Due to state provisions which prohibit persons from requiring borrowers to obtain insurance through particularly agents (so-called “anti-coercion” provisions), we have been providing various multi-state anti-coercion disclosure documents, in which the borrowers are generally informed that they may obtain their insurance products through an agency of their choice, subject only to the reasonable, uniform standards established by the lender.
One of the most common of these generic forms is Cx2778, which is provided for many states, including Illinois, which contains an “anti-coercion” provision applicable towards licensees under the Consumer Installment Loan Act (see 205 Ill. Comp. Stat. Ann. 670/15b[a]), for loans with an original principal amount exceeding $500. Licensees under such Act may extend loans with principal amounts not exceeding $40,000 (see Ibid. 670/1), thus the “anti-coercion” provision only applies to loans with principal amounts between $500.01 and $40,000. Due to the fact that it prints in several different jurisdictions, Cx2778 is currently being provided for all loans in Illinois, regardless of their principal amount, since most other states’ “anti-coercion” provisions are not restricted to loans of a certain amount. Therefore, in order to have the disclosure print only for these types of Illinois loans, we will be creating a new IL Anti-Coercion Insurance Disclosure (Cx17688). This new document will print the same text as Cx2778, as well as under the same conditions, except it will only print for loans with the applicable loan amounts.
This change will take effect on August 1, 2013. If you have any questions or concerns about these changes, please contact Client Support at 1.800.497.3584.
July 25, 2013