Important Update on Predatory Lending Database Law

The Illinois Department of Financial and Professional Regulation (IDFPR) is expected to publish today revised rules pertaining to the Predatory Lending Database legislation that becomes law on January 1, 2006 and to publish emergency rules which will clarify that, while the law takes effect January 1, no loan must meet its terms until the pilot program can officially start.

An unofficial copy of the revised rules is circulating around the industry.  It does NOT define the "pilot program area" within Cook County to which the new database law applies, but according to Susan Hofer, spokeswoman for the IDFPR, who was quoted in the 12/22/05 issue of the Chicago Sun-Times, the areas affected will be announced by February 1, 2006 and that at a later date, IDFPR will announce that the program has started and that loans beginning 30 days after that notice will be subject to the law.

The unofficial copy of the revised rules that is circulating around the industry does, however, contain the following information that is expected to be announced today as well:

346.35 Declaration of Inception Date
The Secretary of Financial and Professional Regulation will declare in writing the date of creation ("inception date") of the Pilot Program created by Section  70(b) of the Residential Real Property Disclosure Act [765 ILCS 77/70(b)].  The inception date shall be at least 30 days after the date the Secretary's declaration is issued. The Secretary's declaration will be established in this Part and will be posted on the Department's website. 

It is also expected that the Department will communicate the declaration to affected licensees of the Department.  Until the inception date, none of the duties, obligations, contingencies or consequences of or from the Pilot Program will be imposed. The four-year term of the program will begin on the inception date.

The official copy of the revised rules will be published in the Illinois Register and can be found at:
http://www.cyberdriveillinois.com/publications/indexpub.html
 
The IL MBA will formally comment on the revised rules within the 15 day comment period once they are published in the Illinois Register.