Over the past few years, numerous states have imposed interest rate caps on consumer credit. In recent blog posts, we discussed the efforts of both Michigan and New Mexico to impose a 36% annual interest rate cap. Last year, Congress took up the discussion of a national 36% annual interest rate cap.… Continue Reading
illinois
Illinois provides guides and templates for Know Before You Owe Private Education Loan Act reporting requirements
Private education lenders doing business in Illinois now have access to official informational guides and templates for meeting the November 1, 2022, reporting requirements under the state’s new Know Before You Owe Private Education Loan Act (“KBYO”).
Promoted as a means to make borrowers aware of federal student loan options before they turn to private loans, KBYO also seeks to collect and publicize data on private educational lending through an annual reporting obligation imposed on lenders. … Continue Reading
Illinois regulator issues proposed Predatory Loan Prevention Act regulations; lawsuits filed to block implementation of Act’s database reporting requirement and for declaration Act does not apply to pawn transactions
In March 2021, Illinois Governor Pritzker signed into law SB 1792, which contains the Predatory Loan Prevention Act (the “Act”). The new law became effective immediately upon signing notwithstanding the authority it gives the Illinois Department of Financial and Professional Regulation (“IDFPR”) to adopt rules “consistent with [the] Act.”
The Act extends the 36% “all-in” Military Annual Percentage Rate (MAPR) finance charge cap of the federal Military Lending Act (MLA) to “any person or entity that offers or makes a loan to a consumer in Illinois” unless made by a statutorily exempt entity. … Continue Reading
Illinois regulator issues FAQs on Predatory Loan Prevention Act and notice on database reporting
The Illinois Department of Financial and Professional Regulation (DFPR) has issued Predatory Loan Prevention Act Frequently Asked Questions (PLPA). The PLPA became effective on March 23, 2021, the day it was signed into law by Governor Pritzker. The DFPR also issued a “Notice Regarding the Consumer Reporting Database and the Predatory Loan Prevention Act” (Notice).… Continue Reading
Illinois Predatory Loan Prevention Act signed into law and now effective
On March 23, Illinois Governor Pritzker signed into law SB 1792, which contains the Predatory Loan Prevention Act (the “Act”). The new law became effective immediately upon signing notwithstanding the authority it gives the Illinois Secretary of Financial and Professional Regulation to adopt rules “consistent with [the] Act.”
The Act extends the 36% “all-in” Military Annual Percentage Rate (MAPR) finance charge cap of the federal Military Lending Act (MLA) to “any person or entity that offers or makes a loan to a consumer in Illinois” unless made by a statutorily exempt entity (SB 1792 separately amends the Illinois Consumer Installment Loan Act and the Payday Loan Reform Act to apply this same 36% MAPR cap.)… Continue Reading
This week’s podcast: SB 1792 and the Illinois Predatory Loan Prevention Act: A look at key issues
Unless vetoed by Governor Pritzker, SB 1792 will soon become law and overhaul the state’s consumer finance laws. After discussing the lenders and loans covered by the 36% APR cap, the types of charges included in the cap, and the penalties for violations, we look at what SB 1792 means for loans made via a bank partnership model, including when an agent or service provider would be considered the lender and the interaction with federal law.… Continue Reading
Illinois publishes proposed student loan servicing rules
The Illinois Department of Financial and Professional Regulation (IDFPR) published a notice of proposed rules implementing the Student Loan Servicing Act in the July 10, 2020 issue of the Illinois Register. Written comments will be accepted for 45 days.
The IDFPR initially proposed rules in November 2018 but withdrew them a year later because it wished “to reassess the rulemaking.”… Continue Reading
Illinois enacts law to fund income share agreements; distinguishes them from loans
Illinois’ Democratic legislature recently passed, and its progressive Democratic Governor, J.B. Pritzker, recently signed into law, the Student Investment Account Act, which establishes a Student Investment Account to be maintained by the state’s Treasurer. Pursuant to the Act, the Treasurer can allocate up to 5% of the state’s Investment Portfolio to that Account, an amount that would appear to be approximately $1.5 billion based on the state’s 2018 annual report. … Continue Reading
Illinois lawmakers override governor’s veto of student loan servicing bill
The Illinois House of Representatives and Senate have voted to override the veto by the state’s Republican governor of Senate Bill 1351, known as the Illinois Student Loan Servicing Rights Act. The override means that the new law will become effective on December 31, 2018. The bill was drafted by the office of Lisa Madigan, the Democratic Illinois Attorney General, and had strong Democratic support in the state’s House and Senate.… Continue Reading
Illinois student loan servicing bill vetoed
Senate Bill 1351, known as the Illinois Student Loan Bill of Rights, was vetoed at the end of last week by the state’s Republican Governor. The bill would have created a student loan ombudsman and implemented new requirements for student loan servicers, including a licensing requirement.
The bill was drafted by the office of Lisa Madigan, the Democratic Illinois Attorney General, and had Democratic support in the state’s House and Senate. … Continue Reading