We received notice that the Consumer Fraud and Deceptive Business Practices Act has been amended to require lenders or their agents to provide a new disclosure pursuant to Section 2WWW when offering terms for a mortgage note for the purchase of a manufactured home. Does this provision apply to banks? Section 2BB indicates that the Consumer Fraud and Deceptive Business Practices Act does not apply to banks.

Yes, this provision applies to banks when offering mortgage loans for the purchase of manufactured homes that have not been deemed to be real property, and we do not believe the exemption under Section 2BB is applicable to this requirement.

The disclosure requirement in Section 2WWW of the Consumer Fraud and Deceptive Business Practices Act applies to lenders offering purchase loans for manufactured homes, including when banks offer such loans. Section 2WWW applies only to manufactured loans as defined in the Mobile Home Act (which excludes campers, recreational vehicles, and modular homes) and expressly does not apply to manufactured homes that have been converted into real property under the Conveyance and Encumbrance of Manufactured Homes as Real Property and Severance Act. However, it does not exempt banks.

The language in Section 2BB of the Act that exempts “any State or national bank” or “State or federal savings and loan association” is specific to the provisions of Section 2BB, which applies only to the assembly, drafting, execution, and funding of a living trust document by a corporation or nonlawyer.

For resources related to our guidance, please see:

Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/2WWW(a) (“A lender, or agent of a lending company, when offering terms for a mortgage note for the purchase of a manufactured home, as defined in the Mobile Home Park Act, that has not been caused to be deemed to be real property by satisfying the requirements of the Conveyance and Encumbrance of Manufactured Homes as Real Property and Severance Act, shall disclose:

(1) any affiliation between the landlord and the lending company;

(2) that the loan is a chattel loan;

(3) that the terms of a chattel loan prohibit refinancing;

(4) that, depending on where the consumer affixes the manufactured home (be it property owned by the consumer or on certain types of leased land), the manufactured home may qualify as real property under the Conveyance and Encumbrance of Manufactured Homes as Real Property and Severance Act; and

(5) any other reason that prohibits refinancing.”)

Mobile Home Park Act, 210 ILCS 115/2.1 (“‘Manufactured home’ means a factory-assembled, completely integrated structure designed for permanent habitation, with a permanent chassis, and so constructed as to permit its transport, on wheels temporarily or permanently attached to its frame, and is a movable or portable unit that is (i) 8 body feet or more in width, (ii) 40 body feet or more in length, and (iii) 320 or more square feet, constructed to be towed on its own chassis (comprised of frame and wheels) from the place of its construction to the location, or subsequent locations, at which it is connected to utilities for year-round occupancy for use as a permanent habitation, and designed and situated so as to permit its occupancy as a dwelling place for one or more persons, and specifically includes a ‘manufactured home’ as defined in subdivision (53) of Section 9-102 of the Uniform Commercial Code. The term shall include units containing parts that may be folded, collapsed, or telescoped when being towed and that may be expected to provide additional cubic capacity, and that are designed to be joined into one integral unit capable of being separated again into the components for repeated towing. The term excludes campers and recreational vehicles. The term ‘mobile home’ shall not include modular homes and their support systems. The words ‘mobile home’ and ‘manufactured home’ are synonymous for the purposes of this Act.”)

Conveyance and Encumbrance of Manufactured Homes as Real Property and Severance Act, 765 ILCS 170/5-1, et seq.

Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/2BB (“The assembly, drafting, execution, and funding of a living trust document or any of those acts by a corporation or a nonlawyer is an unlawful practice within the meaning of this Act. Any person who violates this Section is guilty of a Class A misdemeanor. A person who is convicted of a second or subsequent violation of this Section is guilty of a Class 4 felony.
This Section shall not apply to any State or national bank, State or federal savings and loan association, savings bank, trust company, or any other corporation that has received a certificate of authority authorizing the exercise of trust powers under the Illinois Corporate Fiduciary Act. . . .”)