Illinois
Allows payday loans by omission as there is no limits on small loan interest rates

FINANCIAL REGULATION
(205 ILCS 670/) Consumer Installment Loan Act.
(205 ILCS 670/1) (from Ch. 17, par. 5401)
Sec. 1. License required to engage in business. No person, partnership, association, limited liability company, or corporation shall engage in the business of making loans of money in a principal amount not exceeding $25,000, and charge, contract for, or receive on any such loan a greater rate of interest, discount, or consideration therefor than the lender would be permitted by law to charge if he were not a licensee hereunder, except as authorized by this Act after first obtaining a license from the Director of Financial Institutions (hereinafter called the Director).
(Source: P.A. 89 400, eff. 8 20 95; 90 437, eff. 1 1 98.)
(205 ILCS 670/2) (from Ch. 17, par. 5402)
Sec. 2. Application; fees; positive net worth. Application for such license shall be in writing, and in the form prescribed by the Director. Such applicant at the time of making such application shall pay to the Director the sum of $300 as an application fee and the additional sum of $450 as an annual license fee, for a period terminating on the last day of the current calendar year; provided that if the application is filed after June 30th in any year, such license fee shall be 1/2 of the annual license fee for such year.
Before the license is granted, every applicant shall prove in form satisfactory to the Director that the applicant has and will maintain a positive net worth of a minimum of $30,000. Every applicant and licensee shall maintain a surety bond in the principal sum of $25,000 issued by a bonding company authorized to do business in this State and which shall be approved by the Director. Such bond shall run to the Director and shall be for the benefit of any consumer who incurs damages as a result of any violation of the Act or rules by a licensee. If the Director finds at any time that a bond is of insufficient size, is insecure, exhausted, or otherwise doubtful, an additional bond in such amount as determined by the Director shall be filed by the licensee within 30 days after written demand therefor by the Director. "Net worth" means total assets minus total liabilities.
(Source: P.A. 92 398, eff. 1 1 02; 93 32, eff. 7 1 03.)
(205 ILCS 670/3) (from Ch. 17, par. 5403)
Sec. 3. Appointment of attorney in fact for service of process. Every licensee shall appoint, in writing, the Director of Financial Institutions (hereinafter called Director) and his successors in office or any official who shall hereafter be charged with the administration of this Act, as attorney in fact upon whom all lawful process against such licensee may be served with the same legal force and validity as if served on such licensee. A copy of such written appointment, duly certified, shall be filed in the office of the Director; and a copy thereof certified by him shall be sufficient evidence. This appointment shall remain in effect while any liability remains outstanding in this State against the licensee. When summons is served upon the Director as attorney in fact for such licensee, the Director shall immediately notify the licensee by registered mail, enclosing the summons and specifying the hour and day of service.
(Source: Laws 1963, p. 3526.)
(205 ILCS 670/4) (from Ch. 17, par. 5404)
Sec. 4. Investigation to determine whether license shall be issued. Upon the filing of an application and the payment of the fee, the Director shall investigate to determine (1) that the reputation of the applicant, including managers of a limited liability company, partners, owners, officers or directors thereof is such as to warrant belief that the business will be operated honestly and fairly within the purposes of this Act and (2) that the applicant meets the positive net worth requirement set forth in Section 2 of this Act. Unless the Director makes findings hereinabove enumerated, he or she shall not issue a license and shall notify the applicant of the denial and return to the applicant the sum paid by the applicant as a license fee, but shall retain the $300 application fee. The Director shall approve or deny every application for license hereunder within 60 days from the filing thereof with the fee.
(Source: P.A. 90 437, eff. 1 1 98; 90 575, eff. 3 20 98.)
(205 ILCS 670/4.1) (from Ch. 17, par. 5404.1)
Sec. 4.1. (Repealed).
(Source: P.A. 84 1004. Repealed by P.A. 90 437, eff. 1 1 98.)
(205 ILCS 670/5) (from Ch. 17, par. 5405)
Sec. 5. License. The license shall state the address, including city and state, at which the business is to be conducted and shall state fully the name of the licensee. The license shall be conspicuously posted in the place of business of the licensee and shall not be transferable or assignable.
(Source: P.A. 90 437, eff. 1 1 98.)
(205 ILCS 670/6) (from Ch. 17, par. 5406)
Sec. 6. (Repealed).
(Source: Laws 1963, p. 3526. Repealed by P.A. 90 437, eff. 1 1 98.)
(205 ILCS 670/7) (from Ch. 17, par. 5407)
Sec. 7. More than one license to same licensee Changing place of business.
(a) Not more than one place of business shall be maintained under the same license, but the Director may issue more than one license to the same licensee upon compliance with all the provisions of this Act governing an original issuance of a license.
(b) Whenever a licensee changes his place of business to a location other than that set forth in his license, he shall give written notice thereof to the Director, at least 10 days prior to the relocation. However, if the new location is in excess of 15 miles from the previous location, the licensee shall obtain written approval from the Director prior to the relocation.
(Source: P.A. 90 437, eff. 1 1 98.)
(205 ILCS 670/8) (from Ch. 17, par. 5408)
Sec. 8. Annual license fee Expenses. Before the 15th day of each December, a licensee must pay to the Director, and the Department must receive, the annual license fee required by Section 2 for the next succeeding calendar year. The license shall expire on the first of January unless the license fee has been paid prior thereto.
In addition to such license fee, the reasonable expense of any examination, investigation or custody by the Director under any provisions of this Act shall be borne by the licensee.
If a licensee fails to renew his or her license by the 31st day of December, it shall automatically expire and the licensee is not entitled to a hearing; however, the Director, in his or her discretion, may reinstate an expired license upon payment of the annual renewal fee and proof of good cause for failure to renew.
(Source: P.A. 92 398, eff. 1 1 02.)
(205 ILCS 670/8.1)
Sec. 8.1. All moneys received by the Department of Financial Institutions under this Act shall be deposited in the Financial Institutions Fund created under Section 6z 26 of the State Finance Act.
(Source: P.A. 88 13.)
(205 ILCS 670/9) (from Ch. 17, par. 5409)
Sec. 9. Fines, Suspension or Revocation of license.
(a) The Director may, after 10 days notice by registered mail to the licensee at the address set forth in the license, stating the contemplated action and in general the grounds therefor, fine such licensee an amount not exceeding $10,000 per violation, or revoke or suspend any license issued hereunder if he or she finds that:
(1) The licensee has failed to comply with any
provision of this Act or any order, decision, finding, rule, regulation or direction of the Director lawfully made pursuant to the authority of this Act; or

(2) Any fact or condition exists which, if it had
existed at the time of the original application for the license, clearly would have warranted the Director in refusing to issue the license.

(b) The Director may fine, suspend, or revoke only the particular license with respect to which grounds for the fine, revocation or suspension occur or exist, but if the Director shall find that grounds for revocation are of general application to all offices or to more than one office of the licensee, the Director shall fine, suspend, or revoke every license to which such grounds apply.
(c) (Blank).
(d) No revocation, suspension, or surrender of any license shall impair or affect the obligation of any pre existing lawful contract between the licensee and any obligor.
(e) The Director may issue a new license to a licensee whose license has been revoked when facts or conditions which clearly would have warranted the Director in refusing originally to issue the license no longer exist.
(f) (Blank).
(g) In every case in which a license is suspended or revoked or an application for a license or renewal of a license is denied, the Director shall serve the licensee with notice of his or her action, including a statement of the reasons for his or her actions, either personally, or by certified mail, return receipt requested. Service by certified mail shall be deemed completed when the notice is deposited in the U.S. Mail.
(h) An order assessing a fine, an order revoking or suspending a license or, an order denying renewal of a license shall take effect upon service of the order unless the licensee requests, in writing, within 10 days after the date of service, a hearing. In the event a hearing is requested, the order shall be stayed until a final administrative order is entered.
(i) If the licensee requests a hearing, the Director shall schedule a hearing within 30 days after the request for a hearing unless otherwise agreed to by the parties.
(j) The hearing shall be held at the time and place designated by the Director. The Director and any administrative law judge designated by him or her shall have the power to administer oaths and affirmations, subpoena witnesses and compel their attendance, take evidence, and require the production of books, papers, correspondence, and other records or information that he or she considers relevant or material to the inquiry.
(k) The costs for the administrative hearing shall be set by rule.
(l) The Director shall have the authority to prescribe rules for the administration of this Section.
(Source: P.A. 90 437, eff. 1 1 98.)
(205 ILCS 670/9.1)
Sec. 9.1. Closing of business; surrender of license. At least 10 days prior to a licensee ceasing operations, closing business, or filing for bankruptcy, the licensee shall:
(a) Notify the Department of its action in writing.
(b) With the exception of filing for bankruptcy, surrender its license to the Director for cancellation. The surrender of the license shall not affect the licensee's civil or criminal liability for acts committed prior to surrender or entitle the licensee to a return of any part of the annual license fee.
(c) The licensee shall notify the Department of the location where the books, accounts, contracts, and records will be maintained and the procedure to ensure prompt return of contracts, titles, and releases to the customers.
(d) The accounts, books, records, and contracts shall be maintained and serviced by the licensee or another licensee under this Act, or an entity exempt from licensure under this Act.
(e) The Department shall have the authority to conduct examinations of the books, records, and loan documents at any time after surrender of the license, filing of bankruptcy, or the cessation of operations.
(Source: P.A. 90 437, eff. 1 1 98; 90 575, eff. 3 20 98.)
(205 ILCS 670/10) (from Ch. 17, par. 5410)
Sec. 10. Investigation of conduct of business. For the purpose of discovering violations of this Act or securing information lawfully required by it, the Director may at any time investigate the loans and business and examine the books, accounts, records, and files used therein, of every licensee and of every person, partnership, association, limited liability company, and corporation engaged in the business described in Section 1 of this Act, whether such person, partnership, association, limited liability company, or corporation shall act or claim to act as principal or agent or within or without the authority of this Act. For such purpose the Director shall have free access to the offices and places of business, books, accounts, papers, records, files, safes, and vaults of such persons, partnerships, associations, limited liability companies, and corporations. The Director may require the attendance of and examine under oath all persons whose testimony he or she may require relative to such loans or such business, and in such cases the Director shall have power to administer oaths to all persons called as witnesses; and the Director may conduct such examinations.
The Director shall make an examination of the affairs, business, office and records of each licensee at least once each year. The Director shall by rule and regulation set the fee to be charged for each examination day, including travel expenses for out of state licensed locations. The fee shall reasonably reflect actual costs. The Director shall also have authority to examine the books and records of any business made by a former licensee which is being liquidated, as the Director deems necessary, and may charge the examination fees otherwise required for licensees.
(Source: P.A. 90 437, eff. 1 1 98.)
(205 ILCS 670/11) (from Ch. 17, par. 5411)
Sec. 11. Books and records Reports.
(a) Every licensee shall retain and use in his business or at another location approved by the Director such records as are required by the Director to enable the Director to determine whether the licensee is complying with the provisions of this Act and the rules and regulations promulgated pursuant to this Act. Every licensee shall preserve the records of any loan for at least 2 years after making the final entry for such loan. Accounting systems maintained in whole or in part by mechanical or electronic data processing methods which provide information equivalent to that otherwise required and follow generally accepted accounting principles are acceptable for that purpose, if approved by the Director in writing.
(b) Each licensee shall annually, on or before the first day of March, file a report with the Director giving such relevant information as the Director may reasonably require concerning the business and operations during the preceding calendar year of each licensed place of business conducted by the licensee. The report must be received by the Department on or before March 1. The report shall be made under oath and in a form prescribed by the Director. Whenever a licensee operates 2 or more licensed offices or whenever 2 or more affiliated licensees operate licensed offices, a composite report of such group of licensed offices may be filed in lieu of individual reports. The Director may make and publish annually an analysis and recapitulation of such reports. The Director may fine each licensee $25 for each day beyond March 1 such report is filed.
(Source: P.A. 92 398, eff. 1 1 02.)
(205 ILCS 670/12) (from Ch. 17, par. 5412)
Sec. 12. Other business.
(a) Upon application by the licensee, and approval by the Director, the Director may approve the conduct of other businesses not specifically permitted by this Act in the licensee's place of business, unless the Director finds that such conduct will conceal or facilitate evasion or violation of this Act. Such approval shall be in writing and shall describe the other businesses which may be conducted in the licensed office.
(b) A licensee may without notice to and approval of the Director, in addition to the business permitted by this Act, conduct the following business:
(1) The business of a sales finance agency as
defined in the Sales Finance Agency Act.

(2) The business of soliciting or selling any type
of insurance provided that all such insurance transactions are conducted in accordance with and are regulated under the Illinois Insurance Code.

(3) The business of financing premiums for insurance.
(4) Making loans pursuant to the Financial Services
Development Act.

The Director shall make and enforce such reasonable rules and regulations for the conduct of business under this Act in the same office with other businesses as may be necessary to prevent evasions or violations of this Act. The Director may investigate any business conducted in the licensed office to determine whether any evasion or violation of this Act has occurred.
(Source: P.A. 90 437, eff. 1 1 98.)
(205 ILCS 670/12.5)
Sec. 12.5. Limited purpose branch.
(a) Upon the written approval of the Director, a licensee may maintain a limited purpose branch for the sole purpose of making loans as permitted by this Act. A limited purpose branch may include an automatic loan machine. No other activity shall be conducted at the site, including but not limited to, accepting payments, servicing the accounts, or collections.
(b) The licensee must submit an application for a limited purpose branch to the Director on forms prescribed by the Director with an application fee of $300. The approval for the limited purpose branch must be renewed concurrently with the renewal of the licensee's license along with a renewal fee of $300 for the limited purpose branch.
(c) The books, accounts, records, and files of the limited purpose branch's transactions shall be maintained at the licensee's licensed location. The licensee shall notify the Director of the licensed location at which the books, accounts, records, and files shall be maintained.
(d) The licensee shall prominently display at the limited purpose branch the address and telephone number of the licensee's licensed location.
(e) No other business shall be conducted at the site of the limited purpose branch unless authorized by the Director.
(f) The Director shall make and enforce reasonable rules for the conduct of a limited purpose branch.
(g) A limited purpose branch may not be located within 1,000 feet of a facility operated by an inter track wagering licensee or an organization licensee subject to the Illinois Horse Racing Act of 1975, on a riverboat subject to the Riverboat Gambling Act, or within 1,000 feet of the location at which the riverboat docks.
(Source: P.A. 90 437, eff. 1 1 98.)
(205 ILCS 670/13) (from Ch. 17, par. 5413)
Sec. 13. Prohibition against taking power of attorney. No licensee shall take any power of attorney except to cancel any policies of insurance financed by the licensee as permitted by this Act and to receive either rebate of unearned premiums or loss payments.
(Source: P.A. 90 437, eff. 1 1 98.)
(205 ILCS 670/14) (from Ch. 17, par. 5414)
Sec. 14. Pledge or sale of note. No licensee or other person shall pledge, hypothecate or sell a note entered into under the provisions of this Act by an obligor except to another licensee under this Act, a licensee under the Sales Finance Agency Act, a bank, savings bank, savings and loan association, or credit union created under the laws of this State or the United States, or to other persons or entities authorized by the Director in writing. Sales of such notes by licensees under this Act or other persons shall be made by agreement in writing and shall authorize the Director to examine the loan documents so hypothecated, pledged, or sold.
(Source: P.A. 90 437, eff. 1 1 98.)
(205 ILCS 670/15) (from Ch. 17, par. 5415)
Sec. 15. Charges permitted.
(a) Every licensee may lend a principal amount not exceeding $40,000 and may charge, contract for and receive thereon interest at the rate agreed upon by the licensee and the borrower, subject to the provisions of this Act.
(b) For purpose of this Section, the following terms shall have the meanings ascribed herein.
"Applicable interest" for a precomputed loan contract means the amount of interest attributable to each monthly installment period. It is computed as if each installment period were one month and any interest charged for extending the first installment period beyond one month is ignored. The applicable interest for any monthly installment period is that portion of the precomputed interest that bears the same ratio to the total precomputed interest as the balances scheduled to be outstanding during that month bear to the sum of all scheduled monthly outstanding balances in the original contract.
"Interest bearing loan" means a loan in which the debt is expressed as a principal amount plus interest charged on actual unpaid principal balances for the time actually outstanding.
"Precomputed loan" means a loan in which the debt is expressed as the sum of the original principal amount plus interest computed actuarially in advance, assuming all payments will be made when scheduled.
(c) Loans may be interest bearing or precomputed.
(d) To compute time for either interest bearing or precomputed loans for the calculation of interest and other purposes, a month shall be a calendar month and a day shall be considered 1/30th of a month when calculation is made for a fraction of a month. A month shall be 1/12th of a year. A calendar month is that period from a given date in one month to the same numbered date in the following month, and if there is no same numbered date, to the last day of the following month. When a period of time includes a month and a fraction of a month, the fraction of the month is considered to follow the whole month. In the alternative, for interest bearing loans, the licensee may charge interest at the rate of 1/365th of the agreed annual rate for each day actually elapsed.
(e) With respect to interest bearing loans:
(1) Interest shall be computed on unpaid principal
balances outstanding from time to time, for the time outstanding, until fully paid. Each payment shall be applied first to the accumulated interest and the remainder of the payment applied to the unpaid principal balance; provided however, that if the amount of the payment is insufficient to pay the accumulated interest, the unpaid interest continues to accumulate to be paid from the proceeds of subsequent payments and is not added to the principal balance.

(2) Interest shall not be payable in advance or
compounded. However, if part or all of the consideration for a new loan contract is the unpaid principal balance of a prior loan, then the principal amount payable under the new loan contract may include any unpaid interest which has accrued. The unpaid principal balance of a precomputed loan is the balance due after refund or credit of unearned interest as provided in paragraph (f), clause (3). The resulting loan contract shall be deemed a new and separate loan transaction for all purposes.

(3) Loans may be payable as agreed between the
parties, including payment at irregular times or in unequal amounts and rates that may vary with an index that is independently verifiable and beyond the control of the licensee.

(4) The lender or creditor may, if the contract
provides, collect a delinquency or collection charge on each installment in default for a period of not less than 10 days in an amount not exceeding 5% of the installment on installments in excess of $200, or $10 on installments of $200 or less, but only one delinquency and collection charge may be collected on any installment regardless of the period during which it remains in default.

(f) With respect to precomputed loans:
(1) Loans shall be repayable in substantially equal
and consecutive monthly installments of principal and interest combined, except that the first installment period may be longer than one month by not more than 15 days, and the first installment payment amount may be larger than the remaining payments by the amount of interest charged for the extra days; and provided further that monthly installment payment dates may be omitted to accommodate borrowers with seasonal income.

(2) Payments may be applied to the combined total of
principal and precomputed interest until the loan is fully paid. Payments shall be applied in the order in which they become due, except that any insurance proceeds received as a result of any claim made on any insurance, unless sufficient to prepay the contract in full, may be applied to the unpaid installments of the total of payments in inverse order.

(3) When any loan contract is paid in full by cash,
renewal or refinancing, or a new loan, one month or more before the final installment due date, a licensee shall refund or credit the obligor with the total of the applicable interest for all fully unexpired installment periods, as originally scheduled or as deferred, which follow the day of prepayment; provided, if the prepayment occurs prior to the first installment due date, the licensee may retain 1/30 of the applicable interest for a first installment period of one month for each day from the date of the loan to the date of prepayment, and shall refund or credit the obligor with the balance of the total interest contracted for. If the maturity of the loan is accelerated for any reason and judgment is entered, the licensee shall credit the borrower with the same refund as if prepayment in full had been made on the date the judgement is entered.

(4) The lender or creditor may, if the contract
provides, collect a delinquency or collection charge on each installment in default for a period of not less than 10 days in an amount not exceeding 5% of the installment on installments in excess of $200, or $10 on installments of $200 or less, but only one delinquency or collection charge may be collected on any installment regardless of the period during which it remains in default.

(5) If the parties agree in writing, either in the
loan contract or in a subsequent agreement, to a deferment of wholly unpaid installments, a licensee may grant a deferment and may collect a deferment charge as provided in this Section. A deferment postpones the scheduled due date of the earliest unpaid installment and all subsequent installments as originally scheduled, or as previously deferred, for a period equal to the deferment period. The deferment period is that period during which no installment is scheduled to be paid by reason of the deferment. The deferment charge for a one month period may not exceed the applicable interest for the installment period immediately following the due date of the last undeferred payment. A proportionate charge may be made for deferment for periods of more or less than one month. A deferment charge is earned pro rata during the deferment period and is fully earned on the last day of the deferment period. Should a loan be prepaid in full during a deferment period, the licensee shall credit to the obligor a refund of the unearned deferment charge in addition to any other refund or credit made for prepayment of the loan in full.

(6) If two or more installments are delinquent one
full month or more on any due date, and if the contract so provides, the licensee may reduce the unpaid balance by the refund credit which would be required for prepayment in full on the due date of the most recent maturing installment in default. Thereafter, and in lieu of any other default or deferment charges, the agreed rate of interest may be charged on the unpaid balance until fully paid.

(7) Fifteen days after the final installment as
originally scheduled or deferred, the licensee, for any loan contract which has not previously been converted to interest bearing under paragraph (f), clause (6), may compute and charge interest on any balance remaining unpaid, including unpaid default or deferment charges, at the agreed rate of interest until fully paid. At the time of payment of said final installment, the licensee shall give notice to the obligor stating any amounts unpaid.

(Source: P.A. 93 264, eff. 1 1 04.)
(205 ILCS 670/15a) (from Ch. 17, par. 5416)
Sec. 15a. Credit insurance. Voluntary credit life insurance, credit accident and health insurance, involuntary unemployment insurance, credit property insurance, or other credit insurance policies approved or permitted by the Director of Insurance and any charge therefor which is deducted from the loan or paid by the obligor shall comply with the Illinois Insurance Code and all lawful requirements of the Director of Insurance related thereto. When there are 2 or more obligors on the loan contract, only one charge for credit life insurance and credit accident and health insurance may be made and only one of the obligors need be required to be insured, except that joint credit insurance may cover two obligors. Insurance obtained from, by or through a licensee shall be in effect when the loan is transacted. The purchase of such insurance through the licensee or from an agent, broker or insurer specified by the licensee shall not be a condition precedent to the granting of the loan.
(Source: P.A. 90 437, eff. 1 1 98.)
(205 ILCS 670/15b) (from Ch. 17, par. 5417)
Sec. 15b. Property insurance.
(a) A licensee may require the obligor to provide property damage insurance on real and personal property, all or part of which serves as security against reasonable risks of loss, damage, and destruction in connection with loans exceeding an original principal amount of $500. The amount and term of the insurance shall be reasonable in relation to the amount and term of the loan contract and the type and value of the property, and the insurance shall be procured in accordance with the insurance laws of this State. The purchase of such insurance through the licensee or from an agent, broker or insurer specified by the licensee shall not be a condition precedent to the granting of the loan. The premium charged shall not exceed that charged by the insurance company.
(b) If the obligor fails to furnish evidence that he has procured insurance on the property, the licensee may purchase substitute insurance that may be substantially equivalent to or more limited than coverage the obligor is required to maintain. Such insurance must comply with the Collateral Protection Act.
(Source: P.A. 90 437, eff. 1 1 98.)
(205 ILCS 670/15d) (from Ch. 17, par. 5419)
Sec. 15d. Extra charges prohibited; exceptions. No amount in addition to the charges authorized by this Act shall be directly or indirectly charged, contracted for, or received, except (1) lawful fees paid to any public officer or agency to record, file or release security; (2) (i) costs and disbursements actually incurred in connection with a real estate loan, for any title insurance, title examination, abstract of title, survey, or appraisal, or paid to a trustee in connection with a trust deed, and (ii) in connection with a real estate loan those charges authorized by Section 4.1a of the Interest Act, whether called "points" or otherwise, which charges are imposed as a condition for making the loan and are not refundable in the event of prepayment of the loan; (3) costs and disbursements, including reasonable attorney's fees, incurred in legal proceedings to collect a loan or to realize on a security after default; (4) an amount not exceeding $25, plus any actual expenses incurred in connection with a check or draft that is not honored because of insufficient or uncollected funds or because no such account exists; and (5) a document preparation fee not to exceed $25 for obtaining and reviewing credit reports and preparation of other documents. This Section does not prohibit the receipt of a commission, dividend, charge, or other benefit by the licensee or by an employee, affiliate, or associate of the licensee from the insurance permitted by Sections 15a and 15b of this Act or from insurance in lieu of perfecting a security interest provided that the premiums for such insurance do not exceed the fees that otherwise could be contracted for by the licensee under this Section. Obtaining any of the items referred to in clause (i) of item (2) of this Section through the licensee or from any person specified by the licensee shall not be a condition precedent to the granting of the loan.
(Source: P.A. 89 400, eff. 8 20 95; 90 437, eff. 1 1 98.)
(205 ILCS 670/15e) (from Ch. 17, par. 5419.1)
Sec. 15e. Insurance.
(a) A licensee shall not be considered to be the obligor's agent or broker in connection with the purchase or sale of insurance under this Act for any purpose.
(b) Consideration or another thing of value may be paid to or retained by the licensee, or an affiliate of the licensee, in connection with any insurance, debt cancellation contract, or other such product purchased pursuant to the loan made or held by the licensee, and all or a portion of the consideration may be included in the amount charged to the obligor, so long as the licensee discloses to the obligor that either the licensee or an affiliate may receive something of value in connection with the purchase by the obligor.
(Source: P.A. 90 437, eff. 1 1 98.)
(205 ILCS 670/16) (from Ch. 17, par. 5420)
Sec. 16. Disclosure of Terms of Contract. In any loan transaction under this Act, the licensee must disclose the following items to the obligor of the loan before the transaction is consummated:
(a) The amount and date of the loan contract;
(b) The amount of the loan using the term "amount financed";
(c) Any deduction from the amount financed or payment made by the obligor for insurance and the type of insurance for which each deduction or payment was made;
(d) Any additional deduction from the loan or payment made by the obligor in connection with obtaining the loan;
(e) The date on which the finance charge begins to accrue if different from the date of the transaction;
(f) The total amount of the loan charge with a description of each amount included using the term "finance charge";
(g) The finance charge expressed as an annual percentage rate using the term "annual percentage rate".
"Annual percentage rate" means the nominal annual percentage rate of finance charge determined in accordance with the actuarial method of computation with an accuracy at least to the nearest 1/4 of 1%; or at the option of the licensee by application of the United States rule so that it may be disclosed with an accuracy at least to the nearest 1/4 of 1%;
(h) The number, amount and due dates or periods of payments scheduled to repay the loan and the sum of such payments using the term "total of payments";
(i) The amount, or method of computing the amount of any default, delinquency or similar charges payable in the event of late payments;
(j) The right of the obligor to prepay the loan in full on any installment date and the fact that such prepayment in full will reduce the insurance charge for the loan;
(k) A description or identification of the type of any security interest held or to be retained or acquired by the licensee in connection with the loan and a clear identification of the property to which the security interest relates. If after acquired property will be subject to the security interest, or if other or future indebtedness is or may be secured by any such property, this fact shall be clearly set forth in conjunction with the description or identification of the type of security interest held, retained or acquired;
(l) A description of any penalty charge that may be imposed by the licensee for prepayment of the principal of the obligation with an explanation of the method of computation of such penalty and the conditions under which it may be imposed;
(m) Identification and description of the method of computing any unearned portion of the finance charge in the event of prepayment of the loan, and if the licensee uses the "Rule of 78THS" method, including a statement explaining such method substantially as follows:
Unearned finance charges under the Rule of 78ths are
computed by calculating for all fully unexpired monthly installment periods, as originally scheduled or deferred, which follow the day of prepayment, the portion of the precomputed interest that bears the same ratio to the total precomputed interest as the balances scheduled to be outstanding during that monthly installment period bear to the sum of all scheduled monthly outstanding balances originally contracted for.

The description shall also include an example of its application solely for purposes of illustration in substantially the following form:
PREPAYMENT "RULE OF 78THS"
Sum of balances due every month after
Unearned = Original x prepayment
Charge Charge* Sum of balances due every month of
contract
*for Finance Charge (excluding any charges added for a first payment period of more than one month) or credit insurance charges.
Example: 12 monthly payments of $10 (balance is $120 1st month, $110 2nd month, and so on), $20 Finance Charge. If 5 payments are prepaid in full, unearned Finance Charge is:
$20 x _____________50+40+30+20+10___________ = $3.85
120+110+100+90+80+70+60+50+40+30+20+10
The terms "finance charge" and "annual percentage rate" shall be printed more conspicuously than other terminology required by this Section.
At the time disclosures are made, the licensee shall deliver to the obligor a duplicate of the instrument or statement by which the required disclosures are made and on which the licensee and obligor are identified and their addresses stated. All of the disclosures shall be made clearly, conspicuously and in meaningful sequence and made together on either:
(i) the note or other instrument evidencing the
obligation. Where a creditor elects to combine disclosures with the contract, security agreement, and evidence of a transaction in a single document, the disclosures required under Section 16 shall be made on the face of the document, on the reverse side, or on both sides, provided that the amount of the finance charge and the annual percentage rate shall appear on the face of the document, and, if the reverse side is used, the printing on both sides of the document shall be equally clear and conspicuous, both sides shall contain the statement, "NOTICE: See other side for important information", and the place for the obligor's signature shall be provided following the full content of the document; or

(ii) One side of a separate statement which
identifies the transaction.

The amount of the finance charge shall be determined as the sum of all charges, payable directly or indirectly by the obligor and imposed directly or indirectly by the licensee as an incident to or as a condition to the extension of credit, whether paid or payable by the obligor, any other person on behalf of the obligor, to the licensee or to a third party, including any of the following types of charges:
(1) Interest, time price differential, and any
amount payable under a discount or other system of additional charges.

(2) Service, transaction, activity, or carrying
charge.

(3) Loan fee, points, finder's fee, or similar
charge.

(4) Fee for an appraisal, investigation, or credit
report.

(5) Charges or premiums for credit life, accident,
health, or loss of income insurance, written in connection with any credit transaction unless:

(i) the insurance coverage is not required by
the licensee and this fact is clearly and conspicuously disclosed in writing to the obligor; and

(ii) any obligor desiring such insurance
coverage gives specific dated and separately signed affirmative written indication of such desire after receiving written disclosure to him of the cost of such insurance.

(6) Charges or premiums for insurance, written in
connection with any credit transaction, against loss of or damage to property or against liability arising out of the ownership or use of property unless a clear, conspicuous, and specific statement in writing is furnished by the licensee to the obligor setting forth the cost of the insurance if obtained from or through the licensee and stating that the obligor may choose the person through which the insurance is to be obtained.

(7) Premium or other charge for any other guarantee
or insurance protecting the licensee against the obligor's default or other credit loss.

(8) Any charge imposed by a licensee upon another
licensee for purchasing or accepting an obligation of an obligor if the obligor is required to pay any part of that charge in cash, as an addition to the obligation, or as a deduction from the proceeds of the obligation.

A late payment, delinquency, default, reinstatement or other charge is not a finance charge if imposed for actual unanticipated late payment, delinquency, default or other occurrence.
A licensee who complies with the federal Truth in Lending Act, amendments thereto, and any regulations issued or which may be issued thereunder, shall be deemed to be in compliance with the provisions of this Section, except with respect to the disclosure in paragraph (m), which may be set forth in any manner.
(Source: P.A. 90 437, eff. 1 1 98.)
(205 ILCS 670/16b) (from Ch. 17, par. 5422)
Sec. 16b. No real estate security in certain cases. For loans with an original principal amount of $3,000 or less, a licensee shall not take any security interest in real estate, except such lien as results from obtaining a judgment.
(Source: P.A. 84 1004.)
(205 ILCS 670/16c)
Sec. 16c. Non English language transactions. A licensee may conduct transactions in a language other than English through an employee or agent acting as interpreter or through an interpreter provided by the customer.
(Source: P.A. 92 578, eff. 6 26 02.)
(205 ILCS 670/17) (from Ch. 17, par. 5423)
Sec. 17. Maximum term and amount. The loan contract shall provide for repayment of the principal and charges within 181 months from the date of the loan contract or the last advance, if any, required by the loan contract. No licensee shall permit an obligor to owe such licensee or an affiliate (including a corporation owned or managed by the licensee) or agent of such licensee an aggregate principal amount of more than $40,000 at any time for loans transacted pursuant to this Act.
(Source: P.A. 93 264, eff. 1 1 04.)
(205 ILCS 670/18) (from Ch. 17, par. 5424)
Sec. 18. Advertising. Advertising for loans transacted under this Act may not be false, misleading or deceptive. That advertising, if it states a rate or amount of charge for a loan, must state the rate as an annual percentage rate. No licensee may advertise in any manner so as to indicate or imply that his interest rates or charges for loans are in any way "recommended", "approved", "set" or "established" by the State government or by this Act.
If any advertisement to which this Section applies states the amount of any installment payment, the dollar amount of any finance charge, or the number of installments or the period of repayment, then the advertisement shall state all of the following items:
(1) The amount of the loan.
(2) The number, amount, and due dates or period of payments scheduled to repay the indebtedness if the credit is extended.
(3) The rate of the finance charge expressed as an annual percentage rate.
(Source: P.A. 90 437, eff. 1 1 98.)
(205 ILCS 670/18.5)
Sec. 18.5. Incentives. A licensee may pay money or any other thing of value to any person as an incentive or inducement to apply for a loan, to borrow money, or to refer potential borrowers to the licensee. The Department may by rule place reasonable limits on such incentives or inducements.
(Source: P.A. 89 400, eff. 8 20 95.)
(205 ILCS 670/19) (from Ch. 17, par. 5425)
Sec. 19. (Repealed).
(Source: P.A. 84 1004. Repealed by P.A. 90 437, eff. 1 1 98.)
(205 ILCS 670/19.1) (from Ch. 17, par. 5425.1)
Sec. 19.1. Where the licensee repossesses a motor vehicle that was used as collateral and which is used primarily for the obligor's personal, family or household purposes, the licensee shall be subject to the requirements of and shall transfer the certificate of title pursuant to Section 3 114 of the Illinois Vehicle Code.
(Source: P.A. 90 437, eff. 1 1 98; 90 665, eff. 1 1 99.)
(205 ILCS 670/20) (from Ch. 17, par. 5426)
Sec. 20. Penalties for violation.
(a) Any person who engages in business as a Consumer Installment Loan lender without the license required by this Act shall be guilty of a Class 4 felony.
(b) The obligor, prior to the expiration of 2 years after the date of his last scheduled payment, may recover such reasonable attorney's fees and court costs as a court may assess against such licensee or lender for a violation of Sections 1, 12, 15, 15a, 15b, 15d, 15e, 16, 17, 18, or 19.1. The balance due under the terms of the loan contract shall be reduced by the amount which the obligor is thus entitled to recover. A bona fide error by a licensee in calculating charges or rebates is not a violation if the licensee corrects the error within a reasonable time, after discovery.
(b 5) A license issued under this Act may be revoked if the licensee, or any directors, managers of a limited liability company, partners, or officer thereof is convicted of a felony.
(c) No provision of this Section imposing any liability shall apply to any act done or omitted in conformity with any rule or regulation or written interpretation thereof by the Department of Financial Institutions, notwithstanding that after such act or omission has occurred, such rule, regulation or interpretation is amended, rescinded or determined by judicial or other authority to be invalid for any reason. All interpretations issued after January 1, 1998 must be written and signed by the Department's Chief Counsel and approved by the Director.
(Source: P.A. 90 437, eff. 1 1 98.)
(205 ILCS 670/20.5)
Sec. 20.5. Cease and desist.
(a) The Director may issue a cease and desist order to any licensee, or other person doing business without the required license, when in the opinion of the Director, the licensee, or other person, is violating or is about to violate any provision of this Act or any rule or requirement imposed in writing by the Department as a condition of granting any authorization permitted by this Act.
(b) The Director may issue a cease and desist order prior to a hearing.
(c) The Director shall serve notice of his or her action, designated as a cease and desist order made pursuant to this Section, including a statement of the reasons for the action, either personally or by certified mail, return receipt requested. Service by certified mail shall be deemed completed when the notice is deposited in the U.S. mail.
(d) Within 15 days of service of the cease and desist order, the licensee or other person may request, in writing, a hearing.
(e) The Director shall schedule a hearing within 30 days after the request for a hearing unless otherwise agreed to by the parties.
(f) The Director shall have the authority to prescribe rules for the administration of this Section.
(g) If it is determined that the Director had the authority to issue the cease and desist order, he or she may issue such orders as may be reasonably necessary to correct, eliminate, or remedy such conduct.
(h) The powers vested in the Director by this Section are additional to any and all other powers and remedies vested in the Director by law, and nothing in this Section shall be construed as requiring that the Director shall employ the power conferred in this Section instead of or as a condition precedent to the exercise of any other power or remedy vested in the Director.
(i) The cost for the administrative hearing shall be set by rule.
(Source: P.A. 90 437, eff. 1 1 98.)
(205 ILCS 670/20.7)
Sec. 20.7. Civil action. A claim of violation of this Act may be asserted in a civil action.
(Source: P.A. 90 437, eff. 1 1 98.)
(205 ILCS 670/21) (from Ch. 17, par. 5427)
Sec. 21. Application of act. This Act does not apply to any person, partnership, association, limited liability company, or corporation doing business under and as permitted by any law of this State or of the United States relating to banks, savings and loan associations, savings banks, credit unions, or licensees under the Residential Mortgage License Act for residential mortgage loans made pursuant to that Act. This Act does not apply to business loans.
(Source: P.A. 90 437, eff. 1 1 98.)
(205 ILCS 670/22) (from Ch. 17, par. 5428)
Sec. 22. Rules and regulations. The Department may make and enforce such reasonable rules, regulations, directions, orders, decisions, and findings as the execution and enforcement of the provisions of this Act require, and as are not inconsistent therewith. In addition, the Department may promulgate rules in connection with the activities of licensees that are necessary and appropriate for the protection of consumers in this State. All rules, regulations and directions of a general character shall be printed and copies thereof mailed to all licensees.
(Source: P.A. 90 437, eff. 1 1 98; 91 698, eff. 5 6 00.)
(205 ILCS 670/23) (from Ch. 17, par. 5429)
Sec. 23. Judicial review. All final administrative decisions of the Department hereunder shall be subject to judicial review pursuant to the provisions of the Administrative Review Law, and all amendments and modifications thereof, and any rules adopted pursuant thereto.
(Source: P.A. 90 437, eff. 1 1 98.)
(205 ILCS 670/24) (from Ch. 17, par. 5430)
Sec. 24. (Repealed).
(Source: Laws 1963, p. 3526. Repealed by P.A. 90 437, eff. 1 1 98.)
(205 ILCS 670/24.5)
Sec. 24.5. Injunction; civil penalty; costs. If it appears to the Director that a person or any entity has committed or is about to commit a violation of this Act, a rule promulgated under this Act, or an order of the Director, the Director may apply to the circuit court for an order enjoining the person or entity from violating or continuing to violate this Act, the rule, or order and for injunctive or other relief that the nature of the case may require and may, in addition, request the court to assess a civil penalty up to $1,000 along with costs and attorney's fees.
(Source: P.A. 90 437, eff. 1 1 98.)
(205 ILCS 670/25) (from Ch. 17, par. 5431)
Sec. 25. Partial invalidity. If any clause, sentence, provision or part of this Act shall be adjudged to be unconstitutional or invalid for any reason by any court of competent jurisdiction, such judgment shall not impair, affect, or invalidate the remainder of this Act, which shall remain in full force and effect thereafter.
(Source: Laws 1963, p. 3526.)
(205 ILCS 670/26) (from Ch. 17, par. 5432)
Sec. 26. Title of act. This Act shall be known and may be cited as the Consumer Installment Loan Act.
(Source: Laws 1963, p. 3526.)
(205 ILCS 670/27) (from Ch. 17, par. 5433)
Sec. 27. Effective date. This Act shall take effect September 1, 1963. During the first 90 days after the effective date of this Act, any person who has applied for a license under this Act, or filed written notice of intention to apply for such license with the Director of Financial Institutions, and who has not been denied, shall be subject to all provisions of this Act and may contract for and receive charges as if he were a licensee under this Act. This Act shall not apply to any contract or transaction made before September 1, 1963.
(Source: Laws 1963, p. 3526.)