Topic: Usury Laws
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Can we charge increased interest rates on loans after they mature under Illinois law? Is the answer different for consumer loans?
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There are very few limitations on interest rates and fees charged by banks under Illinois law, whether for commercial or consumer loans. However, any post-maturity rates (also known as default rates) must be agreed to by your customers in your loan agreements, and they may be subject to court scrutiny if they are not considered…
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Can we charge a fee for ACH loan payments or payments that are made by check that are returned to us NSF?
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We do not believe that there are any limitations on charging reasonable NSF fees that would apply to a bank. There are very few limitations on interest rates and fees charged by banks under Illinois law. However, any NSF fees must be agreed to by your customers in your loan agreement. Section 5e of the…
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Is there anything in Illinois law that would prohibit a bank from charging a title insurance review or inspection fee to a commercial loan borrower?
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In general, the answer is no. Under Illinois law, there are very few limitations on fees that banks can charge, whether on commercial or consumer loans. Section 5e of the 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…
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Is there any kind of regulation in Illinois that would cap or restrict commercial loan fees?
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In general, the answer is no. Under Illinois law, there are very few limitations on fees that banks can charge, whether on commercial or consumer loans. Section 5e of the 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…
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Can we charge post maturity interest rates on residential loans in Illinois?
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The Illinois Interest Act does address default rates. Section 4.1a states that default rates are limited to five-percent of the installment amount and that they cannot be charged until ten days after default. 815 ILCS 205/4.1a(f). However, we do not believe that the restrictions on interest rates and charges in the Interest Act apply to…
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Are NSF fees allowed under the Illinois Interest Act for loans of less than $25,000?
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We do not believe that the limitations on installment loan fees in Section 4a of the Interest Act apply to your institution. In fact, there are very few limitations on interest rates and fees charged by banks under Illinois law. Section 5e of the Banking Act states that a bank may “elect to contract for…
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Can we charge/rebate to customers the premiums for Lenders Single Interest insurance?
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We are not aware of any restrictions on charging or rebating to customers the premiums for Lenders Single Interest (LSI) insurance (also known as Vendors Single Interest (VSI) insurance). The Illinois Collateral Protection Act does govern certain types of collateral protection insurance, but it does not apply to the following types of insurance (among other…
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We have set late charges at 10% of a loan payment amount, with a minimum of $10. Our jumbo loan contract just sets a 10% late fee, with no mention of a minimum of $10. Can we omit the $10 minimum from our jumbo loan contracts?
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We don’t see any problem with omitting your minimum charge policy in the loan agreement for jumbo loans (where the loan principal is greater than $250,000), provided there is no chance that a 10% charge could be lower than $10. Section 5e of the Banking Act states that a bank may “elect to contract for…
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Is there a state regulation on how many mortgages can be on commercial real estate? We have an application on commercial real estate that already has two mortgages.
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We are not aware of any restrictions on the number of mortgages that can be filed on a single commercial property under Illinois law.
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Is there an Illinois law that prohibits returned check fees that exceed $4.50?
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Under the Uniform Commercial Code, returned check fees may not exceed $4.50 for “a commercial checking account or other similar commercial account.” 810 ILCS 5/3-806. As to consumer accounts, we are not aware of any limitations on returned check fees that would apply to banks. Under Illinois law, there are very few limitations on fees…