Full Text of HB4781 96th General Assembly
HB4781sam003 96TH GENERAL ASSEMBLY
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Sen. Terry Link
Filed: 4/29/2010
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| AMENDMENT TO HOUSE BILL 4781
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| AMENDMENT NO. ______. Amend House Bill 4781 as follows: | 3 |
| on page 6, by replacing lines 11 through 15 with the following: | 4 |
| "Secretary in which the applicant shall be the obligor and in | 5 |
| which an insurance company, which is duly authorized by the | 6 |
| State of Illinois to transact the business of fidelity and | 7 |
| surety insurance, shall be a surety. The surety bond must: | 8 |
| (i) be in effect during the period of registration and | 9 |
| for 2 years after the provider ceases providing | 10 |
| debt-management services to individuals in this State; | 11 |
| (ii) run to this State for the benefit of this State | 12 |
| and of individuals who reside in this State when they agree | 13 |
| to receive debt-settlement services from the provider, as | 14 |
| their interests may appear; and | 15 |
| (iii) be in the amount of $50,000 or other larger or | 16 |
| smaller amount that the Secretary determines is warranted | 17 |
| by the financial condition and business experience of the |
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| provider, the history of the provider in performing debt | 2 |
| settlement services, the risk to individuals, and any other | 3 |
| factor that the Secretary considers appropriate."; and
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| on page 7, immediately below line 1, by inserting the | 5 |
| following: | 6 |
| "Instead of the surety bond required under this Section, a | 7 |
| provider may deliver to the Secretary, in the amount required | 8 |
| under this Section, payable or available to this State and to | 9 |
| individuals who reside in this State when they agree to receive | 10 |
| debt-settlement services from the provider, as their interests | 11 |
| may appear: | 12 |
| (1) a certificate of insurance: | 13 |
| (A) issued by an insurance company authorized to do | 14 |
| business in this State and rated at least A or | 15 |
| equivalent by a nationally recognized rating | 16 |
| organization approved by the Secretary; and | 17 |
| (B) with no deductible, or if the provider supplies | 18 |
| a bond in the amount of $5,000, a deductible not | 19 |
| exceeding $5,000; or | 20 |
| (2) with the approval of the Secretary: | 21 |
| (A) an irrevocable letter of credit, issued or | 22 |
| confirmed by a bank approved by the Secretary, payable | 23 |
| upon presentation of a certificate by the Secretary | 24 |
| stating that the provider or its agent has not complied | 25 |
| with this Act; or |
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| (B) bonds or other obligations of the United States | 2 |
| or guaranteed by the United States or bonds or other | 3 |
| obligations of this State or a political subdivision of | 4 |
| this State, to be deposited and maintained with a bank | 5 |
| approved by the Secretary for this purpose."; and
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| by replacing line 14 on page 31 through line 11 on page 32 with | 7 |
| the following: | 8 |
| "(b) A debt settlement provider may calculate fees on a | 9 |
| percentage of debt basis or on a percentage of savings basis. | 10 |
| The fee structure shall be clearly disclosed and explained in | 11 |
| the debt settlement services agreement. The debt settlement | 12 |
| provider may only charge fees as provided in either paragraph | 13 |
| (1) or (2) as follows: | 14 |
| (1) Fees calculated as a percentage of debt shall | 15 |
| comport with the following provisions: | 16 |
| (A) The total amount of the fees claimed, demanded, | 17 |
| charged, collected, or received under this paragraph | 18 |
| (1) may not exceed 15% of the aggregate debt that a | 19 |
| consumer enrolls in a debt settlement program. A debt | 20 |
| settlement provider that calculates fees as a | 21 |
| percentage of debt may: | 22 |
| (i) charge an origination fee or set-up fee, | 23 |
| which may be designated by the debt settlement | 24 |
| provider as nonrefundable, of: | 25 |
| (a) $200 on aggregate debt of less than |
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| $20,000; or | 2 |
| (b) $400 on aggregate debt of $20,000 or | 3 |
| more; | 4 |
| (ii) charge a monthly account service fee of: | 5 |
| (a) no greater than $75 per month on | 6 |
| aggregate debt of less than $40,000; or | 7 |
| (b) no greater than $100 per month on | 8 |
| aggregate debt of $40,000 or more; and
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| (iii) charge a settlement fee for the | 10 |
| remainder of the allowable fees, which may be | 11 |
| demanded and collected no earlier than upon | 12 |
| delivery to the debt settlement provider by a | 13 |
| creditor of a bona fide written settlement offer | 14 |
| consistent with the terms of the debt settlement | 15 |
| services agreement; a settlement fee may be | 16 |
| assessed for each debt settled, but the sum total | 17 |
| of the origination fee, the monthly fee, and the | 18 |
| settlement fee may not exceed 15% of the aggregate | 19 |
| debt. | 20 |
| (B) The collection of monthly fees shall cease | 21 |
| under this paragraph (1) when the total monthly fees | 22 |
| and the origination fee together equal 40% of the total | 23 |
| fees allowable under this paragraph. | 24 |
| (C) In no event may more than 40% of the total | 25 |
| amount of fees allowable be claimed, demanded, | 26 |
| charged, collected, or received by a debt settlement |
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| provider any earlier than upon delivery to the debt | 2 |
| settlement provider by a creditor of a bona fide | 3 |
| written settlement offer consistent with the terms of | 4 |
| the debt settlement services agreement. | 5 |
| (2) Fees calculated as a percentage of savings shall | 6 |
| comport with the following provisions: | 7 |
| (A) The total amount of the fees claimed, demanded, | 8 |
| charged, collected, or received under this paragraph | 9 |
| (2) may not exceed 30% of the amount a consumer is | 10 |
| saved in a debt settlement program. More specifically, | 11 |
| a debt settlement provider that calculates fees as a | 12 |
| percentage of savings may: | 13 |
| (i) charge a fee for consultation, obtaining a | 14 |
| credit report, and setting up an account in an | 15 |
| amount not exceeding the lesser of $400 or 4% of | 16 |
| the debt in the plan at the inception of the plan | 17 |
| or a higher amount set forth by regulation; | 18 |
| (ii) charge a monthly service fee, not to | 19 |
| exceed $10 or a higher amount set forth by | 20 |
| regulation, multiplied by the number of creditors | 21 |
| remaining in the plan at the time the fee is | 22 |
| assessed, but not more than $50 total or a higher | 23 |
| amount set forth by regulation, in any month; and | 24 |
| (iii) charge a settlement fee not to exceed 30% | 25 |
| of the excess of the outstanding amount of each | 26 |
| debt over the amount actually paid to the creditor, |
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| as calculated at the time of settlement; | 2 |
| settlement fees authorized under this paragraph | 3 |
| (2) shall become billable only as debts are | 4 |
| settled, and the total aggregate amount of fees | 5 |
| charged to any individual under this paragraph, | 6 |
| including fees charged under items (i) and (ii) of | 7 |
| this subparagraph (A), may not exceed 20% of the | 8 |
| principal amount of debt included in the agreement | 9 |
| at the agreement's inception.
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| (c) No fees, charges, assessments, or any other | 11 |
| compensation may be claimed, demanded, charged, collected, or | 12 |
| received other than the fees allowed under this Section. Any | 13 |
| fees collected in excess of those allowed under this Section | 14 |
| must be immediately returned to the debtor. | 15 |
| (d) No monthly fees shall be charged or collected by a debt | 16 |
| settlement provider unless services are provided to an | 17 |
| individual during that calendar month. Services shall be | 18 |
| documented by the debt settlement provider and may include, but | 19 |
| are not limited to, the following:
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| (1) client qualification; | 21 |
| (2) account management; | 22 |
| (3) debt program organization; | 23 |
| (4) negotiation and settlement discussions with | 24 |
| creditors; | 25 |
| (5) consumer rights education and counseling; | 26 |
| (6) referral to legal assistance; and |
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| (7) third-party payment management."; and | 2 |
| on page 38, immediately below line 22, by inserting the | 3 |
| following: | 4 |
| "Section 160. Repeal of Act. This Act is repealed 2 years | 5 |
| after its effective date.".
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