Illinois Regulator Posts Predatory Lending Prevention Act FAQs and Database Reporting Notice | Ballard Spahr LLP


Illinois Department of Financial and Professional Regulation (DFPR) released Predatory Lending Prevention Act Frequently Asked Questions (PLPA). The PLPA entered into force on March 23, 2021, on the day it was promulgated by Governor Pritzker. The DFPR also published a “Consumer Reporting Database and Predatory Lending Prevention Act Notice” (Note).

The PLPA extended the 36% finance charge cap “all-in” to an annual military percentage rate of the Federal Military Loans Act to “any person or entity that offers or makes a loan to a consumer in the Illinois ”, unless granted by a legally exempt entity. (The bill containing the PLPA also amended the Illinois Consumer Installment Loans Act (CILA) and Payday Loan Reform Act (PLRA) to enforce that same MAPR cap of 36%. .)

Faq. The FAQ expressly states that the PLPA does not affect contracts legally entered into before March 23, 2021. These contracts continue to be effective and the lender can continue to serve it. In addition to confirming the effective date of the PLPA on March 23, the FAQs cover the following topics:

  • Calculations of the rate cap and APR
  • Fresh
  • Guaranteed loans on payday and securities after the PLPA
  • Status Database Reports
  • PLRA and CILA license
  • License surrender
  • Exam

Note. Prior to the enactment of the PLPA, only lenders providing certain higher cost loans with annualized rates above 36% were required to report loan information to a government database maintained by Veritec. The PLPA now requires all approved lenders, regardless of the rate applied, to pay the Veritec fees for each loan and to report the loan information in the database. Because the PLPA went into effect immediately and the integration of Veritec typically takes several months, lenders in Illinois were initially faced with the trap of violating the amended law or terminating all claims. loan operations. To resolve this dilemma, the notice states that the DFPR “does not intend to take adverse monitoring or enforcement action for violations of reporting requirements” under applicable Illinois law until. ‘See you again.

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