State of Illinois
92nd General Assembly

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[ House Amendment 001 ]



 1        AN ACT creating the Short-term Loan Act.

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

 4        Section 1. Short title. This Act  may  be  cited  as  the
 5    Short-term Loan Act.

 6        Section 5. Definitions.
 7        "Check"   means  a  check,  draft,  or  other  negotiable
 8    instrument used for payment of money.
 9        "Department"   means   the   Department   of    Financial
10    Institutions.
11        "Director"  means  the  Director  of  the  Department  of
12    Financial Institutions.
13        "Interest bearing loan" means a loan in which the debt is
14    expressed  as  a  principal  amount  plus interest charged on
15    actual  unpaid  principal  balances  for  the  time  actually
16    outstanding.
17        "Licensee" means an entity licensed  under  this  Act  to
18    provide loan services.
19        "Local   Government  Authorization  Form"  means  a  form
20    prescribed by the Director and signed by the clerk  or  chief
21    executive  officer of the county or municipality in which the
22    licensee is to be located certifying that the applicant for a
23    short-term loan license or license renewal and  the  location
24    at  which the licensee will be located comply with the zoning
25    and all other applicable county or municipal  ordinances  and
26    regulations.
27        "Net worth" means total assets minus total liabilities.
28        "Outstanding balance" includes principal and interest.
29        "Short-term loan" means a loan that:
30             (1)  is  made  by  a  lender  that  does  not accept
31        insured deposits;
                            -2-               LRB9203172JSpcA
 1             (2)  is secured by a  post-dated  check  or  by  the
 2        title to a motor vehicle; and
 3             (3)  has an initial term of not more than 30 days or
 4        upon  which  interest  is charged at an annual percentage
 5        rate exceeding 36%.

 6        Section 10. License required.   No  person,  partnership,
 7    association, limited liability company, corporation, or other
 8    business  combination or entity may engage in the business of
 9    making short-term loans except as authorized by this Act  and
10    while licensed under this Act.  The identity of the owners of
11    a license under this Act is public information.

12        Section 15. Application; fees; assets; bond.
13        (a)  An  applicant  for  a  license  under this Act shall
14    apply in writing in the form prescribed by the  Director.  At
15    the  time  of making the application, the applicant shall pay
16    to the Director $750 as a non-refundable application fee  and
17    $1,000  as  an annual license fee for a period terminating on
18    the last day of the current calendar year. If the application
19    is filed after June 30th in any year,  however,  the  license
20    fee shall be 50% of the annual license fee for the year.
21        (b)  An applicant shall prove in form satisfactory to the
22    Director  that  the   applicant   has   and   will   maintain
23    unencumbered assets of $25,000 per location.
24        (c)  A  licensee  shall  maintain  a  surety  bond in the
25    principal sum of $50,000 for each licensed location issued by
26    a bonding company authorized to do business in this State and
27    approved by the Director. The bond shall run to the  Director
28    and  shall  be  for the benefit of any person who is lawfully
29    awarded damages pursuant to an appropriate court order  as  a
30    result  of  the  actions  of  the  licensee  arising out of a
31    violation of this Act. If the Director finds at any time that
32    a bond is of insufficient size or is insecure, exhausted,  or
                            -3-               LRB9203172JSpcA
 1    otherwise  doubtful,  an  additional  bond  in such amount as
 2    determined by the Director shall be  filed  by  the  licensee
 3    within 30 days after written demand therefor by the Director.
 4        (d)   An   applicant  shall  provide  a  completed  Local
 5    Government Authorization Form signed by the  clerk  or  chief
 6    executive  officer of the county or municipality in which the
 7    licensee is to be established  with  any  application  for  a
 8    license,  license renewal, or relocation. The applicant shall
 9    cause a notice of  the  application  to  be  published  in  a
10    newspaper  of  general  circulation in the community in which
11    the licensee will be located.
12        (e)  Upon the request of 5 members of the public or  upon
13    the order of the Director, the Department must hold a hearing
14    regarding the issuance of a license.

15        Section 20. Granting of license.
16        (a)  The  Director  shall  not  issue  a  license for the
17    location described in the application if he or she finds  any
18    of the following to exist:
19             (1)  a  director,  managerial  employee,  collection
20        agent,  partner,  or  officer  of  the applicant has been
21        convicted of a felony;
22             (2) the location fails to conform  to  local  zoning
23        laws  with respect to location, structural, aesthetic, or
24        other requirements;
25             (3) the location is within one mile  of  a  facility
26        operated  by an inter-track wagering location licensee or
27        an organization licensee subject to  the  Illinois  Horse
28        Racing  Act  of 1975, is within one mile of a facility at
29        which gambling is conducted under the Riverboat  Gambling
30        Act,  is  within  one  mile  of  the  location at which a
31        riverboat subject to the Riverboat Gambling Act docks, or
32        is within one mile of the main  or  branch  campus  of  a
33        public  or  private  college  or university that provides
                            -4-               LRB9203172JSpcA
 1        student housing or student residences; or
 2             (4) the applicant has failed to submit  a  completed
 3        Local Government Authorization Form.
 4        (b)  A  licensee  must  obtain  written approval from the
 5    Director before relocating a licensed office.
 6        (c)  A  licensee  shall  prominently  display   at   each
 7    licensed  location  a  notice disclosing that the licensee is
 8    regulated by the Department  of  Financial  Institutions  and
 9    that any questions regarding licensing or the availability of
10    debt management services should be directed to the Department
11    at  the  telephone number specified in the notice. The notice
12    shall disclose a schedule of all  fees  and  interest  to  be
13    charged,  including  the  corresponding interest rate and the
14    interest rate as an annual percentage rate, for loans payable
15    in 14 days, for loans payable in 30 days, and for  any  other
16    loan  duration term for which the licensee issues loans.  The
17    notice shall also disclose that the licensee cannot  use  the
18    criminal  justice  system  to collect a short-term loan.  The
19    notice shall also inform the consumer  of  the  options  with
20    respect to receiving the loan proceeds.

21        Section 25. License renewal.
22        (a)  A  license  under this Act expires on December 31 of
23    each year. At the  time  the  licensee  applies  for  license
24    renewal,  the  licensee  shall  submit  to the Department, as
25    part of the license renewal application, an annual summary of
26    the  following information:
27             (1)  the number of loans made that were  secured  by
28        the title to a motor vehicle;
29             (2)  the number of vehicle repossessions as a result
30        of  default  on  a  loan  secured  by  a title to a motor
31        vehicle;
32             (3)  the number of loans made that were secured by a
33        post-dated check;
                            -5-               LRB9203172JSpcA
 1             (4)  the number of loans made that were secured by a
 2        post-dated check that resulted in default;
 3             (5)  a sworn statement that  the  licensee  has  not
 4        used  in the past and will not directly or indirectly use
 5        in the future the criminal process to collect the payment
 6        of short-term loans or any civil process to  collect  the
 7        payment  of  short  term loans not generally available to
 8        creditors to collect on loans in default; and
 9             (6)  any  other  information  the  Department  deems
10        appropriate.
11        (b) A license must be renewed on forms prescribed by  the
12    Director  no  later  than  November  30  of  each  year.  The
13    applicant  shall cause a notice of the renewal application to
14    be published in a newspaper of  general  circulation  in  the
15    community in which the licensee is located.
16        (c)  A  license  not  renewed  by  December  31  shall be
17    considered canceled without the licensee being entitled to  a
18    hearing.
19        (d)  The  Director may not renew a license for a location
20    that  due  to  a  change  in  circumstances,  including   the
21    enactment  of  a  local  zoning ordinance, since the original
22    issuance or most recent renewal:
23             (1)  has a director, managerial employee, collection
24        agent, partner, or officer of the applicant that has been
25        convicted of a felony;
26             (2)  is within one mile of a facility operated by an
27        inter-track wagering location licensee or an organization
28        licensee subject to the  Illinois  Horse  Racing  Act  of
29        1975,  is within one mile of a facility at which gambling
30        is conducted under the Riverboat Gambling Act, is  within
31        one  mile of the location at which a riverboat subject to
32        the Riverboat Gambling Act docks, or is within  one  mile
33        of  the  main  or  branch  campus  of a public or private
34        college or university which provides student  housing  or
                            -6-               LRB9203172JSpcA
 1        student residences; or
 2             (3)  fails  to  provide a completed Local Government
 3        Authorization Form.
 4        (e)  Upon the request of 5 members of the public or  upon
 5    the order of the Director, the Department must hold a hearing
 6    regarding the issuance or renewal of a license.

 7        Section 30.  Annual report.
 8        (a)  A  licensee  must file a report with the Director no
 9    later than March 31 each year  on  forms  prescribed  by  the
10    Director.   The  report  must  disclose  for  the immediately
11    preceding calendar year all of the following information:
12             (1)  The resources, assets, and liabilities  of  the
13        licensee at the beginning and end of the year.
14             (2)  The   income,   expenses,  gain,  loss,  and  a
15        reconciliation of surplus or net worth with  the  balance
16        sheets,  and  the  ratios  of  the  profits to the assets
17        reported.
18             (3)  The total number of deferred deposit loans made
19        in the year.
20             (4)  The total number of those loans outstanding  as
21        of December 31 of the year.
22             (5)  The minimum, maximum, and average dollar amount
23        of  checks  the  deposit of which was deferred during the
24        year.
25             (6)  The average  annual  percentage  rate  and  the
26        average  number  of days a deposit of a check is deferred
27        during the year.
28             (7)  The total number and dollar amount of  returned
29        checks,  the  total  number  and  dollar amount of checks
30        recovered, and the total  number  and  dollar  amount  of
31        checks charged off during the year.
32        (b)  Reports  filed  under  this  Section  must  be  made
33    available to the public.
                            -7-               LRB9203172JSpcA
 1        Section  35.  Multiple licenses to same licensee. No more
 2    than one place of business shall be maintained under the same
 3    license, but the Director may issue more than one license  to
 4    the  same licensee upon compliance with all of the provisions
 5    of this Act governing the original issuance of a license.

 6        Section  40.  Lending  limits  and  refinancing.  A  loan
 7    secured by a post-dated check may not exceed  the  lesser  of
 8    $500 or 50% of the borrower's net income on a bi-weekly basis
 9    in principal amount, and any other loan may not exceed $2,000
10    in  principal  amount.   A  loan  made  under this Act may be
11    refinanced a maximum number of 2 times,  and  only  when  the
12    loan's  previous  outstanding  balance has been reduced by at
13    least 25%. If a loan is secured by a  post-dated  check,  the
14    post-dated check must name the lender as the payee.

15        Section 45.  Investigation of conduct of business.
16        (a)  For  the  purpose  of discovering violations of this
17    Act or securing information  lawfully  required  by  it,  the
18    Director  may  at any time investigate the loans and business
19    and examine the books,  accounts,  records,  and  files  used
20    therein,  of every licensee and of every person, partnership,
21    association,  limited  liability  company,  and   corporation
22    engaged  in  the business of making short-term loans, whether
23    such  person,  partnership,  association,  limited  liability
24    company,  or  corporation  shall  act  or  claim  to  act  as
25    principal or agent or within or without the authority of this
26    Act.  For such purpose the Director shall have free access to
27    the offices and places of business, books, accounts,  papers,
28    records,   files,   safes,   and   vaults  of  such  persons,
29    partnerships, associations, limited liability companies,  and
30    corporations.  The Director may require the attendance of and
31    examine under oath all persons whose testimony he or she  may
32    require  relative to such loans or such business, and in such
                            -8-               LRB9203172JSpcA
 1    cases the Director shall have power to  administer  oaths  to
 2    all persons called as witnesses; and the Director may conduct
 3    such examinations.
 4        (b)  The  Director  shall  make  an  examination  of  the
 5    affairs,  business,  office,  and records of each licensee at
 6    least once each year. The Director shall by rule set the  fee
 7    to  be  charged  for  each  examination day, including travel
 8    expenses for out-of-state licensed locations. The  fee  shall
 9    reasonably reflect actual costs. The Director shall also have
10    authority  to  examine the books and records, as the Director
11    deems  necessary,  of  a  former  licensee  that   is   being
12    liquidated  and  may  charge  the  examination fees otherwise
13    required for licensees.
14        (c)  All  books,  accounts,  records,  and  files  of   a
15    licensee  shall  be available in a computerized or electronic
16    format  and  shall,  at  a  minimum,  provide  the  following
17    information:
18             (1)  the customer's name and the  original  date  of
19        the loan;
20             (2)  an   indication   of  whether  the  transaction
21        recorded is a new loan or a renewal  or  rollover  of  an
22        existing  loan and, if a renewal or rollover, the date of
23        the renewal or rollover;
24             (3)  the number of loan contracts  obtained  by  the
25        borrower,  including  renewals  and  rollovers  of  prior
26        loans;
27             (4)  the  total  finance  charges  incurred  by that
28        customer with respect to the loan transaction; and
29             (5)  such other  information  as  the  Director  may
30        require.

31        Section 50.  Contractual disclosures and prohibitions.
32        (a)  The  loan  contract  must  provide  all  disclosures
33    required by Regulation Z of the Federal Truth-In-Lending Act.
                            -9-               LRB9203172JSpcA
 1    A copy of all loan documents must be given to the borrower.
 2        (b)  Before  or at the time an application is tendered, a
 3    licensee must give to the borrower a pamphlet describing  the
 4    availability  of  debt management services and the borrower's
 5    rights and responsibilities in the transaction and  providing
 6    a toll-free number through which the borrower can contact the
 7    Department  of  Financial  Institutions  regarding questions,
 8    complaints, and debt  management  services.   The  Department
 9    shall establish by rule the contents of the pamphlet.
10        (c)  The  loan contract must include a separate statement
11    signed by the debtor attesting that the debtor does not  have
12    any  outstanding  loans  made  by  a  licensee under this Act
13    within the preceding 30 days.  The  lender  must  verify  the
14    statement  by means of any database created by or approved by
15    the Department for that purpose.
16        (d)  A licensee who knowingly or recklessly makes a loan,
17    other than the renewal of an original loan, to a borrower who
18    has an outstanding loan made under this  Act  within  the  30
19    days preceding the date the loan is made is guilty of a Class
20    4 felony.
21        (e)  No  licensee  may  require  binding  arbitration  or
22    mediation  prior  to the filing of a civil action pursuant to
23    Section 125 nor provide for arbitration  or  mediation  in  a
24    venue  other  than  the county in which the loan was made. No
25    loan  contract  may  contain  a  cognovit  or  confession  of
26    judgement clause or provision. No short-term loan may require
27    the borrower to deposit a set of vehicle keys with the lender
28    or an agent of the lender as a condition of, or incident  to,
29    the  loan.  A  loan  contract  shall advise the borrower that
30    matters involving improprieties in the making of the loan  or
31    in   loan   collection  practices  may  be  referred  to  the
32    Department and shall  prominently  display  the  Department's
33    address and telephone number. No licensee may take possession
34    of  a  motor vehicle for a loan default and lease the vehicle
                            -10-              LRB9203172JSpcA
 1    back to the borrower. Any appraisal of the  value of a  motor
 2    vehicle  that has been used to secure a loan shall be limited
 3    to the vehicle's Kelly Blue Book Used Car Guide value.

 4        Section 55.  Debt management service; notice.
 5        (a)  At the  time  a  licensee  conveys  a  notice  to  a
 6    borrower  indicating the borrower is in arrears or in default
 7    for a legally constituted debt issued by the  licensee  under
 8    this  Act,  the  licensee  shall  include  with  the notice a
 9    statement indicating the toll-free telephone  number  of  the
10    Department  of  Financial Institutions which the borrower may
11    contact for the purpose of the borrower receiving information
12    from the Department on  how  to  contact  a  debt  management
13    service  for  assistance  in  resolving  debt problems of the
14    borrower.  The form and method  of  the  notice  provided  by
15    licensees shall be subject to approval by the Department.
16        (b)  The  Department is required to establish a toll-free
17    telephone number  as  provided  by  subsection  (a)  of  this
18    Section.   This  toll-free  number  may  be  the same as that
19    disclosed under subsection (b) of Section 50.  The Department
20    shall, in cooperation with an organization representing  debt
21    management  services,  establish a listing of debt management
22    service  offices  that  the  Department  shall   provide   to
23    borrowers  who  are requesting the services of those offices.
24    The Department shall  provide  the  list  on  an  approximate
25    geographic basis as that relates to the borrower's residence.
26        (c)  The   Department   of   Financial  Institutions,  in
27    cooperation with an organization representing debt management
28    services, shall prepare a notice that describes the  services
29    provided  by  debt  management  services.   The  notice shall
30    include the  address,  telephone  number,  and  general  area
31    served  by  all  debt  management  services in Illinois.  The
32    notice  shall  be  prominently  displayed  at  all  locations
33    licensed under this Act.
                            -11-              LRB9203172JSpcA
 1        (d)  When  an  original  loan  made  under  this  Act  is
 2    refinanced pursuant to Section 40 of this Act,  the  licensee
 3    shall  provide  a  copy  of a statement to the borrower which
 4    contains the information set forth in subsection (c) of  this
 5    Section.   The  statement  shall  be provided to the borrower
 6    separately from the loan refinancing contract at the time the
 7    loan refinancing contract is signed by the borrower.
 8        (e)  Each  loan  refinancing  contract  executed   by   a
 9    licensee  shall include a statement, which shall be initialed
10    by the borrower, as follows:
11        "I have received from (name of lender) a  statement  that
12    discloses  information about debt management services and the
13    address and telephone number of the debt  management  service
14    nearest my residence.".
15        (f)  The  Department  shall  adopt rules to implement the
16    requirements of  this  Section.  For  the  purposes  of  this
17    Section  "debt management service" has the meaning given that
18    term in the Debt Management Service Act.

19        Section 60.  Loan proceeds.  A  licensee  may  issue  the
20    proceeds of a loan in the form of a licensee's business check
21    drawn  on  the licensee's bank account, money order, or cash;
22    provided, however, that no additional fee may be charged by a
23    licensee for cashing any check or money order issued  by  the
24    licensee.   The  loan  proceeds  must  be  issued in the form
25    requested by the borrower.

26        Section 65.  Security interest. In  making  a  short-term
27    loan, a licensee shall not take a security interest in any of
28    the  debtor's property other than the post-dated check or the
29    debtor's motor vehicle title, which is tendered by the debtor
30    at the time of obtaining the loan.  When a  post-dated  check
31    is  taken  as security for a loan, the licensee must stamp or
32    otherwise imprint on the back of the check  a  notation  that
                            -12-              LRB9203172JSpcA
 1    the check secures a deferred deposit loan made under this Act
 2    and that any holder takes the check subject to the claims and
 3    defenses of the maker.

 4        Section  70.  Other business. A licensee shall not engage
 5    in any business other than that  for  which  the  license  is
 6    issued  at  the  licensed  location without the prior written
 7    approved of the Director.

 8        Section 75.  Charging of interest and fees.
 9        (a)  All loans must be interest bearing.
10        (b)  To compute time for the calculation of interest  and
11    other  purposes, the licensee shall calculate interest at the
12    rate of 1/365th of  the  agreed  annual  rate  for  each  day
13    actually elapsed.
14        (c)  Interest  shall  be  computed  on  unpaid  principal
15    balances   outstanding  from  time  to  time,  for  the  time
16    outstanding, until fully paid. Each payment shall be  applied
17    equally  to  both  the  accumulated  interest  and the unpaid
18    principal balance so that 50% of the payment  is  applied  to
19    the accumulated interest and 50% of the payment is applied to
20    the  unpaid principal balance; provided however, that, if the
21    amount of the payment is insufficient to pay the  accumulated
22    interest,  the  unpaid interest continues to accumulate to be
23    paid from the proceeds of subsequent payments and may not  be
24    added  to  the  principal  balance. If the 50% of the payment
25    applied to the  accumulated  interest  is  greater  than  the
26    amount  of  interest  accumulated at the time of the payment,
27    the interest shall be paid in full and the remainder  of  the
28    payment   shall  be  applied  to  the  outstanding  principal
29    balance, in addition  to  the  50%  of  the  payment  already
30    applied to the outstanding principal balance.
31        (d)  Interest   shall   not  be  payable  in  advance  or
32    compounded.
                            -13-              LRB9203172JSpcA
 1        (e)  A licensee may not charge an origination fee greater
 2    than $10.
 3        (f)  In cases in which the original  short-term  loan  is
 4    being  refinanced  pursuant  to  Section  40  of  this Act, a
 5    licensee may charge a fee of $5.
 6        (g)  A licensee may charge finance charges on the  amount
 7    financed  of  the  short-term  loan  transaction at an annual
 8    interest rate not to exceed 40  percentage  points  over  the
 9    prime  rate  on  the first business day of the month prior to
10    the month in which the short-term loan transaction  is  made,
11    as reported by the Federal Reserve Board.
12        (h)  Licensees  may  assess  charges only as permitted in
13    this Act.

14        Section 80.  Prepayment.
15        (a)  At the debtor's option, a loan may be prepaid either
16    in part or in full with the licensee refunding  the  unearned
17    interest charge calculated on a prorata daily basis.
18        (b)  A  consumer  shall  be  permitted  to  make  partial
19    payments, in amounts equal to no less than $5, on the loan at
20    any time without charge.

21        Section 85.  Closing of business; surrender of license.
22        (a)  At  least  10  days  prior  to  a  licensee  ceasing
23    operations or closing business, the licensee shall:
24             (1)  notify the Department of its action in writing;
25             (2)  surrender  its  license  to  the  Director  for
26        cancellation; and
27             (3)  notify the Department of the location where the
28        books,   accounts,   contracts,   and   records  will  be
29        maintained and the procedure to ensure prompt  return  of
30        contracts, titles, and releases to the customers.
31        (b)  The  surrender  of  the license shall not affect the
32    licensee's civil or criminal  liability  for  acts  committed
                            -14-              LRB9203172JSpcA
 1    prior  to  surrender  nor entitle the licensee to a return of
 2    any part of the annual license fee.
 3        (c)  The accounts, books, records, and contracts shall be
 4    maintained and serviced by the licensee or  another  licensee
 5    under this Act, or an entity exempt from licensure under this
 6    Act.
 7        (d)  The  Department  shall have the authority to conduct
 8    examinations of the books, records, and loan documents at any
 9    time after surrender of the license, filing of bankruptcy, or
10    the cessation of operations.

11        Section 90.  Bankruptcy.
12        (a)  On the date of filing for bankruptcy,  the  licensee
13    shall notify the Department in writing of the:
14             (1)  date of bankruptcy;
15             (2)  docket number;
16             (3)  presiding judge; and
17             (4)  name and address of the trustee.
18        (b)  If the bankrupt entity elects to close its business,
19    the provisions in Section 85 must be satisfied.

20        Section 95.  Returned checks.
21        (a)  If  a  check  received  as  payment  for  a  loan is
22    returned to the licensee for  nonpayment,  the  licensee  may
23    assess  the  debtor  a  fee  not  exceeding  $15  or the cost
24    actually incurred by the  lender  as  an  insufficient  funds
25    charge, whichever is less. Only one such fee may be collected
26    with  respect  to  a  particular  check  even  if it has been
27    redeposited more than once.  A fee charged pursuant  to  this
28    Section is a licensee's exclusive charge for late payment.
29        (b)  No  licensee,  nor  any  person claiming directly or
30    indirectly through the licensee for a loan made  pursuant  to
31    this Act, may pursue or threaten to pursue criminal penalties
32    against a debtor for any returned or dishonored check.
                            -15-              LRB9203172JSpcA
 1        (c)  A   violation   of   this   Section  is  a  Class  B
 2    misdemeanor.  In  addition  to   all   other   criminal   and
 3    administrative   enforcement   and   penalties,  a  claim  of
 4    violation of this Section may be asserted pursuant to Section
 5    125 of this Act.

 6        Section 100.  Recording or releasing lien.
 7        (a)  Upon making a loan secured by a  title  to  a  motor
 8    vehicle,  the  licensee must immediately take into possession
 9    evidence of the debtor's ownership in the motor vehicle  that
10    has been registered with the Office of the Illinois Secretary
11    of State.
12        (b)  Within  24 hours after making the loan, the licensee
13    must file a lien with the Office of the Illinois Secretary of
14    State.
15        (c)  Within 24 hours after payment in full, the  licensee
16    must  release  all  filed  liens  and provide evidence of the
17    release to the debtor.
18        (d)  The licensee may not charge, directly or indirectly,
19    fees associated with the repossession of a motor vehicle.

20        Section 105.  Sale or hypothecation of a loan. A licensee
21    may not sell, hypothecate, pledge,  or  assign  a  loan  made
22    under  this  Act.   A person may not broker a short-term loan
23    for any other person or entity or assist in any  way  in  the
24    origination   of  a  short-term  loan  on  behalf  of  or  in
25    conjunction with any other person or entity.

26        Section 110.  Financial Institutions Fund; deposits.  All
27    moneys  received  by  the  Department under this Act shall be
28    deposited in the Financial Institutions  Fund  created  under
29    Section 6z-26 of the State Finance Act.

30        Section  115.  Penalties  for violation; cease and desist
                            -16-              LRB9203172JSpcA
 1    orders.
 2        (a)  Any  entity  engaging  in  the  business  of  making
 3    short-term loans without the requisite license is guilty of a
 4    Class 4 felony.
 5        (b)  A license issued under this Act may  be  revoked  if
 6    the  licensee or any director, manager of a limited liability
 7    company, partner,  or  officer  thereof  is  convicted  of  a
 8    felony.
 9        (c)  No  provision of this Section imposing any liability
10    shall apply to any act done or omitted in conformity with any
11    rule or written interpretation thereof by the  Department  of
12    Financial  Institutions,  notwithstanding that after that act
13    or omission has  occurred,  the  rule  or  interpretation  is
14    amended,  rescinded,  or  determined  by  judicial  or  other
15    authority  to  be invalid for any reason. All interpretations
16    relied upon must be written and signed  by  the  Department's
17    Chief Counsel and approved by the Director.
18        (d)  The  Director  may issue a cease and desist order to
19    any licensee, or person doing business without  the  required
20    license,  when,  in the opinion of the Director, the licensee
21    or other person is violating  or  is  about  to  violate  any
22    provision  of  this Act or any rule or requirement imposed in
23    writing by the Department as  a  condition  of  granting  any
24    authorization permitted by this Act.
25        (e)  The  Director  may  issue  a  cease and desist order
26    prior to holding a hearing.
27        (f)  The Director  shall  serve  notice  of  his  or  her
28    action,  designated as a cease and desist order made pursuant
29    to this Section, including a statement of the reasons for the
30    action,  either  personally  or  by  certified  mail,  return
31    receipt requested. Service by certified mail shall be  deemed
32    completed when the notice is deposited in the U.S. Mail.
33        (g)  Within 15 days after service of the cease and desist
34    order,  the licensee or other person may request, in writing,
                            -17-              LRB9203172JSpcA
 1    a hearing.
 2        (h)  The Director shall schedule a hearing within 30 days
 3    after receiving the request for a  hearing  unless  otherwise
 4    agreed to by the parties.
 5        (i)  The  Director  shall have the authority to prescribe
 6    rules for the administration of this Section.
 7        (j)  If it  is  determined  that  the  Director  had  the
 8    authority  to issue the cease and desist order, he or she may
 9    issue such orders as may be reasonably necessary to  correct,
10    eliminate, or remedy such conduct.
11        (k)  The  powers  vested  in the Director by this Section
12    are additional to any  and  all  other  powers  and  remedies
13    vested  in  the  Director by law, and nothing in this Section
14    shall be construed  as  requiring  that  the  Director  shall
15    employ the power conferred in this Section instead of or as a
16    condition  precedent  to  the  exercise of any other power or
17    remedy vested in the Director.
18        (l)  The cost for the administrative hearing shall be set
19    by rule.

20        Section 120.  Fines; suspension or revocation of license.
21        (a)  The Director may, after 10 days notice by registered
22    mail to the licensee at the address set forth in the license,
23    stating the contemplated action and in  general  the  grounds
24    therefor,  fine  the licensee an amount not exceeding $10,000
25    per violation, or revoke or suspend any license issued  under
26    this Act if the Director finds that:
27             (1)  the  licensee  has  failed  to  comply with any
28        provision of this Act or any  order,  decision,  finding,
29        rule, or direction of the Director lawfully made pursuant
30        to the authority of this Act; or
31             (2)  any  fact  or  condition exists that, if it had
32        existed at the time of the original application  for  the
33        license,  clearly  would  have  warranted the Director in
                            -18-              LRB9203172JSpcA
 1        refusing to issue the license.
 2        (b)  The Director may fine, suspend, or revoke  only  the
 3    particular  license  with  respect  to  which grounds for the
 4    fine, revocation, or suspension occur or exist,  but  if  the
 5    Director  finds  that  grounds  for revocation are of general
 6    application to all offices or to more than one office of  the
 7    licensee,  the  Director shall fine, suspend, or revoke every
 8    license to which the grounds apply.
 9        (c)  No  revocation,  suspension,  or  surrender  of  any
10    license  shall  impair  or  affect  the  obligation  of   any
11    pre-existing  lawful  contract  between  the licensee and any
12    obligor.
13        (d)  The Director may issue a new  license  to  a  former
14    licensee  whose  license  has  been  revoked  when  facts  or
15    conditions   that  clearly  would  warrant  the  Director  in
16    refusing to issue the license do not exist.
17        (e)  In every case in which a  license  is  suspended  or
18    revoked  or  an  application  for  a  license or renewal of a
19    license is denied, the Director shall serve the licensee with
20    notice of that action, including a statement of  the  reasons
21    for  the  action,  either  personally  or  by certified mail,
22    return receipt requested. Service by certified mail shall  be
23    deemed  completed  when  the  notice is deposited in the U.S.
24    Mail.
25        (f)  An order assessing a  fine,  an  order  revoking  or
26    suspending  a  license  or,  an  order  denying  renewal of a
27    license shall take effect upon service of  the  order  unless
28    the  licensee  requests, in writing, within 10 days after the
29    date of service, a hearing. If a hearing  is  requested,  the
30    order  shall  be stayed until a final administrative order is
31    entered.
32        (g)  If the licensee requests  a  hearing,  the  Director
33    shall schedule a hearing within 30 days after the request for
34    a  hearing  is  received  unless  otherwise  agreed to by the
                            -19-              LRB9203172JSpcA
 1    parties.
 2        (h)  The hearing shall be held  at  the  time  and  place
 3    designated   by   the   Director.   The   Director   and  any
 4    administrative law judge designated by him or her shall  have
 5    the  power  to  administer  oaths  and affirmations, subpoena
 6    witnesses and compel their  attendance,  take  evidence,  and
 7    require  the production of books, papers, correspondence, and
 8    other  records  or  information  that  he  or  she  considers
 9    relevant or material to the inquiry.
10        (i)  The costs for the administrative  hearing  shall  be
11    set by rule.
12        (j)  The  Director  shall have the authority to prescribe
13    rules for the administration of this Section.

14        Section 125.  Civil action. A claim of violation of  this
15    Act by a short-term lender may be asserted in a civil action,
16    including  a class action, by any aggrieved person, for which
17    punitive damages, costs, and reasonable attorney fees may  be
18    awarded.  A loan contract may not require binding arbitration
19    or mediation prior to filing a civil action pursuant to  this
20    Section.

21        Section  130.  Rules. The Department may make and enforce
22    such reasonable rules,  directions,  orders,  decisions,  and
23    findings  as  the execution and enforcement of the provisions
24    of this Act require and as are not inconsistent therewith.

25        Section 135.  Judicial review. All  final  administrative
26    decisions  of  the Department under this Act shall be subject
27    to  judicial  review  pursuant  to  the  provisions  of   the
28    Administrative  Review  Law, all amendments and modifications
29    thereof, and any rules adopted pursuant thereto.

30        Section 140.  Injunction; civil  penalty;  costs.  If  it
                            -20-              LRB9203172JSpcA
 1    appears  to  the  Director  that  a  person or any entity has
 2    committed or is about to commit a violation of  this  Act,  a
 3    rule promulgated under this Act, or an order of the Director,
 4    the  Director  may  apply  to  the circuit court for an order
 5    enjoining the person or entity from violating  or  continuing
 6    to violate this Act, the rule, or order and for injunctive or
 7    other relief that the nature of the case may require and may,
 8    in  addition,  request the court to assess a civil penalty up
 9    to $1,000 along with costs and attorney's fees.

10        Section 145.  Local ordinances.
11        (a)  A county or municipality may, by ordinance,  require
12    a   short-term  lender  to  conduct  its  business  within  a
13    described geographic zone and may require that  the  licensed
14    building   or   premises   conform   to  described  aesthetic
15    standards.
16        (b)  A county or municipality may, by ordinance,  require
17    a   short-term  lender  to  make  all  required  disclosures,
18    pamphlets, and posted notices in languages other than English
19    as required to meet the needs of the community in  which  the
20    short-term  lender  is located, including but not limited to,
21    notice of interest rates  and  fees,  and  that  use  of  the
22    criminal  justice  system  to collect a loan after default is
23    prohibited.  A local ordinance may also require  the  posting
24    of  a schedule in English and an appropriate foreign language
25    indicating all fees and interest to  be  charged  on  a  loan
26    payable in 14 days, on a loan payable in 30 days, and for any
27    other loan duration term for which the licensee issues loans.
28        (c)  A  county  or  municipality,  including  a home rule
29    county  or  municipality,  may  regulate  short-term  lending
30    businesses in a manner that  is  not  inconsistent  with  the
31    regulation  by  the State of those businesses under this Act.
32    This Section is a limitation under subsection (i) of  Section
33    6  of  Article  VII  of  the  Illinois  Constitution  on  the
                            -21-              LRB9203172JSpcA
 1    concurrent   exercise  by  home  rule  units  of  powers  and
 2    functions exercised by the State. A  county  or  municipality
 3    may  charge  a licensee a fee to cover the costs and expenses
 4    reasonably associated  with  any  inspection,  clerical,  and
 5    other  costs  incurred in verifying and providing information
 6    required  by  a  Local  Government  Authorization   Form   or
 7    otherwise associated with local regulations.

 8        Section  150.  Severability.  The  provisions of this Act
 9    are severable under Section 1.31 of the Statute on Statutes.

10        Section 199.  Effective date. This Act takes effect  upon
11    becoming law.

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