We believe you are permitted to charge borrowers an erecording fee when electronically recording a release deed (or release of mortgage) under Illinois law — provided your customers have agreed to the fee.

Although Section 4.1 of the Interest Act appears to prohibit lenders from charging borrowers for “expenses, including recording fees and otherwise” when releasing a mortgage lien, a separate section of the Interest Act permits banks to collect “interest and charges at any rate or rates agreed upon by the bank or branch and the borrower” and “charge, contract for, and receive any rate or amount of interest or compensation, except as otherwise provided in the Predatory Loan Prevention Act, with respect to . . . (l) Loans secured by a mortgage on real estate.”

Additionally, the Illinois Banking Act permits banks to charge any “interest, fees, and other charges . . . subject only to the provisions of [subsection 4(1)] of the Interest Act” and any laws applicable to “credit secured by residential real estate.” This Illinois Banking Act provision applies to bank lenders “[n]otwithstanding the provisions of any other law.”

For resources related to our guidance, please see:

• Interest Act, 815 ILCS 205/4.1 (“Whenever a lender is granted a security interest in real property or in a beneficial interest in a land trust, the lender . . . shall agree to pay all expenses, including recording fees and otherwise, to release any such security interest of record whenever it no longer secures any credit under a revolving credit arrangement.”)

• Interest Act, 815 ILCS 205/4(1) (“It is lawful for a state bank or a branch of an out-of-state bank, as those terms are defined in Section 2 of the Illinois Banking Act, 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. . . . It is lawful to charge, contract for, and receive any rate or amount of interest or compensation, except as otherwise provided in the Predatory Loan Prevention Act, with respect to the following transactions: . . . (l) Loans secured by a mortgage on real estate.”)

• Illinois Banking Act, 205 ILCS 5/5e(a) (“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, except for extensions of credit secured by residential real estate, which shall be subject to the laws applicable thereto.”)