We do not believe that there are any restrictions on interest rates and charges in Illinois law that apply to bank loans, whether secured or unsecured. Section 5e of the Banking Act states that “[n]otwithstanding the provisions of any other law in connection with extensions of credit” banks may charge any fees, “subject only to the provisions of [subsection 4(1)] of the Interest Act,” provided that the bank sets fees based on its “prudent business judgment and safe and sound operating standards.” 205 ILCS 5/5e. And subsection 4(1) of the Interest Act states that a bank is authorized “to receive or contract to receive and collect interest and charges at any rate or rates agreed upon by the bank or branch and the borrower.” 815 ILCS 205/4(1). (If the loan is secured by a mortgage on real estate, the Illinois Supreme court has confirmed that the Section 4.1a’s restrictions on loans secured by real estate were implicitly repealed by the later-enacted Section 4(1)(l) of the Interest Act. 815 ILCS 205/4(1)(l)United States Bank Nat’l Ass’n v. Clark, 216 Ill.2d 334, 349 (2005); see also IDFPR Interpretive Letter 98-01.)

With that said, the High Risk Home Loan Act does impose several restrictions on home equity loans that are considered “high risk.” One of the triggers for a loan to be considered high risk is the interest rate; if the rate exceeds the applicable U.S. Treasury rate by 6% (first lien mortgages) or 8% (second lien mortgages), it is a high risk home loan. 12 CFR 1026.32(d)(4). Also, both the federal and state versions of the Service Member Civil Relief Act/Servicemembers Civil Relief Act limit interest rates that can be charged during a service member’s active duty (815 ILCS 205/4.0550 USC App. 527(a)).