Yes, it is permissible to establish a minimum late fee on consumer loans, including vehicle loans and unsecured loans, provided that the customer contracted to pay the fee in your loan agreement. 

Under Illinois law, there are very few limitations on interest rates and fees charged by banks, whether on commercial or consumer loans. The Illinois 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. . .” The Interest Act 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.”

For resources related to our guidance, please see:

• Illinois Banking Act, 205 ILCS 5/5e (“Notwithstanding the provisions of any other law in connection with extensions of credit, a State bank may elect to contract for and receive interest, fees, and other charges for extensions of credit subject only to the provisions of subsection (1) of Section 4 of the Interest Act. . . .”)

• Interest Act, 815 ILCS 205/4(1) (“It is lawful for a state bank . . . to receive or to contract to receive and collect interest and charges at any rate or rates agreed upon by the bank or branch and the borrower.”)