Bill Text: IL HB5177 | 2019-2020 | 101st General Assembly | Introduced

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Bill Title: Amends the Motor Vehicle Leasing Act. Provides that a lessee is not liable for charges for the early termination of a lease agreement if the lessee has died before the end of the lease.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Introduced - Dead) 2020-02-18 - Added Co-Sponsor Rep. Diane Pappas [HB5177 Detail]

Download: Illinois-2019-HB5177-Introduced.html

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101ST GENERAL ASSEMBLY State of Illinois 2019 and 2020 HB5177 Introduced , by Rep. Daniel Didech SYNOPSIS AS INTRODUCED:
815 ILCS 636/25
815 ILCS 636/45
Amends the Motor Vehicle Leasing Act. Provides that a lessee is not liable for charges for the early termination of a lease agreement if the lessee has died before the end of the lease.
LRB101 18451 JLS 67899 b
A BILL FOR
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AN ACT concerning business.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Motor Vehicle Leasing Act is amended by
changing Sections 25 and 45 as follows:
(815 ILCS 636/25)
Sec. 25. Requirements for a consumer lease.
(a) A consumer lease shall be in writing and signed by the
lessor and the lessee.
(b) The printed portion of the consumer lease, other than
directions for completion of the consumer lease, shall be
printed in a size equal to at least eight-point type. The
consumer lease shall contain the following items printed or
written in a conspicuous manner:
(1) At the top of the consumer lease, in at least
10-point bold capitalized type, the words "MOTOR VEHICLE
LEASE AGREEMENT".
(2) If physical damage or liability insurance coverage
for bodily injury and property damage caused to others is
not included in the consumer lease, a notice in at least
10-point bold capitalized type, substantially similar to
the following: "NO PHYSICAL DAMAGE OR LIABILITY INSURANCE
COVERAGE FOR BODILY INJURY OR PROPERTY DAMAGE CAUSED TO

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OTHERS IS INCLUDED IN THIS LEASE."
(3) Directly above the acknowledgement permitted by
subsection (c) of this Section to appear above the space
reserved for the lessee's signature, a written notice
substantially similar to the following:
"NOTICE TO THE LESSEE: This is a lease. You have no
ownership rights in the vehicle unless and until you
exercise your option to purchase the vehicle, if this
lease contains a purchase option. Do not sign this
lease before you read it. Early termination may require
you to pay a substantial amount. You are entitled to a
completed copy of this lease when you sign it."
(4) If the lease contains a provision imposing a fee or
penalty for early termination of the lease, a notice in at
least 10-point bold capitalized type stating: "THE LESSEE
IS NOT LIABLE FOR AN EARLY TERMINATION FEE IF THE LESSEE
HAS DIED BEFORE THE END OF THE LEASE.".
(c) The lessor shall deliver to the lessee a completed copy
of the consumer lease signed by the lessor. Any acknowledgement
by the lessee of delivery of a copy of the consumer lease shall
be conspicuous and shall appear directly above the space
reserved for the lessee's signature.
(d) The consumer lease shall contain the names of the
lessor and the lessee, the place of business of the lessor, the
residence or place of business of the lessee as specified by
the lessee, and a description of the vehicle, including its

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make, model year, model, and, if known, the vehicle's
identification number or marks.
(e) The consumer lease shall contain the following:
(1) All items required to be disclosed by the Consumer
Leasing Act and, in addition, the following items if the
items or substantially similar items are not required to be
disclosed by the Consumer Leasing Act.
(2) The capitalized cost, identified as "capitalized
cost", and a descriptive explanation such as "the agreed
upon amount determined at lease inception for all items and
services included in the lease".
(3) Any capitalized cost reduction, using the term
"capitalized cost reduction".
(4) The adjusted capitalized cost, using the term
"adjusted capitalized cost" and a descriptive explanation,
as applicable, such as "the agreed upon amount which serves
as the basis for determining the base lease payment. If you
are not in default, this amount plus any applicable early
termination charges determines your maximum early
termination obligation".
(5) If the lessee is not permitted to terminate the
lease at any time, the consumer lease shall contain a
conspicuous statement setting forth any prohibitions upon
the lessee's ability to terminate the consumer lease at any
time before the end of the scheduled term.
(6) The vehicle's residual value, using the term

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"residual value".
(f) (1) (A) Any insurance for which a charge is included in
the consumer lease shall be issued by an insurance
company authorized to do that kind of insurance
business in this State.
(B) The lessee shall have the privilege of
purchasing the insurance from an agent or broker of the
lessee's own selection and of selecting an insurance
company acceptable to the lessor provided, however,
that the inclusion of the insurance premium in the
consumer lease when the lessee selects the agent,
broker, or company shall be optional with the lessor
and in such case the lessor or assignee shall have no
obligation to send or cause to be sent to the lessee a
copy of the insurance policy.
(2) If the policy of liability insurance or other
insurance on the vehicle is canceled, any unearned
insurance premium refund received by the holder shall be
either (i) refunded to the lessee or (ii) credited,
together with the unearned portion of the lease charge
applicable thereto, to the lessee's obligations,
including, without limitation, to the final maturing lease
payments or, at the holder's option, to the obligations of
the lessee upon early or scheduled termination except to
the extent applied toward payment for similar insurance
protecting the interests of the lessee and the holder or

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either of them, provided that no such credit or refund need
be made if the amount thereof would be less than one
dollar.
(3) The amount, if any, included as a charge for group
credit insurance, liability insurance, or other insurance
on the vehicle shall not exceed the premiums permitted by
law for the insurance. If the group credit or other
insurance is canceled, the refund for unearned insurance
premiums received by the holder shall be either (i)
refunded to the lessee or (ii) credited, together with the
unearned portion of the lease charge applicable thereto,
either to the lessee's obligations, including, without
limitation, to the final maturing lease payments or, at the
holder's option, to the obligations of the lessee upon
early or scheduled termination, provided that no such
credit or refund need be made if the amount thereof would
be less than one dollar.
(g) If the lessee is obligated under the consumer lease to
maintain insurance on the vehicle and if subsequent to the
execution of the consumer lease the lessee fails to maintain
the required insurance, the holder, at its option, may buy
insurance insuring substantially the same risks for either the
interest of the lessee and the holder or the interest of either
of them. Any amount paid by the holder for insurance may be the
subject of a lease charge from the date the amount was paid by
the holder, as though the amount was part of the capitalized

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cost, shall be subject to the default provisions of the
consumer lease and shall be repayable by the lessee to the
lessor as provided in the consumer lease. Nothing in this
subsection shall prevent the holder from pursuing any other
remedy for default set forth in the consumer lease or provided
by law.
(h) (1) The holder may, if the consumer lease so provides,
collect a late charge on each lease payment in default for a
period of 10 days in the amount or amounts agreed to in the
consumer lease.
(2) The holder may not assess or collect a late charge
under paragraph (1) of this subsection when the only
delinquency is late charges assessed on an earlier lease
payment or payments.
(3) The consumer lease may provide that in the event of
default by the lessee, the lessee shall pay collection
costs, court costs, and, where the consumer lease is
referred to an attorney not a salaried employee of the
holder for collection, reasonable attorneys' fees.
(i) No consumer lease shall be signed by any party thereto
when it contains blank spaces to be filled in after it has been
signed except that, if delivery of the vehicle is not made at
the time of the execution of the consumer lease, the vehicle's
identifying numbers or marks or similar information and the due
date of the first payment may be inserted in the consumer lease
after its execution. The lessee's written acknowledgement,

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conforming to the requirements of subsection (c) of this
Section, of delivery of a copy of the consumer lease shall be
conclusive proof of the delivery of a copy of the consumer
lease and of compliance with this subsection in any action or
proceeding by or against the holder, lessor, or an assignee of
the consumer lease without knowledge to the contrary at the
time of the assignment.
(j) Notwithstanding any contrary provision of this Act or
other laws of this State, (a) a holder may purchase, sell, or
otherwise acquire or transfer an interest in a consumer lease
or a vehicle subject to a consumer lease, on such terms and
conditions and for such price as may be mutually agreed upon,
and (b) no filing of the sale or transfer, no notice to the
lessee of the sale or transfer, and no requirement that the
holder be deprived of dominion over payments due under the
consumer lease or over the vehicle if repossessed by or
returned to the holder shall be necessary to the validity of a
written sale or transfer of a consumer lease as against
creditors, subsequent purchasers, pledgees, mortgagees, or
encumbrancers of the holder.
(k) Unless the lessee has notice of actual or intended sale
or transfer of a consumer lease, payment thereunder made by the
lessee to the last known holder of the consumer lease shall be
binding upon all subsequent holders or assignees. A person who
sells or transfers a lease and thereafter receives payment from
the lessee shall forward the payment in the form in which it

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was received to the person to whom the lease had been sold or
transferred, unless the person to whom the lease has been sold
or transferred agrees in writing that the person who sells or
transfers the lease may retain the payment.
(l) (1) Upon written request from the lessee, the holder
shall give or forward to the lessee a written statement of the
dates and amounts of the periodic lease payments that have been
received by the holder under the consumer lease and the total
amount of the remaining periodic lease payments. Any amounts in
the statement that are estimated shall be identified as
estimated. A lessee shall be given a written receipt for any
payment made in cash.
(2) Upon written request from a lessee who is then
entitled to terminate the consumer lease early, the holder
shall give or forward to the lessee a written statement of
the lessee's projected early termination obligation under
the consumer lease without consideration on the value of
the vehicle.
(3) No charge shall be imposed on the lessee for
preparation by the holder of the lease of a single
statement under paragraph (1) or (2) in a 12-month period.
A holder may impose a reasonable fee, not to exceed $20 per
statement, for the preparation of additional early
termination statements in a 12-month period, provided that
the charge has been disclosed to the lessee either orally
or in writing.

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(m) No consumer lease shall contain any of the following
provisions:
(1) In the absence of the lessee's default, the holder
may, arbitrarily and without reasonable cause, accelerate
the maturity of any part or all of the amount owing
thereon.
(2) A power of attorney is given to confess judgment or
an assignment of wages is given.
(3) The lessee waives any right of action against the
holder for any illegal act committed in the collection of
payments under the consumer lease or in the repossession of
the vehicle.
(4) The lessee executes a power of attorney appointing
the holder or other person acting on behalf of the holder
as the lessee's agent in collection of payments under the
consumer lease or in the repossession of the vehicle,
provided, however, that this paragraph shall not prohibit
the inclusion in a consumer lease of a limited power of
attorney or other provision authorizing the holder to
execute in the lessee's name any proofs of insurance claims
or losses, titling and registration documents, odometer
statements, or for any other purpose properly associated
with the lease transaction or to endorse the lessee's name
on any insurance settlement or premium, rebate draft,
refund, or check.
(5) The holder is relieved from liability for any legal

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remedy which the lessee may have had against the holder
under the consumer lease, or any separate instrument
executed in connection therewith.
(6) The lessee waives any provision of this Act.
(n) Any provision prohibited by this Act shall be
unenforceable but shall not otherwise affect the validity of a
consumer lease.
(Source: P.A. 89-625, eff. 1-1-97.)
(815 ILCS 636/45)
Sec. 45. Restriction on early termination liability.
(a) The lessee shall have the right to terminate the
consumer lease at any time after the lessee has made 12 full
periodic lease payments for which lease charges have been
accrued by the holder or, in the case of a single payment
lease, at the expiration of 12 months from the consummation of
the lease. Nothing in this Section shall be deemed to prohibit
the holder from permitting the lessee to terminate the consumer
lease before the expiration of 12 months. A lessee may not be
held liable for early termination fees if the lessee has died
before the end of the lease.
(b) If a consumer lease is terminated early and there is no
purchase option or the lessee does not exercise a purchase
option, the lessee's early termination obligation may not
exceed an amount equal to the sum of the following:
(1) Any unpaid lease payments that accrued through the

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date of early termination.
(2) Any other unpaid amounts, other than excess mileage
charges, arising under the terms of the lease.
(3) Any official fees and taxes imposed in connection
with lease termination.
(4) A disposition fee in an amount set forth in the
consumer lease.
(5) The reasonable costs of retaking, storing,
preparing for sale, and selling the vehicle, including
reasonable attorneys' fees and collection and court costs
incurred by the lessor in recovering or securing possession
of the vehicle.
(6) The amount, if any, by which (i) the balance
subject to lease charge plus the lease charge earned in
advance for the computational period in which the early
termination occurs, calculated in accordance with the
constant yield method or any other generally accepted lease
accounting method exceeds (ii) the realized value of the
vehicle.
(7) Any other early termination charge expressly
disclosed in the consumer lease.
(c) As an alternative to the constant yield and other
generally accepted lease accounting methods of determining the
depreciation amounts accrued through the date of early
termination of a precomputed lease transaction, those amounts
may be determined under paragraph (6) of subsection (b) of this

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Section by using a lease provision under which the lease charge
is calculated on the adjusted capitalized cost for the time
outstanding according to a generally accepted actuarial
method.
(d) This Section does not limit or restrict the manner of
calculating the lessee's early termination obligation, whether
by way of unamortized capitalized cost, discounted present
value of remaining lease payments, multiples of monthly
payments, or otherwise.
(e) Any refundable security deposit or advance lease
payment held by the holder may be retained by the holder or
lessor and shall be credited against the lessee's early
termination obligation. The amount of the security deposit or
advance lease payment in excess of the amount of the lessee's
early termination obligation shall be returned to the lessee.
The holder or lessor is not obligated to pay interest to the
lessee on the security deposit.
(Source: P.A. 89-625, eff. 1-1-97.)