Bill Text: IL HB5840 | 2021-2022 | 102nd General Assembly | Introduced

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Bill Title: Amends the Pawnbroker Regulation Act. Clarifies that it shall be unlawful for any pawnbroker to charge or collect a greater benefit or percentage upon money advanced, and for the use and forbearance thereof, than permitted under the Predatory Loan Prevention Act. Amends the Predatory Loan Prevention Act. Provides that the definition of "loan" includes transactions subject to the Pawnbroker Regulation Act. Provides that it is a violation of the Act for any person or entity to solicit, broker, or otherwise engage in any other activity intended to facilitate or result in, or that in fact facilitates or results in, the origination of a loan that violates the Act. Provides that it is a violation of the Act for any person or entity to advertise or cause to be advertised a loan that violates the Act. Provides that a violation of the Act by a person or entity licensed under the Pawnbroker Regulation Act shall subject the person or entity to discipline in accordance with that Act. Makes other changes. Effective June 1, 2023.

Spectrum: Partisan Bill (Democrat 23-1)

Status: (Introduced - Dead) 2023-01-05 - Added Co-Sponsor Rep. Joyce Mason [HB5840 Detail]

Download: Illinois-2021-HB5840-Introduced.html

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102ND GENERAL ASSEMBLY State of Illinois 2021 and 2022 HB5840 Introduced , by Rep. Sonya M. Harper SYNOPSIS AS INTRODUCED:
205 ILCS 510/2 from Ch. 17, par. 4652
815 ILCS 123/15-1-5
815 ILCS 123/15-1-10
815 ILCS 123/15-5-10
815 ILCS 123/15-10-5
Amends the Pawnbroker Regulation Act. Clarifies that it shall be unlawful for any pawnbroker to charge or collect a greater benefit or percentage upon money advanced, and for the use and forbearance thereof, than permitted under the Predatory Loan Prevention Act. Amends the Predatory Loan Prevention Act. Provides that the definition of "loan" includes transactions subject to the Pawnbroker Regulation Act. Provides that it is a violation of the Act for any person or entity to solicit, broker, or otherwise engage in any other activity intended to facilitate or result in, or that in fact facilitates or results in, the origination of a loan that violates the Act. Provides that it is a violation of the Act for any person or entity to advertise or cause to be advertised a loan that violates the Act. Provides that a violation of the Act by a person or entity licensed under the Pawnbroker Regulation Act shall subject the person or entity to discipline in accordance with that Act. Makes other changes. Effective June 1, 2023.
LRB102 29629 SPS 41654 b
A BILL FOR
HB5840 LRB102 29629 SPS 41654 b
AN ACT concerning business.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Pawnbroker Regulation Act is amended by
changing Section 2 as follows:
(205 ILCS 510/2) (from Ch. 17, par. 4652)
Sec. 2. Pursuant to Section 15-10-30 of the Predatory Loan
Prevention Act, it It shall be unlawful for any pawnbroker to
charge or collect a greater benefit or percentage upon money
advanced, and for the use and forbearance thereof, than
permitted under Section 15-5-5 of the Predatory Loan
Prevention Act than the rate of 3% per month. Nothing in this
Section shall be construed so as to conflict with the law
pertaining to usury and the person receiving money so advanced
may hold such moneys to pay any fees in addition to interest as
herein provided.
Each pawnbroker, when making a loan under this Section,
must disclose in printed form on the pawn contract the
following information to the persons receiving the loan:
(1) the amount of money advanced, which must be
designated as the amount financed;
(2) the maturity date of the pawn, which must be at
least 30 days after the date of the pawn;

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(3) the total pawn interest and service charge payable
on the maturity date, which must be designated as the
finance charge;
(4) the total of payments that must be paid to redeem
the pledged goods on the maturity date, which must be
designated as the total of payments; and
(5) the annual percentage rate, computed according to
the regulations adopted by the Board of Governors of the
Federal Reserve System under the Federal Truth in Lending
Act.
The changes made to this Section by this amendatory Act of
the 102nd General Assembly shall be construed as being
declaratory of existing law and not as a new enactment. The
changes made to this Section by this amendatory Act of the
102nd General Assembly apply to actions commenced or pending
on or after the effective date of this amendatory Act of the
102nd General Assembly Each pawnbroker may contract for and
receive a monthly finance charge including interest and fees
not to exceed one-fifth of the loan amount, as set forth
herein, for appraising, investigating title, storing and
insuring the collateral, closing the loan, making daily
reports to local law enforcement officers including enhanced
computerized reporting, complying with regulatory
requirements, and for other expenses and losses of every
nature whatsoever and for all other services. Such fees, when
made and collected, shall not be deemed interest for any

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purpose of law.
(Source: P.A. 90-477, eff. 7-1-98.)
Section 10. The Predatory Loan Prevention Act is amended
by changing Sections 15-1-5, 15-1-10, 15-5-10, and 15-10-5 as
follows:
(815 ILCS 123/15-1-5)
Sec. 15-1-5. Purpose and construction. Illinois families
pay over $500,000,000 per year in consumer installment,
payday, and title loan fees. As reported by the Department in
2020, nearly half of Illinois payday loan borrowers earn less
than $30,000 per year, and the average annual percentage rate
of a payday loan is 297%. The purpose of this Act is to protect
consumers from all types of predatory loans, including, but
not limited to, the types of loans covered under consistent
with federal law and the federal Military Lending Act, which
protects active duty members of the military and their
dependents. This Act shall be construed as a consumer
protection law for all purposes. The changes made to this
Section by this amendatory Act of the 102nd General Assembly
shall be construed as being declaratory of existing law and
not as a new enactment. The changes made to this Section by
this amendatory Act of the 102nd General Assembly apply to
actions commenced or pending on or after the effective date of
this amendatory Act of the 102nd General Assembly. This Act

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shall be liberally construed to effectuate its purpose.
(Source: P.A. 101-658, eff. 3-23-21.)
(815 ILCS 123/15-1-10)
Sec. 15-1-10. Definitions. As used in this Act:
"Consumer" means any natural person, including consumers
acting jointly.
"Department" means the Department of Financial and
Professional Regulation.
"Lender" means any person or entity, including any
affiliate or subsidiary of a lender, that offers or makes a
loan, buys a whole or partial interest in a loan, arranges a
loan for a third party, or acts as an agent for a third party
in making a loan, regardless of whether approval, acceptance,
or ratification by the third party is necessary to create a
legal obligation for the third party, and includes any other
person or entity if the Department determines that the person
or entity is engaged in a transaction that is in substance a
disguised loan or a subterfuge for the purpose of avoiding
this Act.
"Person" means any natural person.
"Secretary" means the Secretary of Financial and
Professional Regulation or a person authorized by the
Secretary.
"Loan" means money or credit provided to a consumer in
exchange for the consumer's agreement to a certain set of

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terms, including, but not limited to, any finance charges,
interest, or other conditions. "Loan" includes closed-end and
open-end credit, retail installment sales contracts, motor
vehicle retail installment sales contracts, transactions
subject to the Pawnbroker Regulation Act, and any transaction
conducted via any medium whatsoever, including, but not
limited to, paper, facsimile, Internet, or telephone. "Loan"
does not include a commercial loan.
(Source: P.A. 101-658, eff. 3-23-21.)
(815 ILCS 123/15-5-10)
Sec. 15-5-10. Violation.
(a) Any loan made in violation of this Act is null and void
and no person or entity shall have any right to collect,
attempt to collect, receive, or retain any principal, fee,
interest, or charges related to the loan.
(b) It is a violation of this Act for any person or entity
to solicit, broker, or otherwise engage in any other activity
intended to facilitate or result in, or that in fact
facilitates or results in, the origination of a loan that
violates Section 15-5-5 of this Act.
(c) It is a violation of this Act for any person or entity
to advertise or cause to be advertised a loan that violates
Section 15-5-5 of this Act.
(Source: P.A. 101-658, eff. 3-23-21.)

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(815 ILCS 123/15-10-5)
Sec. 15-10-5. Enforcement and remedies.
(a) The remedies provided in this Act are cumulative and
apply to persons or entities subject to this Act.
(b) Any violation of this Act, including the commission of
an act prohibited under Article 5, constitutes a violation of
the Consumer Fraud and Deceptive Business Practices Act.
(c) 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, and refer
the matter to the appropriate law enforcement agency for
prosecution under this Act. All proceedings shall be open to
the public.
(d) The Secretary may issue a cease and desist order to any
person or entity, when in the opinion of the Secretary the
person or entity is violating or is about to violate any
provision of this Act. The cease and desist order permitted by
this subsection (d) may be issued prior to a hearing.
The Secretary shall serve notice of the action, including,
but not limited to, a statement of the reasons for the action,
either personally or by certified mail. 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 person or entity may request a hearing in writing.

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If it is determined that the Secretary had the authority
to issue the cease and desist order, the Secretary 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 (d)
are additional to any and all other powers and remedies vested
in the Secretary by law, and nothing in this subsection (d)
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.
(e) After 10 days' notice by certified mail to the person
or entity stating the contemplated action and in general the
grounds therefor, the Secretary may fine the person or entity
an amount not exceeding $10,000 per violation if the person or
entity has failed to comply with any provision of this Act or
any order, decision, finding, rule, regulation, or direction
of the Secretary lawfully made in accordance with the
authority of this Act. Service by certified mail shall be
deemed completed when the notice is deposited in the U.S.
Mail.
(f) A violation of this Act by a person or entity licensed
under another Act including, but not limited to, the
Pawnbroker Regulation Act, the Consumer Installment Loan Act,
the Payday Loan Reform Act, and the Sales Finance Agency Act
shall subject the person or entity to discipline in accordance

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with the Act or Acts under which the person or entity is
licensed.
(Source: P.A. 101-658, eff. 3-23-21.)
Section 99. Effective date. This Act takes effect June 1,
2023.