Title: U.S. Bank National Ass'n v. Clark
Citation: N/A
Docket Number: 98379
State: Illinois
Issuer: Illinois Supreme Court
Date: September 22, 2005

Docket No. 98379-Agenda 10-May 2005.
U.S. BANK NATIONAL ASSOCIATION et al., 
Appellants, v. 
MICHAEL CLARK et al., Appellees (The State of Illinois, Intervening 
Appellee).
Opinion filed September 22, 2005.
 
JUSTICE KILBRIDE delivered the opinion of the court:
In this appeal, we consider whether the 3% limitation on 
lender charges for mortgages with interest rates of more than 8% found in 
section 4.1a of the Illinois Interest Act (815 ILCS 205/4.1a (West 2002)) is 
enforceable or is preempted by a prohibition on such caps in the federal 
Depository Institutions Deregulation and Monetary Control Act of 1980 (12 U.S.C. 
§1735f-7a (2000)). In separate foreclosure actions brought by the plaintiff 
creditors, the defendant homeowners filed counterclaims and affirmative defenses 
that included allegations the creditors had violated the Illinois Interest Act 
(815 ILCS 205/0.01 et seq. (West 2002)). The circuit court of Cook 
County dismissed the homeowners' counterclaims and affirmative defenses, but the 
appellate court reversed and remanded the cause for further proceedings. This 
court allowed the creditors' joint petition for leave to appeal. We now reverse 
the judgment of the appellate court.

I. BACKGROUND
In separate actions, the creditors filed for foreclosure 
against a number of homeowners who were behind in their home mortgage payments. 
The homeowners each filed counterclaims and affirmative defenses that included 
an allegation that the creditors had violated the Illinois Interest Act (Act) by 
imposing fees in excess of 3% on loans with interest rates of greater than 8% 
(815 ILCS 205/4.1a(f) (West 2002)). The circuit court of Cook County dismissed 
those counterclaims, ruling the Interest Act claims were preempted by the 
federal Depository Institutions Deregulation and Monetary Control Act of 1980 (DIDMCA) 
(12 U.S.C. §1735f-7a (2000)), and, in some cases, by the federal Alternative 
Mortgage Transaction Parity Act of 1982 (Parity Act) (12 U.S.C. §3803(c) 
(2000)). The cases were later consolidated, and the homeowners filed an 
interlocutory appeal.
The appellate court reversed and remanded, relying in part 
on its prior decision in Fidelity Financial Services, Inc. v. Hicks, 
214 Ill. App. 3d 398 (1991). 348 Ill. App. 3d 856. In Hicks, the court 
considered the interaction between the Interest Act and DIDMCA and, 
specifically, whether section 4.1a of the Act is preempted by section 501 of 
DIDMCA. The Hicks court concluded the loan at issue did not fall within 
the scope of DIDMCA because the "loan was not a purchase-money mortgage" and it 
was not clear whether the trust deed underlying the loan constituted a "first 
lien." Hicks, 214 Ill. App. 3d at 406. In addition, the Hicks 
court held that the 3% limit in section 4.1a of the Act was not implicitly 
repealed when the legislature amended section 4, thus permitting any rate or 
amount of interest or compensation for loans secured by a real estate mortgage.
Hicks, 214 Ill. App. 3d at 404. The appellate court here declined to 
follow conflicting federal authority in Currie v. Diamond Mortgage Corp. of 
Illinois, 859 F.2d 1538 (7th Cir. 1988), holding that section 501 of DIDMCA 
preempted section 4.1a. The appellate court reasoned that it was not bound to 
follow federal precedent, but it was obliged to give deferential weight to 
Hicks. 348 Ill. App. 3d at 863-64.
In addition, the appellate court chose not to address the 
creditors' argument that Hicks was wrongly decided, finding that 
dispositive changes had occurred since the issuance of that decision. 348 Ill. 
App. 3d at 864. The appellate court noted that after Hicks was decided 
in 1991, the legislature adopted Public Act 87-496 to amend section 4.1a of the 
Act. After factually distinguishing the contrary decisions in Village of 
Park Forest v. Wojciechowski, 29 Ill. 2d 435, 438 (1963), and City of 
Chicago v. Gordon, 146 Ill. App. 3d 898, 901 (1986), the court deemed 
Davis v. City of Chicago, 59 Ill. 2d 439 (1974), instructive, although it 
was not directly on point. 348 Ill. App. 3d at 865-66. The appellate court noted 
that DIDMCA specifically allowed states to adopt subsequent limitations on 
discount points and overcome the preemption provision. In light of this 
"opt-out" provision, the court concluded the changes to section 4.1a, while not 
directly altering the relevant portion of the Interest Act, could be seen as an 
attempt to resolve the conflict between Currie and Hicks. 348 
Ill. App. 3d at 866-67. Thus, the court concluded the "reenactment" of section 
4.1a satisfied the override provision in section 501(b)(4) of DIDMCA and the 
homeowners' Interest Act claims were improperly dismissed as preempted by DIDMCA. 
348 Ill. App. 3d at 870.
Finally, the appellate court rejected the creditors' 
argument that provisions in the Parity Act governing "alternative mortgage 
transactions" preempted some of the homeowners' claims, as well as another issue 
not before this court. 348 Ill. App. 3d at 873, 875. We granted the creditors 
leave to appeal (see 177 Ill. 2d R. 315(a)), and the State of Illinois 
intervened as an appellee (see 735 ILCS 5/2-408 (West 2004)). We also allowed 
several entities supporting either the creditors(1) 
or the homeowners(2) leave to file amicus 
curiae briefs. See 155 Ill. 2d R. 345.

II. ANALYSIS
A. DIDMCA
In 1980, Congress passed DIDMCA "to ease the severity of 
the mortgage credit crunches *** and to provide financial institutions, 
particularly those with large mortgage portfolios, with the ability to offer 
higher interest rates on savings deposits." S. Rep. No. 96-368, at 18 (1979),
reprinted in 1980 U.S.C.C.A.N. 236, 254. As Congress observed,
"[i]n addition to the adverse effects of usury ceilings on 
credit availability, mortgage rate ceilings must be removed if savings and loan 
institutions *** are to begin to pay market rates of interest on savings 
deposits. Without enhancing the ability of institutions to achieve market rates 
on both sides of their balance sheets, the stability and continued viability of 
our nation's financial system would not be assured. Thus, Federal preemption of 
State usury ceilings would not only promote national home financing objectives 
but would provide the resources with which savers could be paid more interest on 
their savings accounts." S. Rep. No. 96-368, at 19 (1979), reprinted in 
1980 U.S.C.C.A.N. 236, 255.
With that underlying intent, Congress enacted section 501 
of DIDMCA, stating:
"(a) Applicability to loan, mortgage, credit sale, or 
advance; applicability to deposit, account, or obligation
(1) The provisions of the constitution or the laws of any 
State expressly limiting the rate or amount of interest, discount points, 
finance charges, or other charges which may be charged, taken, received, or 
reserved shall not apply to any loan, mortgage, credit sale, or advance which 
is-
(A) secured by a first lien on residential real property, 
***;
(B) made after March 31, 1980; and
(C) described in section 527(b) of the National Housing 
Act (12 U.S.C. 1735f-5(b)), ***
* * *
(b) Applicability to loan, mortgage, credit sale, or 
advance made in any State after April 1, 1980
***
(2) Except as provided in paragraph (3), the provisions of 
subsection (a)(1) of this section shall not apply to any loan, mortgage, credit 
sale, or advance made in any State after the date (on or after April 1, 1980, 
and before April 1, 1983) on which such State adopts a law or certifies that the 
voters of such State have voted in favor of any provision, constitutional or 
otherwise, which states explicitly and by its terms that such State does not 
want the provisions of subsection (a)(1) of this section to apply with respect 
to loans, mortgages, credit sales, and advances made in such State.
***
(4) At any time after March 31, 1980, any State may adopt 
a provision of law placing limitations on discount points or such other charges 
on any loan, mortgage, credit sale, or advance described in subsection (a)(1) of 
this section." 12 U.S.C. §1735f-7a (2000).
Thus, the relevant portion of DIDMCA preempted every 
existing state limitation on "the rate or amount of interest, discount points, 
finance charges, or other charges" applicable to any loan or mortgage 
(hereinafter, mortgage) unless a state chose to override the preemption by one 
of the methods specified in subsections (b)(2) and (b)(4). 12 U.S.C. 
§§1735f-7a(b)(2), (b)(4).
To "opt-out" under subsection (b)(2), by April 1, 1993, a 
state was required to adopt a law, or to certify a vote favoring a provision, 
expressly stating its decision to opt-out. 12 U.S.C. §1735f-7a(b)(2) (2000). To 
opt-out under subsection (b)(4), a state could adopt a law after March 31, 1980, 
limiting the relevant points or charges on affected mortgages. 12 U.S.C. 
§1735f-7a(b)(4) (2000).

B. The Chronology
This appeal involves the interrelationship of a number of 
Illinois legislative and federal congressional provisions as they have changed 
since 1980. To provide a backdrop for our analysis, we present a brief 
chronology of the relevant provisions and changes.
1974. The Illinois legislature enacts limitations 
on points and fees in section 4.1a of the Interest Act. Preexisting section 4 
continues to impose interest rates limits.
1980. Congress enacts DIDMCA, preempting statutory 
limits on lender fees, including those in section 4.1a.
1981. The Illinois legislature amends section 4 of 
the Interest Act by removing all limitations on residential mortgage interest 
rates and lender compensation.
1992. The Illinois legislature amends section 4.1a 
of the Interest Act to remove two fee categories from the types of charges 
governed in that section and in section 6 of the Interest Act.
The homeowners each entered into the mortgage transactions 
underlying this appeal after 1992. At the most basic level, the creditors claim 
that the homeowners' Interest Act counterclaims and affirmative defenses were 
properly dismissed because they were preempted by section 501 of DIDMCA and 
because Illinois has not opted-out of preemption under either of the two methods 
specified in DIDMCA. The homeowners maintain that the appellate court properly 
reversed the dismissal order because the limitations on points and fees in 
section 4.1a are not preempted by section 501 of DIDMCA.

C. Implicit Repeal of Section 4.1a of the 
Interest Act
The creditors contend in part that Illinois' preexisting 
limitation on points and charges in section 4.1a of the Act was implicitly 
repealed by legislative amendments to section 4 in 1981 and 1982. We note that 
this interlocutory appeal is from the appellate court's reversal of the trial 
court's dismissal of the homeowners' affirmative defenses and counterclaims 
pursuant to section 2-615 and 2-619 of the Code of Civil Procedure (735 ILCS 
5/2-615, 2-619 (West 2000)). The proper standard of review of the dismissal 
orders in this case is de novo. Feltmeier v. Feltmeier, 207 Ill. 2d 263, 266 (2003). We begin our analysis by examining both the language of 
section 4.1a and the evolution of the language currently found in section 4.
In relevant part, section 4.1a states:
"Where there is a charge in addition to the stated 
rate of interest payable directly or indirectly by the borrower and imposed 
directly or indirectly by the lender as a consideration for the loan, or for or 
in connection with the loan of money,*** whether denominated 'points,' 'service 
charge,' 'discount,' 'commission,' or otherwise, *** the rate of interest shall 
be calculated in the following manner:
The percentage of the principal amount of the loan 
represented by all of such charges shall first be computed, which in the case of 
a loan with an interest rate in excess of 8% per annum secured by residential 
real estate, *** shall not exceed 3% of such principal amount. Said 
percentage shall then be divided by the number of years and fractions thereof of 
the period of the loan according to its stated maturity. The percentage thus 
obtained shall then be added to the percentage of the stated annual rate of 
interest." (Emphases added.) 815 ILCS 205/4.1a (West 2004).
Thus, on its face section 4.1a limits the designated 
charges (cumulatively, points or charges) to 3% for residential mortgage loans 
with annual interest rates exceeding 8%. 815 ILCS 205/4.1a (West 2004).
Until 1981, section 4 did not permit lenders "to charge, 
contract for, and receive any rate or amount of interest or compensation with 
respect to" mortgage loans. Ill. Rev. Stat. 1979, ch. 74, par. 4 (now 815 ILCS 
205/4 (West 2004)). In 1981, the legislature added subparagraph (l) to section 
4, making the existing language applicable to "[l]oans secured by a mortgage 
on residential real estate." (Emphasis in original.) Pub. Act 82-660, eff. 
September 25, 1981 (amending Ill. Rev. Stat. 1979, ch. 74, par. 4). Section 4 
was again amended in 1982, removing the word "residential" from subparagraph 
(l), thereby legalizing the receipt of any rate or amount of interest or 
compensation on any real estate mortgage. See Pub. Act 82-951, eff. 
August 19, 1982 (Ill. Rev. Stat. 1981, ch. 17, par. 6404 (moved from Ill. Rev. 
Stat. 1979, ch. 74, par. 4)). This portion of section 4 has not been changed 
since the 1982 amendment. See 815 ILCS 205/4(1)(l) (West 2004).
The creditors contend that by permitting any rate or 
amount of interest or compensation to be charged on any real estate mortgage, 
the legislature's 1981 and 1982 amendments implicitly repealed section 4.1a's 3% 
limitation on points chargeable in connection with mortgage loans bearing 
interest rates above 8%.
Repeal by implication is generally disfavored, and we will 
presume legislation was intended to be consistent with existing law. Lily 
Lake Road Defenders v. County of McHenry, 156 Ill. 2d 1, 9 (1993). 
Therefore, this court will apply that principle only when a subsequent statute's 
terms and operation cannot be reconciled with those of an earlier statute. When 
the two statutes cannot be harmonized, the subsequent statute will be deemed to 
have repealed the earlier by implication because we cannot presume the 
legislature intentionally enacted contradictory laws. Lily Lake, 156 Ill. 2d  at 9. Here, relying on the reasoning of the Seventh Circuit Court of 
Appeals in Currie v. Diamond Mortgage Corp. of Illinois, 859 F.2d 1538 
(7th Cir. 1988), the creditors assert the language in section 4.1a and amended 
section 4 is irreconcilable, and thus section 4.1a was implicitly repealed by 
the amendments to section 4.
In Currie, the plaintiff homeowner claimed in the 
Bankruptcy Court for the Northern District of Illinois that the defendant 
creditor violated section 4.1a of the Act by imposing charges of approximately 
16% of the principal of the loan on a home mortgage with a yearly interest rate 
of 15.5%. The bankruptcy court granted the creditor's motion to dismiss for 
failure to state a claim, citing both the preemption of section 4.1a by section 
501 of DIDMCA and the implicit repeal of section 4.1a by amendments to section 4 
enacted in 1981. The district court affirmed solely on the basis of federal 
preemption. Currie, 859 F.2d  at 1539.
The court of appeals found that Illinois amended section 4 
in 1981 to enhance the availability of money for home financing. The court 
determined that both this purpose and the plain language of that section, 
permitting lenders to impose any interest rate and other compensation, were in 
conflict with section 4.1a's express ceiling on interest and points and could 
not be reconciled. Currie, 859 F.2d  at 1542-43. The court noted that 
the inclusion of points in the calculation of the effective interest rate under 
section 4.1a demonstrated that points are a type of compensation and thus could 
not be restricted under amended section 4. Currie, 859 F.2d  at 1543. 
After discussing the doctrine of repeal by implication and acknowledging that it 
is strongly disfavored, the court held that section 4.1a's limitation on charges 
was repealed by implication by the amendment of section 4. Currie, 859 F.2d  at 1543. The court believed the legislature's failure to repeal expressly 
section 4.1a must have been an oversight. Currie, 859 F.2d  at 1543.
The Seventh Circuit reaffirmed the Currie court's 
finding of repeal by implication in Reiser v. Residential Funding Corp., 
380 F.3d 1027, 1029 (7th Cir. 2004). In its analysis, the Reiser court 
refrained from conducting an in-depth reexamination of Currie, 
believing "it is best to stick with one assessment until the state's supreme 
court, which alone can end the guessing game, does so." (Emphasis in 
original.) Reiser, 380 F.3d  at 1029. We are now availed of an 
opportunity to "end the guessing game" on the issue of implicit repeal.
For their part, the homeowners dismiss the Currie 
rationale as faulty, maintaining that the appellate court in Fidelity 
Financial Services, Inc. v. Hicks, 214 Ill. App. 3d 398 (1991), correctly 
held that section 4.1a was not implicitly repealed. We note that while Hicks 
addressed the issue of repeal by implication, it did not consider the effect of 
DIDMCA on section 4.1a because it involved a second mortgage and thus was 
outside the scope of the federal statute.
The creditor in Hicks relied on the Currie 
decision. The Hicks court ultimately rejected Currie as 
federal dicta not binding on the courts of this state. Hicks, 
214 Ill. App. 3d at 401-02. Rather, the Hicks court "presume[d]" that 
section 4.1a was valid because it remained on the books 12 years after it was 
purportedly repealed. Hicks, 214 Ill. App. 3d at 401-02. Notably, the 
court also believed section 4 could be reasonably reconciled with section 4.1a, 
precluding a finding of implicit repeal under our limited application of that 
doctrine. Hicks, 214 Ill. App. 3d at 404. To reconcile the two 
provisions, the court read section 4, entitled " 'General Interest Rate' " as 
removing restrictions only on lenders' ability to pass their actual cost of 
money along to borrowers. The court interpreted section 4.1a, addressing 
" 'charges for or in connection with the loan of money,' " as applying only to 
"ancillary charges not dictated by the cost of the commodity, but imposed by 
lenders in connection with loans." (Emphasis in original.) Hicks, 
214 Ill. App. 3d at 403, quoting Ill. Rev. Stat. 1987, ch. 17, par. 6404. Thus, 
the court reasoned, the two statutes were not irreconcilable because they 
concerned different types of charges. Hicks, 214 Ill. App. 3d at 403.
In construing a statute, the most fundamental rule is to 
give effect to the legislature's intent, and the best evidence of that intent is 
the statutory language. That language must be given its plain and ordinary 
meaning. Courts may not properly construe a statute by altering its language in 
a way that constitutes a change in the plain meaning of the words actually 
adopted by the legislature. If the statutory language is clear, we must give 
effect to its plain and ordinary meaning without resorting to other construction 
aids. King v. First Capital Financial Services Corp., 215 Ill. 2d 1, 26 
(2005), quoting In re Marriage of Beyer, 324 Ill. App. 3d 305, 310 
(2001).
Here, the language of amended section 4 is clear and 
unambiguous: "It is lawful to charge, contract for, and receive any rate or 
amount of interest or compensation with respect to *** [l]oans secured by a 
mortgage on real estate." 815 ILCS 205/4(1)(l) (West 2004). By refusing to 
restrict either the interest or "compensation" available to lenders "with 
respect to" mortgage loans, the legislature evinced its intent to permit a broad 
category of charges to be imposed in connection with secured real estate loans.
Similarly, on its face the plain language of section 4.1a 
limits to 3% a broad category of noninterest charges that may be imposed by 
lenders in conjunction with high interest rate mortgage loans. The restrictions 
apply to all charges imposed "as a consideration for the loan, or for or in 
connection with the loan of money." 815 ILCS 205/4.1a (West 2004).
We can find no functional distinction between the 
noninterest "compensation" in section 4 and the noninterest "charges" in section 
4.1a. The plain meaning of "compensation" includes: "payment for value received 
or service rendered: REMUNERATION." Webster's Third New International Dictionary 
463 (1993). See also Black's Law Dictionary 301 (8th ed. 2004) (defining 
"compensation" as "[r]emuneration and other benefits received in return for 
services rendered; esp., salary or wages"). The plain meaning of a "charge" is: 
"the price demanded for a thing or service." Webster's Third New International 
Dictionary 377 (1993). See also Black's Law Dictionary 248 (8th ed. 2004) 
(defining a "charge" as the "[p]rice, cost, or expense"). The two terms appear 
to be the same type of payment viewed from different perspectives. 
"Compensation" represents the payee/lender's perspective, while "charges" 
expresses the same money from the perspective of the payor/borrower. Thus, 
section 4 permits lenders to impose unlimited noninterest costs on all mortgage 
loans (815 ILCS 205/4(1)(l) (West 2004)), while section 4.1a restricts the same 
broad category of costs to 3% when the loan's interest rate exceeds 8% (815 ILCS 
205/4.1a (West 2004)). By the terms of their plain language, the two sections 
are irreconcilably inconsistent. 
The Hicks court's interpretation of the two 
sections requires us to read unsupported limitations into the statutory language 
and is overruled. The plain words of the provisions do not restrict section 4 
"compensation" to lenders' actual cost of money or section 4.1a "charges" to 
"ancillary charges not dictated by the cost of the commodity," as the Hicks 
court concluded. See Hicks, 214 Ill. App. 3d at 403. The Hicks 
decision is also at odds with the legislature's 1981 intention to amend section 
4 to remove the artificial limits on the interest and other compensation lenders 
may receive for mortgage loans, thereby allowing market forces to prevail. See 
82d Ill. Gen. Assem., House Proceedings, May 6, 1981, at 135-37 (statements of 
Representative McBroom); 82d Ill. Gen. Assem., Senate Proceedings, June 22, 
1981, at 11-12 (statements of Senator Rock); 1981 Ill. Laws 3436, Governor's 
Message, at 3436-37.
The homeowners, however, argue the Hicks decision 
is consistent with applying market forces to the mortgage market. They contend
Hicks' interpretation of section 4 does not limit a lender's overall
revenue potential because even though section 4.1a limits noninterest 
charges to 3% on high interest loans, it does not regulate interest rates 
themselves, allowing lenders to obtain any desired overall rate of return. This 
argument is specious because it ignores a vital difference between mandatory 
charges that are payable at the beginning of a loan and interest that is payable 
only until the loan is paid off. Under section 4.1a, lenders are only guaranteed 
up-front charges of a maximum of 3%, and their receipt of an additional 
unregulated return from interest payments is dependent on conditions outside 
their control, i.e., the refinancing or early payment of the loan 
balance. For this reason, there is a significant practical difference between 
section 4's bar on any lender interest and compensation restrictions 
and section 4.1a's ceiling on up-front charges despite its allowance for 
unlimited interest. The two sections represent vastly differing approaches to 
regulating lender revenue and are inherently inconsistent. Thus, we agree with 
the Seventh Circuit Court of Appeals in Currie and Reiser that 
the 1981 amendments to section 4 implicitly repealed section 4.1a's limitation 
on noninterest charges lenders may impose on residential mortgage loans.
Nonetheless, the homeowners claim that our legislature 
recently affirmed the continuing viability of section 4.1a by passing the High 
Risk Home Loan Act, effective January 1, 2004 (Loan Act) (815 ILCS 137/1 et 
seq. (West 2004)). This act defines mortgage loans as high risk if their 
annual percentage rates or loan fees exceed certain triggers. If a loan is 
deemed high risk, financed fees are capped at 6%. 815 ILCS 137/55 (West 2004). 
The Loan Act also contains an Interest Act "savings clause": "To the extent this 
Act conflicts with any other Illinois State financial regulation laws, 
except the Interest Act, this Act is superior and supersedes those laws for 
the purposes of regulating high risk home loans in Illinois." (Emphasis added.) 
815 ILCS 137/170 (West 2004). We are not persuaded by this argument.
Both the Interest and the Loan Act concern other aspects 
of the home mortgage market, and the savings clause applies broadly to all 
provisions of the Loan Act, whether they concern fee caps or not. The homeowners 
cite no evidence that the savings clause was specifically intended to permit the 
Interest Act's ceiling on charges for high interest loans to continue in effect. 
Indeed, if that portion of the Interest Act is implicitly repealed, there is no 
conflict with any Loan Act provision, and that act will apply to all home loans 
falling within its scope. In short, the adoption of the Loan Act does not 
demonstrate the continued viability of the Interest Act provision at issue here 
as the homeowners' claim. Thus, we hold the portion of section 4.1a of the 
Interest Act restricting applicable charges to 3% when the mortgage loan rate 
exceeded 8% was implicitly repealed by the amendment of section 4 in 1981.

D. Applicability of DIDMCA Preemption
The intervenor State of Illinois argues the creditors did 
not meet their burden of overcoming the presumption against preemption in this 
case by establishing that the term "first lien" as used in section 501 of the 
Act includes refinancing mortgages as well as purchase-money mortgages. The 
State initially contends that when DIDMCA was enacted in 1980, "a 'first 
mortgage' generally was viewed as one obtained to purchase a home, while a 
mortgage for which accumulated equity served as security (a so-called 'home 
equity loan') was called a 'second mortgage,' regardless of priority of 
position." (Emphasis in original.) A cursory review of the authority cited for 
this proposition reveals the error in the State's argument. In its citation, the 
State notes parenthetically that the cited article declares: " '[t]raditional 
home equity loans are sometimes called second mortgages, although legally 
they may involve a first lien.' " (Emphasis added.) See G. Canner, C. 
Luckett &amp; T. Durkin, Home Equity Lending, 75 Fed. Res. Bull. 333, 344 
n.2 (May 1989). Thus, the cited article expressly recognizes that refinanced 
mortgage loans may constitute "first liens," the term used to define loans and 
mortgages that fall within the scope of section 501 of DIDMCA. See 12 U.S.C. 
§1735f-7a(1)(A) (2000) (stating "(1) The provisions of the constitution or the 
laws of any State expressly limiting the rate or amount of interest, discount 
points, finance charges, or other charges which may be charged, taken, received, 
or reserved shall not apply to any loan, mortgage, credit sale, or advance which 
is-(A) secured by a first lien on residential real property" (emphasis 
added)).
Next, the State cites the Michigan Court of Appeals' 
decision in Mitchell v. Trustees of United States Mutual Real Estate 
Investment Trust, 144 Mich. App. 302, 375 N.W.2d 424 (1985), in support of 
its contention that the inclusion in section 501 of refinanced mortgage loans as 
"first liens" does not further Congress' intent to promote home purchases. In 
its brief, the State asserts that "one of Congress' purposes in enacting DIDMCA" 
recognized by the Mitchell court was stimulation of the home-buying 
market. While that is true, Congress also expressed another purpose: "to provide 
financial institutions, particularly those with large mortgage portfolios, with 
the ability to offer higher interest rates on savings deposits." S. Rep. No. 
96-368, at 18 (1979), reprinted in 1980 U.S.C.C.A.N. 236, 254. This 
purpose is consistent with the incorporation of refinancing mortgage loans in 
the ambit of section 501. We reject the State's argument to the contrary as 
unsupported. Under the plain meaning of the term "first lien," both 
purchase-money and refinancing mortgages meeting the statutory requirements are 
covered by section 501. See Black's Law Dictionary 942 (8th ed. 2004) (defining 
"first lien" as "[a] lien that takes priority over all other charges or 
encumbrances on the same property and that must be satisfied before other 
charges may share in proceeds from the property's sale"). The great weight of 
federal authority also coincides with this view. See Brown v. Investors 
Mortgage Co., 121 F.3d 472, 475 (9th Cir. 1997) (stating the statutory 
language that "state usury restrictions, 'shall not apply to any loan 
*** secured by a first lien.' " (emphasis in original), quoting 12 U.S.C. 
§1735f-7a(a)(1) (1994)); Gora v. Banc One Financial Services Inc., No. 
95 C 2542 (N.D. Ill. October 17, 1995) (mem. op.) (finding section 501 applies 
to nonpurchase money loans); In re L.G.H. Enterprises, Inc. 146 B.R. 612 (Bankr. E.D.N.Y. 1992) (holding section 501 applies to both purchase money 
and refinancing mortgages); Smith v. Fidelity Consumer Discount Co., 
898 F.2d 907, 911-13 (3d Cir. 1989), aff'd in part, rev'd in part on other 
grounds, 898 F.2d 896 (3d Cir. 1989) (concluding that DIDMCA applies to all 
first mortgages, not just purchase money mortgages); In re Lawson Square, 
Inc., 61 B.R. 145 (Bankr. W.D. Ark. 1986) (rejecting the argument that 
section 501 did not apply to nonpurchase money loans). As we have explained, "[i]n 
construing *** Federal statutes, we must look to the Federal decisions for its 
interpretation." Boyer v. Atchinson, Topeka &amp; Santa Fe Ry. Co., 38 Ill. 2d 31, 34 (1967). Therefore, based on our own interpretation of the relevant 
statutory language as well as by the weight of guiding federal authority, we 
conclude section 501 covers the nonpurchase money first lien mortgages at issue 
in this appeal.

E. Effect of the 1992 Amendment to Section 
4.1a
Having determined that section 4.1a of the Interest Act 
has been preempted by section 501 of DIDMCA, we turn to the question of whether 
Illinois has "opted out" of section 501 as permitted in DIDMCA. When DIDMCA was 
enacted, it contained two distinct "opt-out" provisions permitting states to 
avoid its preemptive effect. In the first provision, Congress stated that 
section 501 "shall not apply to any loan, mortgage, credit sale, or advance made 
in any State after the date (on or after April 1, 1980, and before April 1, 
1983) on which such State adopts a law or certifies that the voters of such 
State have voted in favor of any provision, constitutional or otherwise, which 
states explicitly and by its terms that such State does not want the provisions 
of" that section to apply. See 12 U.S.C. §1735f-7a(b)(2) (2000). It is 
undisputed here that Illinois did not opt-out of DIDMCA preemption pursuant to 
this provision.
In the second method, "[a]t any time after March 31, 1980, 
any State may adopt a provision of law placing limitations on discount points or 
such other charges on any loan, mortgage, credit sale, or advance described 
in"section 501. See 12 U.S.C. §1735f-7a(b)(4) (2000). The appellate court agreed 
with the argument of the homeowners and the intervenor that our legislature used 
this method to opt-out of DIDMCA preemption by amending section 4.1a in Public 
Act 87-496 in 1992.
The creditors claim that this amendment does not comport 
with subsection (b)(4)'s requirement that new legislation be adopted placing 
limits on the interest or points imposed on mortgages for two reasons. First, 
the creditors argue that since Illinois enacted the section 4.1a limitation in 
1974, the 1992 amendment could not be considered new opt-out 
legislation. Second, they assert that the amendment did not limit points as 
required in subsection (b)(4) because it amended a portion of section 4.1a that 
is unrelated to limitations on points and fees limitations.
Conversely, the homeowners maintain that if the relevant 
portion of section 4.1a was implicitly repealed in 1981, then the amendment of 
that section in 1992 constituted its "readoption" and demonstrated the 
legislature's intent to revive the preempted interest and points limitation.
The 1992 amendments added two subparts to section 4.1a. 
See Pub. Act 87-496, eff. January 1, 1992 (amending Ill. Rev. Stat. 1989, ch. 
17, par. 6406). Subparts (e) and (f) allow lenders to charge fees for dishonored 
checks and late payments, respectively. The preexisting portion of section 4.1a 
stated that the enumerated fees "shall not be deemed to be *** charges by the 
lender as a consideration for the loan referred to in this Section." 815 ILCS 
205/4.1a (West 2004).
Our Statute on Statutes provides that "[t]he provisions of 
any statute, so far as they are the same as those of any prior statute, shall be 
construed as a continuation of such prior provisions, and not as a new 
enactment." 5 ILCS 70/2 (West 2004). While this general rule is not limited to 
cases of implicit repeal, it is relevant to our analysis in that context. 
Specifically addressing the requirements for reenacting an implicitly repealed 
statute, this court explained in Lily Lake Road Defenders v. County of 
McHenry, 156 Ill. 2d 1, 8 (1993), that the legislature "must expressly 
reenact a statute which has been repealed by implication to render it valid 
and enforceable again." (Emphasis added.)
Here, the portion of section 4.1a expressly limiting 
lender charges to 3% on high interest rate loans was not changed by the 1991 
amendment. The text of Public Act 87-496 clearly designates the amendment as 
consisting of the addition of subparts (e) and (f), highlighting those 
provisions while merely reprinting, unchanged, the remaining, preexisting text. 
See Pub. Act 87-496, eff. January 1, 1992 (amending Ill. Rev. Stat. 1989, ch. 
17, par. 6406). Nothing in the text or structure of the amendatory act reveals 
any legislative "express" intent to "reenact" the ceiling on lender charges in 
section 4.1a. Indeed, our Statute on Statutes specifically precludes that 
conclusion. See 5 ILCS 70/2 (West 2004); Lily Lake, 156 Ill. 2d  at 7.
The homeowners' also premise their argument in part on the 
inference that the legislature knowingly attempted to overcome the implicit 
repeal of section 4.1a's limitation provision by adopting the 1992 amendment. 
Indeed, the decision in Currie v. Diamond Mortgage Corp. of Illinois, 
859 F.2d 1538 (7th Cir. 1988), holding that the charge limitation had been 
implicitly repealed, preceded the 1992 amendment, and some regulatory agencies 
had adopted the Currie holding. The homeowners assert that the 
legislature enacted the 1992 amendment to resolve the conflict between the 
decisions in Hicks and Currie by opting out of DIDMCA. Both 
they and the appellate court seek support for this position from Davis v. 
City of Chicago, 59 Ill. 2d 439 (1974). See 348 Ill. App. 3d at 865-66.
In Davis, the supreme court deviated from the 
general rule that language remaining unchanged from the prior version of the 
statute is construed as a continuation of the previous provision, not as a new 
enactment. The Davis court recognized that it was faced with "an 
unusual situation involving a statute that may have been subject to successful 
constitutional challenge under the former constitution but has now been 
reenacted under the 1970 Constitution in which the provisions of the 1870 
Constitution giving rise to the challenge do not appear." Davis, 59 Ill. 2d  at 444. The court also noted two appellate court cases had previously 
"raised questions as to the validity of [the relevant] section *** with 
differing results." Davis, 59 Ill. 2d  at 444. Under those narrow 
circumstances, the court believed it could be "fairly said that the intent of 
the legislature, and its principal purpose, in reenacting [the relevant] section 
*** with only a minor change was to dispel the questions as to its validity."
Davis, 59 Ill. 2d  at 444.
Here, the appellate court asserted that the same reasoning 
was relevant because "the reenactment of section 4.1a may fairly be said to show 
a legislative intent to dispel the questions raised by the tensions between 
Currie and Hicks." 348 Ill. App. 3d at 867. We disagree. The type 
of unique circumstances underlying the Davis decision do not exist 
here. The legislative history does not support that position because Hicks 
was decided after the amendatory legislation was introduced in the General 
Assembly.
More importantly, as the appellate court recognized, the 
relevant portion of section 501 did not change here, while in Davis, 
the critical language of the state constitution did change. See 348 Ill. App. 3d 
at 867. Thus, the legislature here had no compelling need to overcome a finding 
of implicit repeal comparable to the legislature's need in Davis to 
account for the revisions in the state constitution. No definitive resolution of 
the implicit repeal issue existed when the 1992 amendment was enacted because 
this court had not yet considered that question. As the Seventh Circuit Court of 
Appeals acknowledged, federal opinions represent mere "educated guess[es]" as to 
this court's ultimate ruling. See Reiser v. Residential Funding Corp., 
380 F.3d 1027, 1029 (7th Cir. 2004) (recognizing that only the Illinois supreme 
court could finally resolve the issue of implicit repeal, explaining "[t]he 
state must resolve this conflict internally"). Thus, the legislature would have 
no critical impetus to counter a holding that section 4.1a's charge limitation 
was implicitly repealed when that was not the law of this state at the time of 
the amendment. Moreover, the legislative history is wholly devoid of any 
discussion of Currie, Hicks, or any other ruling or opinion 
considering the issue of implicit repeal. Indeed, there is no reference to 
section 501, DIDMCA, or the 3% charge ceiling on high interest loans in any of 
the relevant legislative history. In the absence of any indication in either the 
language of the statute or its legislative history, we cannot conclude that by 
its 1992 amendment the legislature "expressly reenact[ed] a statute which has 
been repealed by implication," thus rendering the charge limitation in section 
4.1a enforceable and valid again. See Lily Lake, 156 Ill. 2d  at 7.
 
F. Other Issues
The creditors raise the issue of the Act's "safe harbor" 
provisions, but due to our holding that section 501 of DIDMCA preempts section 
4.1a's limitation on charges, we need not consider that issue. In addition, the 
homeowners and intervening State assert that the creditors have forfeited any 
argument concerning the appellate court's reversal of the trial court finding 
that the Alternative Mortgage Transaction Parity Act (Parity Act) preempted 
section 4.1a of the Interest Act. We agree and need not address the matter 
further.

III. CONCLUSION
For the reasons stated, we hold that section 4.1a's 
limitation on lender charges was implicitly repealed by the legislature's 1981 
amendment of section 4 and that neither of the opt-out provisions in DIDMCA have 
been applied by our legislature. The legislature's 1992 amendment to a different 
portion of section 4 did not constitute an opt-out under subsection (b)(4) of 
DIDMCA because that amendment alone was insufficient under state law to revive 
the statutory limitations provision. Therefore, federal preemption by section 
501 of DIDMCA has not been overcome. Thus, the appellate court improperly 
reinstated the homeowners' Interest Act counterclaims and affirmative defenses. 
Accordingly, we reverse the judgment of the appellate court on that issue.



Appellate court judgment reversed.
 
1.   1The American Financial Services Association and the 
Consumer Mortgage Coalition jointly submitted a brief in support of the 
creditors, as did the Illinois Mortgage Bankers Association and the Illinois 
Association of Mortgage Brokers.
2.  2The Woodstock Institute, the National Training and 
Information Center, the Neighborhood Housing Services of Chicago, the South 
Austin Coalition, the South Suburban Housing Center, and the Central Illinois 
Organizing Project jointly submitted a brief in support of the homeowners.