(205 ILCS 675/1) (from Ch. 17, par. 7001)
Sec. 1. This Act shall be
known and may be cited as the "Illinois Financial Services
Development Act".
(Source: P.A. 85-1432.)
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(205 ILCS 675/2) (from Ch. 17, par. 7002)
Sec. 2. Findings and Declarations
of Policy. The General Assembly hereby finds, determines and
declares:
(a) That the economic strength
of Illinois requires strong and effective financial institutions
in Illinois;
(b) That in order to cultivate
the economic strength of the financial institutions in Illinois,
it is necessary to strengthen job opportunities so as to encourage
Illinois financial institutions to expand in Illinois and to
attract new financial institutions to Illinois;
(c) That Illinois is losing
existing jobs and future job opportunities in Illinois financing
institutions because of an adverse regulatory climate involving
consumer revolving credit laws;
(d) That the State has a
responsibility to create a beneficial climate for new and improved
job opportunities for its citizens with financial institutions
of all kinds by encouraging the growth and strengthening of Illinois
financial institutions;
(e) That in order for Illinois
financial institutions to provide the jobs and business opportunities
for the citizens of Illinois, the restrictions on consumer revolving
credit plans must be modernized and made competitive with those
offered to financial institutions located in other states who
in turn provide their services in direct competition with the
Illinois financial institutions;
(f) That without this modernization,
Illinois financial institutions will reduce the existing job
opportunities in Illinois and no longer look to Illinois as a
good place to do business and to expand and grow.
(Source: P.A. 85-1432.)
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(205 ILCS 675/3) (from Ch. 17, par. 7003)
Sec. 3. As used in this
Section:
(a) "Financial institution" means
any bank with its main office or, after May 31, 1997, a branch
in this State, any state or federal savings and loan association
or savings bank with its main office or branch in this State,
any state or federal credit union with its main office in this
State, and any lender licensed under the Consumer Installment
Loan Act or the Sales Finance Agency Act.
(b) "Revolving credit
plan" or "plan" means a plan contemplating the
extension of credit under an account governed by an agreement
between a financial institution and a borrower who is a natural
person pursuant to which:
(1)
The financial institution permits the borrower
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and, if the agreement governing the
plan so provides, persons acting on behalf
of or with authorization from the borrower,
from time to time to make purchases and to
obtain loans by any means whatsoever, including
use of a credit device primarily for personal,
family or household purposes;
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(2)
the amounts of such purchases and loans are
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charged to the borrower's account
under the revolving credit plan;
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(3)
the borrower is required to pay the financial
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institution the amounts of all purchases
and loans charged to such borrower's account
under the plan but has the privilege of paying
such amounts outstanding from time to time
in full or installments; and
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(4)
interest may be charged and collected by the
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financial institution from time to time on the outstanding unpaid indebtedness
under such plan.
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(c) "Credit
device" means any card, check, identification
code or other means of identification contemplated
by the agreement governing the plan.
(d) "Outstanding unpaid
indebtedness" means on any day an amount not in excess of
the total amount of purchases and loans charged to the borrower's
account under the plan which is outstanding and unpaid at the end
of the day, after adding the aggregate amount of any new purchases
and loans charged to the account as of that day and deducting the
aggregate amount of any payments and credits applied to that indebtedness
as of that day and, if the agreement governing the plan so provides,
may include the amount of any billed and unpaid interest and other
charges.
(Source: P.A. 89-208, eff.
9-29-95.)
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(205 ILCS 675/4) (from Ch. 17, par. 7004)
Sec. 4. Notwithstanding
the provisions of any other laws in connection with revolving
credit plans, any financial institution may, subject to the other
provisions of this Section 4 offer and extend credit under a
revolving credit plan to a borrower and in connection therewith
may charge and collect interest and other charges, may take real
and personal property as security therefor and
may provide in the agreement governing the revolving credit plan
for such other terms and conditions as the financial institution
and borrower may agree upon from time to time. A financial institution
offering or soliciting a revolving credit plan involving a credit
card, or extending credit pursuant to the use of a credit card
under any such plan, shall comply with provisions of "An
Act relating to the issuance and use of credit cards", approved
September 16, 1969, as now or hereafter amended.
(Source: P.A. 85-1432.)
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(205 ILCS 675/5) (from Ch. 17, par. 7005)
Sec. 5. A financial institution
may charge and collect interest under a revolving credit plan
on outstanding unpaid indebtedness in the borrower's account
under the plan at such periodic percentage rate or rates as the
agreement governing the plan provides or as established in the
manner provided in the agreement governing the plan. If the agreement
governing the revolving credit plan so provides, the periodic
percentage rate or rates of interest under such plan may vary
in accordance with a schedule or formula. Such periodic percentage
rate or rates may vary from time to time as the rate determined
in accordance with such schedule or formula varies and such periodic
percentage rate or rates, as so varied, may be made applicable
to all outstanding unpaid indebtedness under the plan on or after
the effective date of such variation, including any such indebtedness
arising out of purchases made or loans obtained prior to such
variation in the periodic percentage rate or rates. If the applicable
periodic percentage rate under the agreement governing the plan
is other than daily, periodic interest may be calculated on an
amount not in excess of the average of outstanding unpaid indebtedness
for the applicable billing period, determined by dividing the
total of the amounts of outstanding unpaid indebtedness for each
day in the applicable billing period by the number of days in
the billing period. If the applicable periodic percentage rate
under the agreement governing the plan is monthly, a billing
period shall be deemed to be a month or monthly if the last day
of each billing period is on the same day of each month or does
not vary by more that 4 days therefrom.
(Source: P.A. 85-1432.)
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(205 ILCS 675/6) (from Ch. 17, par. 7006)
Sec. 6. In addition to or
in lieu of interest at a periodic rate or rates as provided in
Section 5, and without limitation of the foregoing Section 4,
a financial institution may, if the agreement governing the revolving
credit plan so provides, charge and collect as interest, in such
manner or form as the plan may provide, an annual or other periodic
fee for the privileges made available to the borrower under the
plan, a transaction charge or charges, late fees or delinquency
charges, returned payment charges, over limit charges and fees
for services rendered.
(Source: P.A. 85-1432.)
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(205 ILCS 675/7) (from Ch. 17, par. 7007)
Sec. 7. (a) At or before
the date a billing statement is first rendered to the borrower
under a revolving credit plan, the financial institution must
mail or deliver to the borrower a written description of the
conditions under which a charge for interest may be made and
the method, including the rate (expressed as an annual percentage
rate), of computing these interest charges. If during any billing
period any debit or credit entry is made to a borrower's account
under a revolving credit plan, and if at the end of that billing
period there is an unpaid balance owing to the financial institution
from the borrower, the financial institution must give to the
borrower the following information within a reasonable time after
the end of the billing period:
(1) the unpaid balance at
the beginning of the billing period;
(2) the date and amount
of all loans or purchases made during the billing period;
(3) the payments by the
borrower to the financial institution and any other credits to
the borrower's account during the billing period;
(4) the amount of interest
and other charges, if any, charged to the borrower's account
during the billing period;
(5) the amount which must
be currently paid by the borrower and the date on which that
amount must be paid in order to avoid delinquency; and
(6) the total amount remaining
unpaid at the end of the billing period and the right of the
borrower to prepay that amount in full without penalty.
A financial institution which complies with or is
exempt from the applicable disclosure requirements of the Truth-in-Lending
Act, and regulations promulgated thereunder,
as in effect from time to time, shall be deemed to be in compliance
or exempt from with all of the provisions of this Section 7.
(b) The financial institution
under a revolving credit plan must compute at the end of each
calendar year the total amount charged to the borrower's account
during such year, including interest and any other charges, and
upon request must furnish such information to the borrower within
30 days after the end of the year, or if the account has been
terminated during such year, may give such requested information
with 30 days after such termination. The financial institution
shall annually inform the borrower of the right to obtain such
information.
(Source: P.A. 85-1432.)
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(205 ILCS 675/8) (from Ch. 17, par. 7008)
Sec. 8. Amendment of governing
agreement.
(a) If the agreement governing
a revolving credit plan so provides or allows, a financial institution
may at any time or from time to time amend the terms of such
agreement in accordance with the further provisions of this Section
8. The financial institution shall notify each affected borrower
of the amendment in the manner set forth in the agreement governing
the plan and in compliance with the requirements of the Truth-in-Lending
Act and regulations promulgated thereunder,
as in effect from time to time, if applicable.
(b) Subject to subsection
(c) below, if the terms of the agreement governing the plan,
as originally drawn or as amended pursuant to this Section so
provide, any amendment may, on and after the date upon which
it becomes effective as to a particular borrower, apply to all
then outstanding unpaid indebtedness in the borrower's account
under the plan, including any such indebtedness which shall have
arisen out of purchases made or loans obtained prior to the effective
date of the amendment.
(c) If such amendment has
the effect of increasing the interest or other charges to be
paid by the borrower, the financial institution shall mail or
deliver to the borrower, at least 30 days before the effective
date of the amendment, a clear and conspicuous written notice
which shall:
(1)
describe the amendment and the existing term or
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terms of the agreement affected by
the amendment,
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(2)
set forth the effective date of the amendment,
(3)
state whether or not the amendment will apply to
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the outstanding unpaid indebtedness
as of the effective date of the amendment,
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(4)
state that absent the borrower's written notice
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to the financial institution within
30 days of the earlier of the mailing or
delivery of the notice of amendment that
the borrower does not agree to accept the
amendment, the amendment will become effective
and apply to the borrower's account, and
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(5)
provide an address to which the borrower may
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send notice of the borrower's election not to accept the amendment
and include an addressed postcard that the
borrower may return to the financial institution
for that purpose.
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(c-5)
If such amendment results in an unfavorable change
in the interest or other charges on a revolving credit
plan which: (i) relates
to a change in the borrower's credit standing, (ii)
does not affect all or a substantial portion of a
class of the creditor's accounts, and (iii) does
not relate to inactivity, default, or delinquency
on that revolving credit plan, the financial institution
shall include in the notice required by subsection
(c) of this Section 8 a statement that is substantially
similar to the following:
Change in Credit Standing
The
amendment to the terms of your account relates
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to a change in your credit standing. The change in your credit
standing may have resulted from a default
or delinquency on other accounts you may
have, or other adverse changes in your financial
circumstances. If you submit the enclosed
postcard or otherwise notify us in a timely
manner as provided in this notice that you
do not accept the amendment, you will be
able to pay off your existing balance at
the rate in effect prior to the amendment.
However, in that instance, you may not be
eligible to obtain additional credit under
this plan after the effective date of the
amendment. If you do not provide timely notice
to us as provided in this notice that you
do not accept the amendment, the amendment
to the terms of your account will become
effective and apply to your account.
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(c-10)
As a condition to the effectiveness of the borrower's
notice not to accept the amendment, the financial
institution may require the borrower to return all
credit devices.
Any borrower who gives a
timely notice electing not to accept the amendment shall be permitted
to pay the outstanding unpaid indebtedness in the borrower's account
under the plan in accordance with the terms of the agreement governing
the plan without giving effect to the amendment.
Notwithstanding the financial
institution's receipt of the borrower's notice under item (4) that
the borrower does not accept the amendment, the amendment shall
be deemed to have been accepted and effective with respect to the
borrower and the borrower's account if the borrower uses the credit
device to obtain credit under the credit plan on or after the effective
date of the amendment, and the amendment shall be deemed effective
as of the effective date originally disclosed by the financial
institution.
(d) For purposes of this
Section, the following shall not be deemed an amendment which has
the effect of increasing the interest to be paid by the borrower:
(1)
a decrease in the required amount of periodic
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installment payments; and
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(2)
a change from a daily periodic rate to a
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periodic rate other than daily, or
from a periodic rate other than daily to
a daily periodic rate, provided that there
is no resulting change in the annual percentage
rate as determined in accordance with the
Truth-in-Lending Act and regulations
promulgated thereunder,
as in effect from time to time.
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(Source: P.A. 93-287, eff. 1-1-04.)
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(205 ILCS 675/9) (from Ch. 17, par. 7009)
Sec. 9. No writing or other
agreement between a borrower and a financial institution may
contain any provision which constitutes a waiver of any right
conferred upon borrowers by this Act, or of any duty, condition
or limitation imposed upon financial institutions by this Act.
Nothing in this Section 9 prohibits, however, any writing or
other agreement which grants to a borrower a more extensive right
or remedy or greater protection than contained in this Act or
a waiver given in settlement of a dispute or action.
(Source: P.A. 85-1432.)
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(205 ILCS 675/10) (from Ch. 17, par. 7010)
Sec. 10. A revolving credit
plan between a financial institution and a borrower shall be
governed by the laws of this State. All terms, conditions and
other provisions of and relating to a plan, including, without
limitation, provisions relating to the method of determining
the outstanding unpaid indebtedness on which interest is applied,
time periods within which interest charges may be avoided, change
in terms, requirements, rights to charge and collect attorneys'
fees, court and collection costs and the computing of periodic
interest or charges, shall be and hereby are deemed to be material
to the determination of interest applicable to a plan under Illinois
law, Section 85 of the National Bank Act and Sections 521 through
523 of the Depository Institutions Deregulation and Monetary
Control Act of 1980.
(Source: P.A. 85-1432.)
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(205 ILCS 675/11) (from Ch. 17, par. 7011)
Sec. 11. Any amendment of
a revolving credit plan which violates the conditions or limitations
of Section 8 of this Act shall not be enforceable, but such plan
shall remain enforceable according to its original terms. Any
borrower whose revolving credit plan has been unlawfully amended
may recover by means of an action or defense an amount equal
to twice the amount by which such borrower's payments of interest
and charges were increased solely due to such unlawful amendment,
plus such reasonable attorneys' fees and court costs as may be
assessed by a court against the financial institution. Recovery
by means of a defense may be had at any time after such amendment
purports to be effective. Recovery by means of an action may
be had at any time after such amendment purports to be effective
and prior to the expiration of 2 years after the earlier of (1)
the date the last payment of such unlawfully increased interest
or charges, or (2) the date on which the borrower's plan has
been terminated. A bona fide error in connection with the amendment
of a revolving credit plan shall not be a violation under this
Section if the financial institution corrects the error within
a reasonable time.
(Source: P.A. 85-1432.)
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