Bill Text: IL HB5538 | 2023-2024 | 103rd General Assembly | Engrossed

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Bill Title: Amends the Financial Institutions Code. Changes the name of the Code to the Financial Institutions Act. Makes conforming changes, including in the Collection Agency Act. Provides that the Division of Financial Institutions may receive and investigate complaints made about regulated persons; keep records of all registrations or other authorizations; issue orders and fines; require information or reports from regulated persons; examine activities, books, and records of regulated persons; defray operating and implementation expenses of administering the Act and other laws; enter into cooperative agreements; prescribe the forms of and receive applications or other authorizations and all reports, books, and records required to be made by regulated persons; subpoena documents and witnesses and administer oaths; appoint examiners, supervisors, experts, and special assistants; and investigate and take actions reasonably necessary to prohibit and stop unlicensed activity. Allows the Division to make and implement specified rules. Repeals provisions relating to the transfer of powers, rights, and duties from various former Departments to the Department of Financial and Professional Regulation. Provides for a Director of the Division appointed by the Governor to report to the Secretary of Financial and Professional Regulation. Provides that any Illinois circuit court may enter an order to enforce subpoenas issued by the Division. Requires regulated persons to maintain character and fitness to justify confidence of the public. Provides for the Secretary to enter into consent orders or settlement agreements with regulated persons. Provides exceptions for some forms of financial interest in any financial institutions under the Division's jurisdiction. Amends the Consumer Installment Loan Act and the Payday Loan Reform Act. Provides that the Director may fine a person doing business without the required license. Amends the Currency Exchange Act. Provides that all rules and directions, which are of a general character, shall be made available in electronic form to all licensees within 10 days after filing and any changes shall be emailed (rather than mailed) to all licensees. Amends the Sales Finance Agency Act. Provides that the Department may deny an application for a sales finance agency license for any of the grounds listed in the Financial Institutions Act. Makes other changes. Effective immediately.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced) 2024-04-19 - Rule 19(a) / Re-referred to Rules Committee [HB5538 Detail]

Download: Illinois-2023-HB5538-Engrossed.html

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AN ACT concerning State government.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Financial Institutions Code is amended by
changing Sections 1, 2, 4, 6, 6a, 7, 8, 15, 16, 17, and 18 and
by adding Sections 18.2, 18.3, and 18.5 as follows:
(20 ILCS 1205/1) (from Ch. 17, par. 101)
Sec. 1. Short title. This Act shall be known and shall be
cited as the "Financial Institutions Act Code."
(Source: Laws 1957, p. 369.)
(20 ILCS 1205/2) (from Ch. 17, par. 102)
Sec. 2. Purpose. The purpose of the Financial Institutions
Act Code is to provide under the Governor for the orderly
administration and enforcement of laws relating to financial
institutions under the authority of the Governor.
(Source: Laws 1957, p. 369.)
(20 ILCS 1205/4) (from Ch. 17, par. 104)
Sec. 4. Definitions. As used in this Act:
"Address of record" means the designated address recorded
by the Division in the applicant's application file or the
licensee's license file, as maintained by the Division.

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"Department" means the Department of Financial and
Professional Regulation.
"Director" means the Director or acting Director of the
Division of Financial Institutions and any authorized
representative of the Director.
"Division" means the Division of Financial Institutions of
the Department.
"Financial institutions" means ambulatory and community
currency exchanges, credit unions, guaranteed credit unions,
money transmitters, title insuring or guaranteeing companies
and their agents, consumer installment lenders, payday
lenders, sales finance agencies, consumer legal funding
companies, collection agencies, and any other person who
industry or business that offers services or products that are
regulated under any Act administered by the Director.
"License" means any certificate or authorization issued to
any person, party, or entity pursuant to any Act administered
by the Division.
"Licensee" means any person, party, or entity who is or
comes to be certified, chartered, registered, licensed, or
otherwise authorized by the Division pursuant to any Act
administered by the Division.
"Payday loan" has the meaning ascribed to that term in the
Payday Loan Reform Act.
"Person" means any individual, partnership, joint venture,
trust, estate, firm, corporation, cooperative society or

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association, or any other form of business association or
legal entity.
"Regulated person" means a person whose activities are
subject to an Act or rule that is administered by the Division.
"Regulated person" includes licensees as well as persons who
are lawfully or unlawfully unlicensed. "Regulated person" also
includes managers and owners of the licensee.
"Secretary" means the Secretary or acting Secretary of
Financial and Professional Regulation and any authorized
representative of the Secretary.
(Source: P.A. 102-975, eff. 1-1-23.)
(20 ILCS 1205/6)
Sec. 6. General powers and duties. In addition to the
powers and duties provided by law and imposed elsewhere in
this Act, the Division has the following powers and duties:
(1) To administer and enforce the Consumer Installment
Loan Act and its implementing rules.
(2) To administer and enforce the Currency Exchange
Act and its implementing rules.
(3) To administer and enforce the Debt Management
Service Act and its implementing rules.
(4) To administer and enforce the Debt Settlement
Consumer Protection Act and its implementing rules.
(5) To administer and enforce the Illinois Development
Credit Corporation Act and its implementing rules.

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(6) To administer and enforce the Payday Loan Reform
Act and its implementing rules.
(7) To administer and enforce the Safety Deposit
License Act and its implementing rules.
(8) To administer and enforce the Sales Finance Agency
Act and its implementing rules.
(9) To administer and enforce the Title Insurance Act
and its implementing rules.
(10) To administer and enforce the Transmitters of
Money Act and its implementing rules.
(11) To administer and enforce the Predatory Loan
Prevention Act and its implementing rules.
(12) To administer and enforce the Motor Vehicle
Retail Installment Sales Act and its implementing rules.
(13) To administer and enforce the Retail Installment
Sales Act and its implementing rules.
(14) To administer and enforce the Illinois Credit
Union Act and its implementing rules.
(15) To administer and enforce the Collection Agency
Act and its implementing rules.
(16) To administer and enforce the Consumer Legal
Funding Act and its implementing rules.
(17) (16) To administer and enforce this Act and any
other Act administered by the Director or Division.
(17) If the Division is authorized or required by law
to consider some aspect of criminal history record

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information for the purpose of carrying out its statutory
powers and responsibilities, to obtain from the Illinois
State Police, upon request and payment of the fees
required by the Illinois State Police Law of the Civil
Administrative Code of Illinois, pursuant to positive
identification, such information contained in State files
as is necessary to carry out the duties of the Division.
(18) To authorize and administer examinations to
ascertain the qualifications of applicants and licensees
for which the examination is held.
(19) To conduct hearings in proceedings to revoke,
suspend, refuse to renew, or take other disciplinary
action regarding licenses, charters, certifications,
registrations, or authorities of persons as authorized in
any Act administered by the Division.
Whenever the Division is authorized or required by law to
consider some aspect of criminal history record information
for the purpose of carrying out its statutory powers and
responsibilities, then, upon request and payment of fees in
conformance with the requirements of Section 2605-400 of the
Illinois State Police Law, the Illinois State Police is
authorized to furnish, pursuant to positive identification,
the information contained in State files that is necessary to
fulfill the request.
(Source: P.A. 102-538, eff. 8-20-21; 102-813, eff. 5-13-22;
102-975, eff. 1-1-23; 103-154, eff. 6-30-23.)

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(20 ILCS 1205/6a) (from Ch. 17, par. 107)
Sec. 6a. The Secretary Director may, in accordance with
the The Illinois Administrative Procedure Act, adopt
reasonable rules with respect to the administration and
enforcement of any Act the administration of which is vested
in the Division Director or the Department.
(Source: P.A. 81-205.)
(20 ILCS 1205/7) (from Ch. 17, par. 108)
Sec. 7. Illinois Administrative Procedure Act. The
provisions of the "The Illinois Administrative Procedure Act",
as now or hereafter amended, are hereby expressly adopted and
incorporated herein as though a part of this Act, and shall
apply to all administrative rules and procedures of the
Division Director and the Department of Financial Institutions
under this Act. , except that the provisions of the
Administrative Procedure Act regarding contested cases shall
not apply to actions of the Director under Section 15.1 of "An
Act in relation to the definition, licensing and regulation of
community currency exchanges and ambulatory currency
exchanges, and the operators and employees thereof, and to
make an appropriation therefor, and to provide penalties and
remedies for the violation thereof", approved June 30, 1943,
as amended, or Sections 8 and 61 of "The Illinois Credit Union
Act".

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(Source: P.A. 100-22, eff. 1-1-18.)
(20 ILCS 1205/8) (from Ch. 17, par. 109)
Sec. 8. Duties of the Secretary. The Secretary Director
shall direct and supervise all Department administrative and
technical activities, in addition to the duties imposed upon
the Secretary him elsewhere in this Act Code, and shall:
(1) Apply and carry out this Act Code and the laws and all
rules adopted in pursuance thereof.
(2) Appoint, subject to the provisions of the Personnel
Code, such employees of the Division Department and such
experts and special assistants as may be necessary to carry
out effectively the provisions of this Act Code.
(3) Foster and develop programs with financial
institutions, for the best interests of these institutions,
their services, and the People people of the State of
Illinois.
(4) Attend meetings of the Advisory Boards created by laws
relating to financial institutions.
(5) Make continuous studies and report his recommendations
to the Governor for the improvement of the Department.
(6) Make an annual report regarding the work of the
Department and such special reports as he may consider
desirable to the Governor, or as the Governor may request.
(5) (7) Perform any other lawful acts that the Secretary
which he may consider necessary or desirable to carry out the

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purposes and provisions of this Act Law.
(Source: Laws 1957, p. 369.)
(20 ILCS 1205/15) (from Ch. 17, par. 116)
Sec. 15. Pending actions and proceedings. This Act shall
not affect any act done, ratified or confirmed or any right
accrued or established, or affect or abate any action or
proceeding had or commenced in a civil or criminal cause
before this Act takes effect; but such actions or proceedings
may be prosecuted and continued by the Division Department of
Financial Institutions.
(Source: Laws 1957, p. 369.)
(20 ILCS 1205/16) (from Ch. 17, par. 117)
Sec. 16. Director and supervisors. The Governor shall, by
and with the advice and consent of the Senate, appoint a
Director of the Division, who shall oversee the Division and
who shall report to the Secretary. There shall be a Supervisor
of Consumer Credit, a Supervisor of Currency Exchanges, a
Supervisor of Title Insurance, and a Supervisor of Credit
Unions. The respective supervisors Supervisors shall be
appointed by and responsible to the Director and shall be
administratively responsible within the Department for the
financial institutions and title insurance entities to which
their appointments pertain. The Secretary may appoint other
supervisory staff as deemed necessary to implement Acts the

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Division administers.
(Source: P.A. 99-549, eff. 7-15-16.)
(20 ILCS 1205/17) (from Ch. 17, par. 118)
Sec. 17. Prohibited interests. Neither the Secretary, the
Director, nor any supervisor in the Division, nor any examiner
in the Division shall be an officer, director, owner, or
shareholder of, or a partner in, or have any proprietary
interest, direct or indirect, in any financial institution
under the jurisdiction of the Division. However, ; provided,
however, that ownership of withdrawable capital accounts or
shares in credit unions and ownership of diversified
investment funds, employee benefit plans, pensions, retirement
and thrift saving plans, or similar financial instruments in
which the employee has no ability to exercise control over or
selection of the financial interests held by the fund are
permitted shall not be deemed to be prevented hereby. If the
Secretary, Director, or any supervisor, or examiner within the
Division is a , shall be a shareholder, or partner in, or an
owner of or has have any interest, direct or indirect, in any
such financial institution under the jurisdiction of the
Division at the time of his appointment, that person he shall
dispose of the his shares of stock or other evidences of
ownership or property within 120 days from the date of his
appointment. It is unlawful for the Secretary, Director, or
any supervisor or examiner within the Division to obtain or

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repay any loan, product, or service from a financial
institution subject to the jurisdiction of the Division on
terms more favorable than those offered to the general public.
The Secretary is authorized to adopt rules to implement or
interpret this Section. It is unlawful for the Director, any
supervisor or examiner to obtain any loan or gratuity from a
financial institution subject to the jurisdiction of the
Department as herein provided. If any other employee of the
Department borrows from or becomes indebted in an aggregate
amount of $2,500 or more to any financial institution subject
to the jurisdiction of the Department, he shall make a written
report to the Director stating the date and amount of such loan
or indebtedness, the security therefor, if any, and the
purpose or purposes for which proceeds have been or are to be
used.
(Source: P.A. 91-357, eff. 7-29-99.)
(20 ILCS 1205/18) (from Ch. 17, par. 119)
Sec. 18. Oaths; subpoenas; penalty.
(a) At any time during the course of any investigation or
hearing conducted pursuant to any Act administered by the
Division, the Secretary The Director shall have the power to
administer oaths, subpoena witnesses, take evidence, and
compel the production of any books, records, or any other
documents that the Secretary deems relevant or and papers
pertinent to any investigation or hearing regarding the

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operation of any financial institution. Witnesses in
investigations or hearings conducted under this Section are
entitled to the same fees and mileage, and in the same manner,
as prescribed by law in judicial proceedings in civil cases of
this State.
(b) Any person who fails to appear in response to a
subpoena, or to answer any question, to or produce any books,
and papers, records, or any documents deemed relevant or
pertinent to such investigation or hearing, or who knowingly
gives false testimony therein, is guilty of a Class A
misdemeanor. Each violation shall constitute a separate and
distinct offense. In addition to initiating criminal
proceedings through referral, the Division, through the
Attorney General, may seek enforcement of any such subpoena in
any circuit court of this State.
(Source: P.A. 77-2594.)
(20 ILCS 1205/18.2 new)
Sec. 18.2. Court order requiring attendance of witnesses
or production of materials. Upon application by the Division,
any Illinois circuit court may enter an order to enforce a
subpoena issued by the Division for the attendance of
witnesses and the production of relevant books and papers or
other documents deemed relevant or pertinent before the
Division in any hearing relative to the denial of an
application, refusal to renew, suspension, revocation, placing

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on probationary status, reprimand, fine, or the taking of any
other disciplinary action as may be authorized in any Act
administered by the Division. The court may compel obedience
to its order through proceedings for contempt.
(20 ILCS 1205/18.3 new)
Sec. 18.3. Perjury; penalty. The Secretary may require any
document filed under any Act administered or rule adopted by
the Division to be verified or contain a written affirmation
that it is signed under the penalties of perjury. Any person
who knowingly signs a fraudulent document commits perjury as
defined in Section 32-2 of the Criminal Code of 2012 and shall
be guilty of a Class A misdemeanor.
(20 ILCS 1205/18.5 new)
Sec. 18.5. Consent orders and settlement agreements. The
Secretary may enter into a consent order or settlement
agreement at any time with a regulated person to resolve a
matter arising under this Act or any other Act under the
jurisdiction of the Division. A consent order or settlement
agreement need not constitute an admission by a regulated
person that this Act or a rule or order issued or adopted under
this Act or any Act under the jurisdiction of the Division has
been violated, nor need it constitute a finding by the
Secretary that the person has violated this Act or a rule or
order adopted under this Act or any Act under the jurisdiction

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of the Division. Nothing in this Section shall be construed as
requiring a regulated person to enter a consent order or
settlement agreement with the Secretary.
(20 ILCS 1205/9 rep.)
(20 ILCS 1205/10 rep.)
(20 ILCS 1205/11 rep.)
(20 ILCS 1205/12 rep.)
(20 ILCS 1205/13 rep.)
(20 ILCS 1205/13.5 rep.)
(20 ILCS 1205/14 rep.)
Section 10. The Financial Institutions Code is amended by
repealing Sections 9, 10, 11, 12, 13, 13.5, and 14.
Section 15. The Currency Exchange Act is amended by
changing Section 19 as follows:
(205 ILCS 405/19) (from Ch. 17, par. 4835)
Sec. 19. The Department may make and enforce such
reasonable rules, directions, orders, decisions and findings
as the execution and enforcement of the provisions of this Act
require, and as are not inconsistent within this Act. All such
rules, directions, orders, decisions and findings shall be
filed and entered by the Secretary in an indexed permanent
book or record, or electronic record, with the effective date
thereof suitably indicated, and such book or record shall be a

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public document. All rules and directions, which are of a
general character, shall be made available in electronic form
to all licensees within 10 days after filing and any changes
shall be emailed to all licensees shall receive by mail notice
of any changes. Copies of all findings, orders and decisions
shall be mailed to the parties affected thereby by United
States mail within 5 days of such filing.
The Department shall adopt rules concerning classes of
violations, which may include continuing violations of this
Act, and factors in mitigation of violations.
(Source: P.A. 99-445, eff. 1-1-16.)
Section 20. The Sales Finance Agency Act is amended by
changing Section 8 as follows:
(205 ILCS 660/8) (from Ch. 17, par. 5208)
Sec. 8. The Department may deny an application for a
license, deny an application for renewal of a license, or
suspend or revoke a license on any of the grounds listed in
Sections 8.1 through 8.14 and the Financial Institutions Act.
(Source: P.A. 90-437, eff. 1-1-98.)
Section 25. The Consumer Installment Loan Act is amended
by changing Sections 9, 15 and 20.5 as follows:
(205 ILCS 670/9) (from Ch. 17, par. 5409)

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Sec. 9. Fines, Suspension or Revocation of license.
(a) The Director may fine a licensee or any other person or
entity doing business without the required license , 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
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
(2) Any fact or condition exists which, if it had
existed at the time of the original application for the
license, clearly would have warranted the Director in
refusing to issue the license.
(a-5) All orders issued pursuant to this Act shall be
served on the licensee, person, or entity with notice of his or
her action, including a statement of the reasons for his or her
actions, either personally, or by certified mail. Service by
certified mail shall be deemed completed when the notice is
deposited in the U.S. Mail.
(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

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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

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entered.
(i) If the licensee requests a hearing, the Director shall
schedule a preliminary 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.
(m) The Department shall establish by rule and publish a
schedule of fines that are reasonably tailored to ensure
compliance with the provisions of this Act and which include
remedial measures intended to improve licensee compliance.
Such rules shall set forth the standards and procedures to be
used in imposing any such fines and remedies.
(Source: P.A. 98-209, eff. 1-1-14.)
(205 ILCS 670/15) (from Ch. 17, par. 5415)

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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 an annual percentage rate of no more than
36%, subject to the provisions of this Act. For purposes of
this Section, the annual percentage rate shall be calculated
as such rate is calculated using the system for calculating a
military annual percentage rate under Section 232.4 of Title
32 of the Code of Federal Regulations as in effect on the
effective date of this amendatory Act of the 101st General
Assembly.
(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

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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.
"Substantially equal installment" includes a last
regularly scheduled payment that may be less than, but not
more than 5% larger than, the previous scheduled payment
according to a disclosed payment schedule agreed to by the
parties.
(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.
(d-5) No licensee or other person may condition an

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extension of credit to a consumer on the consumer's repayment
by preauthorized electronic fund transfers. Payment options,
including, but not limited to, electronic fund transfers and
Automatic Clearing House (ACH) transactions may be offered to
consumers as a choice and method of payment chosen by the
consumer.
(e) With respect to interest-bearing loans:
(1) Interest shall be computed on unpaid principal
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.
(2) Interest shall not be payable in advance or
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

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loan transaction for all purposes.
(3) Loans must be fully amortizing and be repayable in
substantially equal and consecutive weekly, biweekly,
semimonthly, or monthly installments. Notwithstanding this
requirement, rates may vary according to an index that is
independently verifiable and beyond the control of the
licensee.
(4) The lender or creditor may, if the contract
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.
(f) With respect to precomputed loans:
(1) Loans shall be repayable in substantially equal
and consecutive weekly, biweekly, semimonthly, or 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
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.
(3) When any loan contract is paid in full by cash,
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
judgment judgement is entered.
(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.
(5) If the parties agree in writing, either in the
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 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

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obligor a refund of the unearned deferment charge in
addition to any other refund or credit made for prepayment
of the loan in full.
(6) If 2 two or more installments are delinquent one
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.
(7) Fifteen days after the final installment as
originally scheduled or deferred, the licensee, for any
loan contract which has not previously been converted to
interest-bearing under paragraph (f), clause (6), may
compute and charge interest on any balance remaining
unpaid, including unpaid default or deferment charges, at
the agreed rate of interest until fully paid. At the time
of payment of said final installment, the licensee shall
give notice to the obligor stating any amounts unpaid.
(Source: P.A. 101-563, eff. 8-23-19; 101-658, eff. 3-23-21.)
(205 ILCS 670/20.5)
Sec. 20.5. Cease and desist.
(a) The Director may issue a cease and desist order to any

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licensee, or other person or entity doing business without the
required license, when in the opinion of the Director, the
licensee, or other person or entity, has violated, is
violating, or is about to violate any provision of this Act or
any rule or requirement imposed in writing by the Department
as a condition of granting any authorization permitted by this
Act.
(b) The Director may issue a cease and desist order prior
to a hearing.
(c) The Director shall serve notice of his or her action,
designated as a cease and desist order made pursuant to this
Section, including a statement of the reasons for the action,
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.
(d) Within 15 days of service of the cease and desist
order, the licensee or other person may request, in writing, a
hearing.
(e) The Director shall schedule a preliminary hearing
within 30 days after the request for a hearing unless
otherwise agreed to by the parties.
(f) The Director shall have the authority to prescribe
rules for the administration of this Section.
(g) If it is determined that the Director had the
authority to issue the cease and desist order, he or she may
issue such orders as may be reasonably necessary to correct,

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eliminate, or remedy such conduct.
(h) The powers vested in the Director by this Section are
additional to any and all other powers and remedies vested in
the Director by law, and nothing in this Section shall be
construed as requiring that the Director shall employ the
power conferred in this Section instead of or as a condition
precedent to the exercise of any other power or remedy vested
in the Director.
(i) The cost for the administrative hearing shall be set
by rule.
(Source: P.A. 90-437, eff. 1-1-98.)
Section 35. The Collection Agency Act is amended by
changing Section 13.2 as follows:
(205 ILCS 740/13.2) (was 225 ILCS 425/13.2)
(Section scheduled to be repealed on January 1, 2026)
Sec. 13.2. Powers and duties of Department. The Department
shall exercise the powers and duties prescribed by the
Financial Institutions Act Code for the administration of
licensing Acts and shall exercise such other powers and duties
necessary for effectuating the purposes of this Act.
Subject to the provisions of this Act, the Department may:
(1) Conduct hearings on proceedings to refuse to issue
or renew or to revoke licenses or suspend, place on
probation, or reprimand persons licensed under this Act.

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(2) To adopt rules consistent with the purposes of
this Act, including, but not limited to: (i) rules in
connection with the activities of collection agencies as
may be necessary and appropriate for the protection of
consumers in this State; (ii) rules as may be necessary
and appropriate to define and enforce against improper or
fraudulent business practices in connection with the
activities of collection agencies; (iii) rules that define
the terms used in this Act and as may be necessary and
appropriate to interpret and implement the provisions of
this Act; and (iv) rules as may be necessary for the
enforcement of this Act.
(3) Obtain written recommendations from the Board
regarding standards of professional conduct, formal
disciplinary actions and the formulation of rules
affecting these matters. Notice of proposed rulemaking
shall be transmitted to the Board and the Department shall
review the response of the Board and any recommendations
made in the response. The Department may solicit the
advice of the Board on any matter relating to the
administration and enforcement of this Act.
(4) (Blank).
(Source: P.A. 102-975, eff. 1-1-23.)
Section 40. The Payday Loan Reform Act is amended by
changing Section 4-10 as follows:

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(815 ILCS 122/4-10)
Sec. 4-10. Enforcement and remedies.
(a) The remedies provided in this Act are cumulative and
apply to persons or entities subject to this Act.
(b) Any material violation of this Act, including the
commission of an act prohibited under Section 4-5, constitutes
a violation of the Consumer Fraud and Deceptive Business
Practices Act.
(c) If any provision of the written agreement described in
subsection (b) of Section 2-20 violates this Act, then that
provision is unenforceable against the consumer.
(d) Subject to the Illinois Administrative Procedure Act,
the Secretary may hold hearings, make findings of fact,
conclusions of law, issue cease and desist orders, have the
power to issue fines of up to $10,000 per violation, refer the
matter to the appropriate law enforcement agency for
prosecution under this Act, and suspend or revoke a license
granted under this Act. All proceedings shall be open to the
public.
(e) The Secretary may issue a cease and desist order to any
licensee or other person or entity doing business without the
required license, when in the opinion of the Secretary the
licensee or other person or entity has violated, is violating,
or is about to violate any provision of this Act or any rule or
requirement imposed in writing by the Department as a

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condition of granting any authorization permitted by this Act.
The cease and desist order permitted by this subsection (e)
may be issued prior to a hearing.
The Secretary shall serve notice of his or her action,
including, but not limited to, a statement of the reasons for
the action, 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.
Within 10 days of service of the cease and desist order,
the licensee or other person may request a hearing in writing.
The Secretary shall schedule a hearing within 30 days after
the request for a hearing unless otherwise agreed to by the
parties.
If it is determined that the Secretary had the authority
to issue the cease and desist order, he or she may issue such
orders as may be reasonably necessary to correct, eliminate,
or remedy the conduct.
The powers vested in the Secretary by this subsection (e)
are additional to any and all other powers and remedies vested
in the Secretary by law, and nothing in this subsection (e)
shall be construed as requiring that the Secretary shall
employ the power conferred in this subsection instead of or as
a condition precedent to the exercise of any other power or
remedy vested in the Secretary.
(f) The Secretary may, after 10 days notice by registered
mail to the licensee at the address set forth in the license

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stating the contemplated action and in general the grounds
therefore, fine a the licensee or other person or entity doing
business without the required license 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
provision of this Act or any order, decision, finding,
rule, regulation, or direction of the Secretary lawfully
made pursuant to the authority of this Act; or
(2) any fact or condition exists which, if it had
existed at the time of the original application for the
license, clearly would have warranted the Secretary in
refusing to issue the license.
The Secretary 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 Secretary
finds that grounds for revocation are of general application
to all offices or to more than one office of the licensee, the
Secretary shall fine, suspend, or revoke every license to
which the grounds apply.
The Department shall establish by rule and publish a
schedule of fines that are reasonably tailored to ensure
compliance with the provisions of this Act and which include
remedial measures intended to improve licensee compliance.
Such rules shall set forth the standards and procedures to be
used in imposing any such fines and remedies.

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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.
The Secretary may issue a new license to a licensee whose
license has been revoked when facts or conditions which
clearly would have warranted the Secretary in refusing
originally to issue the license no longer exist.
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 Secretary shall serve the licensee or other person or
entity doing business without the required license 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.
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
a hearing, in writing, within 10 days after the date of
service. In the event a hearing is requested, the order shall
be stayed until a final administrative order is entered.
If the licensee requests a hearing, the Secretary shall
schedule a preliminary hearing within 30 days after the
request for a hearing unless otherwise agreed to by the
parties.

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The hearing shall be held at the time and place designated
by the Secretary. The Secretary 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.
(g) The costs of administrative hearings conducted
pursuant to this Section shall be paid by the licensee.
(h) Notwithstanding any other provision of this Section,
if a lender who does not have a license issued under this Act
makes a loan pursuant to this Act to an Illinois consumer, then
the loan shall be null and void and the lender who made the
loan shall have no right to collect, receive, or retain any
principal, interest, or charges related to the loan.
(Source: P.A. 97-1039, eff. 1-1-13; 98-209, eff. 1-1-14.)
Section 99. Effective date. This Act takes effect upon
becoming law.
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INDEX
Statutes amended in order of appearance
20 ILCS 1205/1 from Ch. 17, par. 101
20 ILCS 1205/2 from Ch. 17, par. 102
20 ILCS 1205/4 from Ch. 17, par. 104
20 ILCS 1205/6
20 ILCS 1205/6a from Ch. 17, par. 107
20 ILCS 1205/7 from Ch. 17, par. 108
20 ILCS 1205/8 from Ch. 17, par. 109
20 ILCS 1205/15 from Ch. 17, par. 116
20 ILCS 1205/16 from Ch. 17, par. 117
20 ILCS 1205/17 from Ch. 17, par. 118
20 ILCS 1205/18 from Ch. 17, par. 119
20 ILCS 1205/18.2 new
20 ILCS 1205/18.3 new
20 ILCS 1205/18.4 new
20 ILCS 1205/18.5 new
20 ILCS 1205/9 rep.
20 ILCS 1205/10 rep.
20 ILCS 1205/11 rep.
20 ILCS 1205/12 rep.
20 ILCS 1205/13 rep.
20 ILCS 1205/13.5 rep.
20 ILCS 1205/14 rep.
205 ILCS 405/19 from Ch. 17, par. 4835
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