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Is it true that Illinois requires loan interest to be calculated on a 365/365 basis? – IBA Compliance Connection

IBA Compliance Connection

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Is it true that Illinois requires loan interest to be calculated on a 365/365 basis?

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There have been no Illinois laws enacted on this subject since Public Act 96-1421 (August 3, 2010). The Illinois Interest Act still states that banks may use the 365/360 method to calculate interest on commercial loans. 815 ILCS 205/4(5). (Note that it is not the prevailing industry practice to use the 365/360 method for consumer loans, and banks should be aware of UDAAP concerns and the Illinois Consumer Fraud and Deceptive Business Practices Act in stating the interest rate in a consumer loan note.)