Bill > HB3455

This bill amends the Consumer Installment Loan Act and the Predatory Loan Prevention Act to make several key changes in consumer lending practices. Specifically, the bill updates how annual percentage rates (APR) are calculated, using the federal Truth in Lending Act methodology instead of a military-specific calculation. It prohibits lenders from charging prepayment penalties on loans, which means borrowers can pay off their loans early without additional fees. The bill introduces a new requirement for lenders to offer credit education programs or seminars to borrowers before disbursing loan proceeds, covering topics like credit scores, report improvement, and dispute resolution. The legislation sets new loan term limits, with loans over $10,000 having a maximum repayment period of 181 months, and loans of $10,000 or less requiring repayment between 12 and 60.25 months. Starting January 1, 2026, lenders must report borrowers' payment performance to at least one nationwide consumer reporting agency. The bill also maintains the existing 36% interest rate cap but allows lenders to add the Federal Funds Rate to this cap. These changes aim to provide more transparency, consumer protection, and financial education in the consumer lending market, particularly for lower-income borrowers who are often most vulnerable to predatory lending practices.

https://www.ilga.gov/legislation/BillStatus.asp?DocNum=3455&GAID=18&DocTypeID=HB&SessionID=114&GA=104