January 19, 2021

Partner Catherine Brennan comments for Auto Finance News on passage of Illinois rate cap bill

On January 13, the Illinois Senate passed SB 1792, which will provide sweeping changes to the rate authority for credit transactions subject to Illinois law, including a 36% "all-in" interest rate cap on consumer loans. Auto Finance News spoke to Hudson Cook Partner Catherine Brennan about the changes and how the interest cap will affect lenders operating in the state. The bill is expected to be signed by Illinois Governor J.B. Pritzker, go into effect immediately after signing, and affect loans originated after that date.

Catherine noted that prior to the bill, interest rates in Illinois were open-ended. "Any loan violating the rate cap is null and void and the lender will have no right to collect, attempt to collect, receive, or retain any principal, fee, interest, or charges related to the loan," Catherine wrote in a recent client alert. "The bill also applies to any person or entity who markets, brokers, arranges, or facilitates the loan and holds the right, requirement, or first right of refusal to purchase loans, receivables, or interests in the loans."

Catherine assists national and state banks, investment banks, consumer and commercial finance companies, mortgage bankers, installment lenders and other licensed lenders in the development and maintenance of nationwide consumer and commercial lending programs. She engages in credit due diligence on behalf of investors in fintech firms, bank partnership platforms, small business lenders, merchant cash advance companies, consumer finance companies, title loan companies and payday lenders.

Subscribers to Auto Finance News may click here to read the article.

Hudson Cook, LLP, provides articles, webinars and other content on its website from time to time provided both by attorneys with Hudson Cook, LLP, and by other outside authors, for information purposes only. Hudson Cook, LLP, does not warrant the accuracy or completeness of the content, and has no duty to correct or update information contained on its website. The views and opinions contained in the content provided on the Hudson Cook, LLP, website do not constitute the views and opinion of the firm. Such content does not constitute legal advice from such authors or from Hudson Cook, LLP. For legal advice on a matter, one should seek the advice of counsel.