security interest in the property purchased as part of the transaction, or in other property identified by item or type." Under Regulation Z, a security interest is "an interest in property that secures performance of a consumer credit obligation and that is recognized by state or federal law." § 226.2(a)(25).
The plaintiff argues that the "transaction documents" created a security interest in the plaintiff's accounts. Pl.'s Resp. to Lender Defs. at 5. Specifically, the plaintiff contends that the loan agreements prohibited her from "cancel[ing] my allotment until loan is paid in full," e.g., Compl., Exs. G, M, and that the allotment agreements prohibited her from withdrawing funds from the accounts without the Lender Defendants' permission, e.g., Compl. PP 22(e), 29(c). However, the Lender Defendants' alleged interest in the plaintiff's accounts did not "secure performance" of the loan obligations. § 226.2(a)(25). The complaint simply alleges that the plaintiff's accounts received funds from her paycheck for transfer to the Lender Defendants' accounts. That is, the accounts served to facilitate repayment of the loans, not to secure repayment upon default. We dismiss Count II because the complaint fails, as a matter of law, to allege that the Lender Defendants acquired a "security interest" in the plaintiff's accounts.
B. Illinois Wage Assignment Act
Next, the Lender Defendants move to dismiss Count IV, the IWAA claim, 740 ILCS 170/01-170/11. The IWAA renders invalid an "assignment of wages earned or to be earned" unless, inter alia, "given to secure an existing debt of the wage-earner or one contracted by the wage-earner simultaneously with its execution." 170/1(2) (emphasis added). In addition, the IWAA sets forth notice provisions and other procedures that creditors must follow in order to collect under a wage assignment. E.g., 170/2-170/4. For example, the creditor may not serve an employer with a "demand" pursuant to a wage assignment unless, inter alia, "there has been a default of more than 40 days in payment of the indebtedness secured by the assignment and the default has continued to the date of the demand." 170/2(1) (emphases added).
Because we interpret the IWAA to govern only those wage assignments that "secure" debt, 170/1(2), and that provide a method for collection upon "default," 170/2(1), we hold as a matter of law that the plaintiff fails to state a claim under the IWAA. The IWAA repeatedly refers to "default" as the triggering event at which time the creditor may make demands upon a wage assignment, e.g., 170/2(1), 170/2.1 (requiring that demand form served upon the debtor's employer state that the debtor is in "default"), and thus wage assignments governed by the IWAA represent a self-help remedy for collection upon a debtor's default, see In re Rosol, 114 Bankr. 560, 563 (Bankr. N.D. Ill. 1989).
In the instant case, the complaint simply alleges that the defendants "obtain[ed] what amount to assignments of wages within the meaning of the IWAA." Compl. P 103(a). However, the allegations establish that the weekly paycheck deductions represented the method by which the plaintiff repaid the loans--the plaintiff agreed to make the deductions weekly, even prior to default--not the security for the loans and the collection remedy to which the Lender Defendants would resort upon default. Accordingly, we grant the defendants' motion to dismiss Count IV.
The Lender Defendants also move to dismiss Count V, which alleges that the loans were unconscionable primarily due to the "combined effect" of the high interest rates and the violations of consumer protection laws. Compl. P 106. Under Illinois law, a contract is "unconscionable when it is so one-sided that only one under delusion would make it and only one unfair and dishonest would accept it." In re Estate of Croake, 578 N.E.2d at 569. In addition, "the term unconscionable encompasses the absence of meaningful choice by one of the parties as well as contract terms which are unreasonably favorable to the other party." Larned v. First Chicago Corp., 264 Ill. App. 3d 697, 636 N.E.2d 1004, 1006, 201 Ill. Dec. 572 (Ill. App. Ct. 1994).
At this stage of the litigation, we cannot hold as a matter of law that Cobb has failed to state a claim of unconscionability. The annual percentage rates charged by the Lender Defendants, ranging from 57% to 101%, appear unreasonably favorable to the lenders, and the transactions are not inconsistent with an absence of meaningful choice. Although the Lender Defendants argue in their brief that the loans "were made available without any credit check" and "included all transaction costs," Lender Defs.' Mot. at 9, the complaint does not allege these facts; determining whether the terms were unreasonably" favorable to the Lender Defendants requires looking beyond the complaint. Similarly, although the existence of at least three finance companies willing to Lend Cobb money suggests that she exercised some choice, see Larned, 636 N.E.2d at 1006, deciding whether the choice was "meaningful" requires a factual inquiry outside the complaint. Accordingly, we deny the Lender Defendants' motion to dismiss Count V.
D. Illinois Consumer Fraud Act
Finally, the defendants move to dismiss Count VII, which alleges that the defendants violated the ICFA, 815 ILCS 505/1-505/12, by "engaging in the conduct" alleged in the complaint. Compl. P 113. More specifically, the plaintiff alleges that the Bank and Lender Defendants "agreed to . . . falsely represent to plaintiff and the class members that they could not revoke their authorizations to have the payments transferred to the finance company's account," Compl. P 85(b), and that the Bank and Lender Defendants "had plaintiff and the class members sign a purported waiver of their right to stop payment of preauthorized electronic fund transfers at any time, as conferred by 12 C.F.R. § 205.10(c)," Compl. P 97(c).
Section 205.10(c), a regulation promulgated pursuant to the EFTA, provides that a consumer may stop a preauthorized electronic fund transfer from her account by providing three days' notice to the bank, and the EFTA prohibits waiver of its protections, 15 U.S.C. § 16931. In addition, the complaint alleges that the Bank and Lender Defendants "agreed to . . . evade giving required information to plaintiff and the class members about their accounts," Compl. P 85(a), including a purported waiver of "any rights to receive any and all account statements or transaction reports concerning" the account, Compl. Exs. C, L. The EFTA requires disclosures of specific information prior to the first electronic fund transfer and also requires documentation of transfers. 12 U.S.C. §§ 1693c, 1693d; 12 C.F.R. §§ 205.7, 205.9.
These allegations state a claim under the ICFA. The ICFA prohibits
unfair or deceptive acts of practices, including . . . the use or employment of any deception, fraud, false pretense, false promise, misrepresentation or the concealment, suppression or omission of any material fact, with intent that others rely upon the concealment, suppression or omission of such material fact . . . .
505/2. Notwithstanding 505/2's language, a practice does not violate the ICFA unless it is both "unfair" and "deceptive," Kedziora v. Citicorp. Nat'l Servs., 780 F. Supp. 516, 533-34 (N.D. Ill. 1991) (citing Laughlin v. Evanston Hospital, 133 Ill. 2d 374, 550 N.E.2d 986, 993, 140 Ill. Dec. 861 (Ill. 1990)). However, in order to constitute a "deceptive" practice, "it is enough that a business form be 'misleading,' and whether it is in fact 'misleading' is a factual question not susceptible to decision as a matter of law." 780 F. Supp. at 534 (citing People ex rel. Daley v. Datacom Sys., 146 Ill. 2d 1, 585 N.E.2d 51, 66, 165 Ill. Dec. 655 (Ill. 1991)). The defendants argue that, because the EFTA does not cover the alleged accounts, it was not misleading to have the plaintiff waive the ability to stop the electronic fund transfers and waive the right to receive disclosures. However, because we have already held that the EFTA covers the alleged accounts, the plaintiff adequately alleges that the Bank and Lender Defendants engaged in a deceptive practice.
The defendants also contend that the allegations fail to meet the particularity requirement for allegations of fraud, Fed. R. Civ. P. 9(b). Even if Rule 9(b) applies to allegations of "deceptive" practices under 505/2 as well as fraudulent practices, we hold that the plaintiff adequately sets forth the "'circumstances constituting fraud,'" DiLeo v. Ernst & Young, 901 F.2d 624, 627 (7th Cir. 1990) (quoting Fed. R. Civ. P. 9(b)), cert. denied, 498 U.S. 941, 111 S. Ct. 347, 112 L. Ed. 2d 312 (1990)). Although the plaintiff does not specify the particular persons who devised and procured the misleading waivers, where "corporate insiders are involved and the role of each insider defendant is solely within their knowledge," the plaintiff need not specify the role of each defendant. Marc Develop., Inc. v. Wolin, 845 F. Supp. 547, 556 (N.D. Ill. 1993). We conclude that the complaint sufficiently alleges the "who, what, where, when, and how" of the misleading practice. DiLeo, 901 F.2d at 627.
Finally, the defendants contend that Cobb fails to state a claim for injunctive relief because only the state Attorney General may bring actions for injunctions under the ICFA. However, 505/10a(c) of the ICFA expressly provides, with an exception not relevant here, that "in any action brought by a person under this Section, the Court may grant injunctive relief where appropriate." The defendants acknowledge that a 1991 amendment added this authorization to 505/10a, but cite cases in support of the proposition that, even after the amendment, "courts continue to dismiss claims of putative class representatives for injunctive relief under ICFA." Lender Defs.' Reply at 11. Remarkably, the defendants fail to point out that the cases to which they cite, although decided after 1991, addressed actions based on conduct occurring prior to the effective date of the amendment. Sutherland v. Illinois Bell, 254 Ill. App. 3d 983, 627 N.E.2d 145, 147, 194 Ill. Dec. 29 (Ill. App. Ct. 1993); Disc Jockey Defense Network v. Ameritech Publishing, 230 Ill. App. 3d 908, 596 N.E.2d 4, 6-7, 172 Ill. Dec. 725 (Ill. App. Ct.), appeal denied, 146 Ill. 2d 625, 176 Ill. Dec. 796, 602 N.E.2d 450 (Ill. 1992). Because the allegedly misleading practices in this case occurred well after the effective date of 505/10a(c)'s authorization of injunctive relief, we deny the defendants' motion to dismiss the ICFA claim insofar as it seeks an injunction. In sum, we deny the defendants' motion to dismiss Count VII.
V. Motion to Strike
Lastly, the plaintiff moves to "strike" Bank One's motion for summary judgment. Bank One moved for summary judgment, arguing that the bank had not in fact established an account in Cobb's name. Rather, the salary deductions were made directly into Sir Finance's account at Bank One. Thus, Bank One concluded, there existed no "account" for which Bank One had to provide disclosures and other documentation. Instead of responding to the bank's summary judgment motion, the plaintiff moved to "strike" the motion, contending that Bank One's own documents contradicted the affidavit submitted by Bank One in support of summary judgment. In the alternative, Cobb moved to delay briefing on the summary judgment motion in order to conduct additional discovery.
We deny the plaintiff's motion to "strike" Bank One's summary judgment motion. Although Federal Rule of Civil Procedure 12(f) authorizes the strike pleadings containing "immaterial, impertinent or scandalous matter," there exists no express authority for "striking" a summary judgment motion. See Hrubec v. National R.R. Passenger Corp., 829 F. Supp. 1502, 1506 (N.D. Ill. 1993). Moreover, Rule 56(a) expressly permits the filing of a summary judgment motion "at any time after the expiration of 20 days from the commencement of the action." Therefore, we decline to "strike" Bank One's motion for summary judgment.
We also deny the plaintiff's self-styled motion for a continuance to obtain additional discovery. Rule 56(f) provides the means by which a nonmovant may seek a continuance of a summary judgment motion in order to obtain additional discovery or affidavits. However, the plaintiff does not move under Rule 56(f), and indeed fails to attach the required affidavit explaining why she needs additional discovery to respond to the summary judgment motion. Chambers v. American Trans Air, 17 F.3d 998, 1002 (7th), cert. denied, 115 S. Ct. 512, 130 L. Ed. 2d 419 (1994). Accordingly, we deny the plaintiff's motion to delay briefing on the summary judgment motion.
In light of our disposition, and in order to facilitate prompt disposition of Bank One's summary judgment motion, we order that the plaintiff respond to the motion within 10 days from the entry of this order, and that Bank One reply within 7 days thereafter.
For the reasons set forth above, we grant the motion for class certification, grant in part and deny in part the Bank Defendants' motion to dismiss, grant in part and deny in part the Lender Defendants' motion to dismiss, and deny the plaintiff's motion to "strike" Bank One's motion for summary judgment.
It is so ordered.
MARVIN E. ASPEN
United States District Judge