Press Releases
FOR IMMEDIATE RELEASE
For further information contact:
Joe McTigue
574.243.6040 ext. 239
Illinois 36% APR Rate Cap Signed into Law
On March 23, 2021 Governor Pritzker signed Senate Bill 1792 which enacts The Predatory Loan Prevention Act. This law goes into effect immediately and will significantly impact the extension of credit in the state of Illinois. As the consumer-finance industry awaits to see if regulations are released for guidance implementing the law, Carleton has already begun calculation changes in order to help our clients and partners stay ahead of this compliance challenge. Here is what we know:
Significant Provisions Impacting Computational Requirements:
- Replaces existing maximum charge statutory requirements with:
- A 36% Annual Percentage Rate limit
- Aligns computational requirements with the MAPR for the Military Lending Act
- The new 36% cap will extend to both Loans and Retail Installment Sales
- Exempt institutions:
- Federally chartered banks
- Savings banks
- Savings and loan associations
- Credit Unions
- The Act will be effective immediately upon signature by the Governor.
SB 1792 Aligns Compliance Requirements With the Military APR:
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The Military Loan Act defines “interest” for purposes of complying with the rate cap as including:
- Application fees
- Points, origination fees, participation fees—all fees in the TILA finance charge
- Any fee, premium, or charge for credit insurance
- Any debt protection charges/fees (cancellation and suspension)
- Any credit-related ancillary product sold in conjunction with the transaction
- The controversy over the undefined term “credit-related ancillary product” will extend to this legislation unless subsequent rules and regulations provide specific clarity. To date, the Department of Defense has refused to define this term in relation to the MAPR calculation. Hopefully, new rules and regulations implementing SB 1792 will dive further into the granular details on calculating a MAPR in compliance with this new law.
Carleton has maintained regular communication with industry professionals and trade associations to ensure we are assisting our clients implement these necessary updates. Additionally, Carleton has extensive knowledge and experience with the Military Lending Act and the associated computational requirements. Submit a “Contact Us” request today.
About Carleton, Inc.:
Carleton is the country's leading provider of financial calculation software, loan origination compliance support, and document generation software. Based in South Bend, Indiana, Carleton possesses over 50 years of leadership in this rapidly-changing regulatory industry. Carleton guarantees accuracy in all their calculations and disclosures enabling their partners to fulfill compliance requirements today and into the future. To learn more about Carleton Lending Solutions, go to www.carletoninc.com or contact Joe McTigue, Client Engagement Executive at 800-433-0090 Ext. 239 or jmctigue@carletoninc.com.