Chapter 815 - Business Transactions - Illinois Loan Brokers Act of 1995.

(815 ILCS 175/Art. 5 heading)

ARTICLE 5

(This Article compiled at 815 ILCS 602/5-1 et seq.)

(815 ILCS 175/Art. 10 heading)

ARTICLE 10

(This Article compiled at 815 ILCS 307/10-1 et seq.)

(815 ILCS 175/Art. 15 heading)

ARTICLE 15

(815 ILCS 175/15-1)
Sec. 15-1. Short title. This Article may be cited as the Illinois Loan Brokers Act of 1995, and references in this Article to "this Act" mean this Article.
(Source: P.A. 89-209, eff. 1-1-96.)

(815 ILCS 175/15-5)
Sec. 15-5. Definitions. As used in this Act, the terms defined in the Sections following this Section and preceding Section 15-6 have the meanings ascribed therein.
(Source: P.A. 89-209, eff. 1-1-96.)

(815 ILCS 175/15-5.03)
Sec. 15-5.03. Borrower. "Borrower" means any person who has signed an agreement with a loan broker that provides for the services described in Section 15-5.15, for compensation.
(Source: P.A. 90-70, eff. 7-8-97.)

(815 ILCS 175/15-5.05)
Sec. 15-5.05. Creditor. "Creditor" means any person to whom a loan is initially payable on the face of the note or contract evidencing the loan.
(Source: P.A. 89-209, eff. 1-1-96.)

(815 ILCS 175/15-5.10)
Sec. 15-5.10. Loan. "Loan" means any agreement to advance money or property in return for the promise to make payments for the money or property.
(Source: P.A. 89-209, eff. 1-1-96.)

    (815 ILCS 175/15-5.15)
    Sec. 15-5.15. Loan broker.
    (a) "Loan Broker" means any person who, in return for a fee, commission, or other compensation from any person, promises to procure a loan for any person or assist any person in procuring a loan from any third party, or who promises to consider whether or not to make a loan to any person.
    (b) Loan broker does not include any of the following:
        (1) Any bank, savings bank, trust company, savings

and loan association, credit union or any other financial institution regulated by any agency of the United States or authorized to do business in this State.

(2) Any person authorized to sell and service loans

for the federal National Mortgage Association or the federal Home Loan Mortgage Corporation, issue securities backed by the Government National Mortgage Association, make loans insured by the federal Department of Housing and Urban Development, make loans guaranteed by the federal Veterans Administration, or act as a correspondent of loans insured by the federal Department of Housing and Urban Development or guaranteed by the federal Veterans Administration.

(3) Any insurance producer or company authorized to

do business in this State.

(4) Any person arranging financing for the sale of

the person's product.

(5) Any person authorized to conduct business under

the Residential Mortgage License Act of 1987.

(6) Any person authorized to do business in this

State and regulated by the Department of Financial Institutions or the Office of Banks and Real Estate.

(Source: P.A. 92-308, eff. 1-1-02.)

(815 ILCS 175/15-5.20)
Sec. 15-5.20. Person. "Person" means an individual, a corporation, trust, limited liability company, partnership, a joint stock company, limited liability partnership, incorporated or unincorporated association, or any other entity.
(Source: P.A. 92-308, eff. 1-1-02.)

(815 ILCS 175/15-10)
Sec. 15-10. Registration required. It shall be unlawful for any person to engage in the business of loan brokering unless registered under this Act.
(Source: P.A. 89-209, eff. 1-1-96.)

    (815 ILCS 175/15-15)
    Sec. 15-15. Application for registration; contents; bond; issuance; effective date; consent to Secretary of State as process agent.
    (a) In order to be registered under this Act a loan broker shall file an application for registration with the Secretary of State. The application for registration shall contain:
        (1) the disclosure document required under

subsection (b) of Section 15-30 of this Act and the form of disclosure statement proposed to be used under item (1) of subsection (b) of Section 15-30 of this Act;

(2) consent to service of process under subsection

(e) of this Section;

(3) evidence of the bond required in subsection (b)

of this Section;

(4) a fee in the amount as specified in subsection

(a) of Section 15-25 of this Act, and shall not be returnable in any event.

    (b) A loan broker who engages in any loan brokerage transactions where the loan is subject to the Truth-in-Lending Act must maintain a bond satisfactory to the Secretary of State in the amount of $25,000, which shall be in favor of the State.
    (c) Whenever the provisions of this Act have been complied with, the Secretary of State shall issue a certificate of registration to the applicant, authorizing the applicant to engage in the business of loan brokering.
    (d) An application for registration becomes effective 30 days after it is filed, unless a certificate of the Secretary of State establishes an earlier effective date. Every registration is effective until January 1 of the year after it goes into effect.
    (e) Every applicant for registration shall file with the Secretary of State, in such form as the Secretary of State may prescribe by rule or regulation, an irrevocable consent appointing the Secretary of State to be the applicant's agent to receive service of any lawful process in any noncriminal suit, action or proceeding against the applicant arising from the violation of any provision of this Act.
    (f) An application shall be considered filed when all required documentation and fees are received by the Office of the Secretary of State.
(Source: P.A. 90-70, eff. 7-8-97; 91-357, eff. 7-29-99.)

    (815 ILCS 175/15-20)
    Sec. 15-20. Renewal of registration.
    (a) A loan broker may not continue engaging in the business of loan brokering unless the broker's registration is renewed annually. A loan broker shall renew the registration by filing with the Secretary of State, at least 30 days before the expiration of the registration, an application containing any information the Secretary of State may require by rule or regulation or order to indicate any material change from the information contained in the applicant's original application or any previous application.
    (b) An application for renewal must be accompanied by a filing fee in the amount specified in subsection (a) of Section 15-25 of this Act. The application and fee is not returnable in any event.
    (c) Notwithstanding the foregoing, applications for renewal of registration of loan brokers may be filed within 30 days following the expiration of the registration provided that the applicant pays the annual registration fee together with an additional amount equal to the annual registration fee and files any other information or documents that the Secretary of State may prescribe by rule or order. Any application filed within 30 days following the expiration of the registration shall be automatically effective as of the time of the earlier expiration provided that the proper fee has been paid to the Secretary of State.
(Source: P.A. 92-308, eff. 1-1-02.)

    (815 ILCS 175/15-25)
    Sec. 15-25. Fees and funds; accounting and deposit in Securities Audit and Enforcement Fund.
    (a) The Secretary of State shall by rule or regulation impose and shall collect fees necessary for the administration of this Act including, but not limited to, fees for the following purposes:
        (1) filing an application pursuant to Section 15-15

of this Act;

(2) examining an application pursuant to Section

15-15 or Section 15-20 of this Act;

(3) registering a loan broker pursuant to Section

15-15 of this Act;

(4) renewing registration of a loan broker pursuant

to Section 15-20 of this Act;

(5) failure to file or file timely any document or

information required under this Act;

(6) acceptance of service of process pursuant to

Section 15-95;

(7) issuance of certification pursuant to Section

15-50; or

(8) late registration fee pursuant to Section

15-20(c).

(b) The Secretary of State may, by rule or regulation, raise or lower any fee imposed by this Act, and which he or she is authorized by law to collect under this Act.
(c) All fees and funds accruing for the administration of this Act shall be accounted for by the Secretary of State and shall be deposited with the State Treasurer who shall deposit them in the Securities Audit and Enforcement Fund.
(Source: P.A. 92-308, eff. 1-1-02.)

    (815 ILCS 175/15-30)
    Sec. 15-30. Disclosure document to be provided by loan broker.
    (a) At the time any person signs a contract for the services of a loan broker, or at the time the loan broker receives any consideration upon the contract, whichever occurs first, the loan broker must provide to the contracting person a written disclosure document that meets the requirements set forth in subsection (b) of this Section.
    (b) A written disclosure statement shall contain the following information:
        (1) A disclosure statement which shall be the cover

sheet and shall be entitled in at least 10-point boldface capital letters "DISCLOSURES REQUIRED BY LAW". Under this title shall appear the statement in at least 10-point type that "THE SECRETARY OF STATE HAS NOT REVIEWED AND DOES NOT APPROVE, RECOMMEND, ENDORSE OR SPONSOR ANY LOAN BROKERAGE CONTRACT. THE INFORMATION CONTAINED IN THIS DISCLOSURE HAS NOT BEEN VERIFIED BY THE SECRETARY OF STATE. IF YOU HAVE ANY QUESTIONS SEE AN ATTORNEY BEFORE YOU SIGN A CONTRACT OR AGREEMENT." Nothing except the title and the required statement shall appear on the cover sheet.

(2) The name and form of organization of the broker,

the names under which the broker has done, is doing, or intends to do business, and the name of any parent organization or affiliate of the broker.

(3) The names, addresses and titles of the broker's

officers, directors, trustees, general partners, general managers, principal executives and any other person performing similar duties.

(4) The length of time the broker has conducted

business as a loan broker.

(5) A full and detailed description of the actual

services that the loan broker undertakes to perform for the prospective borrower.

(6) A specific statement of the circumstances under

which the broker will be entitled to obtain or retain consideration from the party with whom the broker contracts.

(7) Any other information the Secretary of State may

require by rule or regulation.

    (b-5) The information in subdivisions b(5) and b(6) of this Section need not be set out on the disclosure document if the loan broker's contract is provided with the disclosure document.
    (c) A loan broker shall amend the disclosure document required by subsection (b) of this Section whenever necessary to prevent it from containing any false or misleading statement of a material fact and shall deliver a copy of the amended disclosure document to the Secretary of State on or before the date of the amendment.
    (d) A loan broker shall deliver to any person who proposes to become obligated for a loan an estimated disclosure document if the creditor is required to deliver to the person a disclosure document under the Truth-in-Lending Law, 15 U.S.C. 1601-1667e, for the transaction. The estimated disclosure document shall:
        (1) Be delivered to the person before the person

becomes contractually obligated on the loan; or

(2) Be delivered or placed in the mail to the person

not later than 3 business days after the person enters into an agreement with the loan broker whichever occurs first. The estimated disclosure document must contain all the information and be in the form required by the Truth-in-Lending Law, 15 U.S.C. 1601-1667e, and regulations under that Law. However, the annual percentage rate, finance charge, total of payments and other matters required under the Truth-in-Lending Law, 15 U.S.C. 1601-1667e, shall be adjusted to reflect the amount of all fees and charges of the loan broker that the creditor could exclude from an estimated disclosure document. The estimated disclosure document must state at the top in at least 10 point type: "THE FOLLOWING IS AN ESTIMATED DISCLOSURE DOCUMENT SHOWING YOUR LOAN TRANSACTION AS IF THE FEES AND CHARGES YOU ARE SCHEDULED TO PAY US WERE CHARGED TO YOU DIRECTLY BY THE CREDITOR." After the estimated disclosure document is delivered to any person, the loan broker shall deliver to the person an additional statement redisclosing all items if the actual annual percentage rate will vary from the annual percentage rate contained in the original estimated disclosure document by more than 0.125%. Any required additional disclosure document shall be delivered or placed in the mail before consummation of the loan or no later than 3 days from when the information that requires redisclosure becomes available, whichever occurs first.

(e) If none of the exemptions in Section 10-30.5 apply, then for a period of 7 days after the time the borrower signs a contract for the services, the borrower shall have the right to rescind the contract for services with the loan broker and receive all fees actually paid thereon; provided, however, that the client who has rescinded the contract may not use or disclose any confidential or non-public information provided to the client by the loan broker.
(Source: P.A. 89-209, eff. 1-1-96; 90-70, eff. 7-8-97.)

    (815 ILCS 175/15-30.5)
    Sec. 15-30.5. Exemption from disclosure requirement. The disclosure requirement of Section 15-30 shall not apply where the borrower to be represented by the loan broker:
        (a) Is a natural person who has, or is reasonably

believed by the loan broker relying upon this Section to have, a net worth or joint net worth with that person's spouse in excess of $1,000,000 at the time of the execution of the loan broker agreement;

(b) Is a natural person who has, or is reasonably

believed by the loan broker relying upon this Section to have, an income or joint income with that person's spouse in excess of $200,000 in the most recent applicable fiscal year;

or is reasonably believed by the loan broker relying upon this Section to have, total assets having a value of $1,000,000 and has been in existence for at least nine months and was not formed for the purposes of the transaction;

(d) Is a person who is not a natural person who has,

or is reasonably believed by the loan broker relying upon this Section to have, gross revenue in excess of $200,000 in the most recent applicable fiscal year and has been in existence for at least nine months and was not formed for the purposes of this transaction;

(e) Is a person who is not a natural person in which

at least 90% of the equity interest is owned, or is reasonably believed by the loan broker relying upon this Section to be owned, by persons who meet any of the tests set forth in this subsection; or

(f) Has had an attorney review the loan broker's

contract.

A loan broker may rely upon a statement signed by the borrower that such borrower is any of the categories enumerated above.
(Source: P.A. 90-70, eff. 7-8-97.)

(815 ILCS 175/15-35)
Sec. 15-35. Contracts required to be in writing; retention of copy by borrowing party. To be enforceable, every contract for the services of a loan broker shall be in writing and signed by all contracting parties. The borrowing party and loan broker shall retain a copy of the signed contract at the time it is signed. The loan broker shall retain a copy of the contract for a period of 6 years.
(Source: P.A. 89-209, eff. 1-1-96; 90-70, eff. 7-8-97.)

    (815 ILCS 175/15-40)
    Sec. 15-40. Denial, suspension or revocation of registration; orders and hearing.
    (a) The Secretary of State may deny, suspend or revoke the registration of a loan broker if the loan broker:
        (1) Fails to maintain the bond required under

subsection (b) of Section 15-15 of this Act.

        (2) Is insolvent.
        (3) Has violated any provision of this Act.
        (4) Has filed with the Secretary of State any

document or statement containing any false representation of a material fact or omitting to state a material fact.

(5) Has been convicted, within 10 years before the

date of the application, renewal or review, of any crime involving fraud or deceit.

(b) The Secretary of State may not enter a final order denying, suspending or revoking the registration of a loan broker without prior notice to all interested parties, opportunity for a hearing and written findings of fact and conclusions of law. The Secretary of State may by summary order deny, suspend or revoke a registration pending final determination of any proceeding under this Section. Upon the entry of a summary order, the Secretary of State shall promptly notify all interested parties that it has been entered, of the reasons for the summary order and, that upon receipt by the Secretary of State of a written request from a party, the matter will be set for hearing which shall be conducted in accordance with the provisions of the Illinois Administrative Procedure Act. If no hearing is requested within 30 days of the entry of the order and none is ordered by the Secretary of State, the order remains in effect until it is modified vacated, or superseded by a final order. A final order may be entered by the Secretary of State against any party who fails to request a hearing within 30 days of the entry of the summary order. If a hearing is requested or ordered, the Secretary of State, after notice of the hearing has been given to all interested persons and the hearing has been held, may modify or vacate the order, extend it until final determination, or issue a final order.
(Source: P.A. 89-209, eff. 1-1-96; 90-70, eff. 7-8-97.)

(815 ILCS 175/15-45)