1-1-12.)".
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