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Public Act 102-0987 | ||||
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AN ACT concerning regulation.
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Be it enacted by the People of the State of Illinois, | ||||
represented in the General Assembly:
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Section 1. Short title. This Act may be cited as the | ||||
Consumer Legal Funding Act. | ||||
Section 5. Definitions. | ||||
"Advertise" means publishing or disseminating any written, | ||||
electronic, or printed communication, or any communication by | ||||
means of recorded telephone messages or transmitted on radio, | ||||
television, the Internet, or similar communications media, | ||||
including film strips, motion pictures, and videos, published, | ||||
disseminated, circulated, or placed before the public, | ||||
directly or indirectly, for the purpose of inducing a consumer | ||||
to enter into a consumer legal funding. | ||||
"Charges" means the fees, as set forth in Section 25, to be | ||||
paid to the consumer legal funding company by or on behalf of | ||||
the consumer above the funded amount provided by or on behalf | ||||
of the company to an Illinois consumer pursuant to this Act. | ||||
"Consumer" means a natural person who has a pending legal | ||||
claim and who resides or is domiciled in Illinois. | ||||
"Consumer legal funding" or "funding" means a nonrecourse | ||||
transaction in which a company purchases and a consumer | ||||
transfers to the company an unvested, contingent future |
interest in the potential net proceeds of a settlement or | ||
judgment obtained
from the consumer's legal claim; if no | ||
proceeds are obtained from the consumer's legal claim, the | ||
consumer is not required to repay the company the consumer | ||
legal funding amount or charges. | ||
"Consumer legal funding company" or "company" means a | ||
person or entity that enters into, purchases, or services a | ||
consumer legal funding transaction with an Illinois consumer. | ||
"Consumer legal funding company" does not include:
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(1) an immediate family member of the consumer; | ||
(2) a bank, lender, financing entity, or other special | ||
purpose entity: | ||
(A) that provides financing to a consumer legal | ||
funding company; or | ||
(B) to which a consumer legal funding company | ||
grants a security interest or transfers any rights or | ||
interest in a consumer legal funding; or | ||
(3) an attorney or accountant who provides services to | ||
a consumer. | ||
"Department" means the Department of Financial and | ||
Professional Regulation. | ||
"Funded amount" means the amount of moneys provided to, or
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on behalf of, the consumer in the consumer legal funding. | ||
"Funded amount" does not include charges except for charges | ||
that are deducted from the funded amount. | ||
"Funding date" means the date on which the funded amount |
is transferred to the consumer by the consumer legal funding | ||
company either by personal delivery; via wire, ACH, or other | ||
electronic means; or mailed by insured, certified, or | ||
registered United States mail. | ||
"Immediate family member" means a parent; sibling; child | ||
by blood, adoption, or marriage; spouse; grandparent; or | ||
grandchild. | ||
"Legal claim" means a bona fide civil claim or cause of | ||
action. | ||
"Resolution amount" means the funded amount plus the | ||
agreed-upon charges that are delivered to the consumer legal | ||
funding company on the resolution date. | ||
"Resolution date" means the date the resolution amount is | ||
delivered to the consumer legal funding company. | ||
"Secretary" means the Secretary of Financial and | ||
Professional Regulation or the Secretary's designee. | ||
Section 10. Contract requirements; right of rescission. | ||
(a) All consumer legal fundings shall meet the following | ||
requirements: | ||
(1) the contract shall be completely filled in when | ||
presented to the consumer for signature with all blanks | ||
marked "not applicable", "n/a", or "none"; | ||
(2) the contract shall contain, in bold and boxed | ||
type, a right of rescission, allowing the consumer to | ||
cancel the contract without penalty or further obligation |
if, within 14 business days after the funding date, the | ||
consumer either: | ||
(A) returns to the consumer legal funding company | ||
the full amount of the disbursed funds by delivering | ||
the company's uncashed check to the company's office | ||
in person; or | ||
(B) mails, by insured, certified, or registered | ||
United States mail, to the address specified in the | ||
contract, a notice of cancellation and includes in the | ||
mailing a return of the full amount of disbursed funds | ||
in the form of the company's uncashed check or a | ||
registered or certified check or money order; and | ||
(3) the contract shall contain the initials of the | ||
consumer on each page. | ||
(b) The contract shall contain a written acknowledgment by | ||
the attorney retained by the consumer in the legal claim that | ||
attests to the following: | ||
(1) to the best of the attorney's knowledge, all the | ||
costs and charges relating to the consumer legal funding | ||
have been disclosed to the consumer; | ||
(2) the attorney is being paid on a contingency basis | ||
pursuant to a written fee agreement; | ||
(3) all proceeds of the legal claim will be disbursed | ||
via either the trust account of the attorney or a | ||
settlement fund established to receive the proceeds of the | ||
legal claim on behalf of the consumer; |
(4) the attorney is following the written instructions | ||
of the consumer with regard to the consumer legal funding;
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and | ||
(5) the attorney has not received a referral fee or
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other consideration from the consumer legal funding | ||
company in connection with the consumer legal funding, nor | ||
will the attorney receive such fee or other consideration | ||
in the future. | ||
(c) If the acknowledgment required in subsection (b) is | ||
not completed by the attorney retained by the consumer in the | ||
legal claim, the contract shall be null and void. The contract | ||
remains valid and enforceable if the consumer terminates | ||
representation by the initial attorney who completed the | ||
acknowledgment required in subsection (b) or retains a new | ||
attorney with respect to the legal claim. | ||
(d) No licensee shall permit an obligor to owe the | ||
licensee, an agent of the licensee, or an affiliate of the | ||
licensee, including a corporation owned or managed by the | ||
licensee, an aggregate principal amount in excess of $100,000, | ||
unless permitted by rule, at any time for consumer legal | ||
fundings transacted pursuant to this Act.
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(e) Any transaction that does not exactly meet the | ||
definition of a consumer legal funding under Section 5 is | ||
subject to the Interest Act and any other applicable law.
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Section 15. Consumer legal funding company prohibitions. A |
consumer legal funding company shall not: | ||
(1) pay or offer to pay commissions, referral fees, or | ||
other forms of consideration to any attorney, law firm, | ||
medical provider, chiropractic physician, or physical | ||
therapist or any of their employees or agents for | ||
referring a consumer to the company; | ||
(2) accept any commissions, referral fees, rebates, or | ||
other forms of consideration from an attorney, law firm, | ||
medical provider, chiropractor, or physical therapist or | ||
any of their employees or agents; | ||
(3) advertise materially false or misleading | ||
information regarding its products or services; | ||
(4) refer, in furtherance of an initial consumer legal | ||
funding, a customer or potential customer to a specific | ||
attorney, law firm, medical provider, chiropractor, or | ||
physical therapist or any of their employees; however, if | ||
a customer needs legal representation, the company may | ||
refer the customer to a local or State bar association | ||
referral service or to a legal aid organization; | ||
(5) fail to supply a true copy of the executed | ||
contract to the attorney for the consumer upon execution | ||
and if the consumer or their attorney requests a copy; | ||
(6) knowingly provide funding to a consumer who has | ||
previously assigned or sold a portion of the consumer's | ||
right to proceeds from his or her legal claim without | ||
first making payment to or purchasing a prior unsatisfied |
consumer legal funding company's entire funded amount and | ||
contracted charges, unless a lesser amount is otherwise | ||
agreed to in writing by the consumer legal funding | ||
companies, except that multiple companies may agree to | ||
contemporaneously provide funding to a consumer if the | ||
consumer and the consumer's attorney consent to the | ||
arrangement in writing; | ||
(7) receive any right to, nor make any decisions with | ||
respect to, the conduct of the underlying legal claim or | ||
any settlement or resolution of the legal claim; the right | ||
to make such decisions shall remain solely with the | ||
consumer and the consumer's attorney in the legal claim; | ||
or | ||
(8) knowingly pay or offer to pay for court costs,
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filing fees, or attorney's fees either during or after the | ||
resolution of the legal claim using funds from the | ||
consumer legal funding transaction. | ||
Section 20. Satisfaction of the contract. A consumer legal | ||
funding company shall require the resolution amount to be set | ||
as a predetermined amount, based upon intervals of time from | ||
the date of origination of the funding through the date of | ||
resolution of the legal claim, and not be determined as a | ||
percentage of the recovery from the legal claim. | ||
Section 25. Fees. |
(a) The fee charged by a consumer legal funding company to | ||
the consumer shall be calculated as not more than 18% of the | ||
funded amount, assessed on the outset of every 6 months. | ||
(b) In addition, a consumer legal funding company may | ||
charge a document preparation fee not to exceed $75, which may | ||
be deducted from the funded amount. This fee is to be used to | ||
defray the ordinary cost of opening, administering, and | ||
terminating a consumer legal funding. | ||
(c) A consumer legal funding company shall not collect any | ||
additional fees unless otherwise specified in this Act. | ||
(d) No charges may accrue on a consumer legal funding for | ||
more than 42 months after the funding date of the consumer | ||
legal funding. No consumer legal funding may be refinanced | ||
except as authorized by rule. Notwithstanding the foregoing, a | ||
consumer legal funding company may assess charges on any | ||
additional amounts provided after the funding date for 42 | ||
months after the additional funding date. | ||
Section 30. Disclosures. All consumer legal funding
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contracts shall contain the disclosures specified in this | ||
Section, which shall constitute material terms of the | ||
contract. Unless otherwise specified, the disclosures shall be | ||
typed in at least 12-point bold-type font and be placed | ||
clearly and conspicuously within the contract as follows: | ||
(1) On the front page under appropriate headings, | ||
language specifying: |
(A) the funded amount to be paid to the consumer or | ||
on the consumer's behalf by the consumer legal funding | ||
company; | ||
(B) an itemization of charges; | ||
(C) the maximum total amount to be paid by the | ||
consumer to the company, including the funded amount | ||
and all fees; and | ||
(D) a payment schedule to include the resolution | ||
amount, listing dates, and the amount due at the end of | ||
each 6-month period from the funding date, until the | ||
date the maximum amount is due to the company by the | ||
consumer to satisfy the amount due pursuant to the | ||
contract. | ||
(2) Pursuant to the provisions set forth in paragraph
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(2) of subsection (a) of Section 10, within the body of the | ||
contract: "CONSUMER'S RIGHT TO CANCELLATION: You may | ||
cancel this contract without penalty or further obligation | ||
within 14 business days after the funding date if you | ||
either: | ||
(A) return to the consumer legal funding company
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the full amount of the funds disbursed to you or on | ||
your behalf by delivering the company's uncashed check | ||
to the company's office in person; or | ||
(B) place in the mail, by mail service materially | ||
equivalent to United States Postal Service certified | ||
mail, addressed to the company at the address |
specified in the contract, a notice of cancellation | ||
and include in such mailing a return of the full amount | ||
of funds disbursed to you or on your behalf in the form | ||
of the company's uncashed check or a registered or | ||
certified check or money order." | ||
(3) Within the body of the contract: "The consumer | ||
legal funding company shall have no role in deciding | ||
whether, when, and how much the legal claim is settled | ||
for, however, the consumer and consumer's attorney must | ||
notify the company of the outcome of the legal claim by | ||
settlement or adjudication before the resolution date. The | ||
company may seek updated information about the status of | ||
the legal claim but in no event shall the company | ||
interfere with the independent professional judgment of | ||
the attorney in the handling of the legal claim or any | ||
settlement thereof." | ||
(4) Within the body of the contract, in all capital | ||
letters in at least 12-point bold-type font contained | ||
within a box: "THE FUNDED AMOUNT AND AGREED-UPON CHARGES | ||
SHALL BE PAID ONLY FROM THE PROCEEDS OF YOUR LEGAL CLAIM, | ||
AND SHALL BE PAID ONLY TO THE EXTENT THAT THERE ARE
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AVAILABLE PROCEEDS FROM YOUR LEGAL CLAIM. YOU WILL NOT OWE | ||
[INSERT NAME OF THE CONSUMER LEGAL FUNDING COMPANY] | ||
ANYTHING IF THERE ARE NO REMAINING PROCEEDS AVAILABLE FROM | ||
YOUR LEGAL CLAIM, UNLESS YOU OR YOUR ATTORNEY HAVE | ||
COMMITTED FRAUD AGAINST THE CONSUMER LEGAL FUNDING |
COMPANY." | ||
(5) Located immediately above the place on the | ||
contract where the consumer's signature is required, in | ||
12-point font: "Do not sign this contract before you read | ||
it completely or if it contains any blank spaces. You are | ||
entitled to a completely filled-in copy of the contract. | ||
Before you sign this contract, you should obtain the | ||
advice of an attorney. Depending on the circumstances, you | ||
may want to consult a tax, public or private benefits | ||
planning, or financial professional. You acknowledge that | ||
your attorney in the legal claim has provided no tax, | ||
public or private benefit planning, or financial advice | ||
regarding this transaction." | ||
(6) The consumer legal funding company shall provide | ||
the consumer with information on accessing a financial | ||
coaching program no later than the funding date. | ||
Section 35. Violations. | ||
(a) Nothing in this Act shall be construed to restrict the | ||
exercise of powers or the performance of the duties of the | ||
Illinois Attorney General that he or she is authorized to | ||
exercise or perform by law. | ||
(b) Any violation of this Act constitutes a violation of | ||
the Consumer Fraud and Deceptive Business Practices Act. | ||
(c) The Illinois Attorney General may enforce a violation | ||
of this Act as an unlawful practice under the Consumer Fraud |
and Deceptive Business Practices Act. | ||
Section 40. Assignability; liens. | ||
(a) The contingent right to receive an amount of the | ||
potential proceeds of a legal claim is assignable by a | ||
consumer. | ||
(b) Only liens related to the legal claim, including | ||
attorney's liens, Medicare, or other statutory liens, shall | ||
take priority over any lien of the consumer legal funding | ||
company. All other liens shall take priority by normal | ||
operation of law. | ||
(c) A consumer legal funding transaction does not | ||
constitute an assignment of a personal injury claim or chose | ||
in action. | ||
(d) A consumer legal funding transaction does not | ||
constitute the assignment of any present right; the | ||
transaction constitutes the transfer of an unvested, | ||
contingent future interest in an amount of the potential | ||
proceeds of a legal claim or cause of action.
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Section 45. Attorney prohibitions. An attorney or law firm | ||
retained by the consumer in the legal claim shall not have a | ||
financial interest in the consumer legal funding company | ||
offering consumer legal funding to that consumer. | ||
Additionally, any attorney who has referred the consumer to | ||
the consumer's retained attorney shall not have a financial |
interest in the consumer legal funding company offering | ||
consumer legal funding to that consumer. A consumer legal | ||
funding that violates this Section is null and void and no | ||
person or entity shall have any right to collect, attempt to | ||
collect, receive, or retain any funded amount or charges | ||
related to the consumer legal funding. | ||
Section 50. Effect of communication on privileges. No | ||
communication between the consumer's attorney in the legal | ||
claim and the consumer legal funding company as it pertains to | ||
the consumer legal funding shall limit, waive, or abrogate the | ||
scope or nature of any statutory or common law privilege, | ||
including the work product doctrine and the attorney-client | ||
privilege. | ||
Section 55. Consumer legal funding license scope. | ||
(a) It shall be unlawful for any person or entity to | ||
operate as a consumer legal funding provider in this State | ||
except as authorized by this Act and without first having | ||
obtained a license in accordance with this Act. No person or | ||
entity may engage in any device, subterfuge, or pretense to | ||
evade the requirements of this Act. However, any company that | ||
has a license in good standing under the Consumer Installment | ||
Loan Act on the effective date of this Act shall be entitled to | ||
make consumer legal fundings under the terms of this Act upon | ||
the effective date of this Act if that company files an |
application for a consumer legal funding license within 60 | ||
days after the Department issues forms for the filing of that | ||
application and until the Department approves or denies the | ||
application for a funding license. Any consumer legal funding | ||
contract made by any person or entity in violation of this | ||
subsection shall be null and void and the person or entity who | ||
entered into the consumer legal funding transaction shall have | ||
no right to collect, attempt to collect, receive, or retain | ||
any principal, interest, or charges related to the consumer | ||
legal funding transaction.
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(b) The provisions of this Act do not apply to a bank, | ||
savings bank, savings association, or credit union organized | ||
under the laws of this State, any other state, or under the | ||
laws of the United States.
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(c) Any consumer legal funding made by a person not | ||
licensed under this Act, including a person holding an | ||
inactive license, and not exempt under this Act shall be null | ||
and void, and no person or entity shall have any right to | ||
collect, attempt to collect, receive, or retain any principal, | ||
fee, interest, or charges related to the funding.
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Section 60. Licensee name. No person, partnership, | ||
association, corporation, limited liability company, or other | ||
entity engaged in a business regulated by this Act shall | ||
operate the business under a name other than the real names of | ||
the entity and individuals conducting the business. The |
business may in addition operate under an assumed corporate | ||
name pursuant to the Business Corporation Act of 1983, an | ||
assumed limited liability company name pursuant to the Limited | ||
Liability Company Act, or an assumed business name pursuant to | ||
the Assumed Business Name Act. | ||
Section 65. License application process; investigation. | ||
(a) The Secretary may issue a license upon completion of | ||
all of the following:
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(1) the filing of an application for a license with | ||
the Secretary or the Nationwide Multistate Licensing | ||
System and Registry as required by the Secretary;
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(2) the filing with the Secretary of a listing of | ||
judgments entered against and bankruptcy petitions by the | ||
license applicant for the preceding 10 years;
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(3) the filing of an audited balance sheet, including | ||
all footnotes prepared by a certified public accountant in | ||
accordance with generally accepted accounting principles | ||
and generally accepted auditing standards; notwithstanding | ||
the requirements of this subsection, an applicant that is | ||
a subsidiary may submit audited consolidated financial | ||
statements of its parent, intermediary parent, or ultimate | ||
parent if the consolidated statements are supported by | ||
consolidating statements that include the applicant's | ||
financial statement; if the consolidating statements are | ||
unaudited, the applicant's chief financial officer shall |
attest to the applicant's financial statements disclosed | ||
in the consolidating statements; and
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(4) an investigation of the averments required by | ||
Section 80, which investigation must allow the Secretary | ||
to issue positive findings stating that the financial | ||
responsibility, experience, character, and general fitness | ||
of the license applicant; of the members thereof if the | ||
license applicant is a partnership or association; of the | ||
officers and directors thereof if the license applicant is | ||
a corporation; and of the managers and members that retain | ||
any authority or responsibility under the operating | ||
agreement if the license applicant is a limited liability | ||
company are such as to command the confidence of the | ||
community and to warrant belief that the business will be | ||
operated honestly, fairly, and efficiently within the | ||
purpose of this Act; if the Secretary does not so find, he | ||
or she shall not issue the license and shall notify the | ||
license applicant of the denial. The Secretary may impose | ||
conditions on a license if the Secretary determines that | ||
those conditions are necessary or appropriate. These | ||
conditions shall be imposed in writing and shall continue | ||
in effect for a period prescribed by the Secretary.
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(b) All licenses shall be issued to the license applicant. | ||
Upon receipt of the license, a consumer legal funding licensee | ||
shall be authorized to engage in the business regulated by | ||
this Act. The license shall remain in full force and effect |
until it expires, it is surrendered by the licensee, or it is | ||
revoked or suspended as provided by this Act.
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Section 70. License application form. | ||
(a) An application for a consumer legal funding company | ||
license must be made in accordance with Section 65 and, if | ||
applicable, in accordance with requirements of the Nationwide | ||
Multistate Licensing System and Registry. The application | ||
shall be in writing, under oath, and on a form obtained from | ||
and prescribed by the Secretary, or may be submitted | ||
electronically with attestation to the Nationwide Multistate | ||
Licensing System and Registry.
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(b) The application shall contain the name and complete | ||
business and residential address or addresses of the license | ||
applicant. If the license applicant is a partnership, | ||
association, corporation, or other form of business | ||
organization, the application shall contain the names and | ||
complete business and residential addresses of each member, | ||
director, and principal officer of the business. The | ||
application shall also include a description of the activities | ||
of the license applicant in such detail and for such periods as | ||
the Secretary may require, including all of the following:
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(1) an affirmation of financial solvency noting such | ||
capitalization requirements as may be required by the | ||
Secretary and access to such credit as may be required by | ||
the Secretary;
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(2) an applicant shall prove in a form satisfactory to | ||
the Secretary that the applicant has and will maintain a | ||
positive net worth of a minimum of $30,000;
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(3) an applicant shall submit to the Secretary with | ||
the application for a license and every licensee shall | ||
maintain a bond to be approved by the Secretary in which | ||
the applicant shall be the obligor, in the sum of $50,000 | ||
or such additional amount as required by the Secretary | ||
based on the amount of consumer legal fundings made, | ||
purchased, or serviced by the licensee in the previous | ||
year, and in which an insurance company that is duly | ||
authorized by this State to transact the business of | ||
fidelity and surety insurance shall be a surety. The | ||
surety bond shall run to the Secretary and shall be for the | ||
benefit of the Department and of any consumer who incurs | ||
damages as a result of any violation of this Act or rules | ||
adopted pursuant to this Act by a licensee;
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(4) an affirmation that the license applicant or its | ||
members, directors, or principals, as may be appropriate, | ||
are at least 18 years of age;
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(5) information as to the character, fitness, | ||
financial and business responsibility, background, | ||
experience, and criminal record of any:
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(i) person, entity, or ultimate equitable owner | ||
that owns or controls, directly or indirectly, 10% or | ||
more of any class of stock of the license applicant;
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(ii) person, entity, or ultimate equitable owner | ||
that is not a depository institution, as defined in | ||
Section 1007.50 of the Savings Bank Act, that lends, | ||
provides, or infuses, directly or indirectly, in any | ||
way, funds to or into a license applicant in an amount | ||
equal to or more than 10% of the license applicant's | ||
net worth;
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(iii) person, entity, or ultimate equitable owner | ||
that controls, directly or indirectly, the election of | ||
25% or more of the members of the board of directors of | ||
a license applicant; or
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(iv) person, entity, or ultimate equitable owner | ||
that the Secretary finds influences management of the | ||
license applicant; the provisions of this subparagraph | ||
shall not apply to a public official serving on the | ||
board of directors of a State guaranty agency;
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(6) upon written request by the licensee and | ||
notwithstanding the provisions of paragraphs (1), (2), and | ||
(3) of this subsection, the Secretary may permit the | ||
licensee to omit all or part of the information required | ||
by those paragraphs if instead of the omitted information, | ||
the licensee submits an affidavit stating that the | ||
information submitted on the licensee's previous renewal | ||
application is still true and accurate; the Department may | ||
adopt rules prescribing the form and content of the | ||
affidavit that are necessary to accomplish the purposes of |
this paragraph; and
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(7) any other information as required by rule.
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Section 75. License application; Nationwide Multistate | ||
Licensing System and Registry. | ||
(a) Applicants for a license shall apply in a form | ||
prescribed by the Secretary. Each form shall contain content | ||
as set forth by rule, regulation, instruction, or procedure of | ||
the Department and may be changed or updated as necessary by | ||
the Department in order to carry out the purposes of this Act.
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(b) In order to fulfill the purposes of this Act, the | ||
Secretary is authorized to establish relationships or | ||
contracts with the Nationwide Multistate Licensing System and | ||
Registry or other entities designated by the Nationwide | ||
Multistate Licensing System and Registry to collect and | ||
maintain records and process transaction fees or other fees | ||
related to licensees or other persons subject to this Act.
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(c) In connection with an application for licensing, the | ||
applicant may be required, at a minimum, to furnish to the | ||
Nationwide Multistate Licensing System and Registry | ||
information concerning the applicant's identity, including | ||
personal history and experience in a form prescribed by the | ||
Nationwide Multistate Licensing System and Registry, including | ||
the submission of authorization for the Nationwide Multistate | ||
Licensing System and Registry and the Secretary to obtain:
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(1) an independent credit report obtained from a |
consumer reporting agency described in Section 603(p) of | ||
the Fair Credit Reporting Act, 15 U.S.C. 1681a(p); and
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(2) information related to any administrative, civil, | ||
or criminal findings by any governmental jurisdiction.
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(d) For the purposes of this Section, and in order to | ||
reduce the points of contact that the Secretary may have to | ||
maintain for purposes of paragraph (2) of subsection (c), the | ||
Secretary may use the Nationwide Multistate Licensing System | ||
and Registry as a channeling agent for requesting and | ||
distributing information to and from any source as directed by | ||
the Secretary.
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Section 80. Averments of applicant. Each application for | ||
license shall be accompanied by the following averments | ||
stating that the applicant: | ||
(1) will file with the Secretary or Nationwide | ||
Multistate Licensing System and Registry, as applicable, | ||
any report or reports that it is required to file under any | ||
of the provisions of this Act when due;
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(2) has not committed a crime against the law of this | ||
State, any other state, or of the United States involving | ||
moral turpitude or fraudulent or dishonest dealing, and | ||
that no final judgment has been entered against it in a | ||
civil action upon grounds of fraud, misrepresentation, or | ||
deceit that has not been previously reported to the | ||
Secretary;
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(3) has not engaged in any conduct that would be cause | ||
for denial of a license;
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(4) has not become insolvent;
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(5) has not submitted an application for a license | ||
under this Act that contains a material misstatement;
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(6) has not demonstrated by course of conduct, | ||
negligence or incompetence in performing any act for which | ||
it is required to hold a license under this Act;
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(7) will advise the Secretary in writing or the | ||
Nationwide Multistate Licensing System and Registry, as | ||
applicable, of any changes to the information submitted on | ||
the most recent application for license or averments of | ||
record within 30 days after the change; the written notice | ||
must be signed in the same form as the application for the | ||
license being amended;
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(8) will comply with the provisions of this Act and | ||
with any lawful order, rule, or regulation made or issued | ||
under the provisions of this Act;
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(9) will submit to periodic examination by the | ||
Secretary as required by this Act; and
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(10) will advise the Secretary in writing of judgments | ||
entered against and bankruptcy petitions by the license | ||
applicant within 5 days after the occurrence.
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A licensee who fails to fulfill the obligations of an | ||
averment, fails to comply with averments made, or otherwise | ||
violates any of the averments made under this Section shall be |
subject to the penalties of this Act. | ||
Section 85. Refusal to issue license. The Secretary may | ||
refuse to issue or renew a license if:
| ||
(1) it is determined that the applicant is not in | ||
compliance with any provisions of this Act;
| ||
(2) there is substantial continuity between the | ||
applicant and any violator of this Act; or
| ||
(3) the Secretary cannot make the findings specified | ||
in subsection (a) of Section 65. | ||
Section 90. Closing of business; surrender of license. At | ||
least 10 days before a licensee ceases operations, closes | ||
business, or files for bankruptcy: | ||
(1) The licensee shall notify the Department of its | ||
action in writing. | ||
(2) With the exception of filing for bankruptcy, the | ||
licensee shall surrender its license to the Secretary for | ||
cancellation; the surrender of the license shall not | ||
affect the licensee's civil or criminal liability for acts | ||
committed before surrender or entitle the licensee to a | ||
return of any part of the annual license fee. | ||
(3) The licensee shall notify the Department of the | ||
location where the books, accounts, contracts, and records | ||
will be maintained and the procedure to ensure prompt | ||
return of contracts, titles, and releases to the
|
customers. | ||
(4) The accounts, books, records, and contracts shall | ||
be maintained and serviced by the licensee or another | ||
licensee under this Act or an entity exempt from licensure | ||
under this Act. | ||
(5) The Department shall have the authority to conduct | ||
examinations of the books, records, and funding documents | ||
at any time after surrender of the license, filing of | ||
bankruptcy, or the cessation of operations. | ||
Section 95. License renewal; fees. | ||
(a) Licenses shall be renewed every year using the common | ||
renewal date of the Nationwide Multistate Licensing System and | ||
Registry, as required by the Secretary. Properly completed | ||
renewal application forms and filing fees may be received by | ||
the Secretary 60 days before the license expiration date, but | ||
to be deemed timely the completed renewal application forms | ||
and filing fees must be received by the Secretary no later than | ||
30 days before the license expiration date.
| ||
(b) It shall be the responsibility of each licensee to | ||
accomplish renewal of its license. Failure by a licensee to | ||
submit a properly completed renewal application form and fees | ||
in a timely fashion, absent a written extension from the | ||
Secretary, shall result in the license becoming inactive.
| ||
(c) No activity regulated by this Act shall be conducted | ||
by the licensee when a license becomes inactive. An inactive |
license may be reactivated by the Secretary upon payment of a | ||
renewal fee and payment of a reactivation fee equal to the | ||
renewal fee.
| ||
(d) A licensee ceasing an activity or activities regulated | ||
by this Act and desiring to no longer be licensed shall inform | ||
the Secretary in writing and, at the same time, convey any | ||
license issued and all other symbols or indicia of licensure. | ||
The licensee shall include a plan for the withdrawal from the | ||
regulated business, including a timetable for the disposition | ||
of the business, and comply with the surrender guidelines or | ||
rules of the Department. Upon receipt of such written notice, | ||
the Secretary shall post the cancellation or issue a certified | ||
statement canceling the license.
| ||
(e) The expenses of administering this Act, including | ||
investigations and examinations provided for in this Act, | ||
shall be borne by and assessed against entities regulated by | ||
this Act. The fees listed in this Section shall be payable to | ||
the Department or to the Nationwide Multistate Licensing | ||
System and Registry for transfer to the required recipients by | ||
the Secretary. The Secretary will specify the form of payment | ||
to the Department or to the Nationwide Multistate Licensing | ||
System and Registry, which may include certified check, money | ||
order, credit card, or other forms of payment authorized by | ||
the Secretary. The Nationwide Multistate Licensing System and | ||
Registry shall be authorized to collect and process | ||
transaction fees or other fees related to licensees or other |
persons subject to the Act.
| ||
(f) Applicants and licensees shall be subject to the | ||
following fees:
| ||
(1) For each application for an initial license, the | ||
applicant shall pay a nonrefundable initial application | ||
fee of $1,000 and a nonrefundable background investigation | ||
fee of $800.
| ||
(2) For each application for an annual renewal of a | ||
license, the applicant shall pay a nonrefundable renewal | ||
fee of $1,000. For each application for a renewal of an | ||
inactive license, the applicant shall pay the | ||
nonrefundable renewal fee of $1,000 and an additional | ||
nonrefundable reactivation fee equal to the renewal fee.
| ||
(3) The licensee shall pay a nonrefundable fee of | ||
$1,000 for each notice of change of ownership or control | ||
filed.
| ||
(4) The licensee shall pay a nonrefundable fee of $50 | ||
for each notice of change of officers or directors or | ||
change of name or address filed.
| ||
(5) Any licensee or person who delivers a check or | ||
other payment to the Department that is returned unpaid by | ||
the financial institution upon which it is drawn shall pay | ||
to the Department, in addition to the amount already owed, | ||
a fee of $50.
| ||
(6) Time expended in the conduct of any examination of | ||
the affairs of any licensee or its affiliates shall be |
billed by the Department at a rate of $510 per examiner | ||
day. Examination fees shall be billed following completion | ||
of the examination and shall be paid within 30 days after | ||
receipt of the billing.
| ||
(7) If out-of-state travel occurs in the conduct of | ||
any examination, the licensee shall make arrangements to | ||
reimburse the Department for all charges for services, | ||
including travel expenses, including airfare, hotel and | ||
per diem expenses incurred by the employee. These expenses | ||
are to be in accord with applicable travel regulations | ||
published by the Department of Central Management Services | ||
and approved by the Governor's Travel Control Board.
| ||
(8) Each licensee shall pay to the Department its pro | ||
rata share of the cost for administration of the Act that | ||
exceeds other fees listed in this Section, as estimated by | ||
the Department, for the current year and any deficit | ||
actually incurred in the administration of the Act in | ||
prior years. The calculation method for each licensee's | ||
pro rata share shall be established by rule.
| ||
(g) Beginning one year after the effective date of this | ||
Act, the Department may, by rule, amend the fees set forth in | ||
this Section.
| ||
Section 100. Secretary of Financial and Professional | ||
Regulation; functions and powers. The functions and powers of | ||
the Secretary shall include the following: |
(1) to issue or refuse to issue any license as | ||
provided by this Act;
| ||
(2) to revoke or suspend for cause any license issued | ||
under this Act;
| ||
(3) to keep records of all licenses issued under this | ||
Act;
| ||
(4) to receive, consider, investigate, and act upon | ||
complaints made by any person in connection with any | ||
licensed consumer legal funding company in this State or | ||
unlicensed consumer legal funding activity;
| ||
(5) to prescribe the forms of and receive:
| ||
(A) applications for licenses; and
| ||
(B) all reports and all books and records required | ||
to be made by any licensee under this Act, including | ||
annual audited financial statements and annual reports | ||
of consumer legal funding activity;
| ||
(6) to subpoena documents and witnesses and compel | ||
their attendance and production, to administer oaths, and | ||
to require the production of any books, papers, or other | ||
materials relevant to any inquiry authorized by this Act;
| ||
(7) to issue orders against any person:
| ||
(A) if the Secretary has reasonable cause to | ||
believe that an unsafe, unsound, or unlawful practice | ||
has occurred, is occurring, or is about to occur;
| ||
(B) if any person has violated, is violating, or | ||
is about to violate any law, rule, or written |
agreement with the Secretary; or
| ||
(C) for the purpose of administering the | ||
provisions of this Act and any rule adopted in | ||
accordance with this Act;
| ||
(8) to address any inquiries to any licensee, or the | ||
officers of the licensee, in relation to the licensee's | ||
activities and conditions or any other matter connected | ||
with its affairs, and it shall be the duty of any licensee | ||
or person so addressed to promptly reply in writing to | ||
those inquiries; the Secretary may also require reports | ||
from any licensee at any time the Secretary chooses;
| ||
(9) to examine the books and records of every licensee | ||
under this Act;
| ||
(10) to enforce the provisions of this Act;
| ||
(11) to levy fees, fines, and charges for services | ||
performed in administering this Act; the aggregate of all | ||
fees collected by the Secretary on and after the effective | ||
date of this Act shall be paid promptly after receipt, | ||
accompanied by a detailed statement of fees paid, into the | ||
Financial Institutions Fund; the amounts deposited into | ||
that Fund shall be used for the ordinary and contingent | ||
expenses of the Department; nothing in this Act shall | ||
prevent the continuation of the practice of paying | ||
expenses involving salaries, retirement, social security, | ||
and State-paid insurance of State officers by | ||
appropriation from the General Revenue Fund or any other |
fund;
| ||
(12) to appoint examiners, supervisors, experts, and | ||
special assistants as needed to effectively and | ||
efficiently administer this Act;
| ||
(13) to conduct hearings for the purpose of:
| ||
(A) appeals of orders of the Secretary;
| ||
(B) suspensions or revocations of licenses;
| ||
(C) fining of licensees or unlicensed persons or | ||
entities;
| ||
(D) investigating:
| ||
(i) complaints against licensees or unlicensed | ||
persons or entities; or
| ||
(ii) annual gross delinquency rates; and
| ||
(E) carrying out the purposes of this Act;
| ||
(14) to exercise visitorial power over a licensee;
| ||
(15) to enter into cooperative agreements with state | ||
regulatory authorities of other states to provide for | ||
examination of corporate offices or branches of those | ||
states and to accept reports of those examinations;
| ||
(16) to assign an examiner or examiners to monitor the | ||
affairs of a licensee with whatever frequency the | ||
Secretary determines appropriate and to charge the | ||
licensee for reasonable and necessary expenses of the | ||
Secretary if in the opinion of the Secretary an emergency | ||
exists or appears likely to occur;
| ||
(17) to impose civil penalties of up to $50 per day |
against a licensee for failing to respond to a regulatory | ||
request or reporting requirement; and
| ||
(18) to enter into agreements in connection with the | ||
Nationwide Multistate Licensing System and Registry.
| ||
Section 105. Other businesses. | ||
(a) Upon application by the licensee and payment of a $500 | ||
fee, the Secretary may approve the conduct of other businesses | ||
not specifically permitted by this Act in the licensee's place | ||
of business, unless the Secretary finds that such conduct will | ||
conceal or facilitate evasion or violation of this Act. The | ||
Secretary's approval shall be in writing and shall describe | ||
the other businesses which may be conducted in the licensed | ||
office. | ||
(b) The Department shall adopt and enforce such reasonable | ||
rules and regulations for the conduct of business under this | ||
Act in the same office with other businesses as may be | ||
necessary to prevent evasions or violations of this Act. The | ||
Secretary may investigate any business conducted in the | ||
licensed office. | ||
Section 110. Financial Institution Fund. All moneys | ||
received by the Secretary under this Act in conjunction with | ||
the provisions relating to consumer legal funding companies | ||
shall be paid into the Financial Institution Fund and all | ||
expenses incurred by the Secretary under this Act in |
conjunction with the provisions relating to consumer legal | ||
funding companies shall be paid from the Financial Institution | ||
Fund. | ||
Section 115. Examination; prohibited activities. | ||
(a) The business affairs of a licensee under this Act | ||
shall be examined for compliance with this Act as often as the | ||
Secretary deems necessary and proper. The Department may adopt | ||
rules with respect to the frequency and manner of examination. | ||
The Secretary shall appoint a suitable person to perform an | ||
examination. The Secretary and his or her appointees may | ||
examine the entire books, records, documents, and operations | ||
of each licensee and its subsidiary, affiliate, or agent, and | ||
may examine any of the licensee's or its subsidiary's, | ||
affiliate's, or agent's officers, directors, employees, and | ||
agents under oath.
| ||
(b) The Secretary shall prepare a sufficiently detailed | ||
report of each licensee's examination, shall issue a copy of | ||
the report to each licensee's principals, officers, or | ||
directors, and shall take appropriate steps to ensure | ||
correction of violations of this Act.
| ||
(c) Affiliates of a licensee shall be subject to | ||
examination by the Secretary on the same terms as the | ||
licensee, but only when reports from or examination of a | ||
licensee provides for documented evidence of unlawful activity | ||
between a licensee and affiliate benefiting, affecting, or |
deriving from the activities regulated by this Act.
| ||
(d) The expenses of any examination of the licensee and | ||
affiliates shall be borne by the licensee and assessed by the | ||
Secretary as may be established by rule.
| ||
(e) Upon completion of the examination, the Secretary | ||
shall issue a report to the licensee. All confidential | ||
supervisory information, including the examination report and | ||
the work papers of the report, shall belong to the Secretary's | ||
office and may not be disclosed to anyone other than the | ||
licensee, law enforcement officials or other regulatory | ||
agencies that have an appropriate regulatory interest as | ||
determined by the Secretary, or to a party presenting a lawful | ||
subpoena to the Department. The Secretary may, through the | ||
Attorney General, immediately appeal to the court of | ||
jurisdiction the disclosure of such confidential supervisory | ||
information and seek a stay of the subpoena pending the | ||
outcome of the appeal. Reports required of licensees by the | ||
Secretary under this Act and results of examinations performed | ||
by the Secretary under this Act shall be the property of only | ||
the Secretary, but may be shared with the licensee. Access | ||
under this Act to the books and records of each licensee shall | ||
be limited to the Secretary and his or her agents as provided | ||
in this Act and to the licensee and its authorized agents and | ||
designees. No other person shall have access to the books and | ||
records of a licensee under this Act. Any person upon whom a | ||
demand for production of confidential supervisory information |
is made, whether by subpoena, order, or other judicial or | ||
administrative process, must withhold production of the | ||
confidential supervisory information and must notify the | ||
Secretary of the demand, at which time the Secretary is | ||
authorized to intervene for the purpose of enforcing the | ||
limitations of this Section or seeking the withdrawal or | ||
termination of the attempt to compel production of the | ||
confidential supervisory information. The Secretary may impose | ||
any conditions and limitations on the disclosure of | ||
confidential supervisory information that are necessary to | ||
protect the confidentiality of that information. Except as | ||
authorized by the Secretary, no person obtaining access to | ||
confidential supervisory information may make a copy of the | ||
confidential supervisory information. The Secretary may | ||
condition a decision to disclose confidential supervisory | ||
information on entry of a protective order by the court or | ||
administrative tribunal presiding in the particular case or on | ||
a written agreement of confidentiality. In a case in which a | ||
protective order or agreement has already been entered between | ||
parties other than the Secretary, the Secretary may | ||
nevertheless condition approval for release of confidential | ||
supervisory information upon the inclusion of additional or | ||
amended provisions in the protective order. The Secretary may | ||
authorize a party who obtained the records for use in one case | ||
to provide them to another party in another case, subject to | ||
any conditions that the Secretary may impose on either or both |
parties. The requester shall promptly notify other parties to | ||
a case of the release of confidential supervisory information | ||
obtained and, upon entry of a protective order, shall provide | ||
copies of confidential supervisory information to the other | ||
parties.
| ||
Section 120. Judicial review. All final administrative | ||
decisions of the Department under this Act, all amendments and | ||
modifications of final administrative decisions, and any rules | ||
adopted by the Department pursuant to this Act shall be | ||
subject to judicial review pursuant to the provisions of the | ||
Administrative Review Law. | ||
Section 125. Subpoena power. | ||
(a) The Secretary shall have the power to issue and to | ||
serve subpoenas and subpoenas duces tecum to compel the | ||
attendance of witnesses and the production of all books, | ||
accounts, records, and other documents and materials relevant | ||
to an examination or investigation. The Secretary, or his or | ||
her duly authorized representative, shall have power to | ||
administer oaths and affirmations to any person.
| ||
(b) In the event of noncompliance with a subpoena or | ||
subpoena duces tecum issued or caused to be issued by the | ||
Secretary, the Secretary may, through the Attorney General, | ||
petition the circuit court of the county in which the person | ||
subpoenaed resides or has its principal place of business for |
an order requiring the subpoenaed person to appear and testify | ||
and to produce such books, accounts, records, and other | ||
documents as are specified in the subpoena duces tecum. The | ||
court may grant injunctive relief restraining the person from | ||
advertising, promoting, soliciting, entering into, offering to | ||
enter into, continuing, or completing any consumer legal | ||
funding transaction. The court may grant other relief, | ||
including, but not limited to, the restraint, by injunction or | ||
appointment of a receiver, of any transfer, pledge, | ||
assignment, or other disposition of the person's assets or any | ||
concealment, alteration, destruction, or other disposition of | ||
books, accounts, records, or other documents and materials as | ||
the court deems appropriate, until the person has fully | ||
complied with the subpoena or subpoena duces tecum and the | ||
Secretary has completed an investigation or examination.
| ||
(c) If it appears to the Secretary that the compliance | ||
with a subpoena or subpoena duces tecum issued or caused to be | ||
issued by the Secretary pursuant to this Section is essential | ||
to an investigation or examination, the Secretary may, in | ||
addition to the other remedies provided for in this Act, | ||
through the Attorney General, apply for relief to the circuit | ||
court of the county in which the subpoenaed person resides or | ||
has its principal place of business. The court shall thereupon | ||
direct the issuance of an order against the subpoenaed person | ||
requiring sufficient bond conditioned on compliance with the | ||
subpoena or subpoena duces tecum. The court shall cause to be |
endorsed on the order a suitable amount of bond or payment | ||
pursuant to which the person named in the order shall be freed, | ||
having a due regard to the nature of the case.
| ||
(d) In addition, the Secretary may, through the Attorney | ||
General, seek a writ of attachment or an equivalent order from | ||
the circuit court having jurisdiction over the person who has | ||
refused to obey a subpoena, who has refused to give testimony, | ||
or who has refused to produce the matters described in the | ||
subpoena duces tecum.
| ||
Section 130. Report required of licensee. In addition to | ||
any reports required under this Act, every licensee shall file | ||
any other report that the Secretary requires.
| ||
Section 135. Suspension; revocation of licenses; fines.
| ||
(a) Upon written notice to a licensee, the Secretary may | ||
suspend or revoke any license issued pursuant to this Act if, | ||
in the notice, he or she makes a finding of one or more of the | ||
following:
| ||
(1) that through separate acts or an act or a course of | ||
conduct, the licensee has violated any provisions of this | ||
Act, any rule adopted by the Department, or any other law, | ||
rule, or regulation of this State or the United States;
| ||
(2) that any fact or condition exists that, if it had | ||
existed at the time of the original application for the | ||
license, would have warranted the Secretary in refusing |
originally to issue the license; or
| ||
(3) that if a licensee is other than an individual, | ||
any ultimate equitable owner, officer, director, or member | ||
of the licensed partnership, association, corporation, or | ||
other entity has acted or failed to act in a way that would | ||
be cause for suspending or revoking a license to that | ||
party as an individual.
| ||
(b) No license shall be suspended or revoked, except as | ||
provided in this Section, nor shall any licensee be fined | ||
without notice of his or her right to a hearing as provided in | ||
subsection (n).
| ||
(c) The Secretary, on good cause shown that an emergency | ||
exists, may suspend any license for a period not exceeding 180 | ||
days, pending investigation.
| ||
(d) The provisions of subsection (d) of Section 95 shall | ||
not affect a licensee's civil or criminal liability for acts | ||
committed before surrender of a license.
| ||
(e) No revocation, suspension, or surrender of any license | ||
shall impair or affect the obligation of any preexisting | ||
lawful contract between the licensee and any person. | ||
(f) Every license issued under this Act shall remain in | ||
force and effect until the license expires without renewal, is | ||
surrendered, is revoked, or is suspended in accordance with | ||
the provisions of this Act, but the Secretary shall have | ||
authority to reinstate a suspended license or to issue a new | ||
license to a licensee whose license has been revoked if no fact |
or condition then exists which would have warranted the | ||
Secretary in refusing originally to issue that license under | ||
this Act.
| ||
(g) Whenever the Secretary revokes or suspends a license | ||
issued pursuant to this Act or fines a licensee under this Act, | ||
he or she shall execute a written order to that effect. The | ||
Secretary shall serve a copy of the order upon the licensee. | ||
Any such order may be reviewed in the manner provided by | ||
Section 170.
| ||
(h) If the Secretary finds any person in violation of the | ||
grounds set forth in subsection (p), he or she may enter an | ||
order imposing one or more of the following penalties:
| ||
(1) revocation of license;
| ||
(2) suspension of a license subject to reinstatement | ||
upon satisfying all reasonable conditions the Secretary | ||
may specify;
| ||
(3) placement of the licensee or applicant on | ||
probation for a period of time and subject to all | ||
reasonable conditions as the Secretary may specify; | ||
(4) issuance of a reprimand;
| ||
(5) imposition of a fine not to exceed $25,000 for | ||
each count of separate offense; except that a fine may be | ||
imposed that shall not exceed $75,000 for each separate | ||
count of offense in violation of paragraph (2) of | ||
subsection (i); | ||
(6) denial of a license; or
|
(7) restitution for the benefit of consumers.
| ||
(i) The Secretary may, after 10 days' notice by certified | ||
mail to the licensee at the address set forth in the license | ||
stating the contemplated action and in general the grounds | ||
therefor, fine the licensee an amount not exceeding $10,000 | ||
per violation or revoke or suspend any license issued under | ||
this Act if he or she finds that: | ||
(1) the licensee has failed to comply with any | ||
provision of this Act, any rule adopted pursuant to this | ||
Act, or any order, decision, finding, or direction of the | ||
Secretary lawfully made pursuant to the authority of this | ||
Act; or | ||
(2) any fact or condition exists which, if it had | ||
existed at the time of the original application for the | ||
license, clearly would have warranted the Secretary in | ||
refusing to issue the license.
| ||
(j) The Secretary may fine, suspend, or revoke only the | ||
particular license with respect to which grounds for the fine, | ||
revocation, or suspension occur or exist, but if the Secretary | ||
finds that grounds for revocation are of general application | ||
to all offices or to more than one office of the licensee, the | ||
Secretary shall fine, suspend, or revoke every license to | ||
which the grounds apply. | ||
(k) No revocation, suspension, or surrender of any license | ||
shall impair or affect the obligation of any preexisting | ||
lawful contract between the licensee and any obligor.
|
(l) The Secretary may issue a new license to a licensee | ||
whose license has been revoked when facts or conditions which | ||
clearly would have warranted the Secretary in refusing | ||
originally to issue the license no longer exist.
| ||
(m) In every case in which a license is suspended or | ||
revoked or an application for a license or renewal of a license | ||
is denied, the Secretary shall serve the licensee with notice | ||
of his or her action, including a statement of the reasons for | ||
his or her actions, either personally or by certified mail. | ||
Service by certified mail shall be deemed completed when the | ||
notice is deposited in the U.S. mail.
| ||
(n) An order assessing a fine, an order revoking or | ||
suspending a license, or an order denying renewal of a license | ||
shall take effect upon service of the order unless the | ||
licensee requests a hearing, in writing, within 10 days after | ||
the date of service. If a hearing is requested, the order shall | ||
be stayed until a final administrative order is entered.
| ||
(1) If the licensee requests a hearing, the Secretary | ||
shall schedule a hearing within 30 days after the request | ||
for a hearing unless otherwise agreed to by the parties.
| ||
(2) The hearing shall be held at the time and place | ||
designated by the Secretary. The Secretary and any | ||
administrative law judge designated by him or her shall | ||
have the power to administer oaths and affirmations, | ||
subpoena witnesses and compel their attendance, take | ||
evidence, and require the production of books, papers, |
correspondence, and other records or information that he | ||
or she considers relevant or material to the inquiry.
| ||
(o) The costs of administrative hearings conducted | ||
pursuant to this Section shall be paid by the licensee.
| ||
(p) The following acts shall constitute grounds for which | ||
the disciplinary actions specified in subsection (h) may be | ||
taken:
| ||
(1) being convicted or found guilty, regardless of | ||
pendency of an appeal, of a crime in any jurisdiction that | ||
involves fraud, dishonest dealing, or any other act of | ||
moral turpitude;
| ||
(2) fraud, misrepresentation, deceit, or negligence in | ||
any relation to any consumer legal funding; | ||
(3) a material or intentional misstatement of fact on | ||
an initial or renewal application;
| ||
(4) insolvency or filing under any provision of the | ||
United States Bankruptcy Code as a debtor;
| ||
(5) failure to account or deliver to any person any | ||
property, such as any money, fund, deposit, check, draft, | ||
or other document or thing of value, that has come into his | ||
or her hands and that is not his or her property or that he | ||
or she is not in law or equity entitled to retain, under | ||
the circumstances and at the time which has been agreed | ||
upon or is required by law, or, in the absence of a fixed | ||
time, upon demand of the person entitled to such | ||
accounting and delivery;
|
(6) failure to disburse funds in accordance with | ||
agreements;
| ||
(7) having a license, or the equivalent, to practice | ||
any profession or occupation revoked, suspended, or | ||
otherwise acted against, including the denial of licensure | ||
by a licensing authority of this State or another state, | ||
territory, or country, for fraud, dishonest dealing, or | ||
any other act of moral turpitude;
| ||
(8) failure to comply with an order of the Secretary | ||
or rule adopted under the provisions of this Act;
| ||
(9) engaging in activities regulated by this Act | ||
without a current, active license unless specifically | ||
exempted by this Act;
| ||
(10) failure to pay in a timely manner any fee, | ||
charge, or fine under this Act;
| ||
(11) failure to maintain, preserve, and keep available | ||
for examination all books, accounts, or other documents | ||
required by the provisions of this Act and the rules of the | ||
Department;
| ||
(12) refusing, obstructing, evading, or unreasonably | ||
delaying an investigation, information request, or | ||
examination authorized under this Act, or refusing, | ||
obstructing, evading, or unreasonably delaying compliance | ||
with the Secretary's subpoena or subpoena duces tecum;
| ||
(13) failure to comply with or a violation of any | ||
provision of this Act; and
|
(14) any unfair, deceptive, or abusive business | ||
practice.
| ||
(q) A licensee shall be subject to the disciplinary | ||
actions specified in this Act for violations of subsection (i) | ||
by any officer, director, shareholder, joint venture, partner, | ||
ultimate equitable owner, or employee of the licensee.
| ||
(r) A licensee shall be subject to suspension or | ||
revocation for unauthorized employee actions only if there is | ||
a pattern of repeated violations by employees, the licensee | ||
has knowledge of the violations, or there is substantial harm | ||
to a consumer. A licensee may be subject to fine for employee | ||
actions, whether authorized or unauthorized, whether there is | ||
a pattern of repeated violations or no pattern of repeated | ||
violations.
| ||
(s) Any licensee may submit an application to surrender a | ||
license, but, upon the Secretary approving the surrender, it | ||
shall not affect the licensee's civil or criminal liability | ||
for acts committed before surrender or entitle the licensee to | ||
a return of any part of the license fee. | ||
Section 140. Investigation of complaints. The Secretary | ||
may receive, record, and investigate complaints and inquiries | ||
made by any person concerning this Act and any licensees under | ||
this Act. Each licensee shall open its books, records, | ||
documents, and offices wherever situated to the Secretary or | ||
his or her appointees as needed to facilitate such |
investigations. | ||
Section 145. Additional investigation and examination | ||
authority. In addition to any authority allowed under this | ||
Act, the Secretary shall have the authority to conduct | ||
investigations and examinations as follows:
| ||
(1) For purposes of initial licensing, license | ||
renewal, license suspension, license conditioning, license | ||
revocation or termination, or general or specific inquiry | ||
or investigation to determine compliance with this Act, | ||
the Secretary shall have the authority to access, receive, | ||
and use any books, accounts, records, files, documents, | ||
information, or evidence, including, but not limited to, | ||
the following:
| ||
(A) criminal, civil, and administrative history | ||
information, including nonconviction data as specified | ||
in the Criminal Code of 2012;
| ||
(B) personal history and experience information, | ||
including independent credit reports obtained from a | ||
consumer reporting agency described in Section 603(p) | ||
of the federal Fair Credit Reporting Act; and
| ||
(C) any other documents, information, or evidence | ||
the Secretary deems relevant to the inquiry or | ||
investigation, regardless of the location, possession, | ||
control, or custody of the documents, information, or | ||
evidence.
|
(2) For the purposes of investigating violations or | ||
complaints arising under this Act or for the purposes of | ||
examination, the Secretary may review, investigate, or | ||
examine any licensee, individual, or person subject to | ||
this Act as often as necessary in order to carry out the | ||
purposes of this Act. The Secretary may direct, subpoena, | ||
or order the attendance of and examine under oath all | ||
persons whose testimony may be required about the consumer | ||
legal fundings or the business or subject matter of any | ||
such examination or investigation, and may direct, | ||
subpoena, or order the person to produce books, accounts, | ||
records, files, and any other documents the Secretary | ||
deems relevant to the inquiry.
| ||
(3) Each licensee, individual, or person subject to | ||
this Act shall make available to the Secretary upon | ||
request the books and records relating to the operations | ||
of the licensee, individual, or person subject to this | ||
Act. The Secretary shall have access to those books and | ||
records and may interview the officers, principals, | ||
employees, independent contractors, agents, and customers | ||
of the licensee, individual, or person subject to this Act | ||
concerning their business.
| ||
(4) Each licensee, individual, or person subject to | ||
this Act shall make or compile reports or prepare other | ||
information as directed by the Secretary in order to carry | ||
out the purposes of this Section, including, but not |
limited to:
| ||
(A) accounting compilations;
| ||
(B) information lists and data concerning consumer | ||
legal fundings in a format prescribed by the | ||
Secretary; or
| ||
(C) other information deemed necessary to carry | ||
out the purposes of this Section.
| ||
(5) In making any examination or investigation | ||
authorized by this Act, the Secretary may control access | ||
to any documents and records of the licensee or person | ||
under examination or investigation. The Secretary may take | ||
possession of the documents and records or place a person | ||
in exclusive charge of the documents and records in the | ||
place where they are usually kept. During the period of | ||
control, no person shall remove or attempt to remove any | ||
of the documents or records, except pursuant to a court | ||
order or with the consent of the Secretary. Unless the | ||
Secretary has reasonable grounds to believe the documents | ||
or records of the licensee have been or are at risk of | ||
being altered or destroyed for purposes of concealing a | ||
violation of this Act, the licensee or owner of the | ||
documents and records shall have access to the documents | ||
or records as necessary to conduct its ordinary business | ||
affairs.
| ||
(6) In order to carry out the purposes of this | ||
Section, the Secretary may:
|
(A) retain attorneys, accountants, or other | ||
professionals and specialists as examiners, auditors, | ||
or investigators to conduct or assist in the conduct | ||
of examinations or investigations;
| ||
(B) enter into agreements or relationships with | ||
other government officials or regulatory associations | ||
in order to improve efficiencies and reduce regulatory | ||
burden by sharing resources, standardized or uniform | ||
methods or procedures, and documents, records, | ||
information, or evidence obtained under this Section;
| ||
(C) use, hire, contract, or employ publicly or | ||
privately available analytical systems, methods, or | ||
software to examine or investigate the licensee, | ||
individual, or person subject to this Act;
| ||
(D) accept and rely on examination or | ||
investigation reports made by other government | ||
officials within or outside this State; or
| ||
(E) accept audit reports made by an independent | ||
certified public accountant for the licensee, | ||
individual, or person subject to this Act in the | ||
course of that part of the examination covering the | ||
same general subject matter as the audit and may | ||
incorporate the audit report in the report of the | ||
examination, report of investigation, or other writing | ||
of the Secretary.
| ||
(7) The authority of this Section shall remain in |
effect if a licensee, individual, or person subject to | ||
this Act acts or claims to act under any licensing or | ||
registration law of this State or claims to act without | ||
the authority.
| ||
(8) No licensee, individual, or person subject to | ||
investigation or examination under this Section may | ||
knowingly withhold, abstract, remove, mutilate, destroy, | ||
or secrete any books, records, computer records, or other | ||
information.
| ||
Section 150. Confidential information. In hearings | ||
conducted under this Act, information presented into evidence | ||
that was acquired by the licensee when serving any individual | ||
in connection with a consumer legal funding, including all | ||
financial information of the individual, shall be deemed | ||
strictly confidential and shall be made available only as part | ||
of the record of a hearing under this Act or otherwise (i) when | ||
the record is required, in its entirety, for purposes of | ||
judicial review or (ii) upon the express written consent of | ||
the individual served, or in the case of his or her death or | ||
disability, the consent of his or her personal representative. | ||
Section 155. Information sharing.
In order to promote more | ||
effective regulation and reduce regulatory burden through | ||
supervisory information sharing: | ||
(1) Except as otherwise provided in any federal law or |
State law regarding the privacy or confidentiality of any | ||
information or material provided to the Nationwide | ||
Mortgage Licensing System and Registry, any privilege | ||
arising under federal or State law, including the rules of | ||
any federal or State court, with respect to such | ||
information or material shall continue to apply to | ||
information or material after the information or material | ||
has been disclosed to the Nationwide Mortgage Licensing | ||
System and Registry. The information and material may be | ||
shared with all State and federal regulatory officials | ||
with relevant oversight authority without the loss of | ||
privilege or the loss of confidentiality protections | ||
provided by federal law or State law.
| ||
(2) The Secretary is authorized to enter into | ||
agreements or sharing arrangements with other governmental | ||
agencies, the Conference of State Bank Supervisors, or | ||
other associations representing governmental agencies as | ||
established by rule or order of the Department. The | ||
sharing of confidential supervisory information or any | ||
information or material described in paragraph (1) | ||
pursuant to an agreement or sharing arrangement shall not | ||
result in the loss of privilege or the loss of | ||
confidentiality protections provided by federal law or | ||
State law.
| ||
(3) Information or material that is subject to a | ||
privilege or confidentiality under paragraph (1) shall not |
be subject to the following:
| ||
(A) disclosure under any State law governing the | ||
disclosure to the public of information held by an | ||
officer or an agency of the State; or
| ||
(B) subpoena, discovery, or admission into | ||
evidence in any private civil action or administrative | ||
process, unless with respect to any privilege held by | ||
the Nationwide Mortgage Licensing System and Registry | ||
with respect to the information or material, the | ||
person to whom such information or material pertains | ||
waives, in whole or in part, in the discretion of that | ||
person, that privilege.
| ||
(4) Any other law relating to the disclosure of | ||
confidential supervisory information or any information or | ||
material described in paragraph (1) that is inconsistent | ||
with paragraph (1) shall be superseded by the requirements | ||
of this Section to the extent the other law provides less | ||
confidentiality or a weaker privilege.
| ||
Section 160. Reports of violations. Any person licensed | ||
under this Act or any other person may report to the Secretary | ||
any information to show that a person subject to this Act is or | ||
may be in violation of this Act. A person who files a report | ||
with the Department that a licensee is engaged in one or more | ||
violations pursuant to this Act shall not be the subject of | ||
disciplinary action by the Department, unless the Department |
determines, by a preponderance of the evidence available to | ||
the Department, that the reporting person knowingly and | ||
willingly participated in the violation that was reported. | ||
Section 165. Rules of the Department.
| ||
(a) In addition to such powers as may be prescribed by this | ||
Act, the Department is hereby authorized and empowered to | ||
adopt rules consistent with the purposes of this Act, | ||
including, but not limited to:
| ||
(1) rules in connection with the activities of | ||
licensees or unlicensed consumer legal funding companies | ||
as may be necessary and appropriate for the protection of | ||
consumers in this State;
| ||
(2) rules as may be necessary and appropriate to | ||
define improper or fraudulent business practices in | ||
connection with the activities of licensees in servicing | ||
consumer legal fundings;
| ||
(3) rules that define the terms used in this Act and as | ||
may be necessary and appropriate to interpret and | ||
implement the provisions of this Act; and
| ||
(4) rules as may be necessary for the enforcement and | ||
administration of this Act.
| ||
(b) The Secretary is hereby authorized and empowered to | ||
make specific rulings, demands, and findings that he or she | ||
deems necessary for the proper conduct of the consumer legal | ||
funding company industry.
|
Section 170. Appeal and review.
| ||
(a) The Department may, in accordance with the Illinois | ||
Administrative Procedure Act, adopt rules to provide for | ||
review within the Department of the Secretary's decisions | ||
affecting the rights of persons or entities under this Act. | ||
The review shall provide for, at a minimum:
| ||
(1) appointment of a hearing officer other than a | ||
regular employee of the Department;
| ||
(2) appropriate procedural rules, specific deadlines | ||
for filings, and standards of evidence and of proof; and
| ||
(3) provision for apportioning costs among parties to | ||
the appeal.
| ||
(b) All final agency determinations of appeals to | ||
decisions of the Secretary may be reviewed in accordance with | ||
and under the provisions of the Administrative Review Law. | ||
Appeals from all final orders and judgments entered by a court | ||
in review of any final administrative decision of the | ||
Secretary or of any final agency review of a decision of the | ||
Secretary may be taken as in other civil cases.
| ||
Section 175. Collection of compensation. Unless exempt | ||
from licensure under this Act, no person engaged in or | ||
offering to engage in any act or service for which a license | ||
under this Act is required may bring or maintain any action in | ||
any court of this State to collect compensation for the |
performance of the licensable services without alleging and | ||
proving that he or she was the holder of a valid consumer legal | ||
funding company license under this Act at all times during the | ||
performance of those services. | ||
Section 180. Cease and desist order.
| ||
(a) The Secretary may issue a cease and desist order to any | ||
licensee or other person doing business without the required | ||
license, when in the opinion of the Secretary the licensee or | ||
other person is violating or is about to violate any provision | ||
of this Act or any rule or requirement imposed in writing by | ||
the Department as a condition of granting any authorization | ||
permitted by this Act. The cease and desist order permitted by | ||
this Section may be issued before a hearing.
| ||
(b) The Secretary shall serve notice of his or her action, | ||
including, but not limited to, a statement of the reasons for | ||
the action, either personally or by certified mail. Service by | ||
certified mail shall be deemed completed when the notice is | ||
deposited in the U.S. Mail.
| ||
(c) Within 10 days after service of the cease and desist | ||
order, the licensee or other person may request a hearing in | ||
writing. The Secretary shall schedule a hearing within 90 days | ||
after the request for a hearing unless otherwise agreed to by | ||
the parties.
| ||
(d) If it is determined that the Secretary had the | ||
authority to issue the cease and desist order, he or she may |
issue such orders as may be reasonably necessary to correct, | ||
eliminate, or remedy the conduct.
| ||
(e) The powers vested in the Secretary by this Section are | ||
in addition to any and all other powers and remedies vested in | ||
the Secretary by law, and nothing in this Section shall be | ||
construed as requiring that the Secretary shall employ the | ||
power conferred in this subsection instead of or as a | ||
condition precedent to the exercise of any other power or | ||
remedy vested in the Secretary.
| ||
Section 185. Injunction. The Secretary may, through the | ||
Attorney General, maintain an action in the name of the people | ||
of the State of Illinois and may apply for an injunction in the | ||
circuit court to enjoin a person from violating this Act or | ||
engaging in unlicensed consumer legal funding activity. | ||
Section 190. Pledge or sale of consumer legal funding.
| ||
(a) No licensee or other person shall pledge, hypothecate, | ||
or sell a consumer legal funding entered into under the | ||
provisions of this Act by a consumer except to another | ||
licensee under this Act, a bank, savings bank, savings and | ||
loan association, or credit union created under the laws of | ||
this State or the United States, or to other persons or | ||
entities authorized by the Secretary in writing. Sales of such | ||
notes by licensees under this Act or other persons shall be | ||
made by agreement in writing and shall authorize the Secretary |
to examine the consumer legal funding documents so | ||
hypothecated, pledged, or sold.
| ||
(b) A consumer may pay the original consumer legal funding | ||
company until he or she receives notification of assignment of | ||
rights to payment pursuant to a consumer legal funding and | ||
that payment is to be made to the assignee. A notification | ||
which does not reasonably identify the rights assigned is | ||
ineffective. If requested by the consumer, the assignee shall | ||
seasonably furnish reasonable proof that the assignment has | ||
been made and, unless the assignee does so, the consumer may | ||
pay the original consumer legal funding company.
| ||
(c) An assignee of the rights of the consumer legal | ||
funding company is subject to all claims and defenses of the | ||
consumer against the consumer legal funding company arising | ||
from the consumer legal funding. A claim or defense of a | ||
consumer may be asserted against the assignee under this | ||
Section only if the consumer has made a good faith attempt to | ||
obtain satisfaction from the consumer legal funding company | ||
with respect to the claim or defense and then only to the | ||
extent of the amount owing to the assignee with respect to the | ||
consumer legal funding company claim or defense that arose at | ||
the time the assignee has notice of the claim or defense. | ||
Notice of the claim or defense may be given before the attempt | ||
specified in this subsection. Oral notice is effective unless | ||
the assignee requests written confirmation when or promptly | ||
after oral notice is given and the consumer fails to give the |
assignee written confirmation within the period of time, not | ||
less than 14 days, stated to the consumer when written | ||
confirmation is requested. An agreement may not limit or waive | ||
the claims or defenses of a consumer under this Section. | ||
Section 195. Penalties. Any person who engages in business | ||
as a licensee without the license required by this Act commits | ||
a Class 4 felony. | ||
Section 200. Civil action. A claim of violation of this | ||
Act may be asserted in a civil action. Additionally, a | ||
prevailing consumer may be awarded reasonable attorney's fees | ||
and court costs. | ||
Section 205. Evasion. An agreement, contract, or | ||
transaction that is structured to evade the definition of | ||
consumer legal funding shall be deemed a consumer legal | ||
funding for the purposes of this Act. | ||
Section 210. Severability. If any clause, sentence, | ||
provision, or part of this Act or its application to any person | ||
or circumstance is adjudged to be unconstitutional or invalid | ||
for any reason by any court of competent jurisdiction, that | ||
judgment shall not impair, affect, or invalidate other | ||
provisions or applications of this Act, which shall remain in | ||
full force and effect thereafter. |
Section 905. The Interest Act is amended by changing | ||
Section 4 as follows: | ||
(815 ILCS 205/4) (from Ch. 17, par. 6404) | ||
Sec. 4. General interest rate. | ||
(1) Except as otherwise provided in Section 4.05, in all | ||
written contracts it shall be lawful for the parties to
| ||
stipulate or agree that an annual percentage rate of 9%, or any | ||
less sum, shall be
taken and paid upon every $100 of money | ||
loaned or in any manner due and
owing from any person to any | ||
other person or corporation in this state, and
after that rate | ||
for a greater or less sum, or for a longer or shorter time,
| ||
except as herein provided. | ||
The maximum rate of interest that may lawfully be | ||
contracted for is
determined by the law applicable thereto at | ||
the time the contract is
made. Any provision in any contract, | ||
whether made before or after July
1, 1969, which provides for | ||
or purports to authorize, contingent upon a
change in the | ||
Illinois law after the contract is made, any rate of
interest | ||
greater than the maximum lawful rate at the time the contract
| ||
is made, is void. | ||
It is lawful for a state bank or a branch of an | ||
out-of-state bank, as those
terms are defined in Section 2 of | ||
the Illinois Banking Act, to receive or to
contract to receive
| ||
and collect interest and charges at any rate or rates agreed |
upon by
the bank or branch and the borrower.
It is lawful for a | ||
savings bank chartered under the Savings Bank Act or a
savings | ||
association chartered under the Illinois Savings and Loan Act | ||
of 1985
to receive or contract to receive and collect interest | ||
and charges at any rate
agreed upon by the savings bank or | ||
savings association and the borrower. | ||
It is lawful to receive or to contract to receive and | ||
collect
interest and charges as authorized by this Act and as | ||
authorized by the
Consumer Installment Loan Act, the Payday | ||
Loan Reform Act, the Retail Installment Sales Act, the | ||
Illinois Financial Services Development Act, or the Motor | ||
Vehicle Retail Installment Sales Act , or the Consumer Legal | ||
Funding Act . It is lawful to charge, contract
for, and receive | ||
any rate or amount of interest or compensation, except as | ||
otherwise provided in the Predatory Loan Prevention Act, with
| ||
respect to the following transactions: | ||
(a) Any loan made to a corporation; | ||
(b) Advances of money, repayable on demand, to an | ||
amount not less
than $5,000, which are made upon warehouse | ||
receipts, bills of lading,
certificates of stock, | ||
certificates of deposit, bills of exchange, bonds
or other | ||
negotiable instruments pledged as collateral security for | ||
such
repayment, if evidenced by a writing; | ||
(c) Any credit transaction between a merchandise | ||
wholesaler and
retailer; any business loan to a business | ||
association or copartnership
or to a person owning and |
operating a business as sole proprietor or to
any persons | ||
owning and operating a business as joint venturers, joint
| ||
tenants or tenants in common, or to any limited | ||
partnership, or to any
trustee owning and operating a | ||
business or whose beneficiaries own and
operate a | ||
business, except that any loan which is secured (1) by an
| ||
assignment of an individual obligor's salary, wages, | ||
commissions or
other compensation for services, or (2) by | ||
his household furniture or
other goods used for his | ||
personal, family or household purposes shall be
deemed not | ||
to be a loan within the meaning of this subsection; and
| ||
provided further that a loan which otherwise qualifies as | ||
a business
loan within the meaning of this subsection | ||
shall not be deemed as not so
qualifying because of the | ||
inclusion, with other security consisting of
business | ||
assets of any such obligor, of real estate occupied by an
| ||
individual obligor solely as his residence. The term | ||
"business" shall
be deemed to mean a commercial, | ||
agricultural or industrial enterprise
which is carried on | ||
for the purpose of investment or profit, but shall
not be | ||
deemed to mean the ownership or maintenance of real estate
| ||
occupied by an individual obligor solely as his residence; | ||
(d) Any loan made in accordance with the provisions of | ||
Subchapter I
of Chapter 13 of Title 12 of the United States | ||
Code, which is designated
as "Housing Renovation and | ||
Modernization"; |
(e) Any mortgage loan insured or upon which a | ||
commitment to insure
has been issued under the provisions | ||
of the National Housing Act,
Chapter 13 of Title 12 of the | ||
United States Code; | ||
(f) Any mortgage loan guaranteed or upon which a | ||
commitment to
guaranty has been issued under the | ||
provisions of the Veterans' Benefits
Act, Subchapter II of | ||
Chapter 37 of Title 38 of the United States Code; | ||
(g) Interest charged by a broker or dealer registered | ||
under the
Securities Exchange Act of 1934, as amended, or | ||
registered under the
Illinois Securities Law of 1953, | ||
approved July 13, 1953, as now or
hereafter amended, on a | ||
debit balance in an account for a customer if
such debit | ||
balance is payable at will without penalty and is secured | ||
by
securities as defined in Uniform Commercial | ||
Code-Investment Securities; | ||
(h) Any loan made by a participating bank as part of | ||
any loan
guarantee program which provides for loans and | ||
for the refinancing of
such loans to medical students, | ||
interns and residents and which are
guaranteed by the | ||
American Medical Association Education and Research
| ||
Foundation; | ||
(i) Any loan made, guaranteed, or insured in | ||
accordance with the
provisions of the Housing Act of 1949, | ||
Subchapter III of Chapter 8A of
Title 42 of the United | ||
States Code and the Consolidated Farm and Rural
|
Development Act, Subchapters I, II, and III of Chapter 50 | ||
of Title 7 of
the United States Code; | ||
(j) Any loan by an employee pension benefit plan, as | ||
defined in Section
3 (2) of the Employee Retirement Income | ||
Security Act of 1974 (29 U.S.C.A.
Sec. 1002), to an | ||
individual participating in such plan, provided that such
| ||
loan satisfies the prohibited transaction exemption | ||
requirements of Section
408 (b) (1) (29 U.S.C.A. Sec. 1108 | ||
(b) (1)) or Section 2003 (a) (26 U.S.C.A.
Sec. 4975 (d) | ||
(1)) of the Employee Retirement Income Security Act of | ||
1974; | ||
(k) Written contracts, agreements or bonds for deed | ||
providing for
installment purchase of real estate, | ||
including a manufactured home as defined in subdivision | ||
(53) of Section 9-102 of the Uniform Commercial Code that | ||
is real property as defined in the Conveyance and | ||
Encumbrance of Manufactured Homes as Real Property and | ||
Severance Act; | ||
(l) Loans secured by a mortgage on real estate, | ||
including a manufactured home as defined in subdivision | ||
(53) of Section 9-102 of the Uniform Commercial Code that | ||
is real property as defined in the Conveyance and | ||
Encumbrance of Manufactured Homes as Real Property and | ||
Severance Act; | ||
(m) Loans made by a sole proprietorship, partnership, | ||
or corporation to
an employee or to a person who has been |
offered employment by such sole
proprietorship, | ||
partnership, or corporation made for the sole purpose of
| ||
transferring an employee or person who has been offered | ||
employment to another
office maintained and operated by | ||
the same sole proprietorship, partnership,
or corporation; | ||
(n) Loans to or for the benefit of students made by an | ||
institution of
higher education. | ||
(2) Except for loans described in subparagraph (a), (c), | ||
(d),
(e), (f) or (i) of subsection (1) of this Section, and | ||
except to the
extent permitted by the applicable statute for | ||
loans made pursuant to
Section 4a or pursuant to the Consumer | ||
Installment Loan Act: | ||
(a) Whenever the rate of interest exceeds an annual | ||
percentage rate of 8% on any
written contract, agreement | ||
or bond for deed providing for the installment
purchase of | ||
residential real estate, or on any loan secured by a | ||
mortgage
on residential real estate, it shall be unlawful | ||
to provide for a
prepayment penalty or other charge for | ||
prepayment. | ||
(b) No agreement, note or other instrument evidencing | ||
a loan
secured by a mortgage on residential real estate, | ||
or written contract,
agreement or bond for deed providing | ||
for the installment purchase of
residential real estate, | ||
may provide for any change in the contract rate of
| ||
interest during the term thereof. However, if the Congress | ||
of the United
States or any federal agency authorizes any |
class of lender to enter, within
limitations, into | ||
mortgage contracts or written contracts, agreements or
| ||
bonds for deed in which the rate of interest may be changed | ||
during the
term of the contract, any person, firm, | ||
corporation or other entity
not otherwise prohibited from | ||
entering into mortgage contracts or
written contracts, | ||
agreements or bonds for deed in Illinois may enter
into | ||
mortgage contracts or written contracts, agreements or | ||
bonds
for deed in which the rate of interest may be changed | ||
during the term
of the contract, within the same | ||
limitations. | ||
(3) In any contract or loan which is secured by a mortgage, | ||
deed of
trust, or conveyance in the nature of a mortgage, on | ||
residential real
estate, the interest which is computed, | ||
calculated, charged, or collected
pursuant to such contract or | ||
loan, or pursuant to any regulation or rule
promulgated | ||
pursuant to this Act, may not be computed, calculated, charged
| ||
or collected for any period of time occurring after the date on | ||
which the
total indebtedness, with the exception of late | ||
payment penalties, is paid
in full. | ||
(4) For purposes of this Section, a prepayment shall mean | ||
the payment of the
total indebtedness, with the exception of | ||
late payment penalties if
incurred or charged, on any date | ||
before the date specified in the contract
or loan agreement on | ||
which the total indebtedness shall be paid in full, or
before | ||
the date on which all payments, if timely made, shall have been
|
made. In the event of a prepayment of the indebtedness which is | ||
made on a
date after the date on which interest on the | ||
indebtedness was last
computed, calculated, charged, or | ||
collected but before the next date on
which interest on the | ||
indebtedness was to be calculated, computed, charged,
or | ||
collected, the lender may calculate, charge and collect | ||
interest on the
indebtedness for the period which elapsed | ||
between the date on which the
prepayment is made and the date | ||
on which interest on the indebtedness was
last computed, | ||
calculated, charged or collected at a rate equal to 1/360 of
| ||
the annual rate for each day which so elapsed, which rate shall | ||
be applied
to the indebtedness outstanding as of the date of | ||
prepayment. The lender
shall refund to the borrower any | ||
interest charged or collected which
exceeds that which the | ||
lender may charge or collect pursuant to the
preceding | ||
sentence. The provisions of this amendatory Act of 1985 shall
| ||
apply only to contracts or loans entered into on or after the | ||
effective
date of this amendatory Act, but shall not apply to | ||
contracts or loans
entered into on or after that date that are | ||
subject to Section 4a of this
Act, the Consumer Installment | ||
Loan Act, the Payday Loan Reform Act, the Predatory Loan | ||
Prevention Act, or the Retail Installment Sales
Act, or that | ||
provide for the refund of precomputed interest on prepayment
| ||
in the manner provided by such Act. | ||
(5) For purposes of items (a) and (c) of subsection (1) of | ||
this Section, a rate or amount of interest may be lawfully |
computed when applying the ratio of the annual interest rate | ||
over a year based on 360 days. The provisions of this | ||
amendatory Act of the 96th General Assembly are declarative of | ||
existing law. | ||
(6) For purposes of this Section, "real estate" and "real | ||
property" include a manufactured home, as defined in | ||
subdivision (53) of Section 9-102 of the Uniform Commercial | ||
Code that is real property as defined in the Conveyance and | ||
Encumbrance of Manufactured Homes as Real Property and | ||
Severance Act. | ||
(Source: P.A. 101-658, eff. 3-23-21.) | ||
Section 910. The Consumer Fraud and Deceptive Business | ||
Practices Act is amended by adding Section 2AAAA as follows: | ||
(815 ILCS 505/2AAAA new) | ||
Sec. 2AAAA. Violations of the Consumer Legal Funding Act. | ||
Any person who violates the Consumer Legal Funding Act commits | ||
an unlawful practice within the meaning of this Act. | ||
Section 999. Effective date. This Act takes effect upon | ||
becoming law. |