Section 210.1  Definitions

 

"Act" means the Payday Loan Reform Act [815 ILCS 122].

 

"Affiliate" means any person or entity that directly or indirectly controls, is controlled by, or shares control with another person or entity. A person or entity has control over another if the person or entity has an ownership interest of 25% or more in the other.

 

"Allotment" means a portion of military pay that is regularly deducted or set-aside.

 

"Annual percentage rate" or "APR" is the cost of the consumer credit expressed as an annual rate which is disclosed to the consumer under applicable law.

 

"Calendar month" means that period from a given date in one month to the same numbered date 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.

 

"Controlling Person" means a person, entity, or ultimate equitable owner that:

 

owns or controls, directly or indirectly, 10% or more of any class of stock of the license applicant;

 

is not a depository institution, as defined in Section 1007.50 of the Savings Bank Act [205 ILCS 205], that lends, provides, or infuses, directly or indirectly, in any way, funds to or into a license applicant, in an amount equal to or more that 10% of the license applicant's net worth;

 

controls, directly or indirectly, the election of 25% or more of the members of the board of directors of a license applicant; or

 

the Director finds influences management of the license applicant.

 

"Covered Dependent" with respect to a covered member, means the covered member's spouse; the covered member's child (as defined in 38 USC 101(4)); or an individual for whom the covered member provided more than one-half of the individual's support for 180 days immediately preceding an extension of consumer credit covered.

 

"Covered Military Member" or "Covered Member" means a member of the armed forces who is on active duty under a call or order that does not specify a period of 30 days or less or is on active Guard and Reserve Duty.

 

"Department" means the Department of Financial and Professional Regulation.

 

"Director" means the Director of the Division of Financial Institutions with the authority delegated by the Secretary.

 

"Division" means the Department of Financial and Professional Regulation-Division of Financial Institutions.

 

"Generally Accepted Accounting Principles" or "GAAP" means those adopted by the American Institute of Certified Public Accountants and Federal Accounting Standards Board and incorporated by reference in Section 210.15.

 

"Gross Monthly Income" means monthly income as demonstrated by official documentation of the income, including, but not limited to, a consumer's pay stub or receipt reflecting payment of government benefits, for the period 30 days prior to the date on which the loan was made.

 

"Hypothecate" means to pledge a security instrument without transfer of title.

 

"John Warner Act" or "Warner Act" means 10 USC 987.

 

"Lender and Licensee" means a lender and licensee as defined in Section 1-10 of the Act.

 

"Loan Receivables" means the outstanding balances due on the loans of the licensee.

 

"Other Business Authorization" means the authorization in writing required by Section 3-5(g) of the Act to conduct another business in a location licensed under the Act that would not be contrary to the best interest of consumers.

 

"Missed payment" means any failure to make a payment within ten days of the due date.

 

"Payday Lender License" means a license issued pursuant to the Act.

 

"Person" means an individual, partnership, association, joint stock association, corporation, or any other form of business organization.

 

"Predatory Loan Prevention Act Annual Percentage Rate" or "PLPA APR" is the cost of the consumer credit expressed as an annual rate and shall be calculated in accordance with 32 CFR 232.4(c), the Predatory Loan Prevention Act [815 ILCS 123], and as incorporated in 38 Ill. Adm. Code 215.

 

"Secretary" means the Secretary of the Department of Financial and Professional Regulation.

 

(Source:  Amended at 46 Ill. Reg. 6550, effective August 1, 2022)

 

Section 210.2  Rate Cap Disclosure Notices

 

All loan contracts or agreements must include a separate disclosure signed by the consumer that states:  "A lender shall not contract for or receive charges exceeding a 36% annual percentage rate on the unpaid balance of the amount financed for a loan, as calculated under the Illinois Predatory Loan Prevention Act (PLPA APR).  Any loan with a PLPA APR over 36% is null and void, such that no person or entity shall have any right to collect, attempt to collect, receive, or retain any principal, fee, interest, or charges related to the loan.  The annual percentage rate disclosed in any loan contract may be lower than the PLPA APR."  This disclosure shall be clear and conspicuous and shall be substantially similar to the form in Appendix A.  A lender shall provide all disclosures required by this section in English and in the same language as the loan agreement.

 

(Source:  Added at 46 Ill. Reg. 6550, effective August 1, 2022)

 

Section 210.10  Minimum Requirements for Office Records

 

a)         Every licensee shall keep the following records at the licensed location in any medium or format that accurately reproduces original documents or papers:

 

1)         Loan register.

 

2)         Individual account records, including transaction histories of consumers.

 

3)         File of all original papers.

 

4)         Cash book.

 

5)         Alphabetical record of all co-makers, consumers or sureties.

 

6)         Permanent file.

 

7)         Information required by Section 2-55 of the Act.

 

b)         Records for loans made under the Act shall be kept separate or readily identifiable from other types of business conducted in the office, if allowed.

 

c)         Electronic data processing, combination forms and special office systems may be used if in accordance with standard accounting procedures and if they contain the information enumerated in subsection (a).

 

(Source:  Amended at 41 Ill. Reg. 12400, effective October 6, 2017)

 

Section 210.15  Application for Payday Lender License; Controlling Person

 

a)         An application for a license must be under oath in the form the Director prescribes and available on the agency's website.  The Director may not issue a license unless and until the findings as set forth in Section 3-5(b) of the Act are made.  These findings include that the financial responsibility, experience, character, and general fitness of the applicant are such as to command the confidence of the public and to warrant the belief that the business will be operated lawfully and fairly and within the provisions and purposes of the Act.  [815 ILCS 122/3-5(b)(1)]  The application shall contain the following:

 

1)         The name of the applicant and the address of the proposed place of business;

 

2)         The form of business organization of the applicant, including:

 

A)        a copy of its filed articles of incorporation;

 

B)        a copy of the filed articles of organization, if the applicant is a limited liability company;

 

C)        a certified statement of the ownership of the partnership and any subsequent changes in ownership, if the applicant is a partnership.

 

3)         The name, business and home address, credit report (except for a publicly traded company) and a chronological summary of the business experience, material litigation history, and felony convictions over the preceding 10 years of:

 

A)        the proprietor, if the applicant is an individual;

 

B)        every general partner, if the applicant is a partnership;

 

C)        President, Secretary, Executive and Senior Vice Presidents, Directors and individuals owning more than 25% of the corporate stock, if the applicant is a corporation;

 

D)        the manager, if the applicant is a limited liability company; and

 

E)        any controlling person.

 

4)         A licensee shall not submit the information required in subsections (a)(2) and (3) if the licensee has previously submitted the information to the Division in a previous license application within the last 5 years and there have been no material changes, unless the licensee is requested by the Director to submit this information.

 

5)         The most current year end financial statements, prepared in accordance with generally accepted accounting principles (as defined by the Financial Standards Accounting Board (401 Merritt 7, PO Box 5116, Norwalk CT 06856-5116 (203/847-0700))) and a balance sheet and statement of operations as of the most recent quarterly report before the date of the application.

 

6)         A list of all states in which the applicant is licensed as a payday lender or short-term lender, or under a similar license, and whether the licenses of the applicant have ever been withdrawn, refused, cancelled or suspended in any other state, with full details.

 

7)         Bond as required by the Act.

 

8)         Appointment of attorney-in-fact.

 

9)         Business plan, which shall only detail the nature, amount and term of loans to be made and types of security that will be taken.

 

10)         Photographs of both the inside and outside of the proposed site.

 

11)         Details of any other businesses that will be conducted within the licensed premises, if allowed.

 

12)         The applicable fees as required by Section 3-5(e) of the Act.

 

13)        Any additional information the Director considers necessary (for example, clarification of credit report, additional documentation clarifying business plan, clarification or additional documentation regarding financial statements, etc.).

 

b)         A licensee that is a corporation must notify the Director within 15 days after a person becomes a controlling person.  Upon notification, the Director may require all information he or she considers necessary to determine if a new application is required.  A licensee that is an entity other than a corporation shall seek prior approval whenever a person proposes to become a controlling person.  The request for approval shall be accompanied by an amendment fee of $1000.

 

(Source:  Amended at 45 Ill. Reg. 4467, effective March 24, 2021)

 

Section 210.16  Dual Licensure Limitation

 

In accordance with Section 3-5(g) of the Act, a licensee may obtain a license under the Consumer Installment Loan Act (CILA) for the exclusive purpose and use of making title secured loans, as defined in Section 15(a) of CILA and governed by 38 Ill. Adm. Code 110.300. 

 

(Source:  Amended at 46 Ill. Reg. 6550, effective August 1, 2022)

 

Section 210.20  Loan Register

 

a)         The loan register shall contain the original entry and be a permanent record, and shall show for every loan the account number, date of loan, name of consumer, nature of security, amount of fees, and total loan amount.

 

b)         The loan register shall be kept numerically by number of loans in order made, and shall have headings for each of the items required by subsection (a).

 

Section 210.30  Individual Account Records

 

a)         An individual account record, that may be maintained in electronic form, shall be kept for each consumer.  The account record shall show the name and address of the consumer, co-makers, or sureties, loan number, date of loan, the number of payments, the amount of payments and payment due dates, nature of security by type, and name of the financial institution if the loan agreement is hypothecated.

 

b)         If payment is made in any other way than in the ordinary course of business, it shall be so designated.  (For example, payment by a third party.)

 

c)         If loan receivables are sold to another person, the individual account record for receivables shall show the name of the authorized person to whom sold and the date of sale.

 

d)         No erasures whatsoever shall be made in the payment and charge sections of any account record.  In case of error, a line shall be drawn in ink through the improper entry and the correct entry made on the following line.  The entries on the record shall correspond with the receipts given the consumer.

 

e)         Every licensee shall preserve the records of all loans, including the account record, for at least two years after making the final entry for the loan.

 

Section 210.40  File of Original Papers

 

a)         Files

 

1)         A separate file shall be maintained for each consumer and shall contain the loan agreement, security agreement, wage assignment, acknowledged copy of the disclosure statement of loan, a separately signed statement indicating the borrower has received a copy of the lender's right to rescind, and all other evidence of indebtedness or security pertaining to the loan, except when these documents are in the custody of a court or of an agent for collection, or are hypothecated as provided in Section 210.90.  Evidence of disclosure must be retained for two years from the date of the loan.  A licensee may maintain these files in any medium or format that accurately reproduces original documents or papers.

 

2)         When a consumer is also a co-maker or consumer on another loan, the file of that consumer shall be cross-referenced to the other, unless a cross-reference is included on the alphabetical record required by Section 210.60.

 

b)         All legal instruments bearing evidence of indebtedness taken in connection with a loan and executed by a consumer, including the disclosure statement of the loan, shall bear the loan number.

 

c)         No licensee shall offer to or accept from a consumer any instruments that contain blank terms.  All spaces or sections not used in the preparation of legal documents shall be ruled out or designated as "none" or "n/a", and any amendments shall be signed by the consumer and licensee.

 

d)         The name and address of the licensee making the loan shall appear on any loan agreement, wage assignment, security agreement or other legal instrument taken from a consumer, before the proceeds of the loan are delivered.

 

Section 210.50  Cash Book

 

a)         All receipts and disbursements of any amount whatsoever shall be entered on the day they occur in the cash book or equivalent record.  Separate headings shall be provided for payments on principal and for fees collected from consumers.

 

b)         The cash book shall be a permanent record of all details of income and disbursements, including all entries to individual accounts of borrowers.

 

Section 210.60  Alphabetical Record of Co-Makers, Consumers or Guarantors

 

The alphabetical record shall show the account number and the name of each co-maker, consumer or guarantor who is currently indebted to the licensee, together with sufficient information to locate the account record. A licensee may maintain these files in any medium or format that accurately reproduces original documents or papers.

 

(Source:  Amended at 41 Ill. Reg. 12400, effective October 6, 2017)

 

Section 210.65  Permanent File

 

Each licensee must maintain a permanent file that includes the following:

 

a)         A copy of all correspondence sent to or received from the Division within the past 24 months.

 

b)         A copy of the last two examination exception reports and any related correspondence.

 

c)         A copy of the Act and a copy of this Part.

 

Section 210.70  Payments and Refunds

 

a)         All payments shall be credited on the account record as of the date received.

 

b)         When a payment is made in cash, the licensee shall give a receipt to the consumer.  A receipt is not required for payment by check or money order unless requested by the consumer.

 

c)         When any loan contract is paid in full, the licensee shall refund any unearned finance charge.  The unearned finance charge that is refunded shall be calculated based on a method that is at least as favorable to the consumer as the actuarial method, as defined by the federal Truth in Lending Act (15 USC 1601 et seq.) and Regulation Z, Appendix J (12 CFR 226 (2011); this incorporation by reference includes no subsequent dates or editions). The Department will post to its website a method of rebate calculation that conforms with Appendix J. Licensees may submit to the Department requests for approval of additional methods of rebate calculation that conform to Appendix J. All methods approved by the Department will be posted on the Department's website. The Department shall make its best efforts to respond to all licensee requests for use of a method. The use of any posted method will constitute compliance with the requirements of this subsection (c).  The sum of the digits or rule of 78 method of calculating prepaid interest refunds is prohibited. 

 

(Source:  Amended at 46 Ill. Reg. 6550, effective August 1, 2022)

 

Section 210.72  Loan Terms

 

a)         No lender may make a payday loan to a consumer if the total of all payday loan payments coming due within the first calendar month of the loan, when combined with the payment amount of all of the consumer's other outstanding payday loans coming due within the same month, exceeds the lesser of:

 

1)         $1,000; or

 

2)         in the case of one or more payday loans, 25% of the consumer's gross monthly income;

 

b)         A lender shall not contract for or receive charges exceeding a 36% PLPA APR on the unpaid balance of the amount financed for a payday loan.  Any loan with a PLPA APR over 36% is null and void, such that no person or entity shall have any right to collect, attempt to collect, receive, or retain any principal, fee, interest, or charges related to the loan.

 

c)         A lender may not take or attempt to take an interest in any of the consumer's personal property to secure a payday loan.

 

d)         A consumer has the right to redeem a check or any other item described in the definition of payday loan under Section 1-10 of the Act issued in connection with a payday loan from the lender holding the check or other item at any time before the payday loan becomes payable by paying the full amount of the check or other item, except that, if the item is a check or an ACH debit that could not be cancelled before it was negotiated, the consumer shall be entitled to a full refund of the amount obtained by the check or ACH debit within 5 business days after the date of redemption.

 

(Source:  Amended at 46 Ill. Reg. 6550, effective August 1, 2022)

 

Section 210.75  Installment Payday Loans (Repealed)

 

(Source:  Repealed at 46 Ill. Reg. 6550, effective August 1, 2022)

 

Section 210.80  Cancellation and Return of Documents

 

The loan agreement executed by the consumer bearing evidence of indebtedness shall be cancelled and returned to the consumer promptly following the paid in full date or upon cancellation of future payment obligations pursuant to Section 2-25 of the Act.  Where original documents are not available, a licensee shall substitute copies reproduced from any medium or format that accurately reproduces the original documents.  If an executed copy of a legal document is retained following payment in full or renewal, it must be clearly marked "PAID", "CANCELLED" or "RENEWED", indicating the date of payment or renewal.  Copies clearly identified with the legend "COPY NOT NEGOTIABLE" or similar language may be used in lieu of this requirement.

 

Section 210.90  Hypothecation at the Time of the Sale of Consumer's Loan Agreement

 

a)         A licensee may pledge, hypothecate or sell a loan agreement made under the provisions of the Act under the following conditions:

 

1)         the licensee notifies the Division in writing within 10 days after the transaction indicating the name of the purchaser/pledgee, location where the related loan agreements can be examined, and that the licensee shall be responsible for all examination costs.

 

2)         the licensee will provide the Division with an executed agreement entered into by the licensee and the purchaser/pledgee authorizing the Director to conduct an examination of these loan agreements.

 

b)         Each instrument hypothecated must bear the following endorsement:

 

            "This instrument is non-negotiable in form but may be pledged as collateral security.  If so pledged, any payment made to the payee, either of principal or of interest, upon the debt evidenced by this obligation, shall be considered and construed as a payment on this instrument, the same as though it were still in the possession and under the control of the payee named herein; and the pledgee holding this instrument as collateral security hereby makes said payee its agent to accept and receive payments hereon, either of principal or of interest."

 

c)         The licensee shall keep in the licensed office a record or list of all account records of all loans sold to another affiliated or non-affiliated licensee at the time of the sale.  The account shall be maintained in the record or list until examined and released by the examiner.  This record or list shall indicate the date of transaction, the account name and number, and the names of the other buyer in the transaction.

 

Section 210.100  Legal Forms

 

a)         Submission to the Division

 

1)         All forms of loan agreements, security agreements or assignments of wages or other forms used in connection with the making of loans shall be submitted to the Division prior to the conduct of business in the licensed location; provided, however, where the licensee or affiliate is engaged in the same business and licensed by this Division, the use of forms in the new location identical to those being used in the existing location shall not require filing.  Notice of intent to use identical forms (change of name excepted) should be provided the Division by the licensee.

 

2)         Should the licensees at any time following submission of forms modify the forms previously submitted, the forms as modified shall be submitted to the Division.

 

b)         Standard forms approved by the Division, that are available on the agency's website, shall be used in the following cases:

 

1)         Application for original license.

 

2)         Application for annual renewal of license.

 

3)         Change of location.

 

4)         Annual report.

 

5)         Appointment of attorney-in-fact for service of process.

 

6)         Bond.

 

Section 210.110  Judgments

 

a)         When a loan agreement has been reduced to judgment, the face of the account record shall show the amount and date of the judgment.

 

b)         All payments received shall be applied to the judgment balance and be properly identified.  The rate of interest charged on a judgment balance must comply with current applicable statutes.  No higher rate of interest or charge shall be assessed or accepted.

 

c)         The files of the licensee shall contain statements setting forth the following items:

 

1)         Date of judgment.

 

2)         Copy of the judgment.

 

3)         Date suit was filed.

 

4)         Amount of the judgment.

 

d)         If records related to the judgment are kept off-site as approved by the Director pursuant to Section 210.220 of this Part, the licensee shall make these documents available from that site or return the records to the licensed location within 72 hours after the Division's request.

 

Section 210.120  Trouble File

 

A separate and complete file shall be kept containing all records pertaining to judgments and sales.  These records shall be filed alphabetically under the name of the consumer or by account number.

 

Section 210.125  Schedule of Fines

 

a)         The Department may assess fines on any licensee or unlicensed person or entity that violates, through any act or omission, any provision of the Act or the Act’s implementing regulations, and shall determine the amount of the fine pursuant to this Section:

 

1)         Fine Schedule:

 

Tier	Conduct	Fine Amount
Tier 1	For each identified act or omission related to information disclosure, information reporting, advertising, document maintenance, or other similar statutory and regulatory requirements.	A fine not to exceed $1,000 per violation except as provided for in Tier 3.
Tier 2	For each identified act or omission related to the terms of a loan, fees, costs, or charges, ancillary products, security interests, underwriting, servicing, collection or any other act or omission not expressly covered by Tiers 1 or 3.	A fine not to exceed $5,000 per violation except as provided for in Tier 3.
Tier 3	For each identified act or omission that is prohibited under Section 122/4-5 of the Act or any action or omission that is an intentional or reckless violation of the Act regardless of type.	A fine not to exceed $10,000 per violation.

 

2)         In determining the amount of any fine assessed under subsection (a)(1), if any, the Department will take into account the totality of the circumstances, including, but not limited to:

 

A)        Proactive consumer remediation provided by the licensee or unlicensed person or entity to address harm caused by the act or omission;

 

B)        Extent of direct consumer harm;

 

C)        Frequency or pervasiveness of the act or omission;

 

D)        Adequacy of compliance policies, procedures, and practices to avoid recurrence of the act or omission and/or agreement to alter compliance policies, procedures, and practices to avoid recurrence of the act or omission in the future;

 

E)        History of compliant or non-compliant behavior, including past legal violations;

 

F)         Cooperation with the Department in its regulatory and examination activities; and

 

G)        Any other remedial measures the licensee or unlicensed person or entity has undertaken or has agreed to undertake in the future.

 

b)         Nothing in this Section shall be construed as limiting the Department’s investigative powers or remedies under the Act, including, but not limited to, any remedy detailed in Section 4-10 of the Act in addition to, or in lieu of, assessing fines in accordance with subsection (a).

 

c)         In accordance with Section 4-5 of the Act, the Department will follow the procedures established under 4-10(f) of the Act for unlicensed violators of the Act and this Part.

 

(Source:  Added at 47 Ill. Reg. 9363, effective June 20, 2023)

 

Section 210.130  Office and Office Hours

 

Every licensee shall maintain a place of business to which the general public shall have free access and where all obligations entered into shall be payable.

 

a)         Except as provided in subsection (c), or otherwise authorized by the Division, each licensed office shall be open not less than three consecutive hours between 8:00 A.M. and 6:00 P.M. on every business day, except Saturdays, Sundays and legal holidays, during the term of the license, and the licensee shall file with the Division a schedule of the hours during which it elects to keep the office open, provided that any licensee may keep its office open for any period it sees fit in addition to the hours listed in the schedule.

 

b)         Whenever a licensee desires to change its schedule of office hours on file with the Division, it may do so upon filing with the Division a schedule setting forth the change of time at least three days before the change shall go into effect.  The schedule of hours shall be prominently displayed in the place of business of the licensee.

 

c)         If any payment shall be due on any obligations to a licensee on any closed day, then the payment shall be considered, for all purposes, as having been received on the closed day, if the payment is received, whether through the mail or otherwise, at any time before the close of business on the next regular business day following the closed day.

 

d)         The license of each licensee and the annual license fee renewal certificate shall be prominently displayed and be made available for easy reading by the public in the place of business of the licensee.

 

Section 210.140  Advertising

 

a)         Licensees shall not make reference in any form of advertising, such as newspapers, circulars, letters, radio, or other media, to "low rates", "lower rates", "lowest rates" or "lowest cost", nor shall licensees indicate, by direct or indirect means, through such expression as "low cost", "lower cost", "low payments", "lower payments" or "easier to repay", that the charges or payments for a loan are low.

 

b)         Upon specific request by the Division, licensees shall forward to the Supervisor of the Consumer Credit Section the complete text of all advertising copy, whether printed or broadcast, that is the subject of questions raised concerning compliance with the Act.

 

c)         A licensee may indicate in advertising and otherwise that its business is "regulated", "examined", "supervised" or "licensed" by the State of Illinois.  A licensee may not advertise in a false, misleading or deceptive manner or imply or indicate that the rates or charges for loans made are "approved", "set" or "established" by the State or by the Act.

 

d)         The licensee shall not advertise the conduct of business other than at the licensed location or other location approved by the Director.

 

Section 210.150  Other Business

 

No other business, except one licensed by the Department, may be conducted within any office suite, room or place of business in which any other business is solicited or engaged in unless authorized in writing by the licensed location unless authorized in writing by the Director. [815 ILCS 122/3-5(g)]  If written authorization is required pursuant to Section 3-5(g) of the Act, the Director's authorization will be predicated upon the licensee agreeing to the following:

 

a)         That the authorization will not conceal nor facilitate concealment of an evasion of the Act;

 

b)         To comply with any State or federal statute or regulation;

 

c)         To obtain any license or registration required by a federal, State or local government agency to engage in the other business authorized;

 

d)         That the Division may examine all records and investigate any or all transactions of the licensee;

 

e)         The Director retains the right, upon notice and opportunity to be heard, to alter, amend or revoke an other business authorization;

 

f)         That, if any federal or State statute or regulation, regardless of when enacted, prohibits the activity, the authorization shall become null and void immediately;

 

g)         At the time of making a request, the licensee shall pay to the Director a nonrefundable other business authorization request fee of $100;

 

h)         At the time of renewing the annual license, the licensee shall pay to the Director the sum of $25 for each other business authorization.  Regardless of the number of licensed locations, only one fee per other business authorization is required.

 

Section 210.160  Examination Remittances

 

a)         Licensees shall forward all examination remittances, as provided in Section 3-5(e) of the Act, to the Division at any address designated by the Director.

 

b)         All fees and charges shall be remitted in the form of a check, draft or money order to the Department of Financial and Professional Regulation.

 

Section 210.170  General

 

a)         Notary fees shall not be charged to or collected from the consumer.

 

b)         Examination of Records

 

1)         The Division may examine all records and investigate any or all transactions in the office of the licensee and shall charge the licensee $400 for each examiner day or portion of an examiner day.

 

2)         The examination of the books and records of the licensee may be conducted concurrently with the examination of any other business conducted by the licensee that is regulated or licensed by the Division.  A separate charge shall be made for each examiner day or portion of an examiner day.

 

3)         The Division may conduct an examination for the purpose of verifying that the licensee has taken necessary actions to correct violations of the Act or this Part and shall charge the licensee $550 for each examiner day or portion of an examiner day, when the Director determines the verification examination must be performed on site at any facility of the licensee.

 

c)         For the purpose of any reports required by the Division, expenses of all businesses conducted in the licensed office shall be allocated to each separate business at the end of each year.  The Division shall require information as to all the businesses in the licensee's annual report.

 

d)         A lender may charge a borrower a fee not to exceed $1 for the verification required under Section 2-15 of the Act.  Only one such fee may be collected by the lender with respect to a particular loan.

 

(Source:  Amended at 35 Ill. Reg. 7343, effective April 21, 2011)

 

Section 210.180  Relocation

 

a)         Whenever a licensee desires to change the licensed place of business to a location other than that set forth in the license and the proposed site is 15 miles or less from the current location, the licensee shall provide the Division with the following at least 10 days prior to the relocation:

 

1)         A written notice providing the complete address of the new location;

 

2)         Photographs of both the exterior and interior of the new location;

 

3)         A written sworn statement that the new location will not share the premises with that of another business and the exact distance in miles between the existing location and new location;

 

4)         A relocation fee of $300; and

 

5)         The original license for endorsement.

 

b)         A relocation in excess of 15 miles requires the prior approval of the Director in addition to the information required in subsection (a) of this Section.

 

Section 210.190  Name Change

 

Whenever the licensee desires to amend the name of the licensed business, the licensee shall submit to the Division, within 15 days after amending the name, the following:

 

a)         $300 amended name change fee.

 

b)         Amended Articles of Incorporation, if the licensee is a corporation, or amended organization papers, if the licensee is an entity other than a corporation.

 

Section 210.200  Hearing Procedures

 

All administrative hearings shall be conducted in accordance with 38 Ill. Adm. Code 100.

 

(Source:  Amended at 46 Ill. Reg. 17948, effective October 27, 2022)

 

Section 210.210 Off-Site Records

 

With the Director's prior written approval, the licensee may retain records at a location other than the licensed location.  The licensee shall make a written request that shall include the following:

 

a)         Address of off-site location.

 

b)         Contact person and telephone number at the off-site location.

 

c)         Statement that all books, records and account information shall be made available within 72 hours after the Division's request at either the licensed location or the off-site location.

 

d)         At the Director's discretion, the examination may be conducted at either the licensed location or the off-site location.

 

e)         The licensee will pay for all examination expenses.

 

Section 210.220  Servicing of Accounts by Contract

 

Upon prior approval of the Director, the licensee may contract with a third party provider for servicing of accounts (e.g., processing of payments, collections, etc.).  A request for the Director's approval shall be in writing and shall include the following:

 

a)         Name and address of proposed servicer;

 

b)         Executed contract, conditioned upon approval by the Director, between licensee and servicer;

 

c)         Contact person and telephone number of the servicer;

 

d)         A statement that the licensee will make all books, records, and account information readily available for examination by the Division;

 

e)         A statement that the licensee will pay all examination expenses; and

 

f)         Written consent of servicer for the Division to conduct its examination.

 

Section 210.230  Revocation or Suspension of License

 

If it is determined that the Director had the authority to issue the suspension or revocation of a license pursuant to Section 4-10(f) of the Act, he or she may issue orders as may be reasonably necessary to correct, eliminate or remedy the situation.

 

Section 210.240  Consumer Written Verification of Compliance with Act

 

a)         Prior to the implementation of a certified database and in the absence of the availability of a certified database, a consumer written verification form must be completed to verify that a proposed loan agreement is permissible under the Act.

 

b)        The written verification must be in a form approved by the Director.

 

c)         The consumer must complete and sign the form attesting that the consumer understands that the lender making the loan under the Act is relying on the verification to determine whether the loan for which the consumer applied is permissible under the Act.

 

(Source:  Amended at 35 Ill. Reg. 7343, effective April 21, 2011)

 

Section 210.250  Gross Monthly Income Verification

 

a)         Prior to making a loan under the Act, the licensee must obtain from the consumer one or more of the following types of documentation to verify the gross monthly income of the consumer as required by Section 2-5(e) of the Act.

 

1)         A copy of the consumer's official pay stub or official payroll receipt, for the period 30 days prior to the date on which the loan is made.

 

2)         A copy of the consumer's official receipt documenting payment of government benefits, for the period 30 days prior to the date on which the loan is made.

 

3)         A contract that provides for funds to have been paid to the consumer within the 30 days prior to the date on which the loan is made, and documentation reflecting that the funds have actually been paid.

 

4)         Other documentation as approved by the Director.

 

b)         If two or more persons jointly apply for credit, each must list income on the application, and the aggregate of all borrowers' income may be taken into account when calculating the maximum gross monthly income under Section 2-5(e) of the Act.  The licensee must obtain documentation of gross monthly income pursuant to this Section with respect to all applicants.

 

(Source:  Amended at 46 Ill. Reg. 6550, effective August 1, 2022)

 

Section 210.260  Certified Database/Commercially Reasonable Method of Verification

 

a)         Certified Database.  In order to certify a consumer reporting service as a commercially reasonable database pursuant to the Act, the provider must comply with the following provisions:

 

1)         Single, centralized consumer reporting service to track payday loan transactions made by licensees under the Act on a real time basis.

 

2)         Real time access by the Division and licensees to verify that individual consumers are eligible for a loan pursuant to the requirements of the Act.

 

3)         All requirements in Section 2-15 of the Act regarding verification.

 

4)         Customer support to licensees and consumers during regular business hours.

 

5)         Develop and provide training to Division staff and licensees under the Act prior to implementation and on an ongoing basis.

 

6)         Provide a charge-back methodology to licensees not to exceed $1 for each search to determine eligibility of the consumer for a loan under the Act.

 

7)         All requirements of Section 2-17 of the Act regarding qualifications and bonding.

 

8)         All confidentiality and privacy requirements of the Act and required by law.

 

b)         The certified consumer reporting service may charge a verification fee not to exceed $1 upon a loan being made or entered into the database.  The certified consumer reporting service shall not charge any additional fees or charges. 

 

c)         Additional Database Providers.  As technology advances permit, the Division may certify additional database providers in the future.  Any additional database provider must guarantee, to the satisfaction of the Director, that the additional database can interface with any other certified database to provide a single point of verification for licensees and the Division to determine consumer eligibility for a loan pursuant to the Act and to provide a single source for reporting purposes. 

 

d)         Licensee Input into Database

 

1)         The licensee shall input the following information into the certified database to determine whether the consumer is eligible for a loan pursuant to the requirements of the Act:

 

A)        Consumer's Social Security Number or Alien Identification Number or other official identification number, as approved by the USA Patriot Act rules and regulations (see 31 CFR 103.12(b)(2)(i)(4)(ii)), issued by a foreign government or government in the United States;.

 

B)        Consumer's gross monthly income.

 

C)        Any additional information required by the Director.

 

2)         On the same day the payday loan is made, the licensee shall update the certified database with the following information:

 

A)        Consumer's identification number under subsection (d)(1)(A);

 

B)        Principal amount of the loan;

 

C)        Total of payments;

 

D)        Term of the loan;

 

E)        Security accepted for the loan;

 

F)         Zip code of consumer;

 

G)        Date of the loan;

 

H)        APR;

 

I)         PLPA APR;

 

J)         Whether the loan is a rollover or a prior loan; and

 

K)        Any additional information required by the Director.

 

3)         On the same day any loan transaction is made, the licensee shall input the information into the certified database, including, but not limited to, the following transactions:

 

A)        Electing a repayment plan;

 

B)        Paying the loan in full;

 

C)        Closing of the loan;

 

D)        Depositing a check used as security for the loan;

 

E)        Canceling a loan within 48 hours as allowed by the Act;

 

F)         Recording an NSF return on a previously closed transaction;

 

G)        Return of security;

 

H)        Writing of the loan;

 

I)         Any missed payment;

 

J)         Any default other than a missed payment; and

 

K)        Any other transaction as required by the Director.

 

e)         Beginning June 1, 2011, licensees must comply with the requirements of subsection (d) of this Section.

 

f)         All personally identifiable information regarding any consumer obtained by way of the certified database and maintained by the Department is strictly confidential and shall be exempt from disclosure under Section 7(c) of the Freedom of Information Act.

 

(Source:  Amended at 46 Ill. Reg. 6550, effective August 1, 2022)

 

Section 210.270  Violation of Federal Law – Section 670 of the John Warner National Defense Authorization Act

 

Payday Loans to Covered Military Members and Covered Dependents

The following requirements are substantially taken from Section 670 of the Warner Act, with the Warner Act's references to "covered member" substituted with "covered military members" and the Warner Act's references to "dependent" substituted with "covered dependent". The substitutions of the above-referenced terms are meant to more clearly identify the targeted group (military personnel and their dependents) of potential payday loan borrowers to whom the Warner Act provisions apply:

 

a)         Annual Percentage Rate 

A lender may not impose an annual percentage rate of interest greater than 36% with respect to any loan extended to a covered military member or a covered dependent of a covered member. (See 10 USC 987(b).)

 

b)         Mandatory Loan Disclosures − Information Required

With respect to any payday loan made to a covered military member or a covered dependent, a lender shall provide to the covered military member or a covered dependent the following information, orally and in writing, before the issuance of the loan:

 

1)         A statement of the annual percentage rate of interest applicable to the loan (see 10 USC 987(c)(1)(A));

 

2)         Any disclosures required under the Truth in Lending Act (15 USC 1601 et seq.) (see 10 USC 987(c)(1)(B));

 

3)         A clear description of the payment obligations of the covered military member or a covered dependent, as applicable (see 10 USC 987(c)(1)(C)).

 

c)         A lender shall not:

 

1)         Roll over, renew, repay, refinance or consolidate any loan made to a covered member or dependent by the same lender with the proceeds of any other loan made to the same covered member or dependent (see 10 USC 987(e)(1));

 

2)         Require the covered member's or dependent to waive the covered member's or dependent's right to legal recourse under any otherwise applicable provision of State or federal law, including any provision of the Servicemembers Civil Relief Act (50 USC App. 501 et seq.) (see 10 USC 987(e)(2)); 

 

3)         Require the covered member or dependent to submit to arbitration or impose onerous legal notice provisions in the case of a dispute (see 10 USC 987(e)(3));

 

4)         Demand unreasonable notice from a covered member or dependent (see 10 USC 987(e)(4));

 

5)         Use a check or other method of access to a deposit, savings or other financial account maintained by the covered member or dependent or the title of a vehicle as security for the obligation (see 10 USC 987(e)(5));

 

6)         Require as a condition for the loan that the covered member or dependent establish an allotment to repay an obligation (see 10 USC 987(e)(6));

 

7)         Prohibit a covered member or dependent from prepaying the loan or charge a penalty or fee for prepaying all or part of the loan (see 10 USC 987(e)(7)).

 

d)         Forms Provided by Licensee

All loans made pursuant to the Act must include a signed form by the debtor stating that the debtor is either a covered military member or a covered dependent, or that the debtor is not considered a covered military member or covered dependent as defined in Section 210.1.  Licensees need not seek form approval from the Department when using language identical to the covered borrower identification statement contained in the Warner Act Regulations (32 CFR 232.5(a)(1) (2012)).  Department approval is required if a licensee seeks to use any other form language.

 

(Source:  Added at 37 Ill. Reg. 216, effective February 19, 2013)

 

 

Section 210.APPENDIX A   Disclosure of 36% Rate Cap   

 

DISCLOSURE OF 36% RATE CAP

 

A lender shall not contract for or receive charges exceeding a 36% annual percentage rate on the unpaid balance of the amount financed for a loan, as calculated under the Illinois Predatory Loan Prevention Act (PLPA APR)

 

Any loan with a PLPA APR over 36% is null and void, such that no person or entity shall have any right to collect, attempt to collect, receive, or retain any principal, fee, interest, or charges related to the loan.

 

The annual percentage rate disclosed in any loan contract may be lower than the PLPA APR.

 

 

 

_________________________________________

Borrower Signature

 

 

_________________________________________

Co-Borrower Signature (If Applicable)

 

(Source:  Added at 46 Ill. Reg. 6550, effective August 1, 2022)