Sen. Terry Link
Filed: 4/21/2010
 
 

 




 

 		












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AMENDMENT TO HOUSE BILL 4781




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    AMENDMENT NO. ______. Amend House Bill 4781 as follows:
 
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on page 6, by replacing lines 11 through 15 with the following:
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"Secretary in which the applicant shall be the obligor and in 
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which an insurance company, which is duly authorized by the 
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State of Illinois to transact the business of fidelity and 
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surety insurance, shall be a surety. The surety bond must:
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        (i) be in effect during the period of registration and 
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    for 2 years after the provider ceases providing 
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    debt-management services to individuals in this State;
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        (ii) run to this State for the benefit of this State 
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    and of individuals who reside in this State when they agree 
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    to receive debt-settlement services from the provider, as 
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    their interests may appear; and
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        (iii) be in the amount of $50,000 or other larger or 
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    smaller amount that the Secretary determines is warranted 
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    by the financial condition and business experience of the 
 


 






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    provider, the history of the provider in performing debt 
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    settlement services, the risk to individuals, and any other 
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    factor that the Secretary considers appropriate."; and


 
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on page 7, immediately below line 1, by inserting the 
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following:
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    "Instead of the surety bond required under this Section, a 
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provider may deliver to the Secretary, in the amount required 
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under this Section, payable or available to this State and to 
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individuals who reside in this State when they agree to receive 
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debt-settlement services from the provider, as their interests 
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may appear:
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        (1) a certificate of insurance:
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            (A) issued by an insurance company authorized to do 
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        business in this State and rated at least A or 
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        equivalent by a nationally recognized rating 
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        organization approved by the Secretary; and
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            (B) with no deductible, or if the provider supplies 
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        a bond in the amount of $5,000, a deductible not 
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        exceeding $5,000; or
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        (2) with the approval of the Secretary:
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            (A) an irrevocable letter of credit, issued or 
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        confirmed by a bank approved by the Secretary, payable 
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        upon presentation of a certificate by the Secretary 
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        stating that the provider or its agent has not complied 
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        with this Act; or
 


 






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            (B) bonds or other obligations of the United States 
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        or guaranteed by the United States or bonds or other 
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        obligations of this State or a political subdivision of 
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        this State, to be deposited and maintained with a bank 
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        approved by the Secretary for this purpose."; and


 
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by replacing line 14 on page 31 through line 11 on page 32 with 
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the following:
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    "(b) A debt settlement provider may only charge fees as 
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provided in either paragraph (1) or (2) as follows:
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        (1) with respect to an agreement that provides for a 
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    flat pay-as-you-go fee based on the overall amount of 
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    included or enrolled debt, the total aggregate amount of 
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    fees charged to any individual under this Section may not 
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    exceed 17% of the principal amount of debt included in the 
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    agreement at the inception of the agreement; the flat 
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    pay-as-you-go fee structure authorized under this 
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    paragraph (1) shall be assessed in equal monthly payments 
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    over at least half the length of the plan, as estimated at 
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    the plan's inception, unless the payment of fees is 
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    voluntarily accelerated by the individual in a separate 
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    record and at least half of the overall amount of 
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    outstanding debt covered by the agreement has been settled; 
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    in the event that a consumer cancels a program being 
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    administered under this fee structure, no further fees 
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    shall be due, owing, or assessed by the provider following 
 


 






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    the month in which notice of the termination of the program 
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    is received by the provider; provided that no monthly fees 
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    shall be charged or collected by a debt settlement provider  
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    unless services are provided to an individual during that 
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    calendar month; services shall be documented by the debt 
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    settlement provider and may include, but are not limited 
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    to, the following:
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            (A)  client qualification;
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            (B)  account management;
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            (C)  debt program organization;
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            (D)  negotiation and settlement discussions with 
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        creditors;
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            (E)  consumer rights education and counseling;
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            (F)  referral to legal assistance; and
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            (G)  third-party payment management;
 or
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        (2) with respect to agreements in which fees are 
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    calculated as a percentage of the amount saved by an 
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    individual, a settlement fee may not exceed 30% of the 
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    excess of the outstanding amount of each debt over the 
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    amount actually paid to the creditor, as calculated at the 
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    time of settlement; settlement fees authorized under this 
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    paragraph (2) shall become billable only as debts are 
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    settled, and the total aggregate amount of fees charged to 
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    any individual under this part may not exceed 20% of the 
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    principal amount of debt included in the agreement at the 
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    agreement's inception.


 


 






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    A provider may not impose or receive fees under both 
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paragraphs (1) and (2) of this subsection.".