Illinois Governor Pat Quinn signed two new laws on Wednesday, protecting Illinois residents from risky home loans and from being unfairly sent to jail after non-payment of debt.
"Illinois consumers deserve the strongest protections possible from predatory lenders and unfair collection practices," Governor Quinn said. "These new laws will help consumers and empower Illinois families with a better understanding of lending and debt collection."
The first bill, Senate Bill 1692, makes the definition of a risky home loan clear to borrowers in an effort to keep them from falling into debt. It also sets limits on fees and penalties that can be charged to borrowers when they receive a loan. Mortgages will also be prohibited from containing penalties if a loan is paid off prior to the end of its term.
In addition, SB 1692 will set a limit to how much a taxpayer seeking a check or loan tied to their federal or state tax refunds can be charged. Companies offering those loans must also remind consumers that if they file their tax return electronically, refunds owed can be deposited directly into their personal account within eight to fifteen days at no cost to them. The law will go into effect on January 1.
The second bill, House Bill 5434 clarifies the best practices for post-judgment collection of debts. Debt collectors and lenders must provide evidence that unprotected assets may exist to repay the debt prior to sending the debtor to jail. The goal of the law is to prevent Illinois residents from being sent to jail for being subject to a payment order they cannot afford, or for missing a hearing they did not receive notice of. HB 5434 goes into effect immediately.
For an in-depth look at how these laws will affect residents, tune into 13 News at 5.
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