Regulation Z allows interest (finance charges) to accrue at the loan closing and does not require you to wait until the expiration of the rescission period (provided that your loan agreement allows for this). Comment 3(iii), Official Staff Commentary, 12 CFR 1026.15(c), 12 CFR 1026.23(c).

As to Illinois law, there are very few limitations on interest charges. 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 “interest, fees, and other charges . . . subject only to the provisions of [subsection 4(1)] of the Interest Act” and subject to any laws applicable to “credit secured by residential real estate.” (Emphasis in bold added.) The only provisos are that the customer must agree to the charges and the bank must set its fees using its “prudent business judgment and safe and sound operating standards.” 205 ILCS 5/5e.

While the Banking Act does refer to the Interest Act (subsection (4)(1)), that law also allows banks to charge any interest rate that a customer agrees to pay — it authorizes banks “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). As to credit secured by real estate, that section goes on to state that “it is lawful to charge, contract for, and receive any rate or amount of interest or compensation with respect to . . . (l) Loans secured by a mortgage on real estate.” 815 ILCS 205/4(1)(l). And, the Illinois Supreme court has confirmed this conclusion specifically as to loans secured by real property (concluding that restrictions on interest rates and charges found elsewhere in the Interest Act were implicitly repealed by the later-enacted Section 4(1)(l) of the Interest Act). 815 ILCS 205/4(1)(l)United States Bank Nat’l Ass’n v. Clark, 216 Ill.2d 334, 349 (2005); see also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.