Illinois General Assembly - Full Text of HB3192
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Full Text of HB3192  102nd General Assembly




State of Illinois
2021 and 2022


Introduced 2/19/2021, by Rep. Jonathan Carroll


10100SB1792enr., Sec. 15-1-5
10100SB1792enr., Sec. 15-5-5
205 ILCS 670/15  from Ch. 17, par. 5415
205 ILCS 670/17.5

    If and only if Senate Bill 1792 of the 101st General Assembly becomes law, amends the Predatory Loan Prevention Act. In provisions concerning purpose and construction of the Predatory Loan Prevention Act, removes a reference to the Military Lending Act. In provisions concerning an annual percentage rate cap, provides that the annual percentage rate shall be calculated as such rate is calculated using the system for calculating the annual percentage rate under the federal Truth in Lending Act and Part 226 of Title 12 of the Code of Federal Regulations (rather than a military annual percentage rate). Amends the Consumer Installment Loan Act. Provides that licensees shall enter information regarding each loan that is repayable in less than 12 months into the certified database, and for every title-secured loan made, the licensee shall input information as provided in the Illinois Administrative Code. Defines "title-secured loan". Removes provisions concerning small consumer loans and the certified database. Removes a provision stating that all personally identifiable information regarding any consumer obtained by way of the certified database is strictly confidential and shall be exempt from disclosure under the Freedom of Information Act. Effective immediately or on the date Senate Bill 1792 of the 101st General Assembly takes effect, whichever is later.

LRB102 14899 BMS 22376 b





HB3192LRB102 14899 BMS 22376 b

1    AN ACT concerning regulation.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 5. If and only if Senate Bill 1792 of the 101st
5General Assembly becomes law, then the Predatory Loan
6Prevention Act is amended by changing Sections 15-1-5 and
715-5-5 as follows:
8    (10100SB1792enr., Sec. 15-1-5)
9    Sec. 15-1-5. Purpose and construction. Illinois families
10pay over $500,000,000 per year in consumer installment,
11payday, and title loan fees. As reported by the Department in
122020, nearly half of Illinois payday loan borrowers earn less
13than $30,000 per year, and the average annual percentage rate
14of a payday loan is 297%. The purpose of this Act is to protect
15consumers from predatory loans consistent with federal law and
16the Military Lending Act which protects active duty members of
17the military. This Act shall be construed as a consumer
18protection law for all purposes. This Act shall be liberally
19construed to effectuate its purpose.
20(Source: 10100SB1792enr.)
21    (10100SB1792enr., Sec. 15-5-5)
22    Sec. 15-5-5. Rate cap. Notwithstanding any other provision



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1of law, for loans made or renewed on and after the effective
2date of this Act, a lender shall not contract for or receive
3charges exceeding a 36% annual percentage rate on the unpaid
4balance of the amount financed for a loan. For purposes of this
5Section, the annual percentage rate shall be calculated as
6such rate is calculated using the system for calculating an
7annual percentage rate under the federal Truth in Lending Act
8and Part 226 of Title 12 of the Code of Federal Regulations, a
9military annual percentage rate under Section 232.4 of Title
1032 of the Code of Federal Regulations as in effect on the
11effective date of this Act. Nothing in this Act shall be
12construed to permit a person or entity to contract for or
13receive a charge exceeding that permitted by the Interest Act
14or other law.
15(Source: 10100SB1792enr.)
16    Section 10. The Consumer Installment Loan Act is amended
17by changing Sections 15 and 17.5 as follows:
18    (205 ILCS 670/15)  (from Ch. 17, par. 5415)
19    Sec. 15. Charges permitted.
20    (a) Every licensee may lend a principal amount not
21exceeding $40,000 and, except as to small consumer loans as
22defined in this Section, may charge, contract for, and receive
23thereon interest at an annual percentage rate of no more than
2436%, subject to the provisions of this Act; provided, however,



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1that the limitation on the annual percentage rate contained in
2this subsection (a) does not apply to title-secured loans,
3which are loans upon which interest is charged at an annual
4percentage rate exceeding 36%, in which, at commencement, an
5obligor provides to the licensee, as security for the loan,
6physical possession of the obligor's title to a motor vehicle,
7and upon which a licensee may charge, contract for, and
8receive thereon interest at the rate agreed upon by the
9licensee and borrower. For purposes of this Section, the
10annual percentage rate shall be calculated as such rate is
11calculated using the system for calculating an annual
12percentage rate under the federal Truth in Lending Act and
13Part 226 of Title 12 of the Code of Federal Regulations, as in
14effect on the effective date of this amendatory Act of the
15102nd General Assembly in accordance with the federal Truth in
16Lending Act.
17    (b) For purpose of this Section, the following terms shall
18have the meanings ascribed herein.
19    "Applicable interest" for a precomputed loan contract
20means the amount of interest attributable to each monthly
21installment period. It is computed as if each installment
22period were one month and any interest charged for extending
23the first installment period beyond one month is ignored. The
24applicable interest for any monthly installment period is, for
25loans other than small consumer loans as defined in this
26Section, that portion of the precomputed interest that bears



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1the same ratio to the total precomputed interest as the
2balances scheduled to be outstanding during that month bear to
3the sum of all scheduled monthly outstanding balances in the
4original contract. With respect to a small consumer loan, the
5applicable interest for any installment period is that portion
6of the precomputed monthly installment account handling charge
7attributable to the installment period calculated based on a
8method at least as favorable to the consumer as the actuarial
9method, as defined by the federal Truth in Lending Act.
10    "Interest-bearing loan" means a loan in which the debt is
11expressed as a principal amount plus interest charged on
12actual unpaid principal balances for the time actually
14    "Precomputed loan" means a loan in which the debt is
15expressed as the sum of the original principal amount plus
16interest computed actuarially in advance, assuming all
17payments will be made when scheduled.
18    "Small consumer loan" means a loan upon which interest is
19charged at an annual percentage rate exceeding 36% and with an
20amount financed of $4,000 or less. "Small consumer loan" does
21not include a title-secured loan as defined by subsection (a)
22of this Section or a payday loan as defined by the Payday Loan
23Reform Act.
24    "Substantially equal installment" includes a last
25regularly scheduled payment that may be less than, but not
26more than 5% larger than, the previous scheduled payment



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1according to a disclosed payment schedule agreed to by the
3    (c) Loans may be interest-bearing or precomputed.
4    (d) To compute time for either interest-bearing or
5precomputed loans for the calculation of interest and other
6purposes, a month shall be a calendar month and a day shall be
7considered 1/30th of a month when calculation is made for a
8fraction of a month. A month shall be 1/12th of a year. A
9calendar month is that period from a given date in one month to
10the same numbered date in the following month, and if there is
11no same numbered date, to the last day of the following month.
12When a period of time includes a month and a fraction of a
13month, the fraction of the month is considered to follow the
14whole month. In the alternative, for interest-bearing loans,
15the licensee may charge interest at the rate of 1/365th of the
16agreed annual rate for each day actually elapsed.
17    (d-5) No licensee or other person may condition an
18extension of credit to a consumer on the consumer's repayment
19by preauthorized electronic fund transfers. Payment options,
20including, but not limited to, electronic fund transfers and
21Automatic Clearing House (ACH) transactions may be offered to
22consumers as a choice and method of payment chosen by the
24    (e) With respect to interest-bearing loans:
25        (1) Interest shall be computed on unpaid principal
26    balances outstanding from time to time, for the time



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1    outstanding, until fully paid. Each payment shall be
2    applied first to the accumulated interest and the
3    remainder of the payment applied to the unpaid principal
4    balance; provided however, that if the amount of the
5    payment is insufficient to pay the accumulated interest,
6    the unpaid interest continues to accumulate to be paid
7    from the proceeds of subsequent payments and is not added
8    to the principal balance.
9        (2) Interest shall not be payable in advance or
10    compounded. However, if part or all of the consideration
11    for a new loan contract is the unpaid principal balance of
12    a prior loan, then the principal amount payable under the
13    new loan contract may include any unpaid interest which
14    has accrued. The unpaid principal balance of a precomputed
15    loan is the balance due after refund or credit of unearned
16    interest as provided in paragraph (f), clause (3). The
17    resulting loan contract shall be deemed a new and separate
18    loan transaction for all purposes.
19        (3) Loans must be fully amortizing and be repayable in
20    substantially equal and consecutive weekly, biweekly,
21    semimonthly, or monthly installments. Notwithstanding this
22    requirement, rates may vary according to an index that is
23    independently verifiable and beyond the control of the
24    licensee.
25        (4) The lender or creditor may, if the contract
26    provides, collect a delinquency or collection charge on



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1    each installment in default for a period of not less than
2    10 days in an amount not exceeding 5% of the installment on
3    installments in excess of $200, or $10 on installments of
4    $200 or less, but only one delinquency and collection
5    charge may be collected on any installment regardless of
6    the period during which it remains in default.
7    (f) With respect to precomputed loans:
8        (1) Loans shall be repayable in substantially equal
9    and consecutive weekly, biweekly, semimonthly, or monthly
10    installments of principal and interest combined, except
11    that the first installment period may be longer than one
12    month by not more than 15 days, and the first installment
13    payment amount may be larger than the remaining payments
14    by the amount of interest charged for the extra days; and
15    provided further that monthly installment payment dates
16    may be omitted to accommodate borrowers with seasonal
17    income.
18        (2) Payments may be applied to the combined total of
19    principal and precomputed interest until the loan is fully
20    paid. Payments shall be applied in the order in which they
21    become due, except that any insurance proceeds received as
22    a result of any claim made on any insurance, unless
23    sufficient to prepay the contract in full, may be applied
24    to the unpaid installments of the total of payments in
25    inverse order.
26        (3) When any loan contract is paid in full by cash,



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1    renewal or refinancing, or a new loan, one month or more
2    before the final installment due date, a licensee shall
3    refund or credit the obligor with the total of the
4    applicable interest for all fully unexpired installment
5    periods, as originally scheduled or as deferred, which
6    follow the day of prepayment; provided, if the prepayment
7    occurs prior to the first installment due date, the
8    licensee may retain 1/30 of the applicable interest for a
9    first installment period of one month for each day from
10    the date of the loan to the date of prepayment, and shall
11    refund or credit the obligor with the balance of the total
12    interest contracted for. If the maturity of the loan is
13    accelerated for any reason and judgment is entered, the
14    licensee shall credit the borrower with the same refund as
15    if prepayment in full had been made on the date the
16    judgement is entered.
17        (4) The lender or creditor may, if the contract
18    provides, collect a delinquency or collection charge on
19    each installment in default for a period of not less than
20    10 days in an amount not exceeding 5% of the installment on
21    installments in excess of $200, or $10 on installments of
22    $200 or less, but only one delinquency or collection
23    charge may be collected on any installment regardless of
24    the period during which it remains in default.
25        (5) If the parties agree in writing, either in the
26    loan contract or in a subsequent agreement, to a deferment



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1    of wholly unpaid installments, a licensee may grant a
2    deferment and may collect a deferment charge as provided
3    in this Section. A deferment postpones the scheduled due
4    date of the earliest unpaid installment and all subsequent
5    installments as originally scheduled, or as previously
6    deferred, for a period equal to the deferment period. The
7    deferment period is that period during which no
8    installment is scheduled to be paid by reason of the
9    deferment. The deferment charge for a one month period may
10    not exceed the applicable interest for the installment
11    period immediately following the due date of the last
12    undeferred payment. A proportionate charge may be made for
13    deferment for periods of more or less than one month. A
14    deferment charge is earned pro rata during the deferment
15    period and is fully earned on the last day of the deferment
16    period. Should a loan be prepaid in full during a
17    deferment period, the licensee shall credit to the obligor
18    a refund of the unearned deferment charge in addition to
19    any other refund or credit made for prepayment of the loan
20    in full.
21        (6) If two or more installments are delinquent one
22    full month or more on any due date, and if the contract so
23    provides, the licensee may reduce the unpaid balance by
24    the refund credit which would be required for prepayment
25    in full on the due date of the most recent maturing
26    installment in default. Thereafter, and in lieu of any



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1    other default or deferment charges, the agreed rate of
2    interest or, in the case of small consumer loans, interest
3    at the rate of 18% per annum, may be charged on the unpaid
4    balance until fully paid.
5        (7) Fifteen days after the final installment as
6    originally scheduled or deferred, the licensee, for any
7    loan contract which has not previously been converted to
8    interest-bearing under paragraph (f), clause (6), may
9    compute and charge interest on any balance remaining
10    unpaid, including unpaid default or deferment charges, at
11    the agreed rate of interest or, in the case of small
12    consumer loans, interest at the rate of 18% per annum,
13    until fully paid. At the time of payment of said final
14    installment, the licensee shall give notice to the obligor
15    stating any amounts unpaid.
16(Source: P.A. 101-563, eff. 8-23-19.)
17    (205 ILCS 670/17.5)
18    Sec. 17.5. Consumer reporting service.
19    (a) For the purpose of this Section: ,
20        "Certified certified database" means the consumer
21    reporting service database established pursuant to the
22    Payday Loan Reform Act.
23        "Title-secured loan" means a loan that is repayable in
24    less than 12 months in which, at commencement, a consumer
25    provides to the licensee physical possession of the



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1    consumer's title to a motor vehicle as security for the
2    loan.
3    (b) (Blank). Within 90 days after making a small consumer
4loan, a licensee shall enter information about the loan into
5the certified database.
6    (b-5) Licensees shall enter information regarding each
7loan that is repayable in less than 12 months into the
8certified database and shall follow the Department's related
10    (c) For every title-secured loan small consumer loan made,
11the licensee shall input information as provided in 38 Ill.
12Adm. Code 110.420. the following information into the
13certified database within 90 days after the loan is made:
14        (i) the consumer's name and official identification
15    number (for purposes of this Act, "official identification
16    number" includes a Social Security Number, an Individual
17    Taxpayer Identification Number, a Federal Employer
18    Identification Number, an Alien Registration Number, or an
19    identification number imprinted on a passport or consular
20    identification document issued by a foreign government);
21        (ii) the consumer's gross monthly income;
22        (iii) the date of the loan;
23        (iv) the amount financed;
24        (v) the term of the loan;
25        (vi) the acquisition charge;
26        (vii) the monthly installment account handling charge;



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1        (viii) the verification fee;
2        (ix) the number and amount of payments; and
3        (x) whether the loan is a first or subsequent
4    refinancing of a prior small consumer loan.
5    (d) (Blank). Once a loan is entered with the certified
6database, the certified database shall provide to the licensee
7a dated, time-stamped statement acknowledging the certified
8database's receipt of the information and assigning each loan
9a unique loan number.
10    (e) (Blank). The licensee shall update the certified
11database within 90 days if any of the following events occur:
12        (i) the loan is paid in full by cash;
13        (ii) the loan is refinanced;
14        (iii) the loan is renewed;
15        (iv) the loan is satisfied in full or in part by
16    collateral being sold after default;
17        (v) the loan is cancelled or rescinded; or
18        (vi) the consumer's obligation on the loan is
19    otherwise discharged by the licensee.
20    (f) (Blank). To the extent a licensee sells a product or
21service to a consumer, other than a small consumer loan, and
22finances any portion of the cost of the product or service, the
23licensee shall, in addition to and at the same time as the
24information inputted under subsection (d) of this Section,
25enter into the certified database:
26        (i) a description of the product or service sold;



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1        (ii) the charge for the product or service; and
2        (iii) the portion of the charge for the product or
3    service, if any, that is included in the amount financed
4    by a small consumer loan.
5    (g) (Blank). The certified database provider shall
6indemnify the licensee against all claims and actions arising
7from illegal or willful or wanton acts on the part of the
8certified database provider. The certified database provider
9may charge a fee not to exceed $1 for each loan entered into
10the certified database under subsection (d) of this Section.
11The database provider shall not charge any additional fees or
12charges to the licensee.
13    (h) (Blank). All personally identifiable information
14regarding any consumer obtained by way of the certified
15database and maintained by the Department is strictly
16confidential and shall be exempt from disclosure under
17subsection (c) of Section 7 of the Freedom of Information Act.
18    (i) (Blank). A licensee who submits information to a
19certified database provider in accordance with this Section
20shall not be liable to any person for any subsequent release or
21disclosure of that information by the certified database
22provider, the Department, or any other person acquiring
23possession of the information, regardless of whether such
24subsequent release or disclosure was lawful, authorized, or
26    (j) (Blank). To the extent the certified database becomes



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1unavailable to a licensee as a result of some event or events
2outside the control of the licensee or the certified database
3is decertified, the requirements of this Section and Section
417.4 of this Act are suspended until such time as the certified
5database becomes available.
6(Source: P.A. 96-936, eff. 3-21-11; 97-813, eff. 7-13-12.)
7    Section 99. Effective date. This Act takes effect upon
8becoming law or on the date Senate Bill 1792 of the 101st
9General Assembly takes effect, whichever is later.