Statement Regarding the Payday Loan Database

On March 21, 2011, Public Act (PA) 96-936 amending the Consumer Installment Loan Act (CILA) and the Payday Loan Reform Act (PLRA) will become effective. The Department of Financial and Professional Regulation, Division of Financial Institutions (DFI) has received numerous questions concerning implementation of the amendment. While DFI does not issue “advisory opinions” or dispense legal advice, the public’s interest in the topic merits this statement. Parties seeking a legal opinion should consult their attorney.

The amendment requires numerous changes to the existing certified database that the Department uses to monitor and regulate payday lending in Illinois. The database, which went live in February 2006, was established by the PLRA, which took effect in December 2005. When the PLRA took effect, but before the database went live, licensees used paper forms of verification. As of March 21, 2011, the same procedure will be accepted until the “go live” date announced by Department.

For small consumer loans, as defined under CILA as amended by PA 96-936, a licensee need only verify that the consumer has no other small consumer loans with that licensee. For payday loans and installment payday loans, as defined under the PLRA as amended by PA 96-936, a licensee should obtain written verification from the consumer using the form that is linked here.

All PLRA loans originated prior to March 21, 2011, must continue to be maintained via the database as required under the PLRA, and nothing in this statement applies to Title-Secured Loans originated under CILA.