20 Dennis M. O’Keefe, P.C. 1025 W. Everett Rd. Lake Forest, IL 60045 (847) 482-0400 dokeefe@dmokeefepc.com Each CATA member is entitled to a limited amount of general legal advice from the association’s general counsel, Dennis O’Keefe. Dennis has extensive experience in the automotive industry, dealer line associations and manufacturer relations, as well as state and local government. CATA QUESTIONS AND ANSWERS The following is for informational purposes only and does not constitute a legal opinion. Should the need occur, members are encouraged to seek legal counsel. QUESTION 1: What is required under the Illinois Predatory Loan Prevention Act (PLPA)? The Illinois PLPA, which became effective Aug. 1, 2022, requires the dealer to provide a statutory notice to every customer who finances a vehicle explaining that a retailer shall not contract for or receive charges exceeding a 36% annual percentage rate on the unpaid balance of the amount financed for a retail installment contract, as calculated under the Illinois PLPA. The notice must also provide that any retail installment contract with a PLPA APR over 36% is null and void, and no person or entity shall have any right to collect, attempt to collect, receive or retain any principal, fee, interest or charges related to the retail installment contract. Further, the notice must also provide that the annual percentage rate disclosed in any retail installment contract may be lower than the PLPA APR. It should be noted that all retail installment contracts or agreements must include this language as a “separate disclosure” signed by the consumer; the disclosure must be “clear and conspicuous (while clear and conspicuous is not defined in the PLPA, other regulatory acts require that a clear and conspicuous disclosure must be in at least 10 point type); the disclosure must be in English and in the same language as the retail installment contract; and the PLPA APR is based on the expansive definition of APR in the Military Lending Act (which includes all fees and charges, including charges and fees for single premium credit insurance and other ancillary products sold in connection with a credit transaction, which might otherwise be excludable from the APR).” QUESTION 2: I understand that dealer cash is now taxable in Illinois. Can you explain? You should note that dealer incentives paid to a dealer based upon the purchase of a vehicle from the supplier, and not conditioned on the retail sale of the GENERAL COUNSEL
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