96TH GENERAL ASSEMBLY
State of Illinois
2009 and 2010
HB5027


 
Introduced 1/25/2010, by Rep. Joseph M. Lyons
 
SYNOPSIS AS INTRODUCED:
 		





 


    




110 ILCS 26/40 new





205 ILCS 675/8
  from Ch. 17, par. 7008


815 ILCS 140/9
  from Ch. 17, par. 6012








     Amends the Credit Card Marketing Act of 2009. Provides that a credit card issuer who complies with or is exempt from the applicable college student credit card marketing requirements of the federal Truth in Lending Act and the regulations promulgated under that Act shall be deemed to be in compliance with or exempt from all of the provisions of the Credit Card Marketing Act of 2009. Amends the Illinois Financial Services Development Act. Provides that a financial institution that complies with or is exempt from the specified federal statutory and regulations standards shall be deemed to be in compliance with or exempt from all of specified provisions of the Act. Amends the Credit Card Issuance Act. Provides that a credit card issuer who complies with or is exempt from the
applicable credit card application, solicitation, and periodic statement disclosure requirements of the federal Truth in Lending Act and the
regulations promulgated under that Act shall be deemed to be in compliance with
or exempt from all of the specified provisions of the Credit Card Issuance Act. Provides that a credit card issuer who complies with or is exempt from the applicable consumer credit card issuance requirements of the federal Truth in Lending Act and the regulations promulgated under that Act pertaining to credit cards issued to persons under the age of 21 shall be deemed to be in compliance with or exempt from all of the specified provisions of the Credit Card Issuance Act. Effective immediately.
  















LRB096 17918 MJR 33286 b

















FISCAL NOTE ACT MAY APPLY
















 


 


A BILL FOR









 




  






HB5027

LRB096 17918 MJR 33286 b





  
1
    AN ACT concerning financial regulation.
  
 
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    Be it enacted by the People of the State of Illinois,
 
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represented in the General Assembly:
  
 
 
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    Section 5. The Credit Card Marketing Act of 2009 is amended  
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by adding Section 40 as follows:
 
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    (110 ILCS 26/40 new)
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    Sec. 40. Applicability. A credit card issuer who complies 
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with or is exempt from the applicable college student credit 
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card marketing requirements of the federal Truth in Lending Act 
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and the regulations promulgated under that Act shall be deemed 
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to be in compliance with or exempt from all of the provisions 
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of this Act.
 
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    Section 10. The Illinois Financial Services Development 
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Act is amended  by changing Section 8 as follows:
 



15
    (205 ILCS 675/8)  (from Ch. 17, par. 7008)



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    Sec. 8. Amendment of governing agreement. 

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    (a) If the agreement governing a revolving credit plan so 
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provides or
allows, a financial institution may at any time or 
19
from time to time amend the
terms of such agreement in 
20
accordance with the further provisions of this
Section 8.  The 
21
financial institution shall notify each affected borrower of

 


 






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the amendment in the manner set forth in the agreement 
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governing the plan and
in compliance with the requirements of 
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the Truth-in-Lending Act and regulations
promulgated 
4
thereunder, as in effect from time to time, if applicable.

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    (b) Subject to subsection (c) below, if the terms of the 
6
agreement
governing the plan, as originally drawn or as amended 
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pursuant to this
Section so provide, any amendment may, on and 
8
after the date upon which it
becomes effective as to a 
9
particular borrower, apply to all then
outstanding unpaid 
10
indebtedness in the borrower's account under the plan,

11
including any such indebtedness which shall have arisen out of 
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purchases
made or loans obtained prior to the effective date of 
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the amendment.

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    (c) If such amendment has the effect of increasing the 
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interest or other
charges to be paid by the borrower, the 
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financial institution shall mail or
deliver to the borrower, at 
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least 30 days before the effective date of the
amendment, a 
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clear and conspicuous written notice which shall:


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        (1) describe the amendment and the existing term or 
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    terms of the agreement
affected by the amendment,


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        (2) set forth the effective date of the amendment,


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        (3) state whether or not the amendment will apply to 
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    the outstanding
unpaid indebtedness as of the effective 
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    date of the amendment,


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        (4) state that absent the borrower's written notice to 
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    the financial
institution within 30 days of the earlier of 
 


 






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    the mailing or delivery of the
notice of amendment that the 
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    borrower does not agree to accept the amendment,
the 
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    amendment will become effective and apply to the borrower's 
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    account, and


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        (5) provide an address to which the borrower may send 
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    notice of the
borrower's election not to accept the 
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    amendment and include an addressed
postcard that the 
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    borrower may return to the financial institution for that

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    purpose.

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    (c-5) If such amendment results in an unfavorable change in 
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the
interest or other charges on a revolving credit plan which: 
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(i) relates to a
change in the borrower's credit standing, (ii) 
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does not
affect all or a substantial portion of a class of the 
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creditor's
accounts, and (iii) does not relate to inactivity, 
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default, or delinquency on
that revolving credit plan, the 
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financial institution shall include in
the notice required by 
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subsection (c) of this Section 8 a statement
that is 
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substantially similar to the following:

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Change in Credit Standing



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        The amendment to the terms of your account relates to a

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    change in your credit standing. The change in your credit

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    standing may have resulted from a default or delinquency on 
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    other
accounts you may have, or other adverse changes in 
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    your financial
circumstances. If you submit the enclosed 
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    postcard or otherwise
notify us in a timely manner as 
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    provided in this notice that you do not accept
the

 


 






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    amendment, you will be able to pay off your existing 
2
    balance at
the rate in effect prior to the amendment. 
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    However, in that
instance, you may not be eligible to 
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    obtain additional credit
under this plan after the 
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    effective date of the amendment. If
you do not provide 
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    timely notice to us as provided in this notice that you do

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    not accept the
amendment, the amendment to the terms of 
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    your account will become
effective and apply to your 
9
    account.

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    (c-10) As a condition to the effectiveness of the 
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borrower's notice not
to accept
the amendment, the financial 
12
institution may require the borrower to return all
credit 
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devices.

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    Any borrower who gives a timely notice electing not to 
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accept the
amendment shall be permitted to pay the outstanding 
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unpaid indebtedness in
the borrower's account under the plan in 
17
accordance with the terms of the
agreement governing the plan 
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without giving effect to the amendment.

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    Notwithstanding the financial institution's receipt of the 
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borrower's
notice under item (4) that the borrower does not 
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accept the amendment, the
amendment shall be deemed to have 
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been accepted and effective with respect to
the borrower and 
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the borrower's account if the borrower uses the credit device

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to obtain credit under the credit plan on or after the 
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effective date of the
amendment, and the amendment shall be 
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deemed effective as of the effective date
originally disclosed 
 


 






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by the financial institution.

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    (d) For purposes of this Section, the following shall not 
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be deemed an
amendment which has the effect of increasing the 
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interest to be paid by the
borrower:


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        (1) a decrease in the required amount of periodic 
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    installment payments;
and


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        (2) a change from a daily periodic rate to a periodic 
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    rate other than
daily, or from a periodic rate other than 
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    daily to a daily periodic rate,
provided that there is no 
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    resulting change in the annual percentage rate as

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    determined in accordance with the Truth-in-Lending Act and 
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    regulations
promulgated thereunder, as in effect from time 
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    to time.

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    (e) A financial institution that complies with or is exempt 
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from the following federal statutory and regulations standards 
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shall be deemed to be in compliance with or exempt from all of 
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the provisions of this Section:
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        (1) the applicable disclosure requirements and 
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    restrictions of the federal Truth in Lending Act and 
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    regulations promulgated under that Act pertaining to 
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    increasing the interest or other charges to be paid by the 
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    borrower under an open end credit plan; and
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        (2) the applicable adverse action notice requirements 
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    of the federal Equal Credit Opportunity Act and regulations 
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    promulgated under that Act. 
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(Source: P.A. 93-287, eff. 1-1-04.)

 
 


 






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    Section 15. The Credit Card Issuance Act is amended  by 
2
changing Section 9 as follows:
 



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    (815 ILCS 140/9)  (from Ch. 17, par. 6012)



4
    Sec. 9. Penalties. 

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    (a) Any credit card issuer who knowingly violates this Act 
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is guilty of a
Class A misdemeanor.

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    (b) No credit card issuer who violates this Act, except as 
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a result of an
accident or bona fide error of computation, may 
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recover interest, annualized
membership fee or participation 
10
fee or charge, late payment charges, minimum
finance charges 
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and over the limit charges in connection with any credit card

12
issued.

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    (c) A credit card issuer who complies with or is exempt 
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from the
applicable credit card application, solicitation, and 
15
periodic statement disclosure requirements of the Truth in 
16
Lending Act and the
regulations promulgated under that Act 
17
shall be deemed to be in compliance with
or exempt from all of 
18
the provisions of subsection (a) of Section 6 of this
Act.

19
    (d) A credit card issuer who complies with or is exempt 
20
from the applicable consumer credit card issuance requirements 
21
of the federal Truth in Lending Act and the regulations 
22
promulgated under that Act pertaining to credit cards issued to 
23
persons under the age of 21 shall be deemed to be in compliance 
24
with or exempt from all of the provisions of Section 7.2 of 
 


 






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this Act. 
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(Source: P.A. 88-569; eff. 8-5-94.)

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