(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.)
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(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.)
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(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.)
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(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.)
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(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.)
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(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.)
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(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.)
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(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.)
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(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.)
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(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.)
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(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
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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
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(2)
Any fact or condition exists which, if it had
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existed at the time of the original
application for the license, clearly would
have warranted the Director in refusing to
issue the license.
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(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.)
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(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.)
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(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.)
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(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.)
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(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
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defined in the Sales Finance Agency
Act.
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(2)
The business of soliciting or selling any type
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of insurance provided that all such
insurance transactions are conducted in accordance
with and are regulated under the Illinois
Insurance Code.
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(3)
The business of financing premiums for insurance.
(4)
Making loans pursuant to the Financial Services
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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.)
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(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.)
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(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.)
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(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.)
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(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
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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.
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(2)
Interest shall not be payable in advance or
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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.
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(3)
Loans may be payable as agreed between the
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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.
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(4)
The lender or creditor may, if the contract
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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.
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(f) With respect
to precomputed loans:
(1)
Loans shall be repayable in substantially equal
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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.
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(2)
Payments may be applied to the combined total of
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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.
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(3)
When any loan contract is paid in full by cash,
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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.
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(4)
The lender or creditor may, if the contract
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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.
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(5)
If the parties agree in writing, either in the
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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.
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(6)
If two or more installments are delinquent one
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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.
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(7)
Fifteen days after the final installment as
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