On May 14, 2021, the Illinois Department of Financial and Professional Regulation published a Notice of Proposal in the Illinois Register in order to implement the new requirements for the Consumer Installment Loan Act identified in Public Act 101-0658, which was signed into law on March 23, 2021 by Gov. J. B. Pritzker.
On August 1, 2022, a new 36% Rate Cap Disclosure rule will go into effect, promulgated by the Illinois Department of Financial and Professional Regulation in agreement with the Illinois Joint Committee on Administrative Rules.
Section 110.2 has been added to Title 38 of the Illinois Administrative Code, to read:
All loan contracts or agreements must include a separate disclosure signed by the consumer that states: “A lender shall not contract for or receive charges exceeding a 36% annual percentage rate on the unpaid balance of the amount financed for a loan, as calculated under the Illinois Predatory Loan Prevention Act (PLPA APR). Any loan with a PLPA APR over 36% is null and void, such that 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. The annual percentage rate disclosed in any loan contract may be lower than the PLPA APR.” This disclosure shall be clear and conspicuous and shall be substantially similar to the form in Appendix C. A lender shall provide all disclosures required by this section in English and in the same language as the loan agreement.
To comply with this new 36% Rate Cap Disclosure rule, a new document has been created as Cx26036 IL Rate Cap Disclosure, based on the language in 38 Ill. Adm. Code 110.2 and Appendix C.
Per the Consumer Installment Loan Act requirements found at 205 Ill. Comp. Stat. Ann. 670/17, the 36% Rate Cap Disclosure applies to real property loans between $500 and $40,000 which have a greater rate of interest or discount than allowed under other laws, and the loan term consists of repayment of the principal and charges within 181 months from the date of the loan contract or the last advance.
As such, Cx26036 IL Rate Cap Disclosure and Cx17688 IL Anti-Coercion Insurance Disclosure (disclosures governed by the Consumer Installment Loan Act in Docutech’s document library) will print when:
Loan Amount Greater Than 500 Dollars and Less Than or Equal To 40k (63245) = Yes
(newly created field) Loan Term Less Than or Equal To 181 months (155525) = Yes
These changes will be in effect August 1, 2022. If you have any questions or concerns about these changes, please contact Client Support at 1.800.497.3584.