Illinois 2025-2026 Regular Session

Illinois House Bill HB2850 Compare Versions

Only one version of the bill is available at this time.

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1	1	104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 HB2850 Introduced , by Rep. Maurice A. West, II SYNOPSIS AS INTRODUCED: See Index Amends the Student Loan Servicing Rights Act. Creates within the Act an Article concerning educational income share agreements. Contains provisions concerning: monthly payment affordability; maximum annual percentage rates; limits on the duration of income share agreements; risk sharing; limits on covered income; fees; restrictions on security interests; discharge of obligations; prohibitions on cosigners; limits on acceleration; assignment of wages; limitations on garnishment; use of multiple agreements; required disclosures; early completion of the agreement; assumption of increases in future income; receipts; and adjustment of dollar amounts. Provides that the Attorney General may enforce a violation of the Educational Income Share Agreements Article of the Student Loan Servicing Rights Act as an unlawful practice under the Consumer Fraud and Deceptive Business Practices Act. Makes other changes. Amends the Consumer Installment Loan Act and the Interest Act to make conforming changes. Provides that the provisions of the amendatory Act are severable. Effective immediately. LRB104 12120 JDS 22219 b A BILL FOR 104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 HB2850 Introduced , by Rep. Maurice A. West, II SYNOPSIS AS INTRODUCED: See Index See Index Amends the Student Loan Servicing Rights Act. Creates within the Act an Article concerning educational income share agreements. Contains provisions concerning: monthly payment affordability; maximum annual percentage rates; limits on the duration of income share agreements; risk sharing; limits on covered income; fees; restrictions on security interests; discharge of obligations; prohibitions on cosigners; limits on acceleration; assignment of wages; limitations on garnishment; use of multiple agreements; required disclosures; early completion of the agreement; assumption of increases in future income; receipts; and adjustment of dollar amounts. Provides that the Attorney General may enforce a violation of the Educational Income Share Agreements Article of the Student Loan Servicing Rights Act as an unlawful practice under the Consumer Fraud and Deceptive Business Practices Act. Makes other changes. Amends the Consumer Installment Loan Act and the Interest Act to make conforming changes. Provides that the provisions of the amendatory Act are severable. Effective immediately. LRB104 12120 JDS 22219 b LRB104 12120 JDS 22219 b A BILL FOR
2	2	104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 HB2850 Introduced , by Rep. Maurice A. West, II SYNOPSIS AS INTRODUCED:
3	3	See Index See Index
4	4	See Index
5	5	Amends the Student Loan Servicing Rights Act. Creates within the Act an Article concerning educational income share agreements. Contains provisions concerning: monthly payment affordability; maximum annual percentage rates; limits on the duration of income share agreements; risk sharing; limits on covered income; fees; restrictions on security interests; discharge of obligations; prohibitions on cosigners; limits on acceleration; assignment of wages; limitations on garnishment; use of multiple agreements; required disclosures; early completion of the agreement; assumption of increases in future income; receipts; and adjustment of dollar amounts. Provides that the Attorney General may enforce a violation of the Educational Income Share Agreements Article of the Student Loan Servicing Rights Act as an unlawful practice under the Consumer Fraud and Deceptive Business Practices Act. Makes other changes. Amends the Consumer Installment Loan Act and the Interest Act to make conforming changes. Provides that the provisions of the amendatory Act are severable. Effective immediately.
6	6	LRB104 12120 JDS 22219 b LRB104 12120 JDS 22219 b
7	7	LRB104 12120 JDS 22219 b
8	8	A BILL FOR
9	9	HB2850LRB104 12120 JDS 22219 b HB2850 LRB104 12120 JDS 22219 b
10	10	HB2850 LRB104 12120 JDS 22219 b
11	11	1 AN ACT concerning education.
12	12	2 Be it enacted by the People of the State of Illinois,
13	13	3 represented in the General Assembly:
14	14	4 Section 5. The Student Loan Servicing Rights Act is
15	15	5 amended by changing Sections 1-5 and 25-5 and by adding
16	16	6 Article 7 as follows:
17	17	7 (110 ILCS 992/1-5)
18	18	8 Sec. 1-5. Definitions. As used in this Act:
19	19	9 "Applicant" means a person applying for a license pursuant
20	20	10 to this Act.
21	21	11 "Borrower" or "student loan borrower" means a person who
22	22	12 has received or agreed to pay a student loan for his or her own
23	23	13 educational expenses.
24	24	14 "Cosigner" means any individual who is liable for the
25	25	15 obligation of another without compensation, regardless of how
26	26	16 the individual is designated in the contract or instrument
27	27	17 with respect to that obligation, including an obligation under
28	28	18 a private education loan extended to consolidate a borrower's
29	29	19 preexisting student loans. The term includes any individual
30	30	20 whose signature is requested, as a condition, to grant credit
31	31	21 or to forbear on collection. The term does not include a spouse
32	32	22 of an individual if the spouse's signature is needed solely to
33	33	23 perfect the security interest in a loan.
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37	37	104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 HB2850 Introduced , by Rep. Maurice A. West, II SYNOPSIS AS INTRODUCED:
38	38	See Index See Index
39	39	See Index
40	40	Amends the Student Loan Servicing Rights Act. Creates within the Act an Article concerning educational income share agreements. Contains provisions concerning: monthly payment affordability; maximum annual percentage rates; limits on the duration of income share agreements; risk sharing; limits on covered income; fees; restrictions on security interests; discharge of obligations; prohibitions on cosigners; limits on acceleration; assignment of wages; limitations on garnishment; use of multiple agreements; required disclosures; early completion of the agreement; assumption of increases in future income; receipts; and adjustment of dollar amounts. Provides that the Attorney General may enforce a violation of the Educational Income Share Agreements Article of the Student Loan Servicing Rights Act as an unlawful practice under the Consumer Fraud and Deceptive Business Practices Act. Makes other changes. Amends the Consumer Installment Loan Act and the Interest Act to make conforming changes. Provides that the provisions of the amendatory Act are severable. Effective immediately.
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43	43	A BILL FOR
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68	68	1 "Department" means the Department of Financial and
69	69	2 Professional Regulation.
70	70	3 "Division of Banking" means the Division of Banking of the
71	71	4 Department of Financial and Professional Regulation.
72	72	5 "Federal loan borrower eligible for referral to a
73	73	6 repayment specialist" means a borrower who possesses any of
74	74	7 the following characteristics:
75	75	8 (1) requests information related to options to reduce
76	76	9 or suspend his or her monthly payment;
77	77	10 (2) indicates that he or she is experiencing or
78	78	11 anticipates experiencing financial hardship, distress, or
79	79	12 difficulty making his or her payments;
80	80	13 (3) has missed 2 consecutive monthly payments;
81	81	14 (4) is at least 75 days delinquent;
82	82	15 (5) is enrolled in a discretionary forbearance for
83	83	16 more than 9 of the previous 12 months;
84	84	17 (6) has rehabilitated or consolidated one or more
85	85	18 loans out of default within the past 12 months; or
86	86	19 (7) has not completed a course of study, as reflected
87	87	20 in the servicer's records, or the borrower identifies
88	88	21 himself or herself as not having completed a program of
89	89	22 study.
90	90	23 "Federal education loan" means any loan made, guaranteed,
91	91	24 or insured under Title IV of the federal Higher Education Act
92	92	25 of 1965.
93	93	26 "Income-driven payment plan certification" means the
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104	104	1 documentation related to a federal student loan borrower's
105	105	2 income or financial status the borrower must submit to renew
106	106	3 an income-driven repayment plan.
107	107	4 "Income-driven repayment options" includes the
108	108	5 Income-Contingent Repayment Plan, the Income-Based Repayment
109	109	6 Plan, the Income-Sensitive Repayment Plan, the Pay As You Earn
110	110	7 Plan, the Revised Pay As You Earn Plan, and any other federal
111	111	8 student loan repayment plan that is calculated based on a
112	112	9 borrower's income.
113	113	10 "Licensee" means a person licensed pursuant to this Act.
114	114	11 "Other repayment plans" means the Standard Repayment Plan,
115	115	12 the Graduated Repayment Plan, the Extended Repayment Plan, or
116	116	13 any other federal student loan repayment plan not based on a
117	117	14 borrower's income.
118	118	15 "Private education loan" has the meaning ascribed to the
119	119	16 term in Section 140 of the federal Truth in Lending Act (15
120	120	17 U.S.C. 1650). In addition, "private education loan" includes
121	121	18 an income share agreement and student financing.
122	122	19 "Private loan borrower eligible for referral to a
123	123	20 repayment specialist" means a borrower who possesses any of
124	124	21 the following characteristics:
125	125	22 (1) requests information related to options to reduce
126	126	23 or suspend his or her monthly payments; or
127	127	24 (2) indicates that he or she is experiencing or
128	128	25 anticipates experiencing financial hardship, distress, or
129	129	26 difficulty making his or her payments.
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140	140	1 "Requester" means any borrower or cosigner that submits a
141	141	2 request for assistance.
142	142	3 "Request for assistance" means all inquiries, complaints,
143	143	4 account disputes, and requests for documentation a servicer
144	144	5 receives from borrowers or cosigners.
145	145	6 "Secretary" means the Secretary of Financial and
146	146	7 Professional Regulation, or his or her designee, including the
147	147	8 Director of the Division of Banking of the Department of
148	148	9 Financial and Professional Regulation.
149	149	10 "Servicing" means: (1) receiving any scheduled periodic
150	150	11 payments from a student loan borrower or cosigner pursuant to
151	151	12 the terms of a student loan; (2) applying the payments of
152	152	13 principal and interest and such other payments with respect to
153	153	14 the amounts received from a student loan borrower or cosigner,
154	154	15 as may be required pursuant to the terms of a student loan; and
155	155	16 (3) performing other administrative services with respect to a
156	156	17 student loan.
157	157	18 "Student loan" or "loan" means any federal education loan
158	158	19 or other loan primarily for use to finance a postsecondary
159	159	20 education and costs of attendance at a postsecondary
160	160	21 institution, including, but not limited to, tuition, fees,
161	161	22 books and supplies, room and board, transportation, and
162	162	23 miscellaneous personal expenses. "Student loan" includes a
163	163	24 loan made to refinance a student loan.
164	164	25 "Student loan" shall not include an extension of credit
165	165	26 under an open-end consumer credit plan, a reverse mortgage
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176	176	1 transaction, a residential mortgage transaction, or any other
177	177	2 loan that is secured by real property or a dwelling.
178	178	3 "Student loan" shall not include an extension of credit
179	179	4 made by a postsecondary educational institution to a borrower
180	180	5 if one of the following apply:
181	181	6 (1) The term of the extension of credit is no longer
182	182	7 than the borrower's education program.
183	183	8 (2) The remaining, unpaid principal balance of the
184	184	9 extension of credit is less than $1,500 at the time of the
185	185	10 borrower's graduation or completion of the program.
186	186	11 (3) The borrower fails to graduate or successfully
187	187	12 complete his or her education program and has a balance
188	188	13 due at the time of his or her disenrollment from the
189	189	14 postsecondary institution.
190	190	15 "Student loan servicer" or "servicer" means any person
191	191	16 engaged in the business of servicing student loans. "Student
192	192	17 loan servicer" or "servicer" includes persons or entities
193	193	18 acting on behalf of the State Treasurer. "Student loan
194	194	19 servicer" includes an EISA provider covered under Article 7 of
195	195	20 this Act.
196	196	21 "Student loan servicer" shall not include:
197	197	22 (1) a bank, savings bank, savings association, or
198	198	23 credit union organized under the laws of the State or any
199	199	24 other state or under the laws of the United States;
200	200	25 (2) a wholly owned subsidiary of any bank, savings
201	201	26 bank, savings association, or credit union organized under
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212	212	1 the laws of the State or any other state or under the laws
213	213	2 of the United States;
214	214	3 (3) an operating subsidiary where each owner of the
215	215	4 operating subsidiary is wholly owned by the same bank,
216	216	5 savings bank, savings association, or credit union
217	217	6 organized under the laws of the State or any other state or
218	218	7 under the laws of the United States;
219	219	8 (4) the Illinois Student Assistance Commission and its
220	220	9 agents when the agents are acting on the Illinois Student
221	221	10 Assistance Commission's behalf;
222	222	11 (5) a public postsecondary educational institution or
223	223	12 a private nonprofit postsecondary educational institution
224	224	13 servicing a student loan it extended to the borrower;
225	225	14 (6) a licensed debt management service under the Debt
226	226	15 Management Service Act, except to the extent that the
227	227	16 organization acts as a subcontractor, affiliate, or
228	228	17 service provider for an entity that is otherwise subject
229	229	18 to licensure under this Act;
230	230	19 (7) any collection agency licensed under the
231	231	20 Collection Agency Act that is collecting post-default
232	232	21 debt;
233	233	22 (8) in connection with its responsibilities as a
234	234	23 guaranty agency engaged in default aversion, a State or
235	235	24 nonprofit private institution or organization having an
236	236	25 agreement with the U.S. Secretary of Education under
237	237	26 Section 428(b) of the Higher Education Act (20 U.S.C.
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248	248	1 1078(B));
249	249	2 (9) a State institution or a nonprofit private
250	250	3 organization designated by a governmental entity to make
251	251	4 or service student loans, provided in each case that the
252	252	5 institution or organization services fewer than 20,000
253	253	6 student loan accounts of borrowers who reside in Illinois;
254	254	7 (10) a law firm or licensed attorney that is
255	255	8 collecting post-default debt; or
256	256	9 (11) the State Treasurer.
257	257	10 "Total and permanent disability" means a physical or
258	258	11 mental impairment, disease, or loss of a permanent nature that
259	259	12 prevents employment with or without reasonable accommodation,
260	260	13 with proof of disability being in the form of a declaration
261	261	14 from the United States Social Security Administration, the
262	262	15 Illinois Workers' Compensation Commission, the United States
263	263	16 Department of Defense, or an insurer authorized to transact
264	264	17 business in this State who is providing disability insurance
265	265	18 coverage to a contractor. The term does not include a
266	266	19 condition that has not progressed or been exacerbated or that
267	267	20 the individual did not acquire until after the closing of the
268	268	21 loan agreement. In addition, documentation sufficient to
269	269	22 establish a total and permanent disability for a federal
270	270	23 student loan made pursuant to Title IV of the federal Higher
271	271	24 Education Act of 1965 is sufficient to establish a total and
272	272	25 permanent disability under this Act.
273	273	26 (Source: P.A. 103-748, eff. 8-2-24.)
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284	284	1 (110 ILCS 992/Art. 7 heading new)
285	285	2 ARTICLE 7. EDUCATIONAL INCOME SHARE AGREEMENTS
286	286	3 (110 ILCS 992/7-1 new)
287	287	4 Sec. 7-1. Purpose and construction. This Article shall be
288	288	5 construed as a consumer-protection law for all purposes and
289	289	6 shall be liberally construed to effectuate its purpose.
290	290	7 (110 ILCS 992/7-3 new)
291	291	8 Sec. 7-3. Applicability. This Article applies only to
292	292	9 educational income share agreements.
293	293	10 (110 ILCS 992/7-5 new)
294	294	11 Sec. 7-5. Definitions. As used in this Article:
295	295	12 "Amount financed" means the amounts advanced by the EISA
296	296	13 provider to the consumer or on behalf of the consumer, or if
297	297	14 the EISA provider is a merchant financing the sale of goods or
298	298	15 services to the consumer using an EISA, "amount financed"
299	299	16 means the amount credited by the EISA provider toward the
300	300	17 purchase of expenses described in the definition of
301	301	18 "educational income share agreement".
302	302	19 "Annual percentage rate" or "APR" means the percentage
303	303	20 rate calculated according to the Federal Reserve Board's
304	304	21 methodology as set forth under Regulation Z, 12 CFR Part 1026.
305	305	22 The "annual percentage rate" of an EISA is the measure of the
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316	316	1 cost of the EISA, expressed as a yearly rate, that relates to
317	317	2 the amount and timing of value received by the consumer to the
318	318	3 amount and timing of payments made, including any charges or
319	319	4 fees that would be included in the APR as set forth under
320	320	5 Regulation Z, 12 CFR Part 1026. The "annual percentage rate"
321	321	6 is determined in accordance with either the actuarial method
322	322	7 or the United States rule method.
323	323	8 "Cash price" has the meaning given in 12 CFR 1026.2(a)(9).
324	324	9 "Consumer" means a natural person who enters into an EISA.
325	325	10 "Educational income share agreement" or "EISA" means an
326	326	11 agreement between a consumer and an EISA provider under which:
327	327	12 (1) the EISA provider credits or advances a sum of
328	328	13 money to the consumer or to a third party on the consumer's
329	329	14 behalf or, if the EISA provider is a seller of goods or
330	330	15 services to the consumer, the EISA provider credits or
331	331	16 advances toward the purchase of such goods or services;
332	332	17 (2) the consumer is obligated to make periodic
333	333	18 payments, if any become due, to the EISA provider
334	334	19 calculated, based upon, or determined by the consumer's
335	335	20 income;
336	336	21 (3) the consumer incurs an obligation in each payment
337	337	22 period only if the individual's income in that period is
338	338	23 above an income threshold specified in the EISA;
339	339	24 (4) there is an EISA duration after which the
340	340	25 obligation is complete, regardless of how much has been
341	341	26 paid, as long as the consumer has paid any prior amounts
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352	352	1 due;
353	353	2 (5) each of these elements is available at the time
354	354	3 the agreement is executed;
355	355	4 (6) the agreement is not made, insured, or guaranteed
356	356	5 under Title IV of the federal Higher Education Act of 1965
357	357	6 or another federally subsidized educational finance
358	358	7 program; and
359	359	8 (7) the agreement is extended to a consumer expressly,
360	360	9 in whole or in part, for postsecondary educational
361	361	10 expenses, tuition, or other obligations of, or pay amounts
362	362	11 to or on behalf of such an individual, for the costs
363	363	12 associated with a postsecondary training program or any
364	364	13 other program designed to increase the individual's human
365	365	14 capital, employability, or earning potential, including,
366	366	15 but not limited to, a program eligible to participate as a
367	367	16 program under Title IV of the federal Higher Education Act
368	368	17 of 1965, as well as any personal expenses, such as books,
369	369	18 supplies, transportation, and living costs, incurred by
370	370	19 the individual while enrolled in such a program and any
371	371	20 other costs or expenses included in the definition of
372	372	21 "qualified higher education expenses" under 26 U.S.C.
373	373	22 529(e)(3)(A), including the refinancing of loans or
374	374	23 agreements used for the purposes described in this
375	375	24 paragraph (7) and regardless of whether the agreement is
376	376	25 provided by the educational institution that the consumer
377	377	26 attends.
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388	388	1 For purposes of this definition, an EISA shall be
389	389	2 treated as a credit, within the meaning of that term under
390	390	3 15 U.S.C. 1602(f), and as a "private education loan",
391	391	4 within the meaning of that term under 15 U.S.C.
392	392	5 1650(a)(8), to the extent the proceeds of the EISA are
393	393	6 used for postsecondary educational expenses in a manner
394	394	7 consistent with the definition of that term.
395	395	8 "EISA duration" means the maximum time during which a
396	396	9 consumer could remain obligated on the EISA, other than
397	397	10 periods when an EISA provider is attempting to collect
398	398	11 past-due amounts and absent periods of payment relief pauses,
399	399	12 forbearance, military service suspension, or other suspension
400	400	13 of obligations at the request of the consumer, regardless of
401	401	14 whether the consumer's income is greater than the minimum
402	402	15 income.
403	403	16 "EISA maximum number of payments" means the maximum number
404	404	17 of EISA payments during EISA payment periods in which the
405	405	18 consumer's income is equal to or greater than the income
406	406	19 threshold that a consumer could be required to make under the
407	407	20 terms of the EISA. "EISA maximum number of payments" does not
408	408	21 include periods of payment relief pause.
409	409	22 "EISA payment" means a calculated monthly payment in
410	410	23 excess of $0.00 that counts toward the maximum income-based
411	411	24 payments under the EISA. An "EISA payment" is required only
412	412	25 for income earned during an EISA payment period in which the
413	413	26 consumer's income was equal to or greater than the income
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424	424	1 threshold.
425	425	2 "EISA payment calculation method" means the mechanism,
426	426	3 formula, percentage, dollar figure, or other means of
427	427	4 calculating a student's payment obligation, based on the
428	428	5 student's income, under the terms of the EISA.
429	429	6 "EISA payment cap" means the maximum amount of money a
430	430	7 consumer must pay to satisfy the terms of an EISA, which may be
431	431	8 expressed as a dollar value, a multiple of the amount funded to
432	432	9 the student or on the student's behalf, or as a maximum
433	433	10 effective annual percentage rate.
434	434	11 "EISA payment cap" does not include charges that would be
435	435	12 excluded from the definition of the term "finance charge"
436	436	13 under 12 CFR 1026.
437	437	14 "EISA provider" means:
438	438	15 (1) a person or entity that provides money, payments,
439	439	16 or credits to or on behalf of a consumer pursuant to the
440	440	17 terms of an EISA;
441	441	18 (2) any person or entity engaged in the business of
442	442	19 soliciting, making, funding, or extending EISAs; or
443	443	20 (3) any person or entity that is providing educational
444	444	21 services to the consumer and receiving compensation from
445	445	22 an EISA provider (separate from proceeds of the EISA to
446	446	23 cover educational expenses of the consumer) for
447	447	24 advertising, marketing, or recommending EISAs, on behalf
448	448	25 of an EISA provider, for those educational services.
449	449	26 This definition does not apply to an entity that either
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460	460	1 (i) has no direct interactions with the consumer and is not
461	461	2 responsible for making credit decisions regarding the consumer
462	462	3 or (ii) is the provider of the educational services to the
463	463	4 consumer, unless the entity qualifies under paragraph (1),
464	464	5 (2), or (3).
465	465	6 "Federal poverty guidelines" means the poverty guidelines
466	466	7 updated periodically in the Federal Register by the U.S.
467	467	8 Department of Health and Human Services under the authority of
468	468	9 42 U.S.C. 9902(2).
469	469	10 "Garnishment" means any legal or equitable procedure
470	470	11 through which earnings of an individual are required to be
471	471	12 withheld for payment of obligations to an EISA provider as set
472	472	13 forth in the Code of Civil Procedure.
473	473	14 "Income threshold" means a fixed dollar amount that is the
474	474	15 minimum income per payment period that an EISA recipient is
475	475	16 required to earn before the EISA recipient is required to make
476	476	17 a payment on an EISA for such payment period.
477	477	18 "Index" means the Consumer Price Index for Urban Wage
478	478	19 Earners and Clerical Workers: U.S. City Average, All Items,
479	479	20 1967=100, compiled by the Bureau of Labor Statistics, United
480	480	21 States Department of Labor.
481	481	22 "Payment relief pause" means a period of time that is
482	482	23 requested by the consumer during which the consumer is not
483	483	24 required to make payments despite the consumer's income
484	484	25 exceeding the income threshold.
485	485	26 "Sales price" means the "total sale price" as set forth in
486	486
487	487
488	488
489	489
490	490
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492	492
493	493
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495	495	HB2850 - 14 - LRB104 12120 JDS 22219 b
496	496	1 12 CFR 1026.18(j).
497	497	2 (110 ILCS 992/7-10 new)
498	498	3 Sec. 7-10. Monthly payment affordability.
499	499	4 (a) Each EISA shall specify the EISA payment calculation
500	500	5 method applicable to the EISA. An EISA shall not require
501	501	6 payments from the consumer toward that EISA that exceed 8% of
502	502	7 the consumer's income. An EISA provider shall not enter into
503	503	8 an EISA with a consumer if the consumer would be committing to
504	504	9 pay more than 15% of the consumer's income at any time during
505	505	10 the EISA duration, based on information available to the EISA
506	506	11 provider at the time of the projection, inclusive of any
507	507	12 payment obligations that the EISA provider knows will arise in
508	508	13 the future for other EISAs and education loans upon which the
509	509	14 consumer is obligated at the time of the projection. The EISA
510	510	15 provider must confirm a consumer's EISA and education loan
511	511	16 liabilities through a verifiable third-party source. At a
512	512	17 minimum, the EISA provider must confirm such liabilities using
513	513	18 information maintained by a nationwide consumer reporting
514	514	19 agency, as defined by 15 U.S.C. 1681a(f), and doing so is
515	515	20 sufficient for meeting the requirement in this subsection.
516	516	21 However, nothing in this subsection shall prohibit an EISA
517	517	22 provider from using other sources to provide additional
518	518	23 verification. For the purposes of calculating the portion of a
519	519	24 student's future income that would be consumed by the EISA for
520	520	25 which the student has applied and other EISAs and education
521	521
522	522
523	523
524	524
525	525
526	526	HB2850 - 14 - LRB104 12120 JDS 22219 b
527	527
528	528
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530	530	HB2850 - 15 - LRB104 12120 JDS 22219 b
531	531	1 loans known at the time, the EISA provider shall calculate the
532	532	2 aggregate future burden of all such obligations, including the
533	533	3 EISA for which the student is applying, at the hypothetical
534	534	4 future income levels described in subdivision (a)(15)(iii) of
535	535	5 Section 7-75, ranging from the income threshold of the EISA
536	536	6 for which the student has applied up to the maximum income
537	537	7 described in subdivision (a)(15)(iii) of Section 7-75. The
538	538	8 terms of the EISA for which the student has applied cannot
539	539	9 cause the student's aggregate future burden to exceed the
540	540	10 percentage limits in this subsection at any of the income
541	541	11 increments stated in this Section. For the purpose of
542	542	12 calculating the percentage burden of an EISA at a given future
543	543	13 income level, the EISA provider shall use the EISA payment
544	544	14 amount that would be applicable for the EISA at such income
545	545	15 level. For the purpose of calculating the percentage burden of
546	546	16 an educational loan at a given future income level, the EISA
547	547	17 provider shall divide the annual payment obligation by income
548	548	18 level using the most affordable payment plan or option which
549	549	19 would yield the lowest monthly payments that would be
550	550	20 available to the student at such income level under such loan.
551	551	21 For students enrolled in a program eligible to receive federal
552	552	22 student loans under Title IV of the federal Higher Education
553	553	23 Act of 1965, as part of this analysis the EISA provider shall
554	554	24 assume a federal loan balance equal to the larger of (1) the
555	555	25 student's existing federal loan balance and (2) the aggregate
556	556	26 maximum amount the student is eligible to borrow under Federal
557	557
558	558
559	559
560	560
561	561
562	562	HB2850 - 15 - LRB104 12120 JDS 22219 b
563	563
564	564
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566	566	HB2850 - 16 - LRB104 12120 JDS 22219 b
567	567	1 Direct Stafford Loans for the student's status, dependent or
568	568	2 independent.
569	569	3 (b) The EISA must state that when a consumer has income
570	570	4 that is equal to or below the income threshold set forth in the
571	571	5 EISA that the consumer's payment obligation is zero dollars.
572	572	6 The income threshold must be equal to or greater than $47,000;
573	573	7 however, that amount shall be increased on January 1, 2026,
574	574	8 and every other January 1 thereafter, by the annual unadjusted
575	575	9 percentage increase (but not less than zero) in the index for
576	576	10 the 12 months ending with the preceding September, including
577	577	11 all previous adjustments.
578	578	12 (c) An EISA must offer at least 3 months of voluntary
579	579	13 payment relief pauses for every 30 income-determined payments
580	580	14 required under the EISA.
581	581	15 (d) During the payment process for the EISA, the consumer
582	582	16 may request that the income threshold on the EISA be adjusted
583	583	17 upward to ensure the consumer's income, less any payments
584	584	18 required by the EISA, would be greater than or equal to the
585	585	19 minimum essential income based on the consumer's current place
586	586	20 of residence.
587	587	21 As used in this subsection (d), the consumer's minimum
588	588	22 essential income is equal to 275% of the federal poverty
589	589	23 guidelines for a single person (for the year in which the
590	590	24 calculation is performed), multiplied by a cost-of-living
591	591	25 adjustment factor equal to the ratio of (i) the current
592	592	26 locality payment percentage issued by the U.S. Office of
593	593
594	594
595	595
596	596
597	597
598	598	HB2850 - 16 - LRB104 12120 JDS 22219 b
599	599
600	600
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602	602	HB2850 - 17 - LRB104 12120 JDS 22219 b
603	603	1 Personnel Management for the locality pay area in which the
604	604	2 consumer resides, divided by (ii) the current locality payment
605	605	3 percentage issued by the U.S. Office of Personnel Management
606	606	4 for the "Rest of U.S." locality pay area. The locality pay
607	607	5 areas described in this subsection (d) are the locality pay
608	608	6 areas described in 5 CFR 531.603.
609	609	7 An EISA provider must notify consumers of this option on
610	610	8 each monthly billing statement. Nothing in this provision
611	611	9 shall prevent an EISA provider from taking reasonable steps to
612	612	10 confirm a consumer's place of residence (such as requiring a
613	613	11 copy of a utility bill or a driver's license) for the purpose
614	614	12 of establishing the consumer's minimum essential income,
615	615	13 including if the EISA provider believes a consumer's place of
616	616	14 residence has changed. Furthermore, an EISA provider may
617	617	15 require that a consumer has resided at a location for at least
618	618	16 90 days before adjusting the consumer's minimum essential
619	619	17 income.
620	620	18 (110 ILCS 992/7-15 new)
621	621	19 Sec. 7-15. Maximum effective annual percentage rate. An
622	622	20 EISA must specify that the maximum amount that a consumer
623	623	21 could be required to pay under the EISA will not result in a
624	624	22 consumer ever being required to pay an effective annual
625	625	23 percentage rate that is greater than 9% or the high yield of
626	626	24 the 10-year United States Constant Maturity Treasury Notes
627	627	25 auctioned at the final auction held before the current
628	628
629	629
630	630
631	631
632	632
633	633	HB2850 - 17 - LRB104 12120 JDS 22219 b
634	634
635	635
636	636	HB2850- 18 -LRB104 12120 JDS 22219 b HB2850 - 18 - LRB104 12120 JDS 22219 b
637	637	HB2850 - 18 - LRB104 12120 JDS 22219 b
638	638	1 calendar year in which the EISA is originated plus 6%,
639	639	2 whichever is greater. If at any time the EISA provider accepts
640	640	3 a payment of an amount that would cause the limit in this
641	641	4 Section to apply, the EISA provider shall, within 20 calendar
642	642	5 days, refund any amounts necessary to ensure that the
643	643	6 consumer's payments do not result in an effective annual
644	644	7 percentage rate that is greater than the limit specified in
645	645	8 this Section.
646	646	9 (110 ILCS 992/7-20 new)
647	647	10 Sec. 7-20. Limits on duration of EISAs.
648	648	11 (a) The EISA maximum number of payments shall not exceed
649	649	12 180 monthly payments.
650	650	13 (b) The EISA duration shall not exceed 240 months,
651	651	14 excluding any months in which a consumer has requested and
652	652	15 received a payment relief pause.
653	653	16 (110 ILCS 992/7-25 new)
654	654	17 Sec. 7-25. Risk sharing.
655	655	18 (a) An EISA provider may not contract for EISA terms that
656	656	19 would result in a consumer having income that is less than or
657	657	20 equal to 450% of the federal poverty guidelines for a single
658	658	21 person for the EISA duration being required to make a stream of
659	659	22 EISA payments that would yield an effective APR greater than
660	660	23 8.5%, or the high yield of the 10-year United States Constant
661	661	24 Maturity Treasury Notes auctioned at the final auction held
662	662
663	663
664	664
665	665
666	666
667	667	HB2850 - 18 - LRB104 12120 JDS 22219 b
668	668
669	669
670	670	HB2850- 19 -LRB104 12120 JDS 22219 b HB2850 - 19 - LRB104 12120 JDS 22219 b
671	671	HB2850 - 19 - LRB104 12120 JDS 22219 b
672	672	1 before the current calendar year in which an EISA offering is
673	673	2 made plus 4.5%, whichever is greater.
674	674	3 (b) An EISA provider shall calculate the effective APR in
675	675	4 subsection (a) by determining the federal poverty guidelines
676	676	5 at the time the consumer's EISA is originated and assuming
677	677	6 such amount is fixed through the EISA duration.
678	678	7 (c) For the purposes of determining EISA duration in this
679	679	8 Section, an EISA provider shall assume the EISA duration
680	680	9 started after a period equal to the expected length of the
681	681	10 program for which a consumer is enrolling.
682	682	11 (d) If there is a discrepancy between the effective annual
683	683	12 percentage rate as calculated in this Section and the maximum
684	684	13 effective annual percentage rate as calculated in Section
685	685	14 7-15, the lower effective annual percentage rate shall apply
686	686	15 in this Section 7-25.
687	687	16 (110 ILCS 992/7-30 new)
688	688	17 Sec. 7-30. Limits on covered income. An EISA must specify
689	689	18 the definition of income to be used for the purposes of
690	690	19 calculating a consumer's payment obligation under the EISA. No
691	691	20 EISA shall include any of the following in its definition of
692	692	21 income:
693	693	22 (1) the income of the consumer's spouse, children, or
694	694	23 dependents or a party to a civil union with the consumer
695	695	24 under the Illinois Religious Freedom and Civil Union Act;
696	696	25 or
697	697
698	698
699	699
700	700
701	701
702	702	HB2850 - 19 - LRB104 12120 JDS 22219 b
703	703
704	704
705	705	HB2850- 20 -LRB104 12120 JDS 22219 b HB2850 - 20 - LRB104 12120 JDS 22219 b
706	706	HB2850 - 20 - LRB104 12120 JDS 22219 b
707	707	1 (2) any amount paid by the consumer under Title II or
708	708	2 XVI of the Social Security Act, 42 U.S.C. 401 et seq. or 42
709	709	3 U.S.C. 1381 et seq., or under a State program funded by
710	710	4 Title IV of the Social Security Act, 42 U.S.C. 601 et seq;
711	711	5 (3) individual retirement account distributions;
712	712	6 (4) pensions and annuities;
713	713	7 (5) social security benefits;
714	714	8 (6) any sources of government aid provided to
715	715	9 individuals, including, but not limited to:
716	716	10 (A) unemployment programs;
717	717	11 (B) disaster relief programs;
718	718	12 (C) Medicare or Medicaid benefits;
719	719	13 (D) benefits received through the Supplemental
720	720	14 Nutrition Assistance Program;
721	721	15 (E) economic impact payments;
722	722	16 (F) the earned income tax credit or child tax
723	723	17 credit;
724	724	18 (G) other income excluded from the definition of
725	725	19 taxable income set forth by the Internal Revenue
726	726	20 Service; or
727	727	21 (H) passive income that is not derived as a result
728	728	22 of a consumer's active participation in any trade or
729	729	23 business.
730	730	24 (110 ILCS 992/7-35 new)
731	731	25 Sec. 7-35. Fees permitted. (a) In addition to the EISA
732	732
733	733
734	734
735	735
736	736
737	737	HB2850 - 20 - LRB104 12120 JDS 22219 b
738	738
739	739
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741	741	HB2850 - 21 - LRB104 12120 JDS 22219 b
742	742	1 obligation permitted by this Act, an EISA provider may
743	743	2 contract for and receive the following additional charges:
744	744	3 (1) government fees and taxes;
745	745	4 (2) a fee, which shall not exceed the sum of $25, for a
746	746	5 failure to provide documentation to the EISA provider for
747	747	6 the confirmation and reconciliation of the consumer's
748	748	7 income within 30 days after the date on which such
749	749	8 documentation is due, as reflected in the written notice
750	750	9 to the consumer;
751	751	10 (3) a fee for processing any forms to confirm the
752	752	11 consumer's income with the United States Internal Revenue
753	753	12 Service or a state department of revenue or taxation on a
754	754	13 dollar-for-dollar, pass-through basis of the expenses
755	755	14 incurred by the EISA provider;
756	756	15 (4) a late payment fee in the amount of $15 or 5% of
757	757	16 the late payment, whichever is less, for any payment that
758	758	17 is more than 15 days past due; no late payment fee may be
759	759	18 charged more than once per late payment;
760	760	19 (5) an amount not exceeding $25, plus any actual
761	761	20 expenses incurred in connection with a check or draft that
762	762	21 is not honored because of insufficient or uncollected
763	763	22 funds or because no such account exists; and
764	764	23 (6) other fees authorized by the Secretary.
765	765	24 In determining whether to authorize a charge, the
766	766	25 Secretary shall consider whether the charge benefits the
767	767	26 consumer and is reasonable.
768	768
769	769
770	770
771	771
772	772
773	773	HB2850 - 21 - LRB104 12120 JDS 22219 b
774	774
775	775
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777	777	HB2850 - 22 - LRB104 12120 JDS 22219 b
778	778	1 (b) Before or after default in payment of a scheduled
779	779	2 payment of an EISA, the parties to the EISA may agree in
780	780	3 writing to a deferral of all or part of one or more unpaid
781	781	4 payments and the EISA provider may make, at the time of
782	782	5 deferral and receive at that time or at any time thereafter, a
783	783	6 deferral charge not exceeding an amount equal to 5% of the
784	784	7 missed payment, except that this paragraph (7) shall not apply
785	785	8 to voluntary payment relief pauses.
786	786	9 (110 ILCS 992/7-40 new)
787	787	10 Sec. 7-40. Restriction on security interest. Under no
788	788	11 circumstances shall an EISA provider take a security interest
789	789	12 in any collateral in connection with an EISA.
790	790	13 (110 ILCS 992/7-45 new)
791	791	14 Sec. 7-45. Discharge of obligations.
792	792	15 (a) All obligations under an EISA shall terminate if the
793	793	16 consumer is deemed totally and permanently disabled by the
794	794	17 applicable governmental agency.
795	795	18 (b) All obligations under an EISA shall terminate upon the
796	796	19 death of the consumer.
797	797	20 (110 ILCS 992/7-50 new)
798	798	21 Sec. 7-50. Prohibition on cosigners. No EISA shall include
799	799	22 or permit the use of a cosigner in connection with any
800	800	23 obligation related to an EISA.
801	801
802	802
803	803
804	804
805	805
806	806	HB2850 - 22 - LRB104 12120 JDS 22219 b
807	807
808	808
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810	810	HB2850 - 23 - LRB104 12120 JDS 22219 b
811	811	1 (110 ILCS 992/7-55 new)
812	812	2 Sec. 7-55. Limitation on acceleration.
813	813	3 (a) EISA providers shall not attempt to accelerate or
814	814	4 otherwise liquidate a future payment stream under an EISA.
815	815	5 (b) Notwithstanding subsection (a), nothing in this
816	816	6 Section shall prevent an EISA provider from collecting or
817	817	7 pursuing any other remedy available to the EISA provider for
818	818	8 the collection of amounts that were due from the consumer
819	819	9 under an EISA that were not paid or properly remitted to the
820	820	10 EISA provider. Nothing in this Section shall prevent an EISA
821	821	11 provider from calculating a projected future income for a
822	822	12 consumer and calculating a consumer's payment obligation using
823	823	13 that projection if the consumer does not provide contractually
824	824	14 obligated documentation of income.
825	825	15 (c) Notwithstanding subsection (a), an EISA may contain a
826	826	16 provision that allows a consumer to terminate the consumer's
827	827	17 EISA before the events terminating further obligations under
828	828	18 the EISA. The early termination mechanisms, such as total caps
829	829	19 on payments due to the EISA provider or other rights to
830	830	20 partially or fully terminate further obligations under the
831	831	21 EISA, must be optional to the consumer and within the
832	832	22 consumer's control. In such circumstances, such mechanisms
833	833	23 shall not be deemed a form of acceleration.
834	834	24 (110 ILCS 992/7-60 new)
835	835
836	836
837	837
838	838
839	839
840	840	HB2850 - 23 - LRB104 12120 JDS 22219 b
841	841
842	842
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844	844	HB2850 - 24 - LRB104 12120 JDS 22219 b
845	845	1 Sec. 7-60. No assignment of wages.
846	846	2 (a) An EISA provider may not take an assignment of
847	847	3 earnings or wages of the consumer for payment or as security
848	848	4 for payment of a debt arising out of an EISA. An assignment of
849	849	5 earnings in violation of this Section is unenforceable by the
850	850	6 assignee of the earnings and revocable by the consumer. This
851	851	7 Section does not limit the ability of the consumer to
852	852	8 voluntarily elect to use a revocable payroll deduction
853	853	9 mechanism, such as one offered by an employer or payroll
854	854	10 provider, provided that the consumer is not assigning the
855	855	11 consumer's earnings or wages.
856	856	12 (b) A sale of unpaid earnings made in consideration of the
857	857	13 payment of money to or for the account of the seller of the
858	858	14 earnings is deemed to be a loan to the seller secured by an
859	859	15 assignment of earnings.
860	860	16 (110 ILCS 992/7-65 new)
861	861	17 Sec. 7-65. Limitations on garnishment. Before entry of
862	862	18 judgment in an action against a consumer for a payment arising
863	863	19 from an EISA, a licensee may not attach unpaid earnings of the
864	864	20 consumer by garnishment or like proceedings.
865	865	21 (110 ILCS 992/7-70 new)
866	866	22 Sec. 7-70. Use of multiple agreements. An EISA provider
867	867	23 shall not use multiple agreements with respect to a single
868	868	24 EISA with intent to violate any limitations of this Act.
869	869
870	870
871	871
872	872
873	873
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875	875
876	876
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878	878	HB2850 - 25 - LRB104 12120 JDS 22219 b
879	879	1 (110 ILCS 992/7-75 new)
880	880	2 Sec. 7-75. Required disclosures.
881	881	3 (a) An EISA provider shall disclose the following
882	882	4 information to each consumer, clearly and conspicuously, in a
883	883	5 form that the consumer can keep at the time the transaction is
884	884	6 consummated:
885	885	7 (1) the date of the EISA;
886	886	8 (2) the dollar amount of the amount financed;
887	887	9 (3) the sales price of the transaction if different
888	888	10 from the amount financed;
889	889	11 (4) the EISA payment calculation method, including any
890	890	12 percentages used in the EISA payment calculation method,
891	891	13 which shall be rounded to the nearest one-hundredth of 1%
892	892	14 if the percentage is not a whole number;
893	893	15 (5) the maximum number of payments expressed as a
894	894	16 whole number;
895	895	17 (6) the maximum duration expressed as a whole number
896	896	18 of the period of time;
897	897	19 (7) the income threshold expressed as a dollar amount
898	898	20 and a statement that payments will only be required during
899	899	21 periods when the consumer's income is equal to or exceeds
900	900	22 the income threshold;
901	901	23 (8) an itemization of the amount financed and, if the
902	902	24 EISA provider is a seller of goods or services, an
903	903	25 itemization of the amount of any down payment and any
904	904
905	905
906	906
907	907
908	908
909	909	HB2850 - 25 - LRB104 12120 JDS 22219 b
910	910
911	911
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913	913	HB2850 - 26 - LRB104 12120 JDS 22219 b
914	914	1 additional fees or costs;
915	915	2 (9) the definition of "income" to be used for the
916	916	3 purposes of calculating the consumer's obligations under
917	917	4 the EISA;
918	918	5 (10) a description of the terms under which the
919	919	6 obligations of the consumer under the EISA will be
920	920	7 extinguished before the full EISA duration;
921	921	8 (11) a payment schedule that shows the date on which
922	922	9 the first payment will be due and reflects each date
923	923	10 thereafter during the EISA duration that a payment may be
924	924	11 due;
925	925	12 (12) an itemization of any permissible fees associated
926	926	13 with the EISA;
927	927	14 (13) a description of the methods used by the EISA
928	928	15 provider to engage in a process of reconciliation and
929	929	16 verification to determine if the consumer's payments are
930	930	17 more than, equal to, or less than the payments owed by the
931	931	18 consumer under the consumer's EISA; this description shall
932	932	19 include the following:
933	933	20 (i) a description of the frequency or triggers for
934	934	21 the commencement of the income verification process;
935	935	22 (ii) a description of the requirements and timing
936	936	23 of the process in which the consumer must participate
937	937	24 in order for the EISA provider to verify the
938	938	25 consumer's income; and
939	939	26 (iii) a description of any records or forms,
940	940
941	941
942	942
943	943
944	944
945	945	HB2850 - 26 - LRB104 12120 JDS 22219 b
946	946
947	947
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949	949	HB2850 - 27 - LRB104 12120 JDS 22219 b
950	950	1 including tax records, that the consumer may be
951	951	2 required to execute or submit.
952	952	3 (14) the name and address of the EISA provider;
953	953	4 (15) a table that displays the dollar amounts of each
954	954	5 payment, the number of payments, the effective annual
955	955	6 percentage rate, and the total of all payments that a
956	956	7 consumer would be required to pay under the EISA at a range
957	957	8 of annual income levels based on the EISA duration and
958	958	9 that includes a statement that "This comparison table is
959	959	10 for illustrative purposes only and may not reflect the
960	960	11 amounts that you are likely to pay under this educational
961	961	12 income share agreement. This table assumes you have the
962	962	13 same income over the entire term of your educational
963	963	14 income share agreement. It does not take into account
964	964	15 changes in income. Your income will likely change over
965	965	16 time. This table does not represent the income or range of
966	966	17 incomes that you are likely to earn in the future.". In
967	967	18 computing the APR, the EISA provider shall use the amount
968	968	19 financed and may assume that the EISA will be disbursed in
969	969	20 the amount and with the disbursement schedule that it
970	970	21 reasonably expects to follow for such EISA and that
971	971	22 payments would commence on the date set forth in the EISA.
972	972	23 The income used in this disclosure shall include, at
973	973	24 minimum, the obligations at the following incomes:
974	974	25 (i) no income;
975	975	26 (ii) income equal to the annual equivalent of the
976	976
977	977
978	978
979	979
980	980
981	981	HB2850 - 27 - LRB104 12120 JDS 22219 b
982	982
983	983
984	984	HB2850- 28 -LRB104 12120 JDS 22219 b HB2850 - 28 - LRB104 12120 JDS 22219 b
985	985	HB2850 - 28 - LRB104 12120 JDS 22219 b
986	986	1 income threshold;
987	987	2 (iii) various income scenarios with at least
988	988	3 calculations at annual incomes of $40,000, $60,000,
989	989	4 $80,000, $100,000, $125,000, $150,000, $175,000, and
990	990	5 $200,000; and
991	991	6 (iv) if known by the EISA provider, the consumer's
992	992	7 current income;
993	993	8 (16) a statement that the EISA is not a fixed payment
994	994	9 installment loan and that the amount the consumer will be
995	995	10 required to pay under the EISA:
996	996	11 (i) may be more or less than the amount financed by
997	997	12 the EISA provider; and
998	998	13 (ii) will vary in proportion with the consumer's
999	999	14 income; and
1000	1000	15 (17) a statement relating to the bankruptcy treatment
1001	1001	16 of the EISA consistent with the requirements set forth in
1002	1002	17 12 CFR 1026.47(a)(3)(iv), as it may be amended or
1003	1003	18 interpreted.
1004	1004	19 (b) The disclosures required by this Section shall be
1005	1005	20 grouped together and segregated from all other information.
1006	1006	21 (c) The disclosures required by this Section may be
1007	1007	22 provided to a consumer in electronic form, subject to
1008	1008	23 compliance with the consumer's consent and other applicable
1009	1009	24 provisions of the Electronic Signatures in Global and National
1010	1010	25 Commerce Act, 15 U.S.C. 7001 et seq., and applicable State
1011	1011	26 law.
1012	1012
1013	1013
1014	1014
1015	1015
1016	1016
1017	1017	HB2850 - 28 - LRB104 12120 JDS 22219 b
1018	1018
1019	1019
1020	1020	HB2850- 29 -LRB104 12120 JDS 22219 b HB2850 - 29 - LRB104 12120 JDS 22219 b
1021	1021	HB2850 - 29 - LRB104 12120 JDS 22219 b
1022	1022	1 (d) If model documents are established pursuant to any
1023	1023	2 federal law covering income share agreements, compliance with
1024	1024	3 those forms shall be considered compliance with this Act with
1025	1025	4 respect to the disclosure requirements contained in this Act.
1026	1026	5 (110 ILCS 992/7-80 new)
1027	1027	6 Sec. 7-80. Early completion. An EISA shall specify the
1028	1028	7 terms and conditions by which the consumer may extinguish the
1029	1029	8 consumer's obligations under the EISA before the end of the
1030	1030	9 EISA's duration. An EISA must not include a prepayment penalty
1031	1031	10 that violates the prohibition found in 15 U.S.C. 1650(e), as
1032	1032	11 it may be amended or interpreted. A consumer may always cancel
1033	1033	12 an EISA by making aggregate payments, excluding payments to
1034	1034	13 fees, equal to the EISA payment cap. The consumer is entitled
1035	1035	14 to this early completion regardless of whether the consumer
1036	1036	15 makes this early completion payment by making regularly
1037	1037	16 scheduled payments or by making a single lump-sum payment in
1038	1038	17 the amount of the early completion payment.
1039	1039	18 This Section shall create an early completion mechanism
1040	1040	19 for EISAs that is in lieu of other State laws regarding
1041	1041	20 prepayment penalties.
1042	1042	21 (110 ILCS 992/7-85 new)
1043	1043	22 Sec. 7-85. Assumption of increase in future income.
1044	1044	23 (a) If a consumer fails to provide income documentation as
1045	1045	24 reasonably required by an EISA, an EISA provider may assign an
1046	1046
1047	1047
1048	1048
1049	1049
1050	1050
1051	1051	HB2850 - 29 - LRB104 12120 JDS 22219 b
1052	1052
1053	1053
1054	1054	HB2850- 30 -LRB104 12120 JDS 22219 b HB2850 - 30 - LRB104 12120 JDS 22219 b
1055	1055	HB2850 - 30 - LRB104 12120 JDS 22219 b
1056	1056	1 amount of income to the consumer and compute the consumer's
1057	1057	2 monthly payment amount by any of the following methods, to the
1058	1058	3 extent disclosed in the EISA:
1059	1059	4 (1) assigning an income amount obtained from a
1060	1060	5 reasonably reliable third party or a credit reporting
1061	1061	6 agency;
1062	1062	7 (2) if the consumer previously provided income
1063	1063	8 documentation or has had an income assigned in the prior
1064	1064	9 12-month period that has increased by an amount not to
1065	1065	10 exceed 10%, but such increase may not be applied more than
1066	1066	11 once per 12-month period;
1067	1067	12 (3) contacting the Department of Revenue or the
1068	1068	13 Internal Revenue Service to obtain the most recent
1069	1069	14 information available about the student's income; or
1070	1070	15 (4) assigning a reasonable qualified income based on
1071	1071	16 the incomes of the nearest reasonably relevant quantile of
1072	1072	17 income of consumers who attended the same or a reasonably
1073	1073	18 comparable covered educational program or course of study,
1074	1074	19 as determined by information published by the Bureau of
1075	1075	20 Labor Statistics or other reasonably reliable publicly
1076	1076	21 available data sources.
1077	1077	22 (b) If an EISA provider assigns an income to a consumer's
1078	1078	23 EISA, then it shall notify the consumer in the monthly billing
1079	1079	24 statement, and in each billing statement thereafter while the
1080	1080	25 assigned income remains applicable to the consumer's EISA,
1081	1081	26 that income has been assigned and of the consumer's rights
1082	1082
1083	1083
1084	1084
1085	1085
1086	1086
1087	1087	HB2850 - 30 - LRB104 12120 JDS 22219 b
1088	1088
1089	1089
1090	1090	HB2850- 31 -LRB104 12120 JDS 22219 b HB2850 - 31 - LRB104 12120 JDS 22219 b
1091	1091	HB2850 - 31 - LRB104 12120 JDS 22219 b
1092	1092	1 under this Section.
1093	1093	2 (c) If the consumer does provide income information as
1094	1094	3 reasonably required by the EISA within one year of the date on
1095	1095	4 which the EISA provider notified the consumer that assigned
1096	1096	5 income will be applied to the EISA, then, within 15 days after
1097	1097	6 the EISA provider's receipt of such information, the EISA
1098	1098	7 provider shall update each prior instance in which assigned
1099	1099	8 income was applied using the income information provided by
1100	1100	9 the consumer; if the consumer provides income information more
1101	1101	10 than one year after the EISA provider first assigned income to
1102	1102	11 the consumer's EISA, then the EISA provider may, but is not
1103	1103	12 obligated to, update each prior instance in which assigned
1104	1104	13 income was applied using the income information provided by
1105	1105	14 the consumer.
1106	1106	15 (d) An EISA provider that assigns income to an EISA shall
1107	1107	16 retain all applicable records relating to the method and data
1108	1108	17 sources used to make such estimation for 3 years after the end
1109	1109	18 of that EISA.
1110	1110	19 (110 ILCS 992/7-90 new)
1111	1111	20 Sec. 7-90. Receipts; statements of account; evidence of
1112	1112	21 payment.
1113	1113	22 (a) The EISA provider shall deliver or mail to the
1114	1114	23 consumer, without request, a written receipt for each payment
1115	1115	24 made pursuant to an EISA. A periodic statement showing a
1116	1116	25 payment received by mail complies with this subsection (a).
1117	1117
1118	1118
1119	1119
1120	1120
1121	1121
1122	1122	HB2850 - 31 - LRB104 12120 JDS 22219 b
1123	1123
1124	1124
1125	1125	HB2850- 32 -LRB104 12120 JDS 22219 b HB2850 - 32 - LRB104 12120 JDS 22219 b
1126	1126	HB2850 - 32 - LRB104 12120 JDS 22219 b
1127	1127	1 (b) An EISA provider shall provide a written payment
1128	1128	2 history to a borrower or cosigner upon request at no cost
1129	1129	3 within 21 calendar days of receiving the request.
1130	1130	4 (c) An EISA provider shall indicate on its website that a
1131	1131	5 borrower may request a payoff statement. An EISA provider
1132	1132	6 shall provide the payoff statement within 10 days, including
1133	1133	7 information the requester needs to pay off the loan. If a
1134	1134	8 payoff is made, the EISA provider must send a paid-in-full
1135	1135	9 notice within 30 days.
1136	1136	10 (110 ILCS 992/7-95 new)
1137	1137	11 Sec. 7-95. Adjustment of dollar amounts.
1138	1138	12 (a) From time to time, the dollar amounts in this Act
1139	1139	13 designated as subject to change shall change, as provided in
1140	1140	14 this Section, according to and to the extent of changes in the
1141	1141	15 index.
1142	1142	16 (b) The index for December of the year preceding the year
1143	1143	17 in which this Act becomes effective is the reference base
1144	1144	18 index.
1145	1145	19 (c) The designated dollar amounts shall change on July 1
1146	1146	20 of each even-numbered year if the percentage of change,
1147	1147	21 calculated to the nearest whole percentage point, between the
1148	1148	22 index and the end of the preceding year and the reference base
1149	1149	23 index is 10% or more, but:
1150	1150	24 (1) the portion of the percentage change in the index
1151	1151	25 in excess of a multiple of 10% shall be disregarded and the
1152	1152
1153	1153
1154	1154
1155	1155
1156	1156
1157	1157	HB2850 - 32 - LRB104 12120 JDS 22219 b
1158	1158
1159	1159
1160	1160	HB2850- 33 -LRB104 12120 JDS 22219 b HB2850 - 33 - LRB104 12120 JDS 22219 b
1161	1161	HB2850 - 33 - LRB104 12120 JDS 22219 b
1162	1162	1 dollar amounts shall change only in multiples of 10% of
1163	1163	2 the amounts provided in this Act on the date of enactment;
1164	1164	3 and
1165	1165	4 (2) the dollar amounts shall not change if the amounts
1166	1166	5 required by this Section are those currently in effect
1167	1167	6 pursuant to this Act as a result of earlier application of
1168	1168	7 this Section.
1169	1169	8 (d) If the index is revised, the percentage of change
1170	1170	9 pursuant to this Section shall be calculated on the basis of
1171	1171	10 the revised index. If a revision of the index changes the
1172	1172	11 reference base index, a revised reference base index shall be
1173	1173	12 determined by multiplying the reference base index then
1174	1174	13 applicable by the rebasing factor furnished by the Bureau of
1175	1175	14 Labor Statistics. If the index is superseded, the index
1176	1176	15 referred to in this Section is the one represented by the
1177	1177	16 Bureau of Labor Statistics as reflecting most accurately
1178	1178	17 changes in the purchasing power of the dollar for consumers.
1179	1179	18 (e) The Department shall adopt a rule setting forth, on or
1180	1180	19 before April 30 of each year in which dollar amounts are to
1181	1181	20 change, the changes in dollar amounts required by this
1182	1182	21 Section. As soon as practical after the changes occur, the
1183	1183	22 Department shall adopt a rule setting forth the changes in the
1184	1184	23 index required by subsection (d), including, if applicable,
1185	1185	24 the numerical equivalent of the reference base index under a
1186	1186	25 revised reference base index and the designation or title of
1187	1187	26 any index superseding the index.
1188	1188
1189	1189
1190	1190
1191	1191
1192	1192
1193	1193	HB2850 - 33 - LRB104 12120 JDS 22219 b
1194	1194
1195	1195
1196	1196	HB2850- 34 -LRB104 12120 JDS 22219 b HB2850 - 34 - LRB104 12120 JDS 22219 b
1197	1197	HB2850 - 34 - LRB104 12120 JDS 22219 b
1198	1198	1 (f) A person does not violate this Act with respect to a
1199	1199	2 transaction otherwise complying with this Act if the person
1200	1200	3 relies on dollar amounts either determined according to
1201	1201	4 subsection (c) or appearing in the last rule of the Department
1202	1202	5 announcing the then-current dollar amounts.
1203	1203	6 (110 ILCS 992/7-100 new)
1204	1204	7 Sec. 7-100. Construction against implicit authority. This
1205	1205	8 Act is a general Act intended as a unified coverage of its
1206	1206	9 subject matter. No part of this Act shall be construed to be
1207	1207	10 impliedly repealed by subsequent law if that construction can
1208	1208	11 reasonably be avoided.
1209	1209	12 (110 ILCS 992/7-105 new)
1210	1210	13 Sec. 7-105. Application of other Acts. EISAs and EISA
1211	1211	14 providers are subject to other Articles of this Act, the Know
1212	1212	15 Before You Owe Private Education Loan Act, and the Predatory
1213	1213	16 Loan Prevention Act and shall comply with their requirements
1214	1214	17 and any rules adopted by the Department of Financial and
1215	1215	18 Professional Regulation pursuant to those Acts. Nothing in
1216	1216	19 this Section is intended to imply that: (i) an EISA is not a
1217	1217	20 credit transaction or (ii) an EISA does not create a debt upon
1218	1218	21 the accrual of an obligation under the EISA.
1219	1219	22 (110 ILCS 992/7-110 new)
1220	1220	23 Sec. 7-110. Rulemaking. Notwithstanding any other
1221	1221
1222	1222
1223	1223
1224	1224
1225	1225
1226	1226	HB2850 - 34 - LRB104 12120 JDS 22219 b
1227	1227
1228	1228
1229	1229	HB2850- 35 -LRB104 12120 JDS 22219 b HB2850 - 35 - LRB104 12120 JDS 22219 b
1230	1230	HB2850 - 35 - LRB104 12120 JDS 22219 b
1231	1231	1 provision of this Act, the Secretary may adopt rules for the
1232	1232	2 regulation of any EISA provider that does not engage in the
1233	1233	3 servicing of student loans, including, but not limited to,
1234	1234	4 EISAs. The Secretary's authority to adopt rules shall include,
1235	1235	5 but is not limited to, licensure, examination, supervision,
1236	1236	6 investigation, confidentiality, and enforcement. The rules
1237	1237	7 adopted by the Secretary shall not incorporate any provision
1238	1238	8 of Article 1, 5, 10, 15, 20, or 25 of this Act if that
1239	1239	9 provision conflicts with this Article.
1240	1240	10 (110 ILCS 992/25-5)
1241	1241	11 Sec. 25-5. Enforcement; Consumer Fraud and Deceptive
1242	1242	12 Business Practices Act. The Attorney General may enforce a
1243	1243	13 violation of Article 5 or 7 of this Act as an unlawful practice
1244	1244	14 under the Consumer Fraud and Deceptive Business Practices Act.
1245	1245	15 (Source: P.A. 100-540, eff. 12-31-18.)
1246	1246	16 Section 10. The Consumer Installment Loan Act is amended
1247	1247	17 by changing Section 1 as follows:
1248	1248	18 (205 ILCS 670/1) (from Ch. 17, par. 5401)
1249	1249	19 Sec. 1. License required to engage in business. No person,
1250	1250	20 partnership, association, limited liability company, or
1251	1251	21 corporation shall engage in the business of making loans of
1252	1252	22 money and charge, contract for, or receive on any such loan a
1253	1253	23 greater annual percentage rate than 9% except as authorized by
1254	1254
1255	1255
1256	1256
1257	1257
1258	1258
1259	1259	HB2850 - 35 - LRB104 12120 JDS 22219 b
1260	1260
1261	1261
1262	1262	HB2850- 36 -LRB104 12120 JDS 22219 b HB2850 - 36 - LRB104 12120 JDS 22219 b
1263	1263	HB2850 - 36 - LRB104 12120 JDS 22219 b
1264	1264	1 this Act after first obtaining a license from the Director of
1265	1265	2 Financial Institutions (hereinafter called the Director). No
1266	1266	3 licensee, or employee or affiliate thereof, that is licensed
1267	1267	4 under the Payday Loan Reform Act shall obtain a license under
1268	1268	5 this Act except that a licensee under the Payday Loan Reform
1269	1269	6 Act may obtain a license under this Act for the exclusive
1270	1270	7 purpose and use of making title-secured loans, as defined in
1271	1271	8 subsection (a) of Section 15 of this Act and governed by Title
1272	1272	9 38, Section 110.300 of the Illinois Administrative Code. For
1273	1273	10 the purpose of this Section, "affiliate" means any person or
1274	1274	11 entity that directly or indirectly controls, is controlled by,
1275	1275	12 or shares control with another person or entity. A person or
1276	1276	13 entity has control over another if the person or entity has an
1277	1277	14 ownership interest of 25% or more in the other. A person or
1278	1278	15 entity licensed to provide educational income share agreements
1279	1279	16 is exempt from the requirements of this Act to the extent of
1280	1280	17 its operation under Article 7 of the Student Loan Servicing
1281	1281	18 Rights Act.
1282	1282	19 In this Act, "Director" means the Director of Financial
1283	1283	20 Institutions of the Department of Financial and Professional
1284	1284	21 Regulation.
1285	1285	22 (Source: P.A. 101-658, eff. 3-23-21.)
1286	1286	23 Section 15. The Interest Act is amended by changing
1287	1287	24 Section 4 as follows:
1288	1288
1289	1289
1290	1290
1291	1291
1292	1292
1293	1293	HB2850 - 36 - LRB104 12120 JDS 22219 b
1294	1294
1295	1295
1296	1296	HB2850- 37 -LRB104 12120 JDS 22219 b HB2850 - 37 - LRB104 12120 JDS 22219 b
1297	1297	HB2850 - 37 - LRB104 12120 JDS 22219 b
1298	1298	1 (815 ILCS 205/4) (from Ch. 17, par. 6404)
1299	1299	2 Sec. 4. General interest rate.
1300	1300	3 (1) Except as otherwise provided in Section 4.05, in all
1301	1301	4 written contracts it shall be lawful for the parties to
1302	1302	5 stipulate or agree that an annual percentage rate of 9%, or any
1303	1303	6 less sum, shall be taken and paid upon every $100 of money
1304	1304	7 loaned or in any manner due and owing from any person to any
1305	1305	8 other person or corporation in this state, and after that rate
1306	1306	9 for a greater or less sum, or for a longer or shorter time,
1307	1307	10 except as herein provided.
1308	1308	11 The maximum rate of interest that may lawfully be
1309	1309	12 contracted for is determined by the law applicable thereto at
1310	1310	13 the time the contract is made. Any provision in any contract,
1311	1311	14 whether made before or after July 1, 1969, which provides for
1312	1312	15 or purports to authorize, contingent upon a change in the
1313	1313	16 Illinois law after the contract is made, any rate of interest
1314	1314	17 greater than the maximum lawful rate at the time the contract
1315	1315	18 is made, is void.
1316	1316	19 It is lawful for a state bank or a branch of an
1317	1317	20 out-of-state bank, as those terms are defined in Section 2 of
1318	1318	21 the Illinois Banking Act, to receive or to contract to receive
1319	1319	22 and collect interest and charges at any rate or rates agreed
1320	1320	23 upon by the bank or branch and the borrower. It is lawful for a
1321	1321	24 savings bank chartered under the Savings Bank Act or a savings
1322	1322	25 association chartered under the Illinois Savings and Loan Act
1323	1323	26 of 1985 to receive or contract to receive and collect interest
1324	1324
1325	1325
1326	1326
1327	1327
1328	1328
1329	1329	HB2850 - 37 - LRB104 12120 JDS 22219 b
1330	1330
1331	1331
1332	1332	HB2850- 38 -LRB104 12120 JDS 22219 b HB2850 - 38 - LRB104 12120 JDS 22219 b
1333	1333	HB2850 - 38 - LRB104 12120 JDS 22219 b
1334	1334	1 and charges at any rate agreed upon by the savings bank or
1335	1335	2 savings association and the borrower.
1336	1336	3 It is lawful to receive or to contract to receive and
1337	1337	4 collect interest and charges as authorized by this Act and as
1338	1338	5 authorized by the Consumer Installment Loan Act, the Payday
1339	1339	6 Loan Reform Act, the Retail Installment Sales Act, the
1340	1340	7 Illinois Financial Services Development Act, the Motor Vehicle
1341	1341	8 Retail Installment Sales Act, or the Consumer Legal Funding
1342	1342	9 Act, or the Student Loan Servicing Rights Act. It is lawful to
1343	1343	10 charge, contract for, and receive any rate or amount of
1344	1344	11 interest or compensation, except as otherwise provided in the
1345	1345	12 Predatory Loan Prevention Act, with respect to the following
1346	1346	13 transactions:
1347	1347	14 (a) Any loan made to a corporation;
1348	1348	15 (b) Advances of money, repayable on demand, to an
1349	1349	16 amount not less than $5,000, which are made upon warehouse
1350	1350	17 receipts, bills of lading, certificates of stock,
1351	1351	18 certificates of deposit, bills of exchange, bonds or other
1352	1352	19 negotiable instruments pledged as collateral security for
1353	1353	20 such repayment, if evidenced by a writing;
1354	1354	21 (c) Any credit transaction between a merchandise
1355	1355	22 wholesaler and retailer; any business loan to a business
1356	1356	23 association or copartnership or to a person owning and
1357	1357	24 operating a business as sole proprietor or to any persons
1358	1358	25 owning and operating a business as joint venturers, joint
1359	1359	26 tenants or tenants in common, or to any limited
1360	1360
1361	1361
1362	1362
1363	1363
1364	1364
1365	1365	HB2850 - 38 - LRB104 12120 JDS 22219 b
1366	1366
1367	1367
1368	1368	HB2850- 39 -LRB104 12120 JDS 22219 b HB2850 - 39 - LRB104 12120 JDS 22219 b
1369	1369	HB2850 - 39 - LRB104 12120 JDS 22219 b
1370	1370	1 partnership, or to any trustee owning and operating a
1371	1371	2 business or whose beneficiaries own and operate a
1372	1372	3 business, except that any loan which is secured (1) by an
1373	1373	4 assignment of an individual obligor's salary, wages,
1374	1374	5 commissions or other compensation for services, or (2) by
1375	1375	6 his household furniture or other goods used for his
1376	1376	7 personal, family or household purposes shall be deemed not
1377	1377	8 to be a loan within the meaning of this subsection; and
1378	1378	9 provided further that a loan which otherwise qualifies as
1379	1379	10 a business loan within the meaning of this subsection
1380	1380	11 shall not be deemed as not so qualifying because of the
1381	1381	12 inclusion, with other security consisting of business
1382	1382	13 assets of any such obligor, of real estate occupied by an
1383	1383	14 individual obligor solely as his residence. The term
1384	1384	15 "business" shall be deemed to mean a commercial,
1385	1385	16 agricultural or industrial enterprise which is carried on
1386	1386	17 for the purpose of investment or profit, but shall not be
1387	1387	18 deemed to mean the ownership or maintenance of real estate
1388	1388	19 occupied by an individual obligor solely as his residence;
1389	1389	20 (d) Any loan made in accordance with the provisions of
1390	1390	21 Subchapter I of Chapter 13 of Title 12 of the United States
1391	1391	22 Code, which is designated as "Housing Renovation and
1392	1392	23 Modernization";
1393	1393	24 (e) Any mortgage loan insured or upon which a
1394	1394	25 commitment to insure has been issued under the provisions
1395	1395	26 of the National Housing Act, Chapter 13 of Title 12 of the
1396	1396
1397	1397
1398	1398
1399	1399
1400	1400
1401	1401	HB2850 - 39 - LRB104 12120 JDS 22219 b
1402	1402
1403	1403
1404	1404	HB2850- 40 -LRB104 12120 JDS 22219 b HB2850 - 40 - LRB104 12120 JDS 22219 b
1405	1405	HB2850 - 40 - LRB104 12120 JDS 22219 b
1406	1406	1 United States Code;
1407	1407	2 (f) Any mortgage loan guaranteed or upon which a
1408	1408	3 commitment to guaranty has been issued under the
1409	1409	4 provisions of the Veterans' Benefits Act, Subchapter II of
1410	1410	5 Chapter 37 of Title 38 of the United States Code;
1411	1411	6 (g) Interest charged by a broker or dealer registered
1412	1412	7 under the Securities Exchange Act of 1934, as amended, or
1413	1413	8 registered under the Illinois Securities Law of 1953,
1414	1414	9 approved July 13, 1953, as now or hereafter amended, on a
1415	1415	10 debit balance in an account for a customer if such debit
1416	1416	11 balance is payable at will without penalty and is secured
1417	1417	12 by securities as defined in Uniform Commercial
1418	1418	13 Code-Investment Securities;
1419	1419	14 (h) Any loan made by a participating bank as part of
1420	1420	15 any loan guarantee program which provides for loans and
1421	1421	16 for the refinancing of such loans to medical students,
1422	1422	17 interns and residents and which are guaranteed by the
1423	1423	18 American Medical Association Education and Research
1424	1424	19 Foundation;
1425	1425	20 (i) Any loan made, guaranteed, or insured in
1426	1426	21 accordance with the provisions of the Housing Act of 1949,
1427	1427	22 Subchapter III of Chapter 8A of Title 42 of the United
1428	1428	23 States Code and the Consolidated Farm and Rural
1429	1429	24 Development Act, Subchapters I, II, and III of Chapter 50
1430	1430	25 of Title 7 of the United States Code;
1431	1431	26 (j) Any loan by an employee pension benefit plan, as
1432	1432
1433	1433
1434	1434
1435	1435
1436	1436
1437	1437	HB2850 - 40 - LRB104 12120 JDS 22219 b
1438	1438
1439	1439
1440	1440	HB2850- 41 -LRB104 12120 JDS 22219 b HB2850 - 41 - LRB104 12120 JDS 22219 b
1441	1441	HB2850 - 41 - LRB104 12120 JDS 22219 b
1442	1442	1 defined in Section 3 (2) of the Employee Retirement Income
1443	1443	2 Security Act of 1974 (29 U.S.C.A. Sec. 1002), to an
1444	1444	3 individual participating in such plan, provided that such
1445	1445	4 loan satisfies the prohibited transaction exemption
1446	1446	5 requirements of Section 408 (b) (1) (29 U.S.C.A. Sec. 1108
1447	1447	6 (b) (1)) or Section 2003 (a) (26 U.S.C.A. Sec. 4975 (d)
1448	1448	7 (1)) of the Employee Retirement Income Security Act of
1449	1449	8 1974;
1450	1450	9 (k) Written contracts, agreements or bonds for deed
1451	1451	10 providing for installment purchase of real estate,
1452	1452	11 including a manufactured home as defined in subdivision
1453	1453	12 (53) of Section 9-102 of the Uniform Commercial Code that
1454	1454	13 is real property as defined in the Conveyance and
1455	1455	14 Encumbrance of Manufactured Homes as Real Property and
1456	1456	15 Severance Act;
1457	1457	16 (l) Loans secured by a mortgage on real estate,
1458	1458	17 including a manufactured home as defined in subdivision
1459	1459	18 (53) of Section 9-102 of the Uniform Commercial Code that
1460	1460	19 is real property as defined in the Conveyance and
1461	1461	20 Encumbrance of Manufactured Homes as Real Property and
1462	1462	21 Severance Act;
1463	1463	22 (m) Loans made by a sole proprietorship, partnership,
1464	1464	23 or corporation to an employee or to a person who has been
1465	1465	24 offered employment by such sole proprietorship,
1466	1466	25 partnership, or corporation made for the sole purpose of
1467	1467	26 transferring an employee or person who has been offered
1468	1468
1469	1469
1470	1470
1471	1471
1472	1472
1473	1473	HB2850 - 41 - LRB104 12120 JDS 22219 b
1474	1474
1475	1475
1476	1476	HB2850- 42 -LRB104 12120 JDS 22219 b HB2850 - 42 - LRB104 12120 JDS 22219 b
1477	1477	HB2850 - 42 - LRB104 12120 JDS 22219 b
1478	1478	1 employment to another office maintained and operated by
1479	1479	2 the same sole proprietorship, partnership, or corporation;
1480	1480	3 (n) Loans to or for the benefit of students made by an
1481	1481	4 institution of higher education.
1482	1482	5 (2) Except for loans described in subparagraph (a), (c),
1483	1483	6 (d), (e), (f) or (i) of subsection (1) of this Section, and
1484	1484	7 except to the extent permitted by the applicable statute for
1485	1485	8 loans made pursuant to Section 4a or pursuant to the Consumer
1486	1486	9 Installment Loan Act:
1487	1487	10 (a) Whenever the rate of interest exceeds an annual
1488	1488	11 percentage rate of 8% on any written contract, agreement
1489	1489	12 or bond for deed providing for the installment purchase of
1490	1490	13 residential real estate, or on any loan secured by a
1491	1491	14 mortgage on residential real estate, it shall be unlawful
1492	1492	15 to provide for a prepayment penalty or other charge for
1493	1493	16 prepayment.
1494	1494	17 (b) No agreement, note or other instrument evidencing
1495	1495	18 a loan secured by a mortgage on residential real estate,
1496	1496	19 or written contract, agreement or bond for deed providing
1497	1497	20 for the installment purchase of residential real estate,
1498	1498	21 may provide for any change in the contract rate of
1499	1499	22 interest during the term thereof. However, if the Congress
1500	1500	23 of the United States or any federal agency authorizes any
1501	1501	24 class of lender to enter, within limitations, into
1502	1502	25 mortgage contracts or written contracts, agreements or
1503	1503	26 bonds for deed in which the rate of interest may be changed
1504	1504
1505	1505
1506	1506
1507	1507
1508	1508
1509	1509	HB2850 - 42 - LRB104 12120 JDS 22219 b
1510	1510
1511	1511
1512	1512	HB2850- 43 -LRB104 12120 JDS 22219 b HB2850 - 43 - LRB104 12120 JDS 22219 b
1513	1513	HB2850 - 43 - LRB104 12120 JDS 22219 b
1514	1514	1 during the term of the contract, any person, firm,
1515	1515	2 corporation or other entity not otherwise prohibited from
1516	1516	3 entering into mortgage contracts or written contracts,
1517	1517	4 agreements or bonds for deed in Illinois may enter into
1518	1518	5 mortgage contracts or written contracts, agreements or
1519	1519	6 bonds for deed in which the rate of interest may be changed
1520	1520	7 during the term of the contract, within the same
1521	1521	8 limitations.
1522	1522	9 (3) In any contract or loan which is secured by a mortgage,
1523	1523	10 deed of trust, or conveyance in the nature of a mortgage, on
1524	1524	11 residential real estate, the interest which is computed,
1525	1525	12 calculated, charged, or collected pursuant to such contract or
1526	1526	13 loan, or pursuant to any regulation or rule promulgated
1527	1527	14 pursuant to this Act, may not be computed, calculated, charged
1528	1528	15 or collected for any period of time occurring after the date on
1529	1529	16 which the total indebtedness, with the exception of late
1530	1530	17 payment penalties, is paid in full.
1531	1531	18 (4) For purposes of this Section, a prepayment shall mean
1532	1532	19 the payment of the total indebtedness, with the exception of
1533	1533	20 late payment penalties if incurred or charged, on any date
1534	1534	21 before the date specified in the contract or loan agreement on
1535	1535	22 which the total indebtedness shall be paid in full, or before
1536	1536	23 the date on which all payments, if timely made, shall have been
1537	1537	24 made. In the event of a prepayment of the indebtedness which is
1538	1538	25 made on a date after the date on which interest on the
1539	1539	26 indebtedness was last computed, calculated, charged, or
1540	1540
1541	1541
1542	1542
1543	1543
1544	1544
1545	1545	HB2850 - 43 - LRB104 12120 JDS 22219 b
1546	1546
1547	1547
1548	1548	HB2850- 44 -LRB104 12120 JDS 22219 b HB2850 - 44 - LRB104 12120 JDS 22219 b
1549	1549	HB2850 - 44 - LRB104 12120 JDS 22219 b
1550	1550	1 collected but before the next date on which interest on the
1551	1551	2 indebtedness was to be calculated, computed, charged, or
1552	1552	3 collected, the lender may calculate, charge and collect
1553	1553	4 interest on the indebtedness for the period which elapsed
1554	1554	5 between the date on which the prepayment is made and the date
1555	1555	6 on which interest on the indebtedness was last computed,
1556	1556	7 calculated, charged or collected at a rate equal to 1/360 of
1557	1557	8 the annual rate for each day which so elapsed, which rate shall
1558	1558	9 be applied to the indebtedness outstanding as of the date of
1559	1559	10 prepayment. The lender shall refund to the borrower any
1560	1560	11 interest charged or collected which exceeds that which the
1561	1561	12 lender may charge or collect pursuant to the preceding
1562	1562	13 sentence. The provisions of this amendatory Act of 1985 shall
1563	1563	14 apply only to contracts or loans entered into on or after the
1564	1564	15 effective date of this amendatory Act, but shall not apply to
1565	1565	16 contracts or loans entered into on or after that date that are
1566	1566	17 subject to Section 4a of this Act, the Consumer Installment
1567	1567	18 Loan Act, the Payday Loan Reform Act, the Predatory Loan
1568	1568	19 Prevention Act, or the Retail Installment Sales Act, or that
1569	1569	20 provide for the refund of precomputed interest on prepayment
1570	1570	21 in the manner provided by such Act.
1571	1571	22 (5) For purposes of items (a) and (c) of subsection (1) of
1572	1572	23 this Section, a rate or amount of interest may be lawfully
1573	1573	24 computed when applying the ratio of the annual interest rate
1574	1574	25 over a year based on 360 days. The provisions of this
1575	1575	26 amendatory Act of the 96th General Assembly are declarative of
1576	1576
1577	1577
1578	1578
1579	1579
1580	1580
1581	1581	HB2850 - 44 - LRB104 12120 JDS 22219 b
1582	1582
1583	1583
1584	1584	HB2850- 45 -LRB104 12120 JDS 22219 b HB2850 - 45 - LRB104 12120 JDS 22219 b
1585	1585	HB2850 - 45 - LRB104 12120 JDS 22219 b
1586	1586	1 existing law.
1587	1587	2 (6) For purposes of this Section, "real estate" and "real
1588	1588	3 property" include a manufactured home, as defined in
1589	1589	4 subdivision (53) of Section 9-102 of the Uniform Commercial
1590	1590	5 Code that is real property as defined in the Conveyance and
1591	1591	6 Encumbrance of Manufactured Homes as Real Property and
1592	1592	7 Severance Act.
1593	1593	8 (Source: P.A. 101-658, eff. 3-23-21; 102-987, eff. 5-27-22.)
1594	1594	9 Section 97. Severability. The provisions of this Act are
1595	1595	10 severable under Section 1.31 of the Statute on Statutes.
1596	1596	11 Section 99. Effective date. This Act takes effect upon
1597	1597	12 becoming law.
1598	1598	HB2850- 46 -LRB104 12120 JDS 22219 b 1 INDEX 2 Statutes amended in order of appearance 3 110 ILCS 992/1-54 110 ILCS 992/Art. 7 5 heading new6 110 ILCS 992/7-1 new7 110 ILCS 992/7-3 new8 110 ILCS 992/7-5 new9 110 ILCS 992/7-10 new10 110 ILCS 992/7-15 new11 110 ILCS 992/7-20 new12 110 ILCS 992/7-25 new13 110 ILCS 992/7-30 new14 110 ILCS 992/7-35 new15 110 ILCS 992/7-40 new16 110 ILCS 992/7-45 new17 110 ILCS 992/7-50 new18 110 ILCS 992/7-55 new19 110 ILCS 992/7-60 new20 110 ILCS 992/7-65 new21 110 ILCS 992/7-70 new22 110 ILCS 992/7-75 new23 110 ILCS 992/7-80 new24 110 ILCS 992/7-85 new25 110 ILCS 992/7-90 new HB2850- 47 -LRB104 12120 JDS 22219 b HB2850- 46 -LRB104 12120 JDS 22219 b HB2850 - 46 - LRB104 12120 JDS 22219 b 1 INDEX 2 Statutes amended in order of appearance 3 110 ILCS 992/1-5 4 110 ILCS 992/Art. 7 5 heading new 6 110 ILCS 992/7-1 new 7 110 ILCS 992/7-3 new 8 110 ILCS 992/7-5 new 9 110 ILCS 992/7-10 new 10 110 ILCS 992/7-15 new 11 110 ILCS 992/7-20 new 12 110 ILCS 992/7-25 new 13 110 ILCS 992/7-30 new 14 110 ILCS 992/7-35 new 15 110 ILCS 992/7-40 new 16 110 ILCS 992/7-45 new 17 110 ILCS 992/7-50 new 18 110 ILCS 992/7-55 new 19 110 ILCS 992/7-60 new 20 110 ILCS 992/7-65 new 21 110 ILCS 992/7-70 new 22 110 ILCS 992/7-75 new 23 110 ILCS 992/7-80 new 24 110 ILCS 992/7-85 new 25 110 ILCS 992/7-90 new HB2850- 47 -LRB104 12120 JDS 22219 b HB2850 - 47 - LRB104 12120 JDS 22219 b
1599	1599	HB2850- 46 -LRB104 12120 JDS 22219 b HB2850 - 46 - LRB104 12120 JDS 22219 b
1600	1600	HB2850 - 46 - LRB104 12120 JDS 22219 b
1601	1601	1 INDEX
1602	1602	2 Statutes amended in order of appearance
1603	1603	3 110 ILCS 992/1-5
1604	1604	4 110 ILCS 992/Art. 7
1605	1605	5 heading new
1606	1606	6 110 ILCS 992/7-1 new
1607	1607	7 110 ILCS 992/7-3 new
1608	1608	8 110 ILCS 992/7-5 new
1609	1609	9 110 ILCS 992/7-10 new
1610	1610	10 110 ILCS 992/7-15 new
1611	1611	11 110 ILCS 992/7-20 new
1612	1612	12 110 ILCS 992/7-25 new
1613	1613	13 110 ILCS 992/7-30 new
1614	1614	14 110 ILCS 992/7-35 new
1615	1615	15 110 ILCS 992/7-40 new
1616	1616	16 110 ILCS 992/7-45 new
1617	1617	17 110 ILCS 992/7-50 new
1618	1618	18 110 ILCS 992/7-55 new
1619	1619	19 110 ILCS 992/7-60 new
1620	1620	20 110 ILCS 992/7-65 new
1621	1621	21 110 ILCS 992/7-70 new
1622	1622	22 110 ILCS 992/7-75 new
1623	1623	23 110 ILCS 992/7-80 new
1624	1624	24 110 ILCS 992/7-85 new
1625	1625	25 110 ILCS 992/7-90 new
1626	1626	HB2850- 47 -LRB104 12120 JDS 22219 b HB2850 - 47 - LRB104 12120 JDS 22219 b
1627	1627	HB2850 - 47 - LRB104 12120 JDS 22219 b
1628	1628
1629	1629
1630	1630
1631	1631
1632	1632
1633	1633	HB2850 - 45 - LRB104 12120 JDS 22219 b
1634	1634
1635	1635
1636	1636
1637	1637	HB2850- 46 -LRB104 12120 JDS 22219 b HB2850 - 46 - LRB104 12120 JDS 22219 b
1638	1638	HB2850 - 46 - LRB104 12120 JDS 22219 b
1639	1639	1 INDEX
1640	1640	2 Statutes amended in order of appearance
1641	1641	3 110 ILCS 992/1-5
1642	1642	4 110 ILCS 992/Art. 7
1643	1643	5 heading new
1644	1644	6 110 ILCS 992/7-1 new
1645	1645	7 110 ILCS 992/7-3 new
1646	1646	8 110 ILCS 992/7-5 new
1647	1647	9 110 ILCS 992/7-10 new
1648	1648	10 110 ILCS 992/7-15 new
1649	1649	11 110 ILCS 992/7-20 new
1650	1650	12 110 ILCS 992/7-25 new
1651	1651	13 110 ILCS 992/7-30 new
1652	1652	14 110 ILCS 992/7-35 new
1653	1653	15 110 ILCS 992/7-40 new
1654	1654	16 110 ILCS 992/7-45 new
1655	1655	17 110 ILCS 992/7-50 new
1656	1656	18 110 ILCS 992/7-55 new
1657	1657	19 110 ILCS 992/7-60 new
1658	1658	20 110 ILCS 992/7-65 new
1659	1659	21 110 ILCS 992/7-70 new
1660	1660	22 110 ILCS 992/7-75 new
1661	1661	23 110 ILCS 992/7-80 new
1662	1662	24 110 ILCS 992/7-85 new
1663	1663	25 110 ILCS 992/7-90 new
1664	1664
1665	1665
1666	1666
1667	1667
1668	1668
1669	1669	HB2850 - 46 - LRB104 12120 JDS 22219 b
1670	1670
1671	1671
1672	1672	HB2850- 47 -LRB104 12120 JDS 22219 b HB2850 - 47 - LRB104 12120 JDS 22219 b
1673	1673	HB2850 - 47 - LRB104 12120 JDS 22219 b
1674	1674
1675	1675
1676	1676
1677	1677
1678	1678
1679	1679	HB2850 - 47 - LRB104 12120 JDS 22219 b