Full Text of HB4781 96th General Assembly
HB4781enr 96TH GENERAL ASSEMBLY
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| AN ACT concerning debt settlement.
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| Be it enacted by the People of the State of Illinois,
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| represented in the General Assembly:
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| Section 1. Short title. This Act may be cited as the Debt | 5 |
| Settlement Consumer Protection Act. | 6 |
| Section 5. Purpose and construction. The purpose of this | 7 |
| Act is to protect consumers who enter into agreements with debt | 8 |
| settlement providers and to regulate debt settlement | 9 |
| providers. This Act shall be construed as a consumer protection | 10 |
| law for all purposes. This Act shall be liberally construed to | 11 |
| effectuate its purpose. | 12 |
| Section 10. Definitions. As used in this Act: | 13 |
| "Consumer" means any person who purchases or contracts for | 14 |
| the purchase of debt settlement services. | 15 |
| "Consumer settlement account" means any account or other | 16 |
| means or device in which payments, deposits, or other transfers | 17 |
| from a consumer are arranged, held, or transferred by or to a | 18 |
| debt settlement provider for the accumulation of the consumer's | 19 |
| funds in anticipation of proffering an adjustment or settlement | 20 |
| of a debt or obligation of the consumer to a creditor on behalf | 21 |
| of the consumer. | 22 |
| "Debt settlement provider" means any person or entity |
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| engaging in, or holding itself out as engaging in, the business | 2 |
| of providing debt settlement service in exchange for any fee or | 3 |
| compensation, or any person who solicits for or acts on behalf | 4 |
| of any person or entity engaging in, or holding itself out as | 5 |
| engaging in, the business of providing debt settlement service | 6 |
| in exchange for any fee or compensation. "Debt settlement | 7 |
| provider" does not include: | 8 |
| (1) attorneys licensed, or otherwise authorized, to | 9 |
| practice in Illinois who are engaged in the practice of | 10 |
| law;
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| (2) escrow agents, accountants, broker dealers in | 12 |
| securities, or investment advisors in securities, when | 13 |
| acting in the ordinary practice of their professions and | 14 |
| through the entity used in the ordinary practice of their | 15 |
| profession;
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| (3) any bank, agent of a bank, operating subsidiary of | 17 |
| a bank, affiliate of a bank, trust company, savings and | 18 |
| loan association, savings bank, credit union, crop credit | 19 |
| association, development credit corporation, industrial | 20 |
| development corporation, title insurance company, title | 21 |
| insurance agent, independent escrowee or insurance company | 22 |
| operating or organized under the laws of a state or the | 23 |
| United States, or any other person authorized to make loans | 24 |
| under State law while acting in the ordinary practice of | 25 |
| that business;
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| (4) any person who performs credit services for his or |
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| her employer while receiving a regular salary or wage when | 2 |
| the employer is not engaged in the business of offering or | 3 |
| providing debt settlement service;
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| (5) a collection agency licensed pursuant to the | 5 |
| Collection Agency Act that is collecting a debt on its own | 6 |
| behalf or on behalf of a third party; | 7 |
| (6) an organization that is described in Section | 8 |
| 501(c)(3) and subject to Section 501(q) of Title 26 of the | 9 |
| United States Code and exempt from tax under Section 501(a) | 10 |
| of Title 26 of the United States Code and governed by the | 11 |
| Debt Management Service Act;
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| (7) public officers while acting in their official | 13 |
| capacities and persons acting under court order;
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| (8) any person while performing services incidental to | 15 |
| the dissolution, winding up, or liquidating of a | 16 |
| partnership, corporation, or other business enterprise; or | 17 |
| (9) persons licensed under the Real Estate License Act | 18 |
| of 2000 when acting in the ordinary practice of their | 19 |
| profession and not holding themselves out as debt | 20 |
| settlement providers. | 21 |
| "Debt settlement service" means:
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| (1) offering to provide advice or service, or | 23 |
| acting as an intermediary between or on behalf of a | 24 |
| consumer and one or more of a consumer's creditors, | 25 |
| where the primary purpose of the advice, service, or | 26 |
| action is to obtain a settlement, adjustment, or |
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| satisfaction of the consumer's unsecured debt to a | 2 |
| creditor in an amount less than the full amount of the | 3 |
| principal amount of the debt or in an amount less than | 4 |
| the current outstanding balance of the debt; or
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| (2) offering to provide services related to or | 6 |
| providing services advising, encouraging, assisting, | 7 |
| or counseling a consumer to accumulate funds for the | 8 |
| primary purpose of proposing or obtaining or seeking to | 9 |
| obtain a settlement, adjustment, or satisfaction of | 10 |
| the consumer's unsecured debt to a creditor in an | 11 |
| amount less than the full amount of the principal | 12 |
| amount of the debt or in an amount less than the | 13 |
| current outstanding balance of the debt. | 14 |
| "Debt settlement service" does not include (A) the | 15 |
| services of attorneys licensed, or otherwise | 16 |
| authorized, to practice in Illinois who are engaged in | 17 |
| the practice of law or (B) debt management service as | 18 |
| defined in the Debt Management Service Act. | 19 |
| "Enrollment or set up fee" means any fee, obligation, or | 20 |
| compensation paid or to be paid by the consumer to a debt | 21 |
| settlement provider in consideration of or in connection with | 22 |
| establishing a contract or other agreement with a consumer | 23 |
| related to the provision of debt settlement service. | 24 |
| "Maintenance fee" means any fee, obligation, or | 25 |
| compensation paid or to be paid by the consumer on a periodic | 26 |
| basis to a debt settlement provider in consideration of |
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| maintaining the relationship and services to be provided by a | 2 |
| debt settlement provider in accordance with a contract with a | 3 |
| consumer related to the provision of debt settlement service. | 4 |
| "Principal amount of the debt" means the total amount or | 5 |
| outstanding balance owed by a consumer to one or more creditors | 6 |
| for a debt that is included in a contract for debt settlement | 7 |
| service at the time when the consumer enters into a contract | 8 |
| for debt settlement service. | 9 |
| "Savings" means the difference between the principal | 10 |
| amount of the debt and the amount paid by the debt settlement | 11 |
| provider to the creditor or negotiated by the debt settlement | 12 |
| provider and paid by the consumer to the creditor pursuant to a | 13 |
| settlement negotiated by the debt settlement provider on behalf | 14 |
| of the consumer as full and complete satisfaction of the | 15 |
| creditor's claim with regard to that debt. | 16 |
| "Secretary" means the Secretary of Financial and | 17 |
| Professional Regulation. | 18 |
| "Settlement fee" means any fee, obligation, or | 19 |
| compensation paid or to be paid by the consumer to a debt | 20 |
| settlement provider in consideration of or in connection with a | 21 |
| completed agreement or other arrangement on the part of a | 22 |
| creditor to accept less than the principal amount of the debt | 23 |
| as satisfaction of the creditor's claim against the consumer.
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| Section 15. Requirement of license. It shall be unlawful | 25 |
| for any person or entity to act as a debt settlement provider |
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| except as authorized by this Act and without first having | 2 |
| obtained a license under this Act. | 3 |
| Section 20. Application for license. An application for a | 4 |
| license to operate as a debt settlement provider in this State | 5 |
| shall be made to the Secretary and shall be in writing, under | 6 |
| oath, and in the form prescribed by the Secretary. | 7 |
| Each applicant, at the time of making such application, | 8 |
| shall pay to the Secretary the required fee as set by rule.
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| Every applicant shall submit to the Secretary, at the time | 10 |
| of the application for a license, a
bond to be approved by the | 11 |
| Secretary in which the applicant shall be the obligor, in the | 12 |
| sum of $100,000 or an additional amount as required by the | 13 |
| Secretary, and in which an insurance company, which is duly | 14 |
| authorized by the State of Illinois to transact the business of | 15 |
| fidelity and surety insurance, shall be a surety.
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| The bond shall run to the Secretary for the use of the | 17 |
| Department or of any person or persons
who may have a cause of | 18 |
| action against the obligor in said bond arising out of any | 19 |
| violation of this Act or rules by a debt settlement provider. | 20 |
| Such bond shall be conditioned that the obligor must faithfully | 21 |
| conform to and abide by the provisions of this Act and of all | 22 |
| rules, regulations, and directions lawfully made by the | 23 |
| Secretary and pay to the Secretary or to any person or persons | 24 |
| any and all money that may become due or owing to the State or | 25 |
| to such person or persons, from the obligor under and by virtue |
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| of the provisions of this Act.
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| Section 25. Qualifications for license. Upon the filing of | 3 |
| the application and the approval of the bond and the payment of | 4 |
| the specified fees, the Secretary may issue a license if he or | 5 |
| she finds all of the following:
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| (1) The financial responsibility, experience, | 7 |
| character, and general fitness of the
applicant, the | 8 |
| managers, if the applicant is a limited liability company, | 9 |
| the partners, if the applicant is a partnership, and the | 10 |
| officers and directors, if the applicant is a corporation | 11 |
| or a not for profit corporation, are such as to command the | 12 |
| confidence of the community and to warrant belief that the | 13 |
| business will be operated fairly, honestly, and | 14 |
| efficiently within the purposes of this Act. | 15 |
| (2) The applicant, if an individual, the managers, if | 16 |
| the applicant is a limited
liability company, the partners, | 17 |
| if the applicant is a partnership, and the officers and | 18 |
| directors, if the applicant is a corporation, have not been | 19 |
| convicted of a felony or a misdemeanor or disciplined with | 20 |
| respect to a license or are not currently the subject of a | 21 |
| license disciplinary proceeding concerning allegations | 22 |
| involving dishonesty or untrustworthiness. | 23 |
| (3) The person or persons have not had a record of | 24 |
| having defaulted in the payment
of money collected for | 25 |
| others, including the discharge of those debts through |
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| bankruptcy proceedings. | 2 |
| (4) The applicant, or any officers, directors, | 3 |
| partners, or managers have not previously
violated any | 4 |
| provision of this Act or any rule lawfully made by the | 5 |
| Secretary. | 6 |
| (5) The applicant has not made any false statement or | 7 |
| representation to the Secretary in
applying for a license | 8 |
| under this Section.
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| The Secretary shall deliver a license to the applicant to | 10 |
| operate as a debt settlement
provider in accordance with the | 11 |
| provisions of this Act at the location specified in the | 12 |
| application. The license shall remain in full force and effect | 13 |
| until it is surrendered by the debt settlement provider or | 14 |
| revoked by the Secretary as provided in this Act; provided, | 15 |
| however, that each license shall expire by its terms on January | 16 |
| 1 next following its issuance unless it is renewed as provided | 17 |
| in this Act. A license, however, may not be surrendered without | 18 |
| the approval of the Secretary.
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| More than one license may be issued to the same person for | 20 |
| separate places of business,
but separate applications shall be | 21 |
| made for each location conducting business with Illinois | 22 |
| residents.
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| Section 30. Renewal of license. | 24 |
| (a) Each debt settlement provider under the provisions of | 25 |
| this Act may make application to the Secretary for renewal of |
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| its license, which application for renewal shall be on the form | 2 |
| prescribed by the Secretary and shall be accompanied by a fee | 3 |
| of $1,000 together with a bond or other surety as required, in | 4 |
| a minimum amount of $100,000 or an amount as required by the | 5 |
| Secretary based on the amount of disbursements made by the | 6 |
| licensee in the previous year. The application must be received | 7 |
| by the Department no later than December 1 of the year | 8 |
| preceding the year for which the application applies. | 9 |
| Section 33. Annual report; debt settlement provider | 10 |
| disclosure of statistical information; Secretary to report | 11 |
| statistical information. | 12 |
| (a) A debt settlement provider must file an annual report | 13 |
| with the Secretary that must include all of the following data: | 14 |
| (1) for each Illinois resident: | 15 |
| (i) the number of accounts enrolled; | 16 |
| (ii) the principal amount of debt at the time each | 17 |
| account was enrolled; | 18 |
| (iii) the status of each account (for example, | 19 |
| active or terminated); | 20 |
| (iv) whether the account has been settled, and if | 21 |
| so, the settlement amount and the corresponding | 22 |
| principal amount of debt enrolled for that account; | 23 |
| (v) the total amount of fees paid to the debt | 24 |
| settlement service provider; | 25 |
| (vi) whether the creditor has filed suit on the |
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| account debt; | 2 |
| (vii) the date the resident is expected to complete | 3 |
| the debt settlement program; and | 4 |
| (viii) the date the resident canceled, terminated, | 5 |
| or became inactive in the program, if applicable. | 6 |
| (2) for persons completing the program during the | 7 |
| reporting period, the median and mean percentage of savings | 8 |
| and the median and mean fees paid to the debt settlement | 9 |
| service provider; | 10 |
| (3) for persons who cancelled, became inactive, or | 11 |
| terminated the program during the reporting period, the | 12 |
| median and mean percentage of the savings and the median | 13 |
| and mean fees paid to the debt settlement service provider; | 14 |
| (4) the percentage of Illinois residents who canceled, | 15 |
| terminated, became inactive, or completed the program | 16 |
| without the settlement of all of the enrolled debt; and | 17 |
| (5) the total amount of fees collected from Illinois | 18 |
| residents.
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| The annual report must contain a declaration executed by an | 20 |
| official authorized by the debt settlement provider under | 21 |
| penalty of perjury that states that the report complies with | 22 |
| this Section. | 23 |
| (b) The Secretary may prepare and make available to the | 24 |
| public an annual consolidated report of all the data debt | 25 |
| settlement providers are required to report pursuant to | 26 |
| subsection (a) of this Section.
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| Section 35. License; display and location of license. Each | 2 |
| license issued shall be kept conspicuously posted in the place | 3 |
| of business of the debt settlement provider. The business | 4 |
| location may be changed by any debt settlement provider upon 10 | 5 |
| days prior written notice to the Secretary. A debt settlement | 6 |
| provider must operate under the name as stated in its original | 7 |
| application. | 8 |
| Section 45. Denial of license. Any complete application for | 9 |
| a license shall be approved or denied within 60 days after the | 10 |
| filing of the complete application with the Secretary. | 11 |
| Section 50. Revocation or suspension of license.
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| (a) The Secretary may revoke or suspend any license if he | 13 |
| or she finds that:
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| (1) any debt settlement provider has failed to pay the | 15 |
| annual
license fee or to maintain in effect the bond | 16 |
| required under the provisions of this Act;
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| (2) the debt settlement provider has violated any | 18 |
| provisions of this
Act or any rule lawfully made by the | 19 |
| Secretary under the authority of this Act;
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| (3) any fact or condition exists that, if it had | 21 |
| existed at the time of the original application for a | 22 |
| license, would have warranted the Secretary in refusing its | 23 |
| issuance; or
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| (4) any applicant has made any false statement or | 2 |
| representation to the Secretary in applying for a license | 3 |
| under this Act.
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| (b) In every case in which a license is suspended or | 5 |
| revoked or an application for a license or renewal of a license | 6 |
| is denied, the Secretary shall serve notice of his or her | 7 |
| action, including a statement of the reasons for his or her | 8 |
| actions, either personally or by certified mail, return receipt | 9 |
| requested. Service by mail shall be deemed completed if the | 10 |
| notice is deposited in the U.S. Mail.
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| (c) In the case of a denial of an application or renewal of | 12 |
| a license, the applicant or
debt settlement provider may | 13 |
| request, in writing, a hearing within 30 days after the date of | 14 |
| service. In the case of a denial of a renewal of a license, the | 15 |
| license shall be deemed to continue in force until 30 days | 16 |
| after the service of the notice of denial, or if a hearing is | 17 |
| requested during that period, until a final administrative | 18 |
| order is entered.
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| (d) An order of revocation or suspension of a license shall | 20 |
| take effect upon service of the
order unless the debt | 21 |
| settlement provider requests, in writing, a hearing within 10 | 22 |
| days after the date of service. In the event a hearing is | 23 |
| requested, the order shall be stayed until a final | 24 |
| administrative order is entered.
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| (e) If the debt settlement provider requests a hearing, | 26 |
| then the Secretary shall schedule the hearing within 30
days |
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| after the request for a hearing unless otherwise agreed to by | 2 |
| the parties.
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| (f) The hearing shall be held at the time and place | 4 |
| designated by the Secretary. The
Secretary and any | 5 |
| administrative law judge designated by the Secretary have the | 6 |
| power to administer oaths and affirmations, subpoena witnesses | 7 |
| and compel their attendance, take evidence, and require the | 8 |
| production of books, papers, correspondence, and other records | 9 |
| or information that the Secretary considers relevant or | 10 |
| material to the injury.
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| (g) The costs for the administrative hearing shall be set | 12 |
| by rule.
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| Section 55. Contracts, books, records, and contract | 14 |
| cancellation. Each debt settlement provider shall furnish to | 15 |
| the Secretary, when requested, a copy of the contract entered | 16 |
| into between the debt settlement provider and the debtor. The | 17 |
| debt settlement provider shall furnish the debtor with a copy | 18 |
| of the written contract at the time of execution, which shall | 19 |
| set forth the charges, if any, agreed upon for the services of | 20 |
| the debt settlement provider.
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| Each debt settlement provider shall maintain records and | 22 |
| accounts that will enable any debtor
contracting with the debt | 23 |
| settlement provider, at any reasonable time, to ascertain the | 24 |
| status of all the debtor's accounts with the debt settlement | 25 |
| service provider, including, but not limited to, the amount of |
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| any fees paid by the debtor, amount held in trust (if | 2 |
| applicable), settlement offers made and received on each of the | 3 |
| debtor's accounts, and legally enforceable settlements reached | 4 |
| with the debtor's creditors. A statement showing the total | 5 |
| amount received and the total disbursements to each creditor | 6 |
| shall be furnished by the debt settlement provider to any | 7 |
| individual within 7 days after a request therefor by the said | 8 |
| debtor. Each debt settlement provider shall issue a receipt for | 9 |
| each payment made by the debtor at a debt settlement provider | 10 |
| office. Each debt settlement provider shall prepare and retain | 11 |
| in the file of each debtor a written analysis of the debtor's | 12 |
| income and expenses to substantiate that the plan of payment is | 13 |
| feasible and practical.
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| Section 60. Examination of debt settlement provider; duty | 15 |
| to disclose a post-license event. | 16 |
| (a) The Secretary at any time, either in person or through | 17 |
| an appointed representative, may examine the condition and | 18 |
| affairs of a debt settlement provider. In connection with any | 19 |
| examination, the Secretary may examine on oath any debt | 20 |
| settlement provider and any director, officer, employee, | 21 |
| customer, manager, partner, member, creditor, or stockholder | 22 |
| of a debt settlement provider concerning the affairs and | 23 |
| business of the debt settlement provider. The Secretary shall | 24 |
| ascertain whether the debt settlement provider transacts its | 25 |
| business in the manner prescribed by law and the rules issued |
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| thereunder. The debt settlement provider shall pay the cost of | 2 |
| the examination as determined by the Secretary by | 3 |
| administrative rule. Failure to pay the examination fee within | 4 |
| 30 days after receipt of demand from the Secretary may result | 5 |
| in the suspension of the license until the fee is paid. The | 6 |
| Secretary shall have the right to investigate and examine any | 7 |
| person, whether licensed or not, who is engaged in the debt | 8 |
| settlement service business. The Secretary shall have the power | 9 |
| to subpoena the production of any books and records pertinent | 10 |
| to any investigation. | 11 |
| (b) Each debt settlement provider shall disclose promptly | 12 |
| to the Secretary, but in no event more than 30 days after the | 13 |
| occurrence of the event, any change in any of the criteria | 14 |
| listed in Section 25 of this Act for the issuance of a license. | 15 |
| Section 65. Trust funds; requirements and restrictions.
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| (a) All funds received by a debt settlement provider or his | 17 |
| agent from and for the purpose of paying bills,
invoices, or | 18 |
| accounts of a debtor shall constitute trust funds owned by and | 19 |
| belonging to the debtor from whom they were received. All such | 20 |
| funds received by the debt settlement provider shall be | 21 |
| separated from the funds of the debt settlement provider not | 22 |
| later than the end of the business day following receipt by the | 23 |
| debt settlement provider. All such funds shall be kept separate | 24 |
| and apart at all times from funds belonging to the debt | 25 |
| settlement provider or any of its officers, employees, or |
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| agents and may be used for no purpose other than paying bills, | 2 |
| invoices, or accounts of the debtor. All such trust funds | 3 |
| received at the main or branch offices of a debt settlement | 4 |
| provider shall be deposited in a bank in an account in the name | 5 |
| of the debt settlement provider-designated trust account, or by | 6 |
| some other appropriate name indicating that the funds are not | 7 |
| the funds of the debt settlement provider or its officers, | 8 |
| employees, or agents, on or before the close of the business | 9 |
| day following receipt.
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| (b) Such funds are not subject to attachment, lien, levy of | 11 |
| execution, or sequestration by order of court except by a | 12 |
| debtor for whom a debt settlement provider is acting as an | 13 |
| agent in paying bills, invoices, or accounts.
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| (c) At least once every month, the debt settlement provider | 15 |
| shall render an accounting to the debtor
that shall itemize the | 16 |
| total amount received from the debtor, the total amount paid | 17 |
| each creditor, the amount of charges deducted, and any amount | 18 |
| held in reserve, if applicable, and the status of each of the | 19 |
| debtors' enrolled accounts. A debt settlement provider shall, | 20 |
| in addition, provide such an accounting to a debtor within 7 | 21 |
| days after written demand, but not more than 3 times per | 22 |
| 6-month period.
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| (d) Nothing in this Act requires the establishment of a | 24 |
| trust account if no consumer funds other than earned settlement | 25 |
| fees are held or controlled by a debt settlement provider. |
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| Section 75. Rules. The Secretary shall adopt and enforce | 2 |
| all reasonable rules necessary or appropriate for the | 3 |
| administration of this Act. The rulemaking shall be subject to | 4 |
| the provisions of the Illinois Administrative Procedure Act. | 5 |
| Section 80. Penalties.
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| (a) Any person who operates as a debt settlement provider | 7 |
| without a license
shall be guilty of a Class 4 felony.
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| (b) Any contract of debt settlement service as defined in | 9 |
| this Act made by an
unlicensed person shall be null and void | 10 |
| and of no legal effect.
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| (c) The Secretary may, after 10 days notice by registered | 12 |
| mail to the debt settlement service provider at the address on | 13 |
| the license or unlicensed entity engaging in the debt | 14 |
| settlement service business, stating the contemplated action | 15 |
| and in general the grounds therefore, fine such debt settlement | 16 |
| service provider or unlicensed entity an amount not exceeding | 17 |
| $10,000 per violation, and revoke or suspend any license issued | 18 |
| hereunder if he or she finds that: | 19 |
| (1) The debt settlement service provider has failed to | 20 |
| comply with any provision of this Act or any order, | 21 |
| decision, finding, rule, regulation or direction of the | 22 |
| Secretary lawfully made pursuant to the authority of this | 23 |
| Act; or | 24 |
| (2) Any fact or condition exists which, if it had | 25 |
| existed at the time of the original application for the |
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| license, clearly would have warranted the Secretary in | 2 |
| refusing to issue the license. | 3 |
| Section 83. Additional liability for unlicensed activity. | 4 |
| Any person who, without the required license, engages in | 5 |
| conduct requiring a license under this Act without the required | 6 |
| license shall be liable to the Department in an amount equal to | 7 |
| the greater of (1) $1,000 or (2) an amount equal to four times | 8 |
| the amount of consumer debt enrolled. The Department shall | 9 |
| cause any funds so recovered to be deposited in the Debt | 10 |
| Settlement Consumer Protection Fund. | 11 |
| Section 85. Injunction. To engage in debt settlement | 12 |
| service, render financial service, or accept debtors' funds, as | 13 |
| defined in this Act, without a valid license to do so, is | 14 |
| hereby declared to be inimical to the public welfare and to | 15 |
| constitute a public nuisance. The Secretary may, in the name of | 16 |
| the people of the State of Illinois, through the Attorney | 17 |
| General of the State of Illinois, file a complaint for an | 18 |
| injunction in the circuit court to enjoin such person from | 19 |
| engaging in that business. An injunction proceeding shall be in | 20 |
| addition to, and not in lieu of, penalties and remedies | 21 |
| otherwise provided in this Act. | 22 |
| Section 90. Review. All final administrative decisions of | 23 |
| the Secretary under this Act shall be subject to judicial |
|
|
|
HB4781 Enrolled |
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LRB096 16778 MJR 32078 b |
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| 1 |
| review pursuant to the provisions of the Administrative Review | 2 |
| Law, including all amendments, modifications, and adopted | 3 |
| rules. | 4 |
| Section 95. Cease and desist orders.
| 5 |
| (a) The Secretary may issue a cease and desist order to any | 6 |
| debt settlement provider or other person doing
business without | 7 |
| the required license when, in the opinion of the Secretary, the | 8 |
| debt settlement provider or other person is violating or is | 9 |
| about to violate any provision of the Act or any rule or | 10 |
| condition imposed in writing by the Department.
| 11 |
| (b) The Secretary may issue a cease and desist order prior | 12 |
| to a hearing.
| 13 |
| (c) The Secretary shall serve notice of his or her action, | 14 |
| including a statement of the reasons for
his or her action | 15 |
| either personally or by certified mail, return receipt | 16 |
| requested. Service by mail shall be deemed completed if the | 17 |
| notice is deposited in the U.S. Mail.
| 18 |
| (d) Within 10 days after service of the cease and desist | 19 |
| order, the licensee or other person
may request, in writing, a | 20 |
| hearing.
| 21 |
| (e) The Secretary shall schedule a hearing within 30 days | 22 |
| after the request for a hearing
unless otherwise agreed to by | 23 |
| the parties.
| 24 |
| (f) If it is determined that the Secretary had the | 25 |
| authority to issue the cease and desist
order, then he or she |
|
|
|
HB4781 Enrolled |
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LRB096 16778 MJR 32078 b |
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| may issue such orders as may be reasonably necessary to | 2 |
| correct, eliminate, or remedy that conduct.
| 3 |
| (g) The powers vested in the Secretary by this Section are | 4 |
| additional to any and all other
powers and remedies vested in | 5 |
| the Secretary by law, and nothing in this Section shall be | 6 |
| construed as requiring that the Secretary shall employ the | 7 |
| power conferred in this Section instead of or as a condition | 8 |
| precedent to the exercise of any other power or remedy vested | 9 |
| in the Secretary.
| 10 |
| (h) The cost for the administrative hearing shall be set by | 11 |
| rule.
| 12 |
| Section 100. Moneys received; Financial Institution Fund. | 13 |
| All moneys received by the Division of Financial Institutions | 14 |
| under this Act, except for moneys received for the Debt | 15 |
| Settlement Consumer Protection Fund, shall be deposited in the | 16 |
| Financial Institution Fund created under Section 6z-26 of the | 17 |
| State Finance Act. | 18 |
| Section 103. Debt Settlement Consumer Protection Fund.
| 19 |
| (a) A special income-earning fund is hereby created in the | 20 |
| State Treasury, known as the Debt Settlement Consumer | 21 |
| Protection Fund. This Fund is not subject to appropriation by | 22 |
| the Illinois General Assembly. | 23 |
| (b) All moneys paid into the Fund together with all | 24 |
| accumulated, undistributed income thereon shall be held as a |
|
|
|
HB4781 Enrolled |
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LRB096 16778 MJR 32078 b |
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| special Fund in the State Treasury. All interest earned on the | 2 |
| Fund is non-distributable and shall be returned to the Fund, | 3 |
| and shall be invested and re-invested in the Fund by the | 4 |
| Treasurer or his or her designee. The Fund shall be used solely | 5 |
| for the purpose of providing restitution to consumers who have | 6 |
| suffered monetary loss arising out of a transaction regulated | 7 |
| by this Act. | 8 |
| (c) The Fund shall be applied only to restitution when | 9 |
| restitution has been ordered by the Secretary. Restitution | 10 |
| shall not exceed the amount actually lost by the consumer. The | 11 |
| Fund shall not be used for the payment of any attorney or other | 12 |
| fees. | 13 |
| (d) The Fund shall be subrogated to the amount of the | 14 |
| restitution, and the Secretary shall request the Attorney | 15 |
| General to engage in all reasonable collection steps to collect | 16 |
| restitution from the party responsible for the loss and | 17 |
| reimburse the Fund. | 18 |
| (e) Notwithstanding any other provisions of this Section, | 19 |
| the payment of restitution from the Fund shall be a matter of | 20 |
| grace and not right, and no consumer shall have any vested | 21 |
| rights in the Fund as a beneficiary or otherwise. Before | 22 |
| seeking restitution from the Fund, the consumer or beneficiary | 23 |
| seeking payment of restitution shall apply for restitution on a | 24 |
| form provided by the Secretary. The form shall include any | 25 |
| information the Secretary may reasonably require in order to | 26 |
| determine that restitution is appropriate. All documentation |
|
|
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HB4781 Enrolled |
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LRB096 16778 MJR 32078 b |
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| required by the Secretary, including the form, is subject to | 2 |
| audit. Distributions from the Fund shall be made solely at the | 3 |
| discretion of the Secretary, except that no payments or | 4 |
| distributions may be made under any circumstance if the Fund is | 5 |
| depleted. | 6 |
| (f) All deposits to this Fund shall be made pursuant to | 7 |
| Section 83 of this Act. | 8 |
| (g) Notwithstanding any other law to the contrary, the Fund | 9 |
| is not subject to administrative charges or charge-backs that | 10 |
| would in any way transfer moneys from the Fund into any other | 11 |
| fund of the State. | 12 |
| Section 105. Advertising and marketing practices. | 13 |
| (a) A debt settlement provider shall not represent, | 14 |
| expressly or by implication, any results or outcomes of its | 15 |
| debt settlement services in any advertising, marketing, or | 16 |
| other communication to consumers unless the debt settlement | 17 |
| provider possesses substantiation for such representation at | 18 |
| the time such representation is made.
| 19 |
| (b) A debt settlement provider shall not, expressly or by | 20 |
| implication, make any unfair or deceptive representations, or | 21 |
| any omissions of material facts, in any of its advertising or | 22 |
| marketing communications concerning debt settlement services.
| 23 |
| (c) All advertising and marketing communications | 24 |
| concerning debt settlement services shall disclose the | 25 |
| following material information clearly and conspicuously:
|
|
|
|
HB4781 Enrolled |
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LRB096 16778 MJR 32078 b |
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| "Debt settlement services are not appropriate for | 2 |
| everyone. Failure to pay your monthly bills in a timely | 3 |
| manner will result in increased balances and will harm your | 4 |
| credit rating. Not all creditors will agree to reduce | 5 |
| principal balance, and they may pursue collection, | 6 |
| including lawsuits." | 7 |
| Section 110. Individualized financial analysis. | 8 |
| (a) Prior to entering into a written contract with a | 9 |
| consumer, a debt settlement provider shall prepare and provide | 10 |
| to the consumer in writing and retain a copy of:
| 11 |
| (1) an individualized financial analysis, including | 12 |
| the individual's income, expenses, and debts;
and | 13 |
| (2) a statement containing a good faith estimate of the | 14 |
| length of time it will take to complete the debt settlement | 15 |
| program, the total amount of debt owed to each creditor | 16 |
| included in the debt settlement program, the total savings | 17 |
| estimated to be necessary to complete the debt settlement | 18 |
| program, and the monthly targeted savings amount estimated | 19 |
| to be necessary to complete the debt settlement program.
| 20 |
| (b) A debt settlement provider shall not enter into a | 21 |
| written contract with a consumer unless it makes written | 22 |
| determinations, supported by the financial analysis, that: | 23 |
| (1) the consumer can reasonably meet the requirements | 24 |
| of the proposed debt settlement program, including the fees | 25 |
| and the periodic savings amounts set forth in the savings |
|
|
|
HB4781 Enrolled |
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LRB096 16778 MJR 32078 b |
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| 1 |
| goals; and | 2 |
| (2) the debt settlement program is suitable for the | 3 |
| consumer at the time the contract is to be signed.
| 4 |
| Section 115. Required pre-sale consumer disclosures and | 5 |
| warnings. | 6 |
| (a) Before the consumer signs a contract, the debt | 7 |
| settlement provider shall provide an oral and written notice to | 8 |
| the consumer that clearly and conspicuously discloses all of | 9 |
| the following:
| 10 |
| (1) Debt settlement services may not be suitable for | 11 |
| all consumers. | 12 |
| (2) Using a debt settlement service likely will harm | 13 |
| the consumer's credit history and credit score.
| 14 |
| (3) Using a debt settlement service does not stop | 15 |
| creditor collection activity, including creditor lawsuits | 16 |
| and garnishments. | 17 |
| (4) Not all creditors will accept a reduction in the | 18 |
| balance, interest rate, or fees a consumer owes.
| 19 |
| (5) The consumer should inquire about other means of | 20 |
| dealing with debt, including, but not limited to, nonprofit | 21 |
| credit counseling and bankruptcy.
| 22 |
| (6) The consumer remains obligated to make periodic or | 23 |
| scheduled payments to creditors while participating in a | 24 |
| debt settlement plan, and that the debt settlement provider | 25 |
| will not make any periodic or scheduled payments to |
|
|
|
HB4781 Enrolled |
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LRB096 16778 MJR 32078 b |
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| 1 |
| creditors on behalf of the consumer.
| 2 |
| (7) The failure to make periodic or scheduled payments | 3 |
| to a creditor is likely to:
| 4 |
| (A) harm the consumer's credit history, credit | 5 |
| rating, or credit score;
| 6 |
| (B) lead the creditor to increase lawful | 7 |
| collection activity, including litigation, garnishment | 8 |
| of the consumer's wages, and judgment liens on the | 9 |
| consumer's property; and
| 10 |
| (C) lead to the imposition by the creditor of | 11 |
| interest charges, late fees, and other penalty fees, | 12 |
| increasing the principal amount of the debt. | 13 |
| (8) The amount of time estimated to be necessary to | 14 |
| achieve the represented results.
| 15 |
| (9) The estimated amount of money or the percentage of | 16 |
| debt the consumer must accumulate before a settlement offer | 17 |
| will be made to each of the consumer's creditors.
| 18 |
| (b) The consumer shall sign and date an acknowledgment form | 19 |
| entitled "Consumer Notice and Rights Form" that states: "I, the | 20 |
| debtor, have received from the debt settlement provider a copy | 21 |
| of the form entitled "Consumer Notice and Rights Form"." The | 22 |
| debt settlement provider or its representative shall also sign | 23 |
| and date the acknowledgment form, which includes the name and | 24 |
| address of the debt settlement services provider. The | 25 |
| acknowledgment form shall be in duplicate and incorporated into | 26 |
| the "Consumer Notice and Rights Form". The original |
|
|
|
HB4781 Enrolled |
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LRB096 16778 MJR 32078 b |
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| 1 |
| acknowledgment form shall be retained by the debt settlement | 2 |
| provider, and the duplicate copy shall be retained within the | 3 |
| form by the consumer.
| 4 |
| If the acknowledgment form is in electronic form, then it | 5 |
| shall contain the consumer disclosures required by Section | 6 |
| 101(c) of the federal Electronic Signatures in Global and | 7 |
| National Commerce Act. | 8 |
| (c) The requirements of this Section are satisfied if the | 9 |
| provider provides the following warning verbatim, both orally | 10 |
| and in writing, with the caption "CONSUMER NOTICE AND RIGHTS | 11 |
| FORM" in at least 28-point font and the remaining portion in at | 12 |
| least 14-point font, to a consumer before the consumer signs a | 13 |
| contract for the debt settlement provider's services: | 14 |
| "CONSUMER NOTICE AND RIGHTS FORM | 15 |
| CAUTION | 16 |
| We CANNOT GUARANTEE that you successfully will reduce or | 17 |
| eliminate your debt. | 18 |
| If you stop paying your creditors, there is a strong | 19 |
| likelihood some or all of the following may happen: | 20 |
| - CREDITORS MAY STILL CONTACT YOU AND TRY TO COLLECT. | 21 |
| - CREDITORS MAY STILL SUE YOU FOR THE MONEY YOU OWE.
| 22 |
| - YOUR WAGES OR BANK ACCOUNT MAY STILL BE GARNISHED.
| 23 |
| - YOUR CREDIT RATING AND CREDIT SCORE LIKELY WILL BE | 24 |
| HARMED. |
|
|
|
HB4781 Enrolled |
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LRB096 16778 MJR 32078 b |
|
| 1 |
| - NOT ALL CREDITORS WILL AGREE TO ACCEPT A BALANCE | 2 |
| REDUCTION. | 3 |
| - YOU SHOULD CONSIDER ALL YOUR OPTIONS FOR ADDRESSING YOUR | 4 |
| DEBT, SUCH AS CREDIT COUNSELING AND BANKRUPTCY FILING.
| 5 |
| - THE AMOUNT OF MONEY YOU OWE MAY INCREASE DUE TO CREDITOR | 6 |
| IMPOSITION OF INTEREST CHARGES, LATE FEES, AND OTHER PENALTY | 7 |
| FEES.
| 8 |
| - EVEN IF WE DO SETTLE YOUR DEBT, YOU MAY STILL BE REQUIRED | 9 |
| TO PAY TAXES ON THE AMOUNT FORGIVEN. | 10 |
| YOUR RIGHT TO CANCEL | 11 |
| If you sign a contract with a Debt Settlement Provider, you | 12 |
| have the right to cancel at any time and receive a full refund | 13 |
| of all unearned fees you have paid to the provider and all | 14 |
| funds placed in your settlement fund that have not been paid to | 15 |
| any creditors. | 16 |
| IF YOU ARE DISSATISFIED
| 17 |
| OR YOU HAVE QUESTIONS | 18 |
| If you are dissatisfied with a debt settlement provider or | 19 |
| have any questions, please bring it to the attention of the | 20 |
| Illinois Attorney General's Office and the Department of | 21 |
| Financial and Professional Regulation. | 22 |
| Attorney General Toll-Free Numbers:
| 23 |
| Carbondale (800) 243-0607 | 24 |
| Springfield (800) 243-0618
|
|
|
|
HB4781 Enrolled |
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LRB096 16778 MJR 32078 b |
|
| 1 |
| Chicago (800) 386-5438 | 2 |
| Website for Department of Financial and Professional | 3 |
| Regulation: www.idfpr.com | 4 |
| I, the debtor, have received from the debt settlement provider | 5 |
| a copy of the form entitled Consumer Notice and Rights Form.". | 6 |
| Section 120. Debt settlement contract. | 7 |
| (a) A debt settlement provider shall not provide debt | 8 |
| settlement service to a consumer without a written contract | 9 |
| signed and dated by both the consumer and the debt settlement | 10 |
| provider.
| 11 |
| (b) Any contract for the provision of debt settlement | 12 |
| service entered into in violation of the provisions of this | 13 |
| Section is void.
| 14 |
| (c) A contract between a debt settlement provider and a | 15 |
| consumer for the provision of debt settlement service shall | 16 |
| disclose all of the following clearly and conspicuously:
| 17 |
| (1) The name and address of the consumer. | 18 |
| (2) The date of execution of the contract.
| 19 |
| (3) The legal name of the debt settlement provider, | 20 |
| including any other business names used by the debt | 21 |
| settlement provider.
| 22 |
| (4) The corporate address and regular business | 23 |
| address, including a street address, of the debt settlement | 24 |
| provider.
| 25 |
| (5) The telephone number at which the consumer may |
|
|
|
HB4781 Enrolled |
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LRB096 16778 MJR 32078 b |
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| 1 |
| speak with a representative of the debt settlement provider | 2 |
| during normal business hours.
| 3 |
| (6) A complete list of the consumer's accounts, debts, | 4 |
| and obligations to be included in the provision of debt | 5 |
| settlement service, including the name of each creditor and | 6 |
| principal amount of each debt.
| 7 |
| (7) A description of the services to be provided by the | 8 |
| debt settlement provider, including the expected time | 9 |
| frame for settlement for each account, debt, or obligation | 10 |
| included in item (6) of this subsection (c). | 11 |
| (8) An itemized list of all fees to be paid by the | 12 |
| consumer to the debt settlement provider, and the date, | 13 |
| approximate date, or circumstances under which each fee | 14 |
| will become due.
| 15 |
| (9) A good faith estimate of the total amount of all | 16 |
| fees and compensation, not to exceed the amounts specified | 17 |
| in Section 125 of this Act, to be collected by the debt | 18 |
| settlement provider from the consumer for the provision of | 19 |
| debt settlement service contemplated by the contract.
| 20 |
| (10) A statement of the proposed savings goals for the | 21 |
| consumer, stating the amount to be saved per month or other | 22 |
| period, time period over which savings goal extends, and | 23 |
| the total amount of the savings expected to be paid by the | 24 |
| consumer pursuant to the terms of the contract.
| 25 |
| (11) The amount of money or the percentage of debt the | 26 |
| consumer must accumulate before a settlement offer will be |
|
|
|
HB4781 Enrolled |
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LRB096 16778 MJR 32078 b |
|
| 1 |
| made to each of the consumer's creditors.
| 2 |
| (12) The written individualized financial analysis | 3 |
| required by Section 110 of this Act.
| 4 |
| (13) The contents of the "Consumer Notice and Rights | 5 |
| Form" provided in Section 115.
| 6 |
| (14) A written notice to the consumer that the consumer | 7 |
| may cancel the contract at any time until after the debt | 8 |
| settlement provider has fully performed each service the | 9 |
| debt settlement provider contracted to perform or | 10 |
| represented he or she would perform, and upon that event:
| 11 |
| (A) the consumer shall be entitled to a full refund | 12 |
| of all unearned fees and compensation paid by the | 13 |
| consumer to the debt settlement provider, and a full | 14 |
| refund of all funds provided by the consumer to the | 15 |
| debt settlement provider for a consumer settlement | 16 |
| account, except for funds actually paid to a creditor | 17 |
| on behalf of the consumer, under the terms of the | 18 |
| contract for debt settlement service; and
| 19 |
| (B) all powers of attorney granted to the debt | 20 |
| settlement provider by the consumer shall be | 21 |
| considered revoked and voided.
| 22 |
| (15) A form the consumer may use to cancel the contract | 23 |
| pursuant to the provisions of Section 135 of this Act. The | 24 |
| form shall include the name and mailing address of the debt | 25 |
| settlement provider and shall disclose clearly and | 26 |
| conspicuously how the consumer can cancel the contract, |
|
|
|
HB4781 Enrolled |
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LRB096 16778 MJR 32078 b |
|
| 1 |
| including applicable addresses, telephone numbers, | 2 |
| facsimile numbers, and electronic mail addresses the | 3 |
| consumer can use to cancel the contract.
| 4 |
| (d) If a debt settlement provider communicates with a | 5 |
| consumer primarily in a language other than English, then the | 6 |
| debt settlement provider shall furnish to the consumer a | 7 |
| translation of all the disclosures and documents required by | 8 |
| this Act in that other language.
| 9 |
| Section 125. Fees. | 10 |
| (a) A debt settlement provider shall not charge fees of any | 11 |
| type or receive compensation from a consumer in a type, amount, | 12 |
| or timing other than fees or compensation permitted in this | 13 |
| Section.
| 14 |
| (b) A debt settlement provider shall not charge or receive | 15 |
| from a consumer any enrollment fee, set up fee, up front fee of | 16 |
| any kind, or any maintenance fee, except for a one-time | 17 |
| enrollment fee of no more than $50.
| 18 |
| (c) A debt settlement provider may charge a settlement fee, | 19 |
| which shall not exceed an amount greater than 15% of the | 20 |
| savings. If the amount paid by the debt settlement provider to | 21 |
| the creditor or negotiated by the debt settlement provider and | 22 |
| paid by the consumer to the creditor pursuant to a settlement | 23 |
| negotiated by the debt settlement provider on behalf of the | 24 |
| consumer as full and complete satisfaction of the creditor's | 25 |
| claim with regard to that debt is greater than the principal |
|
|
|
HB4781 Enrolled |
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LRB096 16778 MJR 32078 b |
|
| 1 |
| amount of the debt, then the debt settlement provider shall not | 2 |
| be entitled to any settlement fee.
| 3 |
| (d) A debt settlement provider shall not collect any | 4 |
| settlement fee from a consumer until a creditor enters into a | 5 |
| legally enforceable agreement to accept funds in a specific | 6 |
| dollar amount as full and complete satisfaction of the | 7 |
| creditor's claim with regard to that debt and those funds are | 8 |
| provided by the debt settlement provider on behalf of the | 9 |
| consumer or are provided directly by the consumer to the | 10 |
| creditor pursuant to a settlement negotiated by the debt | 11 |
| settlement provider
| 12 |
| Section 130. Consumer settlement accounts and monthly | 13 |
| accounting. | 14 |
| (a) A debt settlement provider who receives funds from a | 15 |
| consumer shall hold all funds received for a consumer | 16 |
| settlement account in a properly designated trust account in a | 17 |
| federally insured depository institution. The funds shall | 18 |
| remain the property of the consumer until the debt settlement | 19 |
| provider disburses the funds to a creditor on behalf of the | 20 |
| consumer as full or partial satisfaction of the consumer's debt | 21 |
| to the creditor or the creditor's claim against the consumer.
| 22 |
| Any interest earned on such account shall be credited to the | 23 |
| consumer. | 24 |
| (b) A debt settlement provider shall not be named on a | 25 |
| consumer's bank account, take a power of attorney in a |
|
|
|
HB4781 Enrolled |
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LRB096 16778 MJR 32078 b |
|
| 1 |
| consumer's bank account, create a demand draft on a consumer's | 2 |
| bank account, or exercise any control over any bank account | 3 |
| held by or on behalf of the consumer.
| 4 |
| (c) A debt settlement provider shall, no less than monthly, | 5 |
| provide each consumer with which it has a contract for the | 6 |
| provision of debt settlement service a statement of account | 7 |
| balances, fees paid, settlements completed, and remaining | 8 |
| debts.
| 9 |
| Section 135. Cancellation of contract and right to fee and | 10 |
| settlement fund refunds. | 11 |
| (a) A consumer may cancel a contract with a debt settlement | 12 |
| provider at any time before the debt settlement provider has | 13 |
| fully performed each service the debt settlement provider | 14 |
| contracted to perform or represented it would perform.
| 15 |
| (b) If a consumer cancels a contract with a debt settlement | 16 |
| provider, or at any time upon a material violation of this Act | 17 |
| on the part of the debt settlement provider, then the debt | 18 |
| settlement provider shall refund all fees and compensation, | 19 |
| with the exception of the application fee and any earned | 20 |
| settlement fee, as well as all funds paid by the consumer to | 21 |
| the debt settlement provider that have accumulated in a | 22 |
| consumer settlement account and that the debt settlement | 23 |
| provider has not disbursed to creditors. Upon cancellation, all | 24 |
| powers of attorney and direct debit authorizations granted to | 25 |
| the debt settlement provider by the consumer shall be |
|
|
|
HB4781 Enrolled |
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LRB096 16778 MJR 32078 b |
|
| 1 |
| considered revoked and voided.
| 2 |
| (c) A debt settlement provider shall make any refund | 3 |
| required under this Section within 5 business days after the | 4 |
| notice of cancellation, and shall include with the refund a | 5 |
| full statement of account showing fees received, fees refunded, | 6 |
| savings held, payments to creditors, settlement fees earned if | 7 |
| any, and savings refunded.
| 8 |
| (d) Upon the cancellation of a contract under this Section, | 9 |
| the debt settlement provider shall provide timely notice of the | 10 |
| cancellation of the contract to each of the creditors with whom | 11 |
| the debt settlement provider has had any prior communication on | 12 |
| behalf of the consumer in connection with the provision of any | 13 |
| debt settlement service.
| 14 |
| Section 140. Obligation of good faith. A debt settlement | 15 |
| provider shall act in good faith in all matters under this Act. | 16 |
| Section 145. Prohibited practices. A debt settlement | 17 |
| provider shall not do any of the following:
| 18 |
| (1) Charge or collect from a consumer any fee not | 19 |
| permitted by, in an amount in excess of the maximum amount | 20 |
| permitted by, or at a time earlier than permitted by | 21 |
| Section 125 of this Act.
| 22 |
| (2) Advise or represent, expressly or by implication, | 23 |
| that consumers should stop making payments to their | 24 |
| creditors.
|
|
|
|
HB4781 Enrolled |
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LRB096 16778 MJR 32078 b |
|
| 1 |
| (3) Advise or represent, expressly or by implication, | 2 |
| that consumers should stop communicating with their | 3 |
| creditors. | 4 |
| (4) Change the mailing address on any of a consumer's | 5 |
| creditor's statements.
| 6 |
| (5) Make loans or offer credit or solicit or accept any | 7 |
| note, mortgage, or negotiable instrument other than a check | 8 |
| signed by the consumer and dated no later than the date of | 9 |
| signature.
| 10 |
| (6) Take any confession of judgment or power of | 11 |
| attorney to confess judgment against the consumer or appear | 12 |
| as the consumer or on behalf of the consumer in any | 13 |
| judicial proceedings.
| 14 |
| (7) Take any release or waiver of any obligation to be | 15 |
| performed on the part of the debt settlement provider or | 16 |
| any right of the consumer.
| 17 |
| (8) Advertise, display, distribute, broadcast, or | 18 |
| televise services or permit services to be displayed, | 19 |
| advertised, distributed, broadcasted, or televised, in any | 20 |
| manner whatsoever, that contains any false, misleading, or | 21 |
| deceptive statements or representations with regard to any | 22 |
| matter, including services to be performed, the fees to be | 23 |
| charged by the debt settlement provider, or the effect | 24 |
| those services will have on a consumer's credit rating or | 25 |
| on creditor collection efforts.
| 26 |
| (9) Receive any cash, fee, gift, bonus, premium, |
|
|
|
HB4781 Enrolled |
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LRB096 16778 MJR 32078 b |
|
| 1 |
| reward, or other compensation from any person other than | 2 |
| the consumer explicitly for the provision of debt | 3 |
| settlement service to that consumer.
| 4 |
| (10) Offer or provide gifts or bonuses to consumers for | 5 |
| signing a debt settlement service contract or for referring | 6 |
| another potential customer or customer.
| 7 |
| (11) Disclose to anyone the name or any personal | 8 |
| information of a consumer for whom the debt settlement | 9 |
| provider has provided or is providing debt settlement | 10 |
| service other than to a consumer's own creditors or the | 11 |
| debt settlement provider's agents, affiliates, or | 12 |
| contractors for the purpose of providing debt settlement | 13 |
| service without the prior consent of the consumer.
| 14 |
| (12) Enter into a contract with a consumer without | 15 |
| first providing the disclosures and financial analysis and | 16 |
| making the determinations required by this Section.
| 17 |
| (13) Misrepresent any material fact, make a material | 18 |
| omission, or make a false promise directed to one or more | 19 |
| consumers in connection with the solicitation, offering, | 20 |
| contracting, or provision of debt settlement service.
| 21 |
| (14) Violate the provisions of applicable do not call | 22 |
| statutes. | 23 |
| (15) Purchase debts or engage in the practice or | 24 |
| business of debt collection.
| 25 |
| (16) Include in a debt settlement agreement any secured | 26 |
| debt.
|
|
|
|
HB4781 Enrolled |
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LRB096 16778 MJR 32078 b |
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| 1 |
| (17) Employ an unfair, unconscionable, or deceptive | 2 |
| act or practice, including the knowing omission of any | 3 |
| material information.
| 4 |
| (18) Engage in any practice that prohibits or limits | 5 |
| the consumer or any creditor from communication directly | 6 |
| with one another. | 7 |
| (19) Represent or imply to a person participating in or | 8 |
| considering debt settlement that purchase of any ancillary | 9 |
| goods or services is required. | 10 |
| Section 150. Noncompliance with the Act. | 11 |
| (a) Any waiver by any consumer of any protection provided | 12 |
| by or any right of the consumer under this Act:
| 13 |
| (1) shall be treated as void; and
| 14 |
| (2) may not be enforced by any federal or State court | 15 |
| or any other person.
| 16 |
| (b) Any attempt by any person to obtain a waiver from any | 17 |
| consumer of any protection provided by or any right or | 18 |
| protection of the consumer or any obligation or requirement of | 19 |
| the debt settlement provider under this Act shall be a | 20 |
| violation of this Act.
| 21 |
| (c) Any contract for debt settlement service that does not | 22 |
| comply with the applicable provisions of this Act:
| 23 |
| (1) shall be treated as void;
and | 24 |
| (2) may not be enforced by any federal or State court | 25 |
| or any other person; and
|
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|
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HB4781 Enrolled |
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LRB096 16778 MJR 32078 b |
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| Upon notice of a void contract, a refund by the debt | 2 |
| settlement provider to the consumer shall be made as if the | 3 |
| contract had been cancelled as provided in Section 135 of this | 4 |
| Act.
| 5 |
| Section 155. Civil remedies. | 6 |
| (a) A violation of Section 105, 110, 115, 120, 125, 130, | 7 |
| 135, 140, 145, or 150 of this Act constitutes an unlawful | 8 |
| practice under the Consumer Fraud and Deceptive Business | 9 |
| Practices Act. All remedies, penalties, and authority granted | 10 |
| to the Attorney General or State's Attorney by the Consumer | 11 |
| Fraud and Deceptive Business Practices Act shall be available | 12 |
| to him or her for the enforcement of this Act. | 13 |
| (b) A consumer who suffers loss by reason of a violation of | 14 |
| Section 105, 110, 115, 120, 125, 130, 135, 140, 145, or 150 of | 15 |
| this Act may bring a civil action in accordance with the | 16 |
| Consumer Fraud and Deceptive Business Practices Act to enforce | 17 |
| that provision. All remedies and rights granted to a consumer | 18 |
| by the Consumer Fraud and Deceptive Business Practices Act | 19 |
| shall be available to the consumer bringing such an action. The | 20 |
| remedies and rights provided for in this Act are not exclusive, | 21 |
| but cumulative, and all other applicable claims are | 22 |
| specifically preserved. | 23 |
| Section 900. The State Finance Act is amended by changing | 24 |
| Section 6z-26 and by adding Sections 5.755 and 5.756 as |
|
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HB4781 Enrolled |
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LRB096 16778 MJR 32078 b |
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| 1 |
| follows: | 2 |
| (30 ILCS 105/5.755 new) | 3 |
| Sec. 5.755. The Debt Management Service Consumer | 4 |
| Protection Fund. | 5 |
| (30 ILCS 105/5.756 new) | 6 |
| Sec. 5.756. The Debt Settlement Consumer Protection Fund.
| 7 |
| (30 ILCS 105/6z-26)
| 8 |
| Sec. 6z-26. The Financial Institution Fund. All moneys | 9 |
| received by the
Department of Financial and Professional | 10 |
| Regulation under the Safety Deposit License Act, the
Foreign | 11 |
| Exchange License Act, the Pawners Societies Act, the Sale of | 12 |
| Exchange
Act, the Currency Exchange Act, the Sales Finance | 13 |
| Agency Act, the Debt Management Service Act, the Consumer | 14 |
| Installment Loan Act, the Illinois Development Credit
| 15 |
| Corporation Act, the Title Insurance Act, the Debt Settlement | 16 |
| Consumer Protection Act, the Debt Management Service Consumer | 17 |
| Protection Fund, and any other Act administered by the | 18 |
| Department of Financial and Professional Regulation as the | 19 |
| successor of the
Department of Financial Institutions now or in | 20 |
| the future (unless an Act
specifically provides otherwise) | 21 |
| shall be deposited in the Financial
Institution Fund | 22 |
| (hereinafter "Fund"), a special fund that is hereby created in
| 23 |
| the State Treasury.
|
|
|
|
HB4781 Enrolled |
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LRB096 16778 MJR 32078 b |
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| 1 |
| Moneys in the Fund shall be used by the Department, subject | 2 |
| to appropriation,
for expenses incurred in administering the | 3 |
| above named and referenced Acts.
| 4 |
| The Comptroller and the State Treasurer shall transfer from | 5 |
| the General
Revenue Fund to the Fund any monies received by the | 6 |
| Department after June 30,
1993, under any of the above named | 7 |
| and referenced Acts that have been deposited
in the General | 8 |
| Revenue Fund.
| 9 |
| As soon as possible after the end of each calendar year, | 10 |
| the Comptroller
shall compare the balance in the Fund at the | 11 |
| end of the calendar year with the
amount appropriated from the | 12 |
| Fund for the fiscal year beginning on July 1 of
that calendar | 13 |
| year. If the balance in the Fund exceeds the amount
| 14 |
| appropriated, the Comptroller and the State Treasurer shall | 15 |
| transfer from the
Fund to the General Revenue Fund an amount | 16 |
| equal to the difference between the
balance in the Fund and the | 17 |
| amount appropriated.
| 18 |
| Nothing in this Section shall be construed to prohibit | 19 |
| appropriations from
the General Revenue Fund for expenses | 20 |
| incurred in the administration of the
above named and | 21 |
| referenced Acts.
| 22 |
| Moneys in the Fund may be transferred to the Professions | 23 |
| Indirect Cost Fund, as authorized under Section 2105-300 of the | 24 |
| Department of Professional Regulation Law of the Civil | 25 |
| Administrative Code of Illinois.
| 26 |
| (Source: P.A. 94-91, eff. 7-1-05.)
|
|
|
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HB4781 Enrolled |
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LRB096 16778 MJR 32078 b |
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| 1 |
| Section 905. The Debt Management Service Act is amended by | 2 |
| changing Sections 2, 4, 5, 6, 7, 8.5, 9, 10, 11, 11.5, 12, | 3 |
| 12.1, 13, 14, 15, 16, 17, 18, 20, and 20.5 and by adding | 4 |
| Sections 1.5, 16.5, and 16.6 as follows: | 5 |
| (205 ILCS 665/1.5 new) | 6 |
| Sec. 1.5. Purpose and construction. The purpose of this Act | 7 |
| is to protect consumers who enter into agreements with debt | 8 |
| management service providers and to regulate debt management | 9 |
| service providers. This Act shall be construed as a consumer | 10 |
| protection law for all purposes. This Act shall be liberally | 11 |
| construed to effectuate its purpose.
| 12 |
| (205 ILCS 665/2) (from Ch. 17, par. 5302)
| 13 |
| Sec. 2. Definitions. As used in this Act:
| 14 |
| "Credit counselor" means an individual, corporation, or | 15 |
| other entity that is not a debt management service that | 16 |
| provides (1) guidance, educational programs, or advice for the | 17 |
| purpose of addressing budgeting, personal finance, financial | 18 |
| literacy, saving and spending practices, or the sound use of | 19 |
| consumer credit; or (2) assistance or offers to assist | 20 |
| individuals and families with financial problems by providing | 21 |
| counseling; or (3) a combination of the activities described in | 22 |
| items (1) and (2) of this definition. | 23 |
| "Debt management
service" means
the planning and |
|
|
|
HB4781 Enrolled |
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LRB096 16778 MJR 32078 b |
|
| 1 |
| management of the financial affairs of
a debtor for a fee and | 2 |
| the receiving
of money
from the debtor for the purpose
of | 3 |
| distributing it , directly or indirectly, to the debtor's | 4 |
| creditors in payment or partial payment of
the debtor's | 5 |
| obligations or soliciting financial contributions from | 6 |
| creditors.
The business of debt management is conducted in this | 7 |
| State if the debt
management business, its employees, or its | 8 |
| agents are located in this State or
if the
debt management | 9 |
| business solicits or contracts with debtors located in this
| 10 |
| State. "Debt management service" does not include "debt | 11 |
| settlement service" as defined in the Debt Settlement Consumer | 12 |
| Protection Act.
| 13 |
| This term shall not include the following when engaged in
| 14 |
| the regular course of their respective businesses and | 15 |
| professions:
| 16 |
| (a) Attorneys at law licensed, or otherwise authorized | 17 |
| to practice, in Illinois who are engaged in the practice of | 18 |
| law .
| 19 |
| (b) Banks, operating subsidiaries of banks, affiliates | 20 |
| of banks, fiduciaries, credit unions, savings and loan | 21 |
| associations,
and savings banks as duly
authorized and | 22 |
| admitted to transact business in the State of Illinois and
| 23 |
| performing credit and financial adjusting service in the | 24 |
| regular course of
their principal business.
| 25 |
| (c) Title insurers , title agents, independent | 26 |
| escrowees, and abstract companies, while doing an escrow
|
|
|
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HB4781 Enrolled |
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LRB096 16778 MJR 32078 b |
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| 1 |
| business.
| 2 |
| (d) Judicial officers or others acting pursuant to | 3 |
| court
order.
| 4 |
| (e) Employers for their employees, except that no | 5 |
| employer shall retain the services of an outside debt | 6 |
| management service to perform this service unless the debt | 7 |
| management service is licensed pursuant to this Act. | 8 |
| Employers for their employees .
| 9 |
| (f) Bill payment services, as defined in the | 10 |
| Transmitters of Money Act.
| 11 |
| (g) Credit counselors, only when providing services | 12 |
| described in the definition of credit counselor in this | 13 |
| Section. | 14 |
| "Director" means Director of Financial Institutions.
| 15 |
| "Debtor" means the person or persons for whom the debt
| 16 |
| management service is performed.
| 17 |
| "Person" means an individual, firm, partnership,
| 18 |
| association, limited liability company,
corporation, or | 19 |
| not-for-profit corporation.
| 20 |
| "Licensee" means a person licensed under this Act.
| 21 |
| "Secretary" means the Secretary of Financial and | 22 |
| Professional Regulation. | 23 |
| (Source: P.A. 95-331, eff. 8-21-07.)
| 24 |
| (205 ILCS 665/4) (from Ch. 17, par. 5304)
| 25 |
| Sec. 4. Application for license. Application for a license |
|
|
|
HB4781 Enrolled |
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LRB096 16778 MJR 32078 b |
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| to engage in the debt
management
service
business in this State | 2 |
| shall be made to the Secretary Director and shall
be in | 3 |
| writing, under oath, and in the form prescribed by the | 4 |
| Secretary Director .
| 5 |
| Each applicant, at the time of making such application, | 6 |
| shall pay to the
Secretary Director the sum of $30.00 as a fee | 7 |
| for investigation of the applicant, and
the additional sum of | 8 |
| $100.00 as a license fee.
| 9 |
| Every applicant shall submit to the Secretary Director , at | 10 |
| the time of the
application for a license, a bond to be | 11 |
| approved by the Secretary Director in which
the applicant shall | 12 |
| be the obligor, in the sum of $25,000 or
such additional amount | 13 |
| as required by the Secretary Director based on the amount of
| 14 |
| disbursements made by the
licensee in the
previous year, and in | 15 |
| which an
insurance company, which is duly authorized by the | 16 |
| State of Illinois, to
transact the business of fidelity and | 17 |
| surety insurance shall be a surety.
| 18 |
| The bond shall run to the Secretary Director for the use of
| 19 |
| the Department or
of any person or persons who may have a cause | 20 |
| of action against the obligor
in said bond arising out
of any | 21 |
| violation of this
Act or rules by a license.
Such
bond
shall be | 22 |
| conditioned that the obligor will faithfully conform to
and | 23 |
| abide
by the provisions of this Act and of all rules, | 24 |
| regulations and directions
lawfully made by the Secretary | 25 |
| Director and will pay to the Secretary Director or to
any | 26 |
| person or persons any and all money that may become due or |
|
|
|
HB4781 Enrolled |
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LRB096 16778 MJR 32078 b |
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| 1 |
| owing
to the State or to such person or persons, from said | 2 |
| obligor under and by
virtue of the provisions of this Act.
| 3 |
| (Source: P.A. 92-400, eff. 1-1-02.)
| 4 |
| (205 ILCS 665/5) (from Ch. 17, par. 5305)
| 5 |
| Sec. 5. Qualifications for license. Upon the filing of the | 6 |
| application and
the approval of the bond and the payment of the | 7 |
| specified fees, the Secretary may Director
shall issue a | 8 |
| license if he finds:
| 9 |
| (1) That the financial responsibility, experience, | 10 |
| character and general
fitness of the applicant, the managers | 11 |
| thereof, if the applicant is a limited
liability company, the | 12 |
| partners thereof, if the applicant is a partnership, and
of the | 13 |
| officers and directors thereof, if the applicant is a | 14 |
| corporation or a
not-for-profit corporation, are such as to | 15 |
| command the confidence of the
community and to warrant belief | 16 |
| that the business will be operated fairly,
honestly and | 17 |
| efficiently within the purposes of this Act, and
| 18 |
| (2) That the applicant, if an individual, the managers | 19 |
| thereof, if the
applicant is a limited liability company, the | 20 |
| partners thereof, if the
applicant is a partnership, and the | 21 |
| officers and directors thereof, if the
applicant is a | 22 |
| corporation, have not been convicted of a felony or a
| 23 |
| misdemeanor involving dishonesty or untrustworthiness, and
| 24 |
| (3) That the person or persons have not had a record of | 25 |
| having defaulted in
the payment of money collected for others, |
|
|
|
HB4781 Enrolled |
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LRB096 16778 MJR 32078 b |
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| 1 |
| including the discharge of such
debts through bankruptcy | 2 |
| proceedings, and
| 3 |
| (4) The applicant, or any officers, directors, partners or | 4 |
| managers, have
not previously violated any provision of this | 5 |
| Act or any rule lawfully made
by the Secretary Director , and
| 6 |
| (5) The applicant has not made any false statement or | 7 |
| representation to the
Secretary Director in applying for a | 8 |
| license hereunder.
| 9 |
| The Secretary Director shall deliver a license to the | 10 |
| applicant to engage in the debt
management service business in | 11 |
| accordance with the provisions of this Act at
the location | 12 |
| specified in the said application, which license shall remain | 13 |
| in
full force and effect until it is surrendered by the | 14 |
| licensee or revoked by the
Secretary Director as herein | 15 |
| provided; provided, however, that each license shall expire
by | 16 |
| the terms thereof on January 1 next following the issuance | 17 |
| thereof unless
the same be renewed as hereinafter provided. A | 18 |
| license, however, may not be
surrendered without the approval | 19 |
| of the Secretary Director .
| 20 |
| More than one license may be issued to the same person for | 21 |
| separate
places of business, but separate applications shall be | 22 |
| made for each location conducting business with Illinois | 23 |
| residents place
of business .
| 24 |
| (Source: P.A. 90-545, eff. 1-1-98.)
| 25 |
| (205 ILCS 665/6) (from Ch. 17, par. 5306)
|
|
|
|
HB4781 Enrolled |
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LRB096 16778 MJR 32078 b |
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| 1 |
| Sec. 6. Renewal of license. Each debt management service | 2 |
| provider licensee under the provisions of this Act may
make | 3 |
| application to the
Secretary Director for renewal of its | 4 |
| license, which
application for renewal shall be on the form | 5 |
| prescribed by the Secretary Director and
shall be accompanied | 6 |
| by a fee of $100.00 together with a bond or other
surety as | 7 |
| required, in a minimum amount of $25,000 or such an amount as
| 8 |
| required by the Secretary Director based on the amount of | 9 |
| disbursements made by the
licensee in the previous year. The | 10 |
| application must be received by the
Department no later than | 11 |
| December 1 of the year preceding the year for which
the | 12 |
| application applies.
| 13 |
| (Source: P.A. 92-400, eff. 1-1-02.)
| 14 |
| (205 ILCS 665/7) (from Ch. 17, par. 5307)
| 15 |
| Sec. 7. License, display and location. Each license issued | 16 |
| shall be kept conspicuously posted in the
place of business of | 17 |
| the debt management service provider licensee . The business
| 18 |
| location may be changed by any licensee upon
10 days prior | 19 |
| written notice to the Secretary Director .
A license must | 20 |
| operate under the name as stated in its original
application.
| 21 |
| (Source: P.A. 90-545, eff. 1-1-98.)
| 22 |
| (205 ILCS 665/8.5)
| 23 |
| Sec. 8.5. Temporary location. The Secretary Director may | 24 |
| approve a temporary
additional business location for the |
|
|
|
HB4781 Enrolled |
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LRB096 16778 MJR 32078 b |
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| 1 |
| purpose of allowing a debt management service provider licensee | 2 |
| to conduct
business outside the licensed location.
| 3 |
| (Source: P.A. 90-545, eff. 1-1-98.)
| 4 |
| (205 ILCS 665/9) (from Ch. 17, par. 5309)
| 5 |
| Sec. 9. Denial of license. Any application for a license | 6 |
| shall be approved or denied
within 60 days of the filing of a | 7 |
| completed an application with the Secretary Director .
| 8 |
| (Source: P.A. 90-545, eff. 1-1-98.)
| 9 |
| (205 ILCS 665/10) (from Ch. 17, par. 5310)
| 10 |
| Sec. 10. Revocation , or suspension , or refusal to renew of | 11 |
| license.
| 12 |
| (a) The Secretary Director may revoke or suspend or refuse | 13 |
| to renew any license if he finds that:
| 14 |
| (1) any licensee has failed to pay the annual license | 15 |
| fee, or to maintain
in
effect the bond required under the | 16 |
| provisions of this Act;
| 17 |
| (2) the licensee
has violated any
provisions
of this | 18 |
| Act or any rule, lawfully made by the Secretary Director | 19 |
| within
the authority of this Act;
| 20 |
| (3) any fact or condition exists
which, if it had | 21 |
| existed at the time of the original application for a
| 22 |
| license, would have warranted the Secretary Director in | 23 |
| refusing its issuance; or
| 24 |
| (4) any applicant has made any false
statement or |
|
|
|
HB4781 Enrolled |
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LRB096 16778 MJR 32078 b |
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| 1 |
| representation to the Secretary Director in applying for a | 2 |
| license
hereunder.
| 3 |
| (b) In every case in which a license is suspended or | 4 |
| revoked or an
application for a license or renewal of a license | 5 |
| is denied, the Secretary Director shall
serve notice of his | 6 |
| action, including a statement of the reasons for his
actions, | 7 |
| either personally or by certified mail, return receipt | 8 |
| requested.
Service by mail shall be deemed completed if the | 9 |
| notice is deposited in the
U.S. Mail.
| 10 |
| (c) In the case of a denial of an application or renewal of | 11 |
| a license,
the applicant or licensee may request in writing, | 12 |
| within
30 days after the date of service, a hearing. In the | 13 |
| case of a denial of a
renewal of a license, the license shall | 14 |
| be deemed to continue in force until 30
days after the service | 15 |
| of the notice of denial, or if a hearing is requested
during | 16 |
| that period, until a final administrative order is entered.
| 17 |
| (d) An order of revocation or suspension of a license shall | 18 |
| take effect upon
service of the order unless the licensee | 19 |
| requests, in writing, within 10 days
after the date of service, | 20 |
| a hearing. In the event a hearing is requested, the
order shall | 21 |
| be stayed until a final administrative order is entered.
| 22 |
| (e) If the licensee requests a hearing, the Secretary | 23 |
| Director shall schedule either a status date or a the
hearing | 24 |
| within 30 days after the request for a hearing unless otherwise | 25 |
| agreed
to by the parties.
| 26 |
| (f) The hearing shall be held at the time and place |
|
|
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HB4781 Enrolled |
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LRB096 16778 MJR 32078 b |
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| 1 |
| designated by the
Secretary Director . The Secretary Director | 2 |
| and any administrative law judge designated by him have
the | 3 |
| power to administer oaths and affirmations, subpoena witnesses | 4 |
| and compel
their attendance, take evidence, and require the | 5 |
| production of books, papers,
correspondence, and other records | 6 |
| or information that he considers relevant or
material to the | 7 |
| injury.
| 8 |
| (g) The costs for the administrative hearing shall be set | 9 |
| by rule and shall be borne by the respondent .
| 10 |
| (h) The Director shall have the authority to prescribe | 11 |
| rules for the
administration of this Section.
| 12 |
| (Source: P.A. 90-545, eff. 1-1-98.)
| 13 |
| (205 ILCS 665/11) (from Ch. 17, par. 5311)
| 14 |
| Sec. 11. Contracts, books, records and contract | 15 |
| cancellation. Each debt management service provider licensee | 16 |
| shall furnish to the Secretary Director , when requested, a copy | 17 |
| of
the contract entered into between the debt management | 18 |
| service provider licensee and the debtor. The
debt management | 19 |
| service provider licensee shall furnish the debtor with a copy | 20 |
| of the written contract, at the
time of execution,
which shall | 21 |
| set forth the charges, if any, agreed upon for the services of
| 22 |
| the debt management service provider licensee .
| 23 |
| Each debt management service provider licensee shall | 24 |
| maintain records and accounts which will
enable any debtor | 25 |
| contracting with the debt management service provider |
|
|
|
HB4781 Enrolled |
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LRB096 16778 MJR 32078 b |
|
| 1 |
| licensee , at any
reasonable
time, to ascertain the amounts paid | 2 |
| to creditors of the debtor. A
statement showing the total | 3 |
| amount received and the total disbursements to
each creditor | 4 |
| shall be furnished by the debt management service provider | 5 |
| licensee to any individual within
seven days of a request | 6 |
| therefor by the said debtor. Each
debt management service | 7 |
| provider licensee shall issue a receipt for each payment made | 8 |
| by the
debtor at a debt management service provider's | 9 |
| licensee's office. Each debt management service provider | 10 |
| licensee
shall prepare and
retain in the
file of each debtor a | 11 |
| written analysis of debtor's income and expenses to
| 12 |
| substantiate that the plan of payment is feasible and | 13 |
| practical.
| 14 |
| (Source: P.A. 90-545, eff. 1-1-98.)
| 15 |
| (205 ILCS 665/11.5)
| 16 |
| Sec. 11.5. Examination of debt management service provider | 17 |
| licensee . The Secretary Director at any time, either in
person | 18 |
| or through an appointed representative, may examine the | 19 |
| condition and
affairs of a
debt management service provider | 20 |
| licensee . In connection with any
examination, the Secretary | 21 |
| Director may examine on oath any debt management service | 22 |
| provider licensee and
any
director,
officer, employee, | 23 |
| customer, manager, partner, member, creditor or stockholder
of | 24 |
| a licensee concerning the affairs and business of the debt | 25 |
| management service provider licensee . The
Secretary Director |
|
|
|
HB4781 Enrolled |
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LRB096 16778 MJR 32078 b |
|
| 1 |
| shall ascertain whether the debt management service provider | 2 |
| licensee transacts its business in the
manner prescribed by law | 3 |
| and the rules issued thereunder. The
debt management service | 4 |
| provider licensee shall pay the cost of the examination as | 5 |
| determined by the Secretary Director by
administrative rule. | 6 |
| Failure to pay the examination fee within 30 days after
receipt | 7 |
| of demand from the Secretary Director may result in the | 8 |
| suspension of the license
until the fee is paid. The Secretary | 9 |
| Director shall have the right to investigate and
examine any | 10 |
| person, whether licensed or not, who is engaged in the debt
| 11 |
| management service business. The Secretary Director shall have | 12 |
| the power to subpoena the
production of any books and records | 13 |
| pertinent to any investigation.
| 14 |
| (Source: P.A. 90-545, eff. 1-1-98.)
| 15 |
| (205 ILCS 665/12) (from Ch. 17, par. 5312)
| 16 |
| Sec. 12.
Fees and charges of debt management service | 17 |
| providers licensees . A debt management service provider | 18 |
| licensee may not charge a debtor any
fees or penalties except | 19 |
| the following:
| 20 |
| (1) an initial counseling fee not to exceed $50 per
debtor | 21 |
| counseled , provided the average initial counseling fee does not
| 22 |
| exceed $30 per debtor for all debtors counseled ; and
| 23 |
| (2) additional fees at the completion of the initial | 24 |
| counseling services
which shall not exceed $50 per month , | 25 |
| provided the average monthly fee does not
exceed $30 per debtor |
|
|
|
HB4781 Enrolled |
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LRB096 16778 MJR 32078 b |
|
| 1 |
| for all debtors counseled .
| 2 |
| (Source: P.A. 90-545, eff. 1-1-98.)
| 3 |
| (205 ILCS 665/12.1)
| 4 |
| Sec. 12.1.
All moneys received by the Department of | 5 |
| Financial Institutions
under this Act , except moneys received | 6 |
| for the Debt Management Service Consumer Protection Fund, shall | 7 |
| be deposited in the Financial Institutions Fund created
under | 8 |
| Section 6z-26 of the State Finance Act.
| 9 |
| (Source: P.A. 88-13.)
| 10 |
| (205 ILCS 665/13) (from Ch. 17, par. 5313)
| 11 |
| Sec. 13. Prohibitions.
| 12 |
| (1) No licensee shall advertise, in any manner whatsoever, | 13 |
| any statement
or
representation with regard to the rates, terms | 14 |
| or conditions of debt management
service which is false, | 15 |
| misleading, or deceptive.
| 16 |
| (2) No licensee shall require as a part of the agreement | 17 |
| between the
licensee and any debtor, the purchase of any stock, | 18 |
| insurance, commodity,
service or other property or any interest | 19 |
| therein.
| 20 |
| (3) No licensee shall, directly or indirectly, accept | 21 |
| payment or any other
consideration, whether in cash or in kind, | 22 |
| from any entity for referring
applicants to that entity. The | 23 |
| licensee shall not, directly or indirectly,
make payments in | 24 |
| any form, whether in cash or in kind, to any person,
|
|
|
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| 1 |
| corporation, or other entity for referring applicants or | 2 |
| clients to the
licensee.
| 3 |
| (4) No licensee shall make any loans.
| 4 |
| (5) No licensee shall issue credit cards or act as an agent | 5 |
| in procuring
customers for a credit card company or any | 6 |
| financial institution.
| 7 |
| (6) No licensee shall act as a loan broker.
| 8 |
| (7) No licensee shall operate any other business at the | 9 |
| licensed location .
without another business authorization from | 10 |
| the Director, pursuant to Section
13.5.
| 11 |
| (Source: P.A. 90-545, eff. 1-1-98.)
| 12 |
| (205 ILCS 665/14) (from Ch. 17, par. 5314)
| 13 |
| Sec. 14. Trust funds; requirements and restrictions.
| 14 |
| (a) All funds received by a debt management service | 15 |
| provider licensee or his agent from and for the purpose
of | 16 |
| paying bills, invoices, or accounts of a debtor shall | 17 |
| constitute trust funds
owned by and belonging to the debtor | 18 |
| from whom they were received. All such
funds received by a debt | 19 |
| management service provider licensee shall be separated from | 20 |
| the funds of the debt management service provider licensee
not | 21 |
| later than the end of the business day following receipt by the
| 22 |
| debt management service provider licensee . All such funds shall | 23 |
| be kept separate and apart at all times from
funds belonging to | 24 |
| the debt management service provider licensee or any of its | 25 |
| officers, employees or agents and
may be used for no purpose |
|
|
|
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| 1 |
| other than paying bills, invoices, or accounts of
the debtor. | 2 |
| All such trust funds received at the main or branch offices of | 3 |
| a
debt management service provider licensee shall be deposited | 4 |
| in a bank in an account in the name of the debt management | 5 |
| service provider licensee
designated "trust account", or by | 6 |
| some other appropriate name indicating that
the funds are not | 7 |
| the funds of the debt management service provider licensee or | 8 |
| its officers, employees, or
agents, on or before the close of | 9 |
| the business day following receipt.
| 10 |
| (b) If a consumer's funds are kept in an interest earning | 11 |
| trust account, then any interest earned on the consumer funds | 12 |
| shall belong to the consumer. If multiple consumers funds are | 13 |
| kept in a single interest earning trust account, then the | 14 |
| interest earned shall belong to the consumers and shall be | 15 |
| deposited pro rata among the consumers whose funds are in the | 16 |
| account. Prior to separation and deposit by the licensee, such | 17 |
| funds may be
used by the licensee only for the making of change | 18 |
| or the cashing of checks
in the normal course of its business. | 19 |
| Such funds are not subject to
attachment, lien, levy of | 20 |
| execution, or sequestration by order of court except
by a | 21 |
| debtor for whom a licensee is acting as an agent in paying | 22 |
| bills,
invoices, or accounts.
| 23 |
| (c) Each debt management service provider licensee shall | 24 |
| make remittances within 30 days after
initial receipt of funds, | 25 |
| and thereafter remittances shall be made within
15 days of | 26 |
| receipt, less fees and costs, unless the reasonable
payment of |
|
|
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| 1 |
| one or more of the debtor's obligations requires that the funds
| 2 |
| be held for a longer period so as to accumulate a sum certain.
| 3 |
| (d) At least once every quarter, the debt management | 4 |
| service provider licensee shall render an accounting to
the | 5 |
| debtor which shall itemize the total amount received from the | 6 |
| debtor, the
total amount paid each creditor, the amount of | 7 |
| charges deducted, and any amount
held in reserve. A debt | 8 |
| management service provider licensee shall, in addition | 9 |
| thereto, provide such an
accounting to a debtor within 7 days | 10 |
| after written demand, but not more
than 3 times per 6 month | 11 |
| period.
| 12 |
| (Source: P.A. 90-545, eff. 1-1-98.)
| 13 |
| (205 ILCS 665/15) (from Ch. 17, par. 5315)
| 14 |
| Sec. 15.
Rules.)
The Secretary Director shall make and | 15 |
| enforce all
reasonable rules as shall be necessary for the
| 16 |
| administration of this Act. Such rulemaking shall be subject to | 17 |
| the provisions
of the Illinois Administrative Procedure Act.
| 18 |
| (Source: P.A. 81-1403.)
| 19 |
| (205 ILCS 665/16) (from Ch. 17, par. 5319)
| 20 |
| Sec. 16. Penalties.
| 21 |
| (a) Any person who engages in the business of debt | 22 |
| management service
without a license shall be guilty of a Class | 23 |
| 4 felony.
| 24 |
| (b) Any contract of debt management service as defined in |
|
|
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HB4781 Enrolled |
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| 1 |
| this Act, made by
an unlicensed
person, shall be null and void | 2 |
| and of no legal effect.
| 3 |
| (c) The Secretary Director may , after 10 days notice by | 4 |
| registered mail to the debt management service provider at the | 5 |
| address on the license or unlicensed entity engaging in the | 6 |
| debt management service business, stating the contemplated | 7 |
| action and in general the grounds therefore, fine that debt | 8 |
| management service provider or unlicensed entity an amount not | 9 |
| exceeding $10,000 per violation, and revoke or suspend any | 10 |
| license issued if he or she finds that either: | 11 |
| (1) the debt management service provider or unlicensed | 12 |
| entity has failed to comply with any provision of this Act | 13 |
| or any order, decision, finding, rule, regulation, or | 14 |
| direction of the Secretary lawfully made pursuant to the | 15 |
| authority of this Act; or | 16 |
| (2) any fact or condition exists which, if it had | 17 |
| existed at the time of the original application for the | 18 |
| license, clearly would have warranted the Secretary in | 19 |
| refusing to issue the license. set by rule monetary | 20 |
| penalties for violation of this
Act.
| 21 |
| (Source: P.A. 90-545, eff. 1-1-98.)
| 22 |
| (205 ILCS 665/16.5 new) | 23 |
| Sec. 16.5. Additional liability for unlicensed activity. | 24 |
| Any person who, without the required license, engages in | 25 |
| conduct requiring a license under this Act, shall be liable to |
|
|
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HB4781 Enrolled |
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| 1 |
| the Department in an amount equal to the greater of (1) $1,000 | 2 |
| or (2) an amount equal to 4 times the amount of consumer debt | 3 |
| enrolled. The Department shall cause any funds so recovered to | 4 |
| be deposited in the Debt Management Service Consumer Protection | 5 |
| Fund. | 6 |
| (205 ILCS 665/16.6 new) | 7 |
| Sec. 16.6. Debt Management Service Consumer Protection | 8 |
| Fund. | 9 |
| (a) A special non-appropriated income-earning fund is | 10 |
| hereby created in the State Treasury, known as the Debt | 11 |
| Management Service Consumer Protection Fund. This Fund is not | 12 |
| subject to appropriation by the Illinois General Assembly. | 13 |
| (b) All moneys paid into the Fund together with all | 14 |
| accumulated, undistributed interest thereon shall be held as a | 15 |
| special Fund in the State Treasury. All interest earned on the | 16 |
| Fund is non-distributable and shall be returned to the Fund, | 17 |
| and shall be invested and re-invested in the Fund by the | 18 |
| Treasurer or his or her designee. The Fund shall be used solely | 19 |
| for the purpose of providing restitution to consumers who have | 20 |
| suffered monetary loss arising out of a transaction regulated | 21 |
| by this Act. | 22 |
| (c) The Fund shall be applied only to restitution when | 23 |
| restitution has been ordered by the Secretary. Restitution | 24 |
| shall not exceed the amount actually lost by the consumer. The | 25 |
| Fund shall not be used for the payment of any attorney or other |
|
|
|
HB4781 Enrolled |
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| 1 |
| fees. | 2 |
| (d) The Fund shall be subrogated to the amount of the | 3 |
| restitution, and the Secretary shall request the Attorney | 4 |
| General to engage in all reasonable collection steps to collect | 5 |
| restitution from the party responsible for the loss and | 6 |
| reimburse the Fund. | 7 |
| (e) Notwithstanding any other provision of this Section, | 8 |
| the payment of restitution from the Fund shall be a matter of | 9 |
| grace and not of right, and no consumer shall have any vested | 10 |
| rights in the Fund as a beneficiary or otherwise. Before | 11 |
| seeking restitution from the Fund, the consumer or beneficiary | 12 |
| seeking payment of restitution shall apply for restitution on a | 13 |
| form provided by the Secretary. The form shall include any | 14 |
| information the Secretary may reasonably require in order to | 15 |
| determine that restitution is appropriate. All documentation | 16 |
| required by the Secretary, including the form, is subject to | 17 |
| audit. Distributions from the Fund shall be made solely at the | 18 |
| discretion of the Secretary, except that no payments or | 19 |
| distributions may be made under any circumstance if the Fund is | 20 |
| depleted. | 21 |
| (f) All deposits to this Fund shall be made pursuant to | 22 |
| Section 16.5 of this Act. | 23 |
| (g) Notwithstanding any other law to the contrary, the Fund | 24 |
| is not subject to administrative charges or charge-backs that | 25 |
| would in any way transfer moneys from the Fund into any other | 26 |
| fund of the State.
|
|
|
|
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| 1 |
| (205 ILCS 665/17) (from Ch. 17, par. 5320)
| 2 |
| Sec. 17. Injunction. To engage in debt management service, | 3 |
| render financial service, or accept debtors'
funds, as defined
| 4 |
| in this Act, without a valid license so to do, is hereby | 5 |
| declared
to be
inimical to the public welfare and to constitute | 6 |
| a public nuisance. The
Secretary Director may, in the name of | 7 |
| the people of the State of Illinois, through
the Attorney | 8 |
| General of the State of Illinois, file a complaint for
an | 9 |
| injunction in the circuit court to enjoin such person,
from
| 10 |
| engaging in said business. Such injunction proceeding shall
be | 11 |
| in addition to, and not in lieu of, penalties and remedies | 12 |
| otherwise in this
Act provided.
| 13 |
| (Source: P.A. 90-545, eff. 1-1-98.)
| 14 |
| (205 ILCS 665/18) (from Ch. 17, par. 5321)
| 15 |
| Sec. 18. Review. All final administrative decisions of the | 16 |
| Secretary Director hereunder shall be
subject to judicial | 17 |
| review pursuant to the provisions of the Administrative
Review | 18 |
| Law, and all amendments and
modifications thereof and the rules | 19 |
| adopted pursuant thereto.
| 20 |
| (Source: P.A. 90-545, eff. 1-1-98.)
| 21 |
| (205 ILCS 665/20) (from Ch. 17, par. 5323)
| 22 |
| Sec. 20. Cease and desist orders.
| 23 |
| (a) The Secretary Director may issue a cease and desist |
|
|
|
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| 1 |
| order to any
licensee, or other person doing business without | 2 |
| the required license, when in
the opinion of the Secretary | 3 |
| Director , the licensee, or other person, is violating or is
| 4 |
| about to violate any provision of the Act or any rule or | 5 |
| condition imposed in
writing by the Department.
| 6 |
| (b) The Secretary Director may issue a cease and desist | 7 |
| order prior to a hearing.
| 8 |
| (c) The Secretary Director shall serve notice of his | 9 |
| action, including a statement of
the reasons for his action | 10 |
| either personally or by certified mail, return
receipt | 11 |
| requested. Service by mail shall be deemed completed if the | 12 |
| notice is
deposited in the U.S. Mail.
| 13 |
| (d) Within 10 days
after
service of the cease and desist | 14 |
| order, the licensee or
other person may request, in writing, a | 15 |
| hearing.
| 16 |
| (e) The Secretary Director shall schedule either a status | 17 |
| date or a hearing within 30 days after the request
for a | 18 |
| hearing unless otherwise agreed to by the parties.
| 19 |
| (f) The Director shall have the authority to prescribe | 20 |
| rules for the
administration of this Section.
| 21 |
| (g) If it is determined that the Secretary Director had the | 22 |
| authority to issue the
cease and desist order, he may issue | 23 |
| such orders as may be reasonably necessary
to correct, | 24 |
| eliminate, or remedy such conduct.
| 25 |
| (h) The powers vested in the Secretary Director by this | 26 |
| Section are additional
to any and all other powers and remedies |
|
|
|
HB4781 Enrolled |
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| 1 |
| vested in the Secretary Director by law, and
nothing in this | 2 |
| Section shall be construed as requiring that the Secretary | 3 |
| Director shall
employ the power conferred in this Section | 4 |
| instead of
or
as a condition precedent
to the exercise of any | 5 |
| other power or remedy vested in the Secretary Director .
| 6 |
| (i) The cost for the administrative hearing shall be set by | 7 |
| rule and shall be borne by the respondent .
| 8 |
| (Source: P.A. 90-545, eff. 1-1-98.)
| 9 |
| (205 ILCS 665/20.5)
| 10 |
| Sec. 20.5. Receivership.
| 11 |
| (a) If the Secretary Director determines that a licensee is | 12 |
| insolvent or is violating
this Act,
he or she may appoint a | 13 |
| receiver. Under the direction of the Secretary Director , the
| 14 |
| receiver shall,
for the purpose of receivership, take | 15 |
| possession of and title to the books,
records, and
assets of | 16 |
| the licensee. The Secretary Director may require the receiver | 17 |
| to provide
security in an
amount the Secretary Director deems | 18 |
| proper. Upon appointment of the receiver, the
Secretary | 19 |
| Director shall
have published, once each week for 4 consecutive | 20 |
| weeks in a newspaper having a
general
circulation in the | 21 |
| community, a notice informing all persons who have claims
| 22 |
| against the
licensee to present them to the receiver. Within 10 | 23 |
| days after the receiver
takes
possession, the licensee may | 24 |
| apply to the Circuit Court of Sangamon County to
enjoin
further | 25 |
| proceedings. The receiver may operate the business until the |
|
|
|
HB4781 Enrolled |
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LRB096 16778 MJR 32078 b |
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| 1 |
| Secretary Director
determines
that possession should be | 2 |
| restored to the licensee or that the business should
be
| 3 |
| liquidated.
| 4 |
| (b) If the Secretary Director determines that a business in | 5 |
| receivership should be
liquidated,
he or she shall direct the | 6 |
| Attorney General to file a complaint in the Circuit
Court of | 7 |
| the
county in which the business is located, in the name of the | 8 |
| People of the State
of Illinois,
for the orderly liquidation | 9 |
| and dissolution of the business and for an
injunction | 10 |
| restraining
the licensee and its officers and directors from | 11 |
| continuing the operation
of the business.
Within 30 days after | 12 |
| the day the Secretary Director determines that the business
| 13 |
| should be
liquidated, the receiver shall file
with the | 14 |
| Secretary Director and with the clerk of the court that has | 15 |
| charge
of the liquidation
a correct list of all
creditors, as | 16 |
| shown by
the licensee's books and records,
who
have not | 17 |
| presented their claims.
The list shall state the amount of the | 18 |
| claim after allowing all
just credits, deductions, and
set-offs | 19 |
| as shown by the licensee's books. These claims
shall be deemed | 20 |
| proven unless
some interested party files an objection within | 21 |
| the time fixed by the Secretary Director
or court that
has | 22 |
| charge of the liquidation.
| 23 |
| (c) The General Assembly finds and declares that debt | 24 |
| management services
provide an important service and vital | 25 |
| services to Illinois citizens. It is therefore
declared to be | 26 |
| the
policy of this State that customers who receive these |
|
|
|
HB4781 Enrolled |
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LRB096 16778 MJR 32078 b |
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| 1 |
| services must be
protected from
interruptions of services. To | 2 |
| carry out this policy and to insure that
customers of a
| 3 |
| licensee are protected if it is determined that a business in | 4 |
| receivership
should be
liquidated, the Secretary Director | 5 |
| shall make a distribution of moneys collected by the
receiver | 6 |
| in
the following order of priority:
| 7 |
| (1) Allowed claims for the actual necessary expenses of | 8 |
| the receivership
of
the business being liquidated, | 9 |
| including:
| 10 |
| (A) reasonable receiver's fees and receiver's | 11 |
| attorney's fees
approved by the Secretary Director ;
| 12 |
| (B) all expenses of any preliminary or other | 13 |
| examinations into
the condition of the receivership;
| 14 |
| (C) all expenses incurred by the Secretary | 15 |
| Director that are incident to
possession and control of | 16 |
| any property or records of the licensee's
business; and
| 17 |
| (D) reasonable expenses incurred by the Secretary | 18 |
| Director as the result of
business agreements or | 19 |
| contractual arrangements necessary to insure
that the | 20 |
| services of the licensee are delivered to the community | 21 |
| without
interruption.
These business agreements or | 22 |
| contractual arrangements may include, but
are not | 23 |
| limited to, agreements made by the Secretary Director , | 24 |
| or by the receiver with
the
approval of the Secretary | 25 |
| Director , with banks, bonding companies, and other | 26 |
| types of
financial institutions.
|
|
|
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|
| 1 |
| (1.5) Secured claims.
| 2 |
| (2) Allowed unsecured claims for wages or salaries, | 3 |
| excluding vacation,
severance, and sick leave pay earned by | 4 |
| employees within 90 days before
the appointment of a | 5 |
| receiver.
| 6 |
| (3) Allowed unsecured claims of any tax, and interest | 7 |
| and penalty on
the
tax.
| 8 |
| (4) Allowed unsecured claims, other than a kind | 9 |
| specified in items (1),
(2),
and (3) of this subsection, | 10 |
| filed with the Secretary Director within the time the
| 11 |
| Secretary Director
fixes
for filing claims.
| 12 |
| (5) Allowed unsecured claims, other than a kind | 13 |
| specified in items (1),
(2),
and (3) of this subsection, | 14 |
| filed with the Secretary Director after the time fixed for
| 15 |
| filing
claims by the Secretary Director .
| 16 |
| (6) Allowed creditor claims asserted by an owner, | 17 |
| member, or stockholder
of the business in liquidation.
| 18 |
| (7) After one year from the final dissolution of the | 19 |
| licensee's business,
all
assets not
used to satisfy allowed | 20 |
| claims shall be distributed pro rata to the owner,
owners,
| 21 |
| members, or stockholders of the business.
| 22 |
| The Secretary Director shall pay all claims of equal | 23 |
| priority according to the schedule
established in this | 24 |
| subsection and shall not pay claims of lower priority until
all | 25 |
| higher
priority claims are satisfied. If insufficient assets | 26 |
| are available to meet all
claims of equal
priority, those |
|
|
|
HB4781 Enrolled |
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LRB096 16778 MJR 32078 b |
|
| 1 |
| assets shall be distributed pro rata among those claims. All
| 2 |
| unclaimed
assets of a licensee and the licensee's business | 3 |
| shall be deposited with the
Secretary Director to be
paid out | 4 |
| when proper claims are presented to the Secretary Director .
| 5 |
| (d) Upon the order of the circuit court of the county in | 6 |
| which the business
being
liquidated is located, the receiver | 7 |
| may sell or compound any bad or doubtful
debt, and on
like | 8 |
| order may sell the personal property of the business on such | 9 |
| terms as the
court
approves. The receiver shall succeed to | 10 |
| whatever rights or remedies the
unsecured
creditors of the | 11 |
| business may have against the owner or owners, operators,
| 12 |
| stockholders,
directors, members, managers, or officers, | 13 |
| arising out of their claims
against the
licensee's business, | 14 |
| but nothing contained in this Section shall prevent those
| 15 |
| creditors
from filing their claims in the liquidation | 16 |
| proceeding. The receiver may
enforce those
rights or remedies | 17 |
| in any court of competent jurisdiction.
| 18 |
| (e) At the close of a receivership, the receiver shall turn | 19 |
| over to the
Secretary Director all
books of account and ledgers | 20 |
| of the business for preservation. The Secretary Director
shall | 21 |
| hold all
records of receiverships received at any time for a | 22 |
| period of 2 years after the
close of the
receivership. The | 23 |
| records may be destroyed at the termination of the 2-year
| 24 |
| period. All
expenses of the receivership including, but not | 25 |
| limited to, reasonable
receiver's and
attorney's fees approved | 26 |
| by the Secretary Director , all expenses of any preliminary or
|
|
|
|
HB4781 Enrolled |
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LRB096 16778 MJR 32078 b |
|
| 1 |
| other
examinations into the condition of the licensee's | 2 |
| business or the
receivership, and all
expenses incident to the | 3 |
| possession and control of any property or records of
the | 4 |
| business
incurred by the Secretary Director shall be paid out | 5 |
| of the assets of the licensee's
business. These
expenses shall | 6 |
| be paid before all other claims.
| 7 |
| (f) Upon the filing of a complaint by the Attorney General | 8 |
| for the orderly
liquidation and dissolution of a debt | 9 |
| management service provider's licensee's business, as provided | 10 |
| in this Act,
all pending
suits and actions upon unsecured | 11 |
| claims against the business shall abate.
Nothing
contained in | 12 |
| this Act, however, prevents these claimants from filing their
| 13 |
| claims in the
liquidation proceeding. If a suit or an action is | 14 |
| instituted or maintained by
the receiver on
any bond or policy | 15 |
| of insurance issued pursuant to the requirements of this
Act, | 16 |
| the
bonding or insurance company sued shall not have the right | 17 |
| to interpose or
maintain any
counterclaim based upon | 18 |
| subrogation, upon any express or implied agreement of,
or right
| 19 |
| to, indemnity or exoneration, or upon any other express or | 20 |
| implied agreement
with, or
right against, the debt management | 21 |
| service provider's licensee's business. Nothing contained in | 22 |
| this Act prevents
the bonding
or insurance company from filing | 23 |
| this type of claim in the liquidation
proceeding.
| 24 |
| (g) A debt management service provider licensee may not | 25 |
| terminate its affairs and close up its business
unless it has
| 26 |
| first deposited with the Secretary Director an amount of money |
|
|
|
HB4781 Enrolled |
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LRB096 16778 MJR 32078 b |
|
| 1 |
| equal to all of its debts,
liabilities,
and lawful demands | 2 |
| against it including the costs and expenses of a proceeding
| 3 |
| under this
Section, surrendered to the Secretary Director its | 4 |
| license, and filed with the Secretary Director a
statement of
| 5 |
| termination signed by the debt management service provider | 6 |
| licensee containing a pronouncement of intent to
close up its
| 7 |
| business and liquidate its liabilities and containing a sworn | 8 |
| list itemizing in
full all of its
debts, liabilities, and | 9 |
| lawful demands against it. Corporate licensees must
attach to,
| 10 |
| and make a part of the statement of termination, a copy of a | 11 |
| resolution
providing for the
termination and closing up of the | 12 |
| licensee's affairs, certified by the
secretary of the
licensee | 13 |
| and duly adopted at a shareholders' meeting by the holders of | 14 |
| at least
two-thirds
of the outstanding shares entitled to vote | 15 |
| at the meeting. Upon the filing with
the Secretary Director
of | 16 |
| a statement of termination, the Secretary Director shall cause | 17 |
| notice of that action
to be published
once each week for 3 | 18 |
| consecutive weeks in a public newspaper of general
circulation
| 19 |
| published in the city or village where the business is located, | 20 |
| and if no
newspaper is
published in that place, then in a | 21 |
| public newspaper of general circulation
nearest to that
city or | 22 |
| village. The publication shall give notice that the debts,
| 23 |
| liabilities, and lawful
demands against the business will be | 24 |
| redeemed by the Secretary Director upon demand in
writing
made | 25 |
| by the owner thereof, at any time within 3 years after the date | 26 |
| of first
publication.
After the expiration of the 3-year |
|
|
|
HB4781 Enrolled |
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LRB096 16778 MJR 32078 b |
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| period, the Secretary Director shall return to the
person or | 2 |
| persons
designated in the statement of termination to receive | 3 |
| repayment, and in the
proportion
specified in that statement, | 4 |
| any balance of money remaining in his or her
possession after
| 5 |
| first deducting all unpaid costs and expenses incurred in | 6 |
| connection with
a
proceeding under this Section. The Secretary | 7 |
| Director shall receive for his or her
services, exclusive
of | 8 |
| costs
and expenses, 2% of any amount up to $5,000 and 1% of any | 9 |
| amount in excess of
$5,000 deposited
with him or her under this | 10 |
| Section by any business. Nothing contained
in this
Section | 11 |
| shall affect or impair the liability of any bonding or | 12 |
| insurance
company on
any bond
or insurance policy issued under | 13 |
| this Act relating to the business.
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| (Source: P.A. 92-400, eff. 1-1-02.)
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| Section 910. The Consumer Fraud and Deceptive Business | 16 |
| Practices Act is amended by adding Section 2III as follows: | 17 |
| (815 ILCS 505/2III new) | 18 |
| Sec. 2III. Violations of the Debt Settlement Consumer | 19 |
| Protection Act. Any person who violates the Debt Settlement | 20 |
| Consumer Protection Act commits an unlawful practice within the | 21 |
| meaning of this Act. | 22 |
| (205 ILCS 665/13.5 rep.) | 23 |
| (205 ILCS 665/15.1 rep.) |
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HB4781 Enrolled |
- 70 - |
LRB096 16778 MJR 32078 b |
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| (205 ILCS 665/15.2 rep.) | 2 |
| (205 ILCS 665/15.3 rep.) | 3 |
| Section 915. The Debt Management Service Act is amended by | 4 |
| repealing Sections 13.5, 15.1, 15.2, and 15.3. | 5 |
| Section 970. Severability. The provisions of this Act are | 6 |
| severable under Section 1.31 of the Statute on Statutes.
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| Section 999. Effective date. This Act takes effect upon | 8 |
| becoming law. |
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