Public Act 097-0421
 
SB1133 EnrolledLRB097 04859 AEK 44898 b



    AN ACT concerning business.

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




 
    Section 5. The Payday Loan Reform Act is amended  by 
changing Section 2-5 as follows:
 
    (815 ILCS 122/2-5)

    Sec. 2-5. Loan terms. 
    (a) Without affecting the right of a consumer to prepay at 
any time without cost or penalty, no payday loan may have a 
minimum term of less than 13 days.
    (b)  Except for an installment payday loan as defined in 
this Section,
no payday loan may be made to a consumer if the 
loan would result in the consumer being indebted to one or more 
payday lenders for a period in excess of 45 consecutive days.  
Except as provided under subsection (c) of this Section and 
Section 2-40, if a consumer has or has had loans outstanding 
for a period in excess of 45 consecutive days, no payday lender 
may offer or make a loan to the consumer for at least 7 
calendar days after the date on which the outstanding balance 
of all payday loans made during the 45 consecutive day period  
is paid in full.  For purposes of this subsection, the term 
"consecutive days" means a series of continuous calendar days 
in which the consumer has an outstanding balance on one or more 
payday loans;  however, if a payday loan is made to a consumer 
within 6 days or less after the outstanding balance of all 
loans is paid in full, those days are counted as "consecutive 
days" for purposes of this subsection.
    (c) Notwithstanding anything in this Act to the contrary, a 
payday loan
shall also include any installment loan otherwise 
meeting the definition of
payday loan contained in Section 
1-10, but that has a term agreed by the
parties of not less 
than 112 days and not exceeding 180 days; hereinafter an

"installment payday loan". The following provisions shall 
apply:

        (i) Any installment payday loan must be fully 
    amortizing, with a finance
charge calculated on the 
    principal balances scheduled to be outstanding and
be 
    repayable in substantially equal and consecutive 
    installments, according
to a payment schedule agreed by the 
    parties with not less than 13 days and
not more than one 
    month between payments; except that the first installment

    period may be longer than the remaining installment periods 
    by not more than
15 days, and the first installment payment 
    may be larger than the remaining
installment payments by 
    the amount of finance charges applicable to the
extra days. 
    In calculating finance charges under this subsection, when 
    the first installment period is longer than the remaining 
    installment periods, the amount of the finance charges 
    applicable to the extra days shall not be greater than 
    $15.50 per $100 of the original principal balance divided 
    by the number of days in a regularly scheduled installment 
    period and multiplied by the number of extra days 
    determined by subtracting the number of days in a regularly 
    scheduled installment period from the number of days in the 
    first installment period.
        (ii) An installment payday loan may be refinanced by a 
    new installment
payday loan one time during the term of the 
    initial loan; provided that the
total duration of 
    indebtedness on the initial installment payday loan 
    combined
with the total term of indebtedness of the new 
    loan refinancing that initial
loan, shall not exceed 180 
    days. For purposes of this Act, a refinancing
occurs when 
    an existing installment payday loan is paid from the 
    proceeds of
a new installment payday loan.
        (iii) In the event an installment payday loan is paid 
    in full prior to
the date on which the last scheduled 
    installment payment before maturity is
due, other than 
    through a refinancing, no licensee may offer or make a 
    payday
loan to the consumer for at least 2 calendar days 
    thereafter.
        (iv) No installment payday loan may be made to a 
    consumer if the loan would
result in the consumer being 
    indebted to one or more payday lenders for a
period in 
    excess of 180 consecutive days. The term "consecutive days" 
    does not include the date on which a consumer makes the 
    final installment payment.
    (d) (Blank).
    (e) 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; or
        (3) in the case of one or more installment payday 
    loans, 22.5% of the consumer's gross monthly income; or
        (4) in the case of a payday loan and an installment 
    payday loan, 22.5% of the consumer's gross monthly income.
    No loan shall be made to a consumer who has an outstanding 
balance on 2 payday loans, except that, for a period of 12 
months after the effective date of this amendatory Act of the 
96th General Assembly, consumers with an existing CILA loan may 
be issued an installment loan issued under this Act from the 
company from which their CILA loan was issued.
    (e-5) Except as provided in subsection (c)(i), no No lender 
may charge more than $15.50 per $100 loaned on any payday loan, 
or more than $15.50 per $100 on the initial principal balance 
and on the principal balances scheduled to be outstanding 
during any installment period on any installment payday loan. 
Except for installment payday loans and except as provided in 
Section 2-25, this charge is considered fully earned as of the 
date on which the loan is made. For purposes of determining the 
finance charge earned on an installment payday loan, the 
disclosed annual percentage rate shall be applied to the 
principal balances outstanding from time to time until the loan 
is paid in full, or until the maturity date, which ever occurs 
first.  No finance charge may be imposed after the final 
scheduled maturity date. 
    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. The sum of the 
digits or rule of 78ths method of calculating prepaid interest 
refunds is prohibited. 
    (f) A lender may not take or attempt to take an interest in 
any of the consumer's personal property to secure a payday 
loan.
    (g) A consumer has the right to redeem a check or any other 
item described in the definition of payday loan under Section 
1-10 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.


(Source: P.A. 96-936, eff. 3-21-11.)