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Does Illinois impose a minimum of $5,000 for lines of credit secured by a home? – IBA Compliance Connection

IBA Compliance Connection

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Does Illinois impose a minimum of $5,000 for lines of credit secured by a home?

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The Interest Act does not allow a lender to take a security interest in real property for a revolving line unless the line of credit is in excess of $5,000. 815 ILCS 205/4.1. However, the Illinois Financial Services Development Act exempts any “financial institution,” including Illinois banks, from that requirement. The law applies “notwithstanding the provisions of any other laws in connection with revolving credit plans” and expressly permits banks to offer revolving credit plans (including HELOCs) and to “take real and personal property as security therefor.” 205 ILCS 675/4.