No. The Illinois Interest Act (not the Illinois Banking Act) does contain a provision that generally operates to prohibit lenders from taking a security interest in real property on “a revolving credit arrangement” under $5,000. However, this prohibition does not apply to bank lenders. The Illinois Financial Services Development Act exempts “any financial institution” from that prohibition and defines a “financial institution” to include an out-of-state bank with at least one branch in Illinois, in addition to any bank that has its main office in Illinois.

Regarding closed-end loans, we are not aware of any Illinois law that would operate to prohibit a lender from taking a security interest in real property on a loan under $5,000.

For resources related to our guidance, please see:

• Illinois Interest Act, 815 ILCS 205/4.1 (“A revolving credit arrangement which grants the debtor a line of credit in excess of $5,000 may include provisions granting the lender a security interest in real property or in a beneficial interest in a land trust to secure amounts of credit extended by the lender.”)

• Illinois Financial Services Development Act, 205 ILCS 675/4 (“Notwithstanding the provisions of any other laws in connection with revolving credit plans, any financial institution may, subject to the other provisions of this Section 4 offer and extend credit under a revolving credit plan to a borrower and in connection therewith may charge and collect interest and other charges, may take real and personal property as security therefor and may provide in the agreement governing the revolving credit plan for such other terms and conditions as the financial institution and borrower may agree upon from time to time.”)

• Illinois Financial Services Development Act, 205 ILCS 675/3 (“(a) ‘Financial institution’ means any bank with its main office or, after May 31, 1997, a branch in this State . . . .”)