Opinion ID: 2095287
Heading Depth: 2
Heading Rank: 5

Heading: Effect of the 1992 Amendment to Section 4.1a

Text: 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 Conversely, the homeowners maintain that if the relevant portion of section 4.1a was implicitly repealed in 1981, then the amendment of that section in 1992 constituted its readoption and demonstrated the legislature's intent to revive the preempted interest and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, ¶ 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, 188 Ill.Dec. 773, 619 N.E.2d 137 (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, ¶ 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, 188 Ill.Dec. 773, 619 N.E.2d 137. 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, 322 N.E.2d 29 (1974). See 348 Ill.App.3d at 865-66, 283 Ill.Dec. 268, 807 N.E.2d 1109. 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, 322 N.E.2d 29. 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, 322 N.E.2d 29. 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, 322 N.E.2d 29. 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, 283 Ill.Dec. 268, 807 N.E.2d 1109. 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, 283 Ill.Dec. 268, 807 N.E.2d 1109. 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, 188 Ill.Dec. 773, 619 N.E.2d 137.