SB 3523 — TAX REFUND ANTICIPATION LOAN

*LRB09718601JLS65596b* SB3523 97THEngrossed GENERALLRB097 ASSEMBLY18601 StateJLS of65596 Illinoisb andAN 2012ACT SB3523concerning Introducedtax 2/8/2012,refunds. by Sen.

Jacqueline Y.

Collins SYNOPSIS AS INTRODUCED:

ILCS 405/3.1 from Ch.

17, par.

4805 ILCS 177/1 ILCS 177/5 ILCS 177/10 ILCS 177/15 ILCS 177/20 new ILCS 177/25 new ILCS 177/30 new ILCS 177/35 new ILCS 505/2NNN new short title of the Act to the Tax Refund Anticipation Loan Reform Act.he Makes changes concerning disclosure requirements, prohibited activities, interest rate limits for non-bank refund anticipation loans, and defined terms.

Provides a calculation for the refund anticipation loan interest rate.

Provides that a person who violates the Tax Refund Anticipation Loan Reform Act commits an unlawful practice under the Consumer Fraud and Deceptive Practices Act.

Makes conforming changes in the Currency Exchange Act and the Consumer Fraud and Deceptive Business Practices Act.

Contains a severability provision.

Effective immediately.

LRB097 18601 JLS 65596 b A BILL FOR SB3523 LRB097 18601 JLS 65596 b AN ACT concerning tax refunds.

The Tax Refund Anticipation Loan Disclosure Act is amended by changing Sections 1, 5, 10, and 15 and by adding Sections 20, 25, 30, 35, and 3540 as follows:

This Act may be cited as the Tax SB3523 Engrossed - 2 - LRB097 18601 JLS 65596 b Refund Anticipation Loan Reform Disclosure Act.

"Facilitator" does not SB3523 Engrossed - 3 - LRB097 18601 JLS 65596 b include a bank, savings bank, savings and loan association, or credit union, or licensee under the Consumer Installment Loan Act operating under the laws of the United States or this State and does not include any person who acts solely as an intermediary and does not deal with the public in the making of the refund anticipation loan.

"Person" does not, however, mean a bank, savings bank, savings and loan association, or credit union operating under the laws of the United States or this State.

"Refund anticipation loan" means a loan that is secured by or that the creditor arranges arranged to be repaid directly or indirectly from the proceeds of the consumer's a borrower's income tax refund or tax credits refunds.

"Refund anticipation loan" also includes any sale, assignment, or purchase of a consumer's tax refund at a discount or for a fee, whether or not the consumer SB3523 Engrossed - 4 - LRB097 18601 JLS 65596 b is required to repay the buyer or assignee if the Internal Revenue Service denies or reduces the consumer's tax refund.

SB3523 - 4 - LRB097 18601 JLS 65596 b "Refund anticipation loan fee" means the charges, fees, or other consideration charged or imposed directly or indirectly by the creditor facilitator for the making of or in connection with a refund anticipation loan.

(i) the maturity of the loan for the purpose of determining the refund SB3523 Engrossed - 5 - LRB097 18601 JLS 65596 b anticipation loan interest rate shall be assumed to be the estimated date when the tax refund will be deposited in the SB3523 - 5 - LRB097 18601 JLS 65596 b deposit account;

(2.5) for refund anticipation loans, the total cost to SB3523 Engrossed - 6 - LRB097 18601 JLS 65596 b the consumer borrower for utilizing a refund anticipation loan;

(3) for refund anticipation loans, the estimated date that the loan proceeds will be SB3523 - 6 - LRB097 18601 JLS 65596 b paid to the consumer borrower if the loan is approved;

(4) for refund anticipation loans, that the consumer borrower is responsible for repayment of the loan and related fees in the event the tax refund is not paid or not paid in full;

and (5) for refund anticipation loans, the availability of electronic filing for the income tax return of the consumer borrower and the average time announced by the federal Internal Revenue Service within which the consumer borrower can expect to receive a refund if the consumer's borrower's return is filed electronically and the consumer borrower does not obtain a refund anticipation loan.

(a) A facilitator shall display a schedule showing the current fees for refund anticipation loans, if refund anticipation loans are offered, or refund anticipation checks, if refund anticipation checks are offered, facilitated at the office.

(b) A facilitator who offers refund anticipation loans SB3523 Engrossed - 7 - LRB097 18601 JLS 65596 b shall display on each fee schedule examples of the refund anticipation loan interest rates for refund anticipation loans of at least 5 different amounts, such as $300, $500, $1,000, $1,500, $2,000, and $5,000.

(c) A facilitator who offers refund anticipation loans shall also prominently display on each fee schedule:

(i) a legend, centered, in bold, capital letters, SB3523 - 7 - LRB097 18601 JLS 65596 b and in one-inch letters stating:

You can have your tax return filed electronically and your refund direct deposited into your own bankfinancial institution account without obtaining a loan or paying fees for an extra product.".

(e) A facilitator may not facilitate a refund anticipation SB3523 Engrossed - 8 - LRB097 18601 JLS 65596 b loan or refund anticipation check unless (i) the disclosures required by this Section are displayed and (ii) the fee actually charged for the refund anticipation loan or refund anticipation check is the same as the fee displayed on the schedule.

In addition, a facilitator who violates this Act shall be liable to any aggrieved borrower in an amount equal to 3 times the refund SB3523 - 8 - LRB097 18601 JLS 65596 b anticipation loan fee, plus a reasonable attorney's fee, in a civil action brought in the circuit court by the aggrieved borrower or by the Attorney General on behalf of the aggrieved borrower.

SB3523 Engrossed - 9 - LRB097 18601 JLS 65596 b (b) A facilitator may not market or advertise a refund anticipation check without including this language verbatim:

SB3523 - 9 - LRB097 18601 JLS 65596 b (815 ILCS 177/25 new) Sec.

(a) Charge or impose any fee, charge, or other consideration in the making or facilitating of a refund anticipation loan or refund anticipation check apart from the fee charged by the creditor or bankfinancial institution that provides the loan or check.

(c) Directly or indirectly arrange for any third party to charge any interest, fee, or charge related to a refund SB3523 Engrossed - 10 - LRB097 18601 JLS 65596 b anticipation loan or refund anticipation check, other than the refund anticipation loan or refund anticipation check fee imposed by the creditor, including but not limited to:

SB3523 - 10 - LRB097 18601 JLS 65596 b (i) A hold harmless clause;

This provision shall not affect the right of the parties to agree that certain SB3523 Engrossed - 11 - LRB097 18601 JLS 65596 b specified information is a trade secret or otherwise confidential, or to later agree, after the dispute arises, to keep a resolution confidential.

(f) Directly or indirectly, individually or in conjunction or cooperation with another person, engage in the collection of SB3523 - 11 - LRB097 18601 JLS 65596 b an outstanding or delinquent refund anticipation loan for any creditor or assignee, including soliciting the execution of, processing, receiving, or accepting an application or agreement for a refund anticipation loan or refund anticipation check that contains a provision permitting the creditor to repay, by offset or other means, an outstanding or delinquent refund anticipation loan for that creditor or any creditor from the proceeds of the consumer's tax refund.

(g) Facilitate any loan that is secured by or that the creditor arranges to be repaid directly from the proceeds of the consumer's State tax refund from the Illinois State Treasury.treasury.

(a) No person shall make or facilitate a refund SB3523 Engrossed - 12 - LRB097 18601 JLS 65596 b anticipation loan for which the refund anticipation loan interest rate is greater than 36% per annum.