HB3477eng 104TH GENERAL ASSEMBLY

HB3477 Engrossed LRB104 09252 BAB 19310 b

AN ACT concerning regulation.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 1. Short title. This Act may be cited as the Small Business Financing Transparency Act.

Section 2. Purpose and construction. The purpose of this Act is to protect small businesses. This Act shall be liberally construed to effectuate its purpose.

Section 5. Definitions. As used in this Act:

"Advance fee" means any consideration that is charged or collected by a broker prior to the closing of a commercial financing transaction.

"Applicant" means a person who has submitted an application for a registration under this Act.

"Broker" means any person who, for compensation or the expectation of compensation, obtains a commercial financing transaction or an offer for a commercial financing transaction from a third party that would, if executed, be binding upon that third party and communicates that offer to a business located in this State. The term "broker" excludes a provider, or any individual or entity whose compensation is not based or dependent on the terms of the specific commercial financing transaction obtained or offered.

"Closed-end financing" means a closed-end extension of credit, secured or unsecured, that the recipient does not intend to use for personal, family, or household purposes. "Closed-end financing" includes financing with an established principal amount and duration.

"Commercial financing" means open-end financing, closed-end financing, sales-based financing, factoring transaction, or other form of financing, the proceeds of which the recipient does not intend to use primarily for personal, family, or household purposes. For purposes of determining whether a financing is a commercial financing, the provider may rely on any statement of intended purposes by the recipient. The statement may be a separate statement signed by the recipient; may be contained in the financing application, financing agreement, or other document signed or consented to by the recipient; or may be provided orally by the recipient so long as it is documented in the recipient's application file by the provider. Electronic signatures and consents are valid for purposes of the foregoing sentence. The provider shall not be required to ascertain that the proceeds of a commercial financing are used in accordance with the recipient's statement of intended purposes.

"Commercial financing facility" means a commercial financing agreement pursuant to which the provider reasonably contemplates repeated transactions with the recipient over a period of time, and the agreement sets forth the terms and conditions governing the use of the facility. "Commercial financing facility" includes, but is not limited to, open-end financing.

"Department" means the Department of Financial and Professional Regulation.

"Division of Financial Institutions" or "Division" means the Division of Financial Institutions of the Department of Financial and Professional Regulation.

"Factoring transaction" means an accounts receivable purchase transaction that includes an agreement to purchase, transfer, or sell a legally enforceable claim for payment held by a recipient for goods the recipient has supplied or services the recipient has rendered that have been ordered but for which payment has not yet been made.

"Finance charge" means the cost of financing as a dollar amount. "Finance charge" includes any charge payable directly or indirectly by the recipient and imposed directly or indirectly by the provider as an incident to or a condition of the extension of financing. For the purposes of a factoring transaction, "finance charge" includes the discount taken on the face value of the accounts receivable.

"Open-end financing" means an agreement for one or more extensions of open-end credit, secured or unsecured, that the recipient does not intend to use the proceeds of primarily for personal, family, or household purposes. "Open-end financing" includes credit extended by a provider under a plan in which: (i) the provider reasonably contemplates repeated transactions; (ii) the provider may impose a finance charge from time to time on an outstanding unpaid balance; and (iii) the amount of credit that may be extended to the recipient during the term of the plan is generally made available to the extent that any outstanding balance is repaid.

"Person" means an individual, entity, corporation, partnership, limited liability company, joint venture, association, joint stock company, trust, or unincorporated organization, including, but not limited to, a sole proprietorship.

"Provider" means a person who extends a specific offer of commercial financing to a recipient. The mere extension of a specific offer or provision of disclosures for a commercial financing, is not sufficient to conclude that a provider is originating, making, funding, or providing commercial financing. "Provider" does not include:

(1) a bank, trust company, or industrial loan company, or any subsidiary or affiliate thereof, doing business under the authority of, or in accordance with, a license, certificate, or charter issued by the United States, this State, or any other state, district, territory, or commonwealth of the United States that is authorized to transact business in this State;

(2) a federally chartered savings and loan association, federal savings bank, or federal credit union, or any subsidiary or affiliate thereof, that is authorized to transact business in this State;

(3) a savings and loan association, savings bank, or credit union, or any subsidiary or affiliate thereof, organized under the laws of this State or any other state that is authorized to transact business in this State;

(4) a lender regulated under the federal Farm Credit Act; and

(5) a person acting as a technology services provider to an entity described by sub-paragraphs (1), (2), or (3) for use as part of that entity's commercial financing program, provided the person has no interest, or arrangement, or agreement to purchase any interest in the commercial financing extended by the entity in connection with the program.

"Recipient" means a person located in the State of Illinois who applies for commercial financing and is made a specific offer of commercial financing by a provider. For the purpose of determining whether a recipient is located in Illinois, a provider may rely upon (i) any written representation by the recipient as to whether it is located in Illinois; or (ii) the business address provided by the recipient in the application for commercial financing showing that the recipient is located in Illinois. "Recipient" does not include a person acting as a broker.

"Sales-based financing" means a transaction that is repaid by the recipient to the provider, over time, as a percentage of sales or revenue, in which the payment amount may increase or decrease according to the volume of sales made or revenue received by the recipient or a transaction that includes a true-up mechanism where the financing is repaid as a fixed payment but provides for a reconciliation process that adjusts the payment to an amount that is a percentage of sales or revenue.

"Secretary" means the Secretary of Financial and Professional Regulation or a person authorized by the Secretary to perform the Secretary's responsibilities under this Act.

"Specific offer" means the specific terms of commercial financing, including price or amount, that is quoted in writing to a recipient based on information obtained from or about the recipient that, if accepted by a recipient, shall be binding on the provider, as applicable, subject to any specific requirements stated in the specific terms.

"True-up mechanism" means, with respect to sales-based financing, a contractual arrangement with all the following elements:

(1) The financer receives periodic payments based upon a pre-set amount stated in the contract.

(2) The contract allows the recipient to request, or the financer to initiate, adjustments to the payment amount, credits to the recipient, or charges to the recipient after execution of the contract, so that the total amount paid by the recipient more closely reflects a split rate listed in the contract.

Section 10. Applicability.

(a) The provisions of this Act do not apply to:

(1) a bank, trust company, or industrial loan company, or any subsidiary or affiliate thereof, doing business under the authority of, or in accordance with, a license, certificate or charter issued by the United States, this State, or any other state, district, territory, or commonwealth of the United States that is authorized to transact business in this State;

(2) a federally chartered savings and loan association, federal savings bank, or federal credit union, or any subsidiary or affiliate thereof, that is authorized to transact business in this State;

(3) a savings and loan association, savings bank, or credit union, or any subsidiary or affiliate thereof, organized under the laws of this State or any other state that is authorized to transact business in this State;

(4) a lender regulated under the federal Farm Credit Act; and

(5) a person acting in the person's capacity as a technology services provider to an entity described by sub-paragraphs (1), (2), or (3) for use as part of that entity's commercial financing program, provided the person has no interest, or arrangement, or agreement to purchase any interest in the commercial financing extended by the entity in connection with the program.

Section 15. Division of Financial Institutions. This Act shall be administered by the Division on behalf of the Secretary.

Section 20. Registration requirement.

(a) It is unlawful for a person to engage in the conduct regulated by this Act as a broker or provider unless the broker or provider: (i) registers with the Secretary in accordance with this Section; and (ii) maintains a valid registration. An officer or employee of a person required to register under this Section is not required to register if the person for whom the individual is an officer or employee is registered.

(b) Application for registration and renewal of registration shall be made in accordance with this Act and with the requirements of the multistate licensing system, if required by the Secretary. The application shall be in writing, under oath, and on a form obtained from and prescribed by the Secretary. The Secretary may change or update the form to carry out the purposes of this Act. The Secretary may require part or all of the application to be submitted electronically, with attestation, to the multistate licensing system.

(c) Registrants shall apply to renew their registration every calendar year. Registrants may submit properly completed renewal application forms and filing fees 60 days before the registration expiration date, and the same shall be received by the Secretary at least 30 days before the registration expiration date. Absent a written extension from the Department, a registration shall expire on December 31 of each year if a registrant fails to timely submit a properly completed renewal application and fees.

(d) Upon receipt of the registration, a registrant is authorized to engage in conduct regulated by this Act. The registration shall remain in full force and effect until it expires, is withdrawn by the registrant, or is revoked or suspended as provided in this Act.

(e) To register under this Section, an applicant shall:

(1) pay a registration fee of $2,500 to the Department; and

(2) submit a registration statement containing the information described in subsection (g).

(f) To renew a registration under this Section, a person shall:

(1) pay the annual fee of $2,500 to the Department; and

(2) submit a renewal statement containing the information described in subsection (g).

(g) A registration or renewal statement must be submitted to the Secretary or to a multistate licensing system as approved by the Secretary. The registration or renewal statement shall include:

(1) the name of the person;

(2) the name in which the business will be transacted if different from that required in paragraph (1), which must be properly registered as an assumed corporate name under the Business Corporation Act of 1983, an assumed limited liability company name under the Limited Liability Company Act, or an assumed business name under the Assumed Business Name Act;

(3) the address of the person's principal business office;

(4) the address of each office in this State at which the person engages in commercial financing transactions;

(5) if the person engages in brokering or providing commercial financing transactions in this State but does not maintain an office in this State, a brief description of the manner in which the business is conducted;

(6) if the person conducts business through an agent located in this State, the name and address in this State of the person's agent properly registered with the Secretary of State;

(7) for a registration application, whether the person, an officer, director, manager, operator, or principal of the person, or an employee of the person engaged in the business of commercial financing has been convicted of a crime involving an act of fraud, dishonesty, breach of trust, or money laundering; if the applicant answers yes to this paragraph, then the applicant shall report the names, titles or relationship to the applicant or registrant, and the nature of the covered crime;

(8) for a renewal application, whether, in the past year, the person, an officer, director, manager, operator, or principal of the person, or an employee of the person engaged in the business of commercial financing has been convicted of a crime involving an act of fraud, dishonesty, breach of trust, or money laundering; if the registrant answers yes to this paragraph, then the registrant shall report the names, titles or relationship to the applicant or registrant, and the nature of the covered crime; and

(9) a statement of the person's commitment to abide by the requirements of registering persons under this Act.

(h) The Department shall adopt and amend rules as may be required for the proper administration and enforcement of this Section, including rules providing for the form, content, and filing of a registration and renewal statement.

Section 25. Additional registration information.

(a) In order to fulfill the purposes of this Act, the Secretary may establish relationships or contracts with a multistate licensing system or other persons to collect and maintain records and process fees related to registrants or other persons subject to this Act.

(b) For the purposes of this Section, and to reduce the points of contact that the Secretary may have to maintain, the Secretary may use a multistate licensing system as a channeling agent for requesting and distributing information to and from any source.

(c) Each registrant shall furnish to the Secretary or multistate licensing system an updated business address within 30 days after any change of business address.

Section 30. Registration expiration. No activity regulated by this Act shall be conducted by a registrant whose registration has expired. The Secretary shall reinstate an expired registration upon payment of the renewal fee, payment of a reactivation fee equal to 2 times the renewal fee, and submission of a completed renewal application.

Section 35. Functions; powers; duties. The functions, powers, and duties of the Secretary include, but are not limited to, the following:

(1) to issue any registration or renewal;

(2) to revoke or suspend for cause any registration issued under this Act;

(3) to keep records of all registrations issued under this Act;

(4) to receive, consider, investigate, and act upon complaints made by any person in connection with any registration in this State or unregistered commercial brokering or financing activity of any person;

(5) to adopt rules necessary and proper for the administration of this Act;

(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 or its implementing rules;

(7) to issue orders against any person if the Secretary has reasonable cause to believe that an unlawful practice has occurred, is occurring, or is about to occur; if any person is violating, or is about to violate any law, rule, or written agreement with the Secretary; or 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 registrant, or the owners, officers, or directors thereof, in relation to its activities and conditions, or any other matter connected with its affairs, and any registrant or person so addressed shall promptly reply in writing to those inquiries. The Secretary may also require reports from any registrant at any time the Secretary deems desirable;

(9) to enforce provisions of this Act and its implementing rules;

(10) to levy fees, including, but not limited to, assessments, registration fees, civil penalties, and charges for services performed in administering this Act. The Secretary may establish and modify fees by rule. The aggregate of all fees collected by the Secretary under this Act shall be paid promptly after receipt into the Financial Institution Fund. The amounts deposited into the Financial Institution Fund shall be used for the ordinary and contingent expenses of the Department. Nothing in this Act prevents paying expenses including salaries, retirement, social security, and State-paid insurance of State employees, or any other expenses incurred under this Act by appropriation from the General Revenue Fund or any other fund;

(11) to issue refunds to registrants of any overpayment for good cause shown;

(12) to appoint experts and special assistants as needed to effectively and efficiently administer this Act;

(13) to conduct hearings for the purpose of suspensions, denials, or revocations of registrations, fining, or other discipline of registrants or unregistered persons or entities;

(14) to exercise visitorial power over a registrant if the Secretary has reasonable cause to believe that a person is violating or is about to violate this Act;

(15) to impose civil penalties of up to $200 per day against a registrant for failing to respond to a regulatory request or reporting requirement; and

(16) to enter into agreements in connection with a multistate licensing system.

Section 40. Subpoena power of the Secretary.

(a) The Secretary may issue and 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 investigation. The Secretary, or the Secretary's duly authorized representative, may administer oaths and affirmations to any person.

(b) If a person does not comply with the Secretary's subpoena or subpoena duces tecum, the Secretary may, through the Attorney General, petition the circuit court of the county in which the subpoenaed person resides or has its principal place of business for an order requiring the subpoenaed person to testify and to comply with the subpoena duces tecum. The court may grant injunctive relief restraining the person from engaging in activity regulated by this Act. 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, concealment, 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.

(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 under this Section is essential to an investigation, the Secretary, in addition to the other remedies provided for in this Act, may, 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 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 45. Sales-based financing disclosure requirements. A provider subject to this Act shall provide the following disclosures to a recipient, in a manner prescribed by the Secretary, if any, at the time of extending a specific offer of sales-based financing:

(1) The total amount of the commercial financing, and, if different from the financing amount, the disbursement amount after any fees deducted or withheld at disbursement.

(2) The total cost of the commercial financing, which is the finance charge.

(3) The total remittance amount.

(4) The estimated term, which is the period of time required for the initially estimated periodic payments to equal the total remittance amount.

(5) The estimated payment amounts:

(A) for payment amounts that are fixed, the payment amounts and frequency, such as, daily, weekly, monthly, and, if the payment frequency is other than monthly, the amount of the average projected payments per month; or

(B) for payment amounts that are variable, a payment schedule or a description of the method used to calculate the amounts and frequency of payments and the amount of the average projected payments per month.

(6) A description of all other potential fees and charges not included in the finance charge, including, but not limited to, draw fees, late payment fees, and returned payment fees.

(7) If the recipient elects to pay off or refinance the commercial financing before full payment, the provider shall disclose:

(A) whether the recipient would be required to pay any finance charges; if so, disclosure of the maximum dollar amount the recipient could be required to pay; and

(B) whether the recipient would be required to pay any additional fees not already included in the finance charge.

(8) A description of collateral requirements or security interests, if any.

Section 50. Commercial closed-end financing disclosure requirements. A provider subject to this Act shall provide the following disclosures to a recipient, in a manner prescribed by the Secretary, if any, at the time of extending a specific offer for closed-end financing:

(1) The total amount of the commercial financing, and, if different from the financing amount, the disbursement amount after any fees deducted or withheld at disbursement.

(2) The total cost of the commercial financing, which is the finance charge.

(3) The total repayment amount, which is the disbursement amount plus the finance charge.

(4) The term of the financing.

(5) The payment amounts:

(A) for payment amounts that are fixed, the payment amounts and frequency, such as daily, weekly, monthly, and, if the payment frequency is other than monthly, the amount of the average projected payments per month; or

(B) for payment amounts that are variable, a full payment schedule or a description of the method used to calculate the amounts and frequency of payments and the amount of the average projected payments per month.

(6) A description of all other potential fees and charges that can be avoided by the recipient, including, but not limited to, late payment fees and returned payment fees.

(7) If the recipient elects to pay off or refinance the commercial financing before full repayment, the provider shall disclose:

(A) whether the recipient would be required to pay any finance charges other than interest accrued since their last payment; if so, disclosure of the maximum dollar amount the recipient could be required to pay; and

(B) whether the recipient would be required to pay any additional fees not already included in the finance charge.

(8) A description of collateral requirements or security interests, if any.

Section 55. Open-end commercial financing disclosure requirements. A provider subject to this Act shall provide the following disclosures to a recipient, in a manner prescribed by the Secretary, if any, at the time of extending a specific offer for open-end financing:

(1) The maximum amount of credit available to the recipient, such as the credit line amount, and the amount scheduled to be drawn by the recipient at the time the offer is extended, if any, less any fees deducted or withheld at disbursement.

(2) The total cost of the commercial financing, which is the finance charge.

(3) The total repayment amount.

(4) The term of the plan, if applicable, or the period over which a draw is amortized.

(5) The payment frequency and amounts, including a description of payment amount requirements such as a minimum payment amount, and if the payment frequency is other than monthly, the amount of the average projected payments per month. For payment amounts that are variable, the provider should include a payment schedule or a description of the method used to calculate the amounts and frequency of payments and the estimated average monthly payment amount.

(6) A description of all other potential fees and charges that can be avoided by the recipient, including, but not limited to, draw fees, late payment fees, and returned payment fees.

(7) Were the recipient to elect to pay off or refinance the commercial financing before full repayment, the provider shall disclose:

(A) whether the recipient would be required to pay any finance charges other than interest accrued since their last payment; if so, disclosure of the maximum dollar amount the recipient could be required to pay; and

(B) whether the recipient would be required to pay any additional fees not already included in the finance charge.

(8) A description of collateral requirements or security interests, if any.

Section 60. Factoring transaction disclosure requirements. A provider subject to this Act shall provide the following disclosures to a recipient, in a manner prescribed by the Secretary, if any, at the time of extending a specific offer for a factoring transaction:

(1) The amount of the receivables purchase price paid to the recipient, and, if different from the purchase price, the disbursement amount after any fees deducted or withheld at disbursement.

(2) The total cost of the commercial financing, which is the finance charge.

(3) The total repayment amount.

(4) A description of all other potential fees and charges that can be avoided by the recipient.

(5) A description of the receivables purchased and any additional collateral requirements or security interests.

Section 65. Other forms of financing disclosure requirements. The Secretary may require disclosure by a provider extending a specific offer of commercial financing which is not an open-end financing, closed-end financing, sales-based financing, or factoring transaction but otherwise meets the definition of commercial financing. Subject to rules adopted by the Secretary, a provider subject to this Act shall provide the following disclosures to a recipient, in a manner prescribed by the Secretary, if any, at the time of extending a specific offer of other forms of financing:

(1) The total amount of the commercial financing, and, if different from the financing amount, the disbursement amount after any fees deducted or withheld at disbursement.

(2) The total cost of the commercial financing, which is the finance charge.

(3) The total repayment amount.

(4) The term of the financing.

(5) The payment amounts:

(A) for payment amounts that are fixed, the payment amounts and frequency, such as daily, weekly, monthly, and the average monthly payment amount; or

(B) for payment amounts that are variable, a payment schedule or a description of the method used to calculate the amounts and frequency of payments, and the estimated average monthly payment amount.

(6) A description of all other potential fees and charges that can be avoided by the recipient, including, but not limited to, late payment fees and returned payment fees.

(7) If the recipient elects to pay off or refinance the commercial financing before full repayment, the provider shall disclose:

(A) whether the recipient would be required to pay any finance charges other than interest accrued since their last payment; if so, disclosure of the maximum dollar amount the recipient could be required to pay; and

(B) whether the recipient would be required to pay any additional fees not already included in the finance charge.

(8) A description of collateral requirements or security interests, if any.

Section 70. Disclosure requirements for renewal financing. If, as a condition of obtaining the commercial financing, the provider requires the recipient to pay off the balance of an existing commercial financing from the same provider, the provider shall disclose:

(1) The amount of the new commercial financing that is used to pay off the portion of the existing commercial financing that consists of prepayment charges required to be paid and any unpaid finance charges that were not forgiven at the time of renewal. For financing for which the total repayment amount is calculated as a fixed amount, the prepayment charge is equal to the original finance charge multiplied by the amount of the renewal used to pay off existing financing as a percentage of the total repayment amount, minus any portion of the total repayment amount forgiven by the provider at the time of prepayment. If the amount is more than zero, the amount shall be the answer to the following question: "Does the renewal financing include any amount that is used to pay unpaid finance charges? Yes, {enter amount}. If the amount is zero, the answer would be no."

(2) If the disbursement amount will be reduced to pay down any unpaid portion of the outstanding balance, the actual dollar amount by which the disbursement amount will be reduced.

Section 75. Commercial financing facilities and additional information.

(a) In connection with a commercial financing facility, a provider may provide disclosures based on an example of a transaction that could occur under the agreement. Only one disclosure is required for each commercial financing facility, and a disclosure is not required as result of additional funds being disbursed, or a modification, forbearance, or change to the facility.

(b) Nothing in this Act shall prevent a provider from providing or disclosing additional information on a commercial financing being offered to a recipient; however, the additional information shall not be disclosed as part of the disclosure required by this Act.

Section 80. Violation of disclosure requirements. If the Secretary finds that a provider who is required to register with the Department according to this Act has violated any disclosure requirements outlined in Sections 45, 50, 55, 60, 65, 70, and 75, that shall be considered a violation of this Act separate from any other violation that may result from operating without a registration as required in this Act.

Section 90. Notification.

(a) A registrant must advise the Secretary in writing of any changes to the information submitted on its most recent registration or renewal of registration within 30 days after the change.

(b) A registrant must advise the Secretary in writing that the registrant has been disciplined, including denial of licensure, by a licensing authority of this State or another state within 10 days after entry of the discipline.

Section 95. Disciplinary actions.

(a) The Secretary may enter an order imposing one or more of the following penalties:

(1) revocation of registration;

(2) suspension of a registration subject to reinstatement upon satisfying all reasonable conditions the Secretary may specify;

(3) placement of the registrant or applicant on probation for a period of time and subject to all reasonable conditions as the Secretary may specify;

(4) imposition of civil monetary penalties not to exceed $10,000 for each separate offense, but civil penalties may not to exceed $50,000 for all aggregated violations arising from the use of the same or substantially similar form of disclosure or materials found to be in violation of this Act;

(5) restitution, refunds, or any other relief necessary to protect recipients; and

(6) denial of a registration.

(b) Grounds for penalties include:

(1) if a registrant has violated any provision of this Act;

(2) if a person has violated any provision of this Act or any rule adopted by the Secretary pursuant to this Act;

(3) if an applicant made a material misstatement in the applicant's application for registration or any other communication to the Secretary;

(4) if a person has failed to advise the Secretary in writing of any changes to the information submitted on the person's most recent registration or renewal of registration within 30 days after the change; and

(5) if a person failed to timely pay any fee, charge, or civil penalty assessed under this Act.

(c) No registration shall be suspended or revoked, except as provided in this Section, nor shall any person be assessed a civil penalty without notice of the right to a hearing.

(d) No violation of this Act shall impair or affect the obligation of any lawful contract between the registrant and any person.

(e) Every registration issued under this Act shall remain in force and effect until the registration expires, is surrendered, is revoked, or is suspended in accordance with the provisions of this Act. The Secretary shall have authority to reinstate a suspended registration or to issue a new registration to a registrant whose registration has been revoked or surrendered if no fact or condition then exists which would have warranted the Secretary in refusing originally to issue that registration under this Act.

(f) Whenever the Secretary imposes discipline authorized by this Section, the Secretary shall execute a written order to that effect. The Secretary shall serve a copy of the order upon the person. The Secretary shall serve the person with notice of the order, including a statement of the reasons for the order personally or by certified mail. Service by certified mail shall be deemed completed when the notice is deposited in the U.S. Mail.

(g) An order assessing a civil penalty, an order revoking or suspending a registration, or an order denying renewal of a registration shall take effect upon service of the order unless the registrant serves the Department with a written request for a hearing in the manner required by the order within 10 days after the date of service of the order. If a person requests a hearing, the order shall be stayed from its date of service until the Department enters a final administrative order. Hearings shall be conducted as follows:

(1) If the registrant requests a hearing, then the Secretary shall schedule a hearing within 90 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 the Secretary 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 they consider relevant or material to the inquiry.

(i) The costs of administrative hearings conducted under this Section shall be paid by the registrant or other person subject to the hearing.

(j) Registrants and other persons subject to this Act shall be subject to the disciplinary actions specified in this Act for any violations conducted by any officer, director, shareholder, joint venture, partner, owner, including, but not limited to, ultimate equitable owner.

Section 100. Investigation of complaints. The Secretary may investigate any complaints and inquiries made concerning this Act and any registrants or persons the Secretary believes may be required to register under this Act. Each registrant or person the Secretary believes may be required to register under this Act shall open the registrant's or person's books, records, documents, and offices wherever situated to the Secretary as needed to facilitate the investigations.

Section 105. Additional investigation authority. In addition to any authority allowed under this Act, the Secretary may conduct investigations as follows:

(1) Each person subject to this Act shall make available to the Secretary upon request the books and records relating to the operations of the person subject to this Act. The Secretary shall have access to those books and records and may interview the owners, officers, principals, employees, independent contractors, agents, vendors, and customers of any registrant or person subject to this Act.

(2) In making any investigation authorized by this Act, the Secretary may control access to any documents and records of the registrant or person under investigation. The Secretary may take possession of the documents and records or otherwise take constructive control of the documents. During the period of control, no person shall remove or alter any of the documents or records, except pursuant to a court order or with the consent of the Secretary for purposes outlined in Section 100(5) below. Unless the Secretary has reasonable grounds to believe the documents or records of the registrant have been or are at risk of being altered or destroyed for purposes of concealing a violation of this Act, the registrant or owner of the documents and records shall have access to the documents or records as necessary to conduct its ordinary business affairs.

(3) In order to carry out the purposes of this Section, the Secretary may:

(A) retain attorneys, accountants, or other professionals and specialists as auditors or investigators to conduct or assist in the conduct of investigations;

(B) enter into agreements or relationships with other government officials or regulatory associations to protect financing recipients, 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 or investigate the registrant 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 person subject to this Act and may incorporate the audit report in the report of the investigation or other writing of the Secretary.

(4) The authority of this Section shall remain in effect, whether the 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.

(5) No registrant or person subject to investigation or under this Section may knowingly withhold, alter, abstract, remove, mutilate, destroy, hide, or conceal any books, records, computer records, or other information or take actions designed to delay or complicate review of records.

Section 110. Confidentiality. To promote more effective regulation, protect consumers and financing recipients, and reduce regulatory burden through inter-regulatory sharing of confidential supervisory information:

(1) The privacy or confidentiality of any information or material provided to a multistate licensing system, including all privileges arising under federal or state court rules and law, shall continue to apply to the information or material after the information or material has been disclosed to the multistate licensing system. Information and material may be shared with a multistate licensing system, federal and state regulatory officials with relevant oversight authority, and law enforcement without the loss of privilege or the loss of confidentiality protections.

(2) The Secretary is authorized to enter into agreements or sharing arrangements with other governmental agencies, the Conference of State Bank Supervisors, and other associations representing governmental agencies.

(3) Information or material that is privileged or confidential under this Act as determined by the Secretary is not 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 except as authorized by the Secretary.

(4) Any other law relating to the disclosure of confidential supervisory information that is inconsistent with this Act shall be superseded by the requirements of this Section to the extent the other law provides less confidentiality or a weaker privilege for information that is privileged or confidential under this Act.

(5) Confidential or privileged information received from a multistate licensing system, another licensing body, federal and State regulatory officials, or law enforcement shall be protected to the same extent as the Secretary's confidential and privileged information is protected under this Act. The Secretary may also protect from disclosure confidential or privileged information that would be exempt from disclosure to the extent it is held directly by the multistate licensing system, another licensing body, federal and State regulatory officials, or law enforcement.

Section 115. Appeal and review.

(a) The Secretary may, in accordance with the Illinois Administrative Procedure Act, adopt rules to provide for review within the Department of their decisions affecting the rights of persons under this Act. The review shall provide for, at a minimum:

(1) appointment of a hearing officer;

(2) appropriate procedural rules, specific deadlines for filings, and standards of evidence and of proof; and

(3) provisions 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 120. Registration fees.

(a) The fee for initial registration is $2,500. The fee is nonrefundable.

(b) The fee for annual application renewal is $2,500. The fee is nonrefundable.

(c) The Department shall impose a contingent fee sufficient to cover its operating expenses in administering this Act not otherwise covered by all other revenue collected under this Act.

Section 125. Cease and desist order.

(a) The Secretary may issue a cease and desist order to any registrant or person doing business without the required registration when, in the opinion of the Secretary, the registrant or other person has violated, is violating, or is about to violate any provision of this Act or any rule adopted by the Department under this Act or any requirement imposed in writing by the Department as a condition of granting any authorization permitted by this Act. The cease and desist order authorized by this Section may be issued prior to a hearing.

(b) The Secretary shall serve notice of the cease and desist order, either personally or by certified mail. Service by certified mail shall be deemed completed when the notice is deposited in the U.S. Mail. The Secretary's notice shall include a statement of the reasons for the action.

(c) Within 10 days after service of the cease and desist order, the person subject to the cease and desist order may request a hearing in writing. The Secretary shall schedule a preliminary hearing within 60 days after the request for a hearing unless the parties agree to a later date.

(d) If it is determined that the Secretary had the authority to issue the cease and desist order, the Secretary may issue the orders as may be reasonably necessary to correct, eliminate, deter, or remedy the conduct described in the order and resulting harms.

(e) The powers vested in the Secretary by this Section are additional to all other powers and remedies vested in the Secretary by any law. Nothing in this Section shall be construed as requiring that the Secretary shall employ the power conferred in this Section instead of or as a condition precedent to the exercise of any other power or remedy vested in the Secretary.

Section 130. Injunctions. The Secretary may maintain an action in the name of the people of this State and may apply for an injunction in the circuit court to enjoin a person from violating this Act or its implementing rules through the Attorney General.

Section 135. Exemptions. This Act does not apply to, and does not place any additional requirements or obligations upon, any of the following:

(1) any person or entity that is not a broker or a provider;

(2) a commercial financing transaction secured by real property;

(3) a lease as defined in Section 2A-103 of the Uniform Commercial Code or a purchase money obligation as defined in paragraph Section 9-103 of the Uniform Commercial Code that is incurred as all or part of the price of the collateral or for value given to enable the recipient to acquire rights in or the use of the collateral if the value is in fact so used;

(4) a commercial financing transaction offered by a person in connection with the sale or lease of products or services that such person manufactures, licenses, or distributes, or whose parent company or any of its directly or indirectly owned and controlled subsidiaries manufactures, licenses, or distributes;

(5) any person or provider who makes no more than 5 commercial financing transactions in this State in a 12-month period;

(6) a single, discrete commercial financing transaction in an amount over $500,000; or

(7) a commercial financing transaction in which the recipient is a vehicle dealer subject to Section 5-101 or 5-102 of the Illinois Vehicle Code, an affiliate of a dealer, a rental vehicle company as defined in Section 10 of the Renter's Financial Responsibility and Protection Act, or an affiliate of a company under a commercial financing agreement or commercial open-end credit plan of at least $50,000, including any commercial loan made pursuant to the commercial financing transaction.

Section 140. Complaint disclosure. All commercial financing disclosure forms shall include a clear and conspicuous notice on how to file a complaint with the Department and how to submit a complaint to the provider.

Section 145. Rules. The Secretary may adopt rules to enact and enforce this Act, including, but not limited to:

(1) rules defining the terms used in this Act and as may be necessary and appropriate to interpret and implement the provisions of this Act;

(2) rules for the enforcement and administration of this Act;

Section 150. Violations. Nothing in this Act shall be construed to restrict the exercise of powers or the performance of the duties that the Attorney General is authorized to exercise or perform by law.

Section 155. Beginning of registration. No person shall be required to register under this Act before the date established by the Department by rule. The date shall not be before January 1, 2026.

Section 160. Beginning of disclosure requirements. No person shall be required to comply with the disclosure requirements set forth in this Act before the date established by the Department by rule. The date shall not be before January 1, 2026.

Section 165. Commercial financing database. No broker shall assess, collect, or solicit an advance fee from a business to provide services as a broker, except that nothing contained in this Section shall preclude a broker from soliciting a business to pay for, or preclude a business from paying for, actual services necessary to apply for a commercial financing transaction, including, but not limited to, a credit check or an appraisal of security, where the payment is made by check or money order payable to a party independent of the broker; making or using any false or misleading representations or omitting any material fact in the offer or sale of the services of a broker or engaging, directly or indirectly, in any act that operates or would operate as fraud or deception upon any person in connection with the offer or sale of the services of a broker, notwithstanding the absence of reliance by the business; or making or using any false or deceptive representation in the broker's business dealings.

Section 170. Severability. The provisions of this Act are severable under Section 1.31 of the Statute on Statutes.

Section 900. The Freedom of Information Act is amended by changing Section 7.5 as follows:

(5 ILCS 140/7.5)

Sec. 7.5. Statutory exemptions. To the extent provided for by the statutes referenced below, the following shall be exempt from inspection and copying:

(a) All information determined to be confidential under Section 4002 of the Technology Advancement and Development Act.

(b) Library circulation and order records identifying library users with specific materials under the Library Records Confidentiality Act.

(c) Applications, related documents, and medical records received by the Experimental Organ Transplantation Procedures Board and any and all documents or other records prepared by the Experimental Organ Transplantation Procedures Board or its staff relating to applications it has received.

(d) Information and records held by the Department of Public Health and its authorized representatives relating to known or suspected cases of sexually transmitted infection or any information the disclosure of which is restricted under the Illinois Sexually Transmitted Infection Control Act.

(e) Information the disclosure of which is exempted under Section 30 of the Radon Industry Licensing Act.

(f) Firm performance evaluations under Section 55 of the Architectural, Engineering, and Land Surveying Qualifications Based Selection Act.

(g) Information the disclosure of which is restricted and exempted under Section 50 of the Illinois Prepaid Tuition Act.

(h) Information the disclosure of which is exempted under the State Officials and Employees Ethics Act, and records of any lawfully created State or local inspector general's office that would be exempt if created or obtained by an Executive Inspector General's office under that Act.

(i) Information contained in a local emergency energy plan submitted to a municipality in accordance with a local emergency energy plan ordinance that is adopted under Section 11-21.5-5 of the Illinois Municipal Code.

(j) Information and data concerning the distribution of surcharge moneys collected and remitted by carriers under the Emergency Telephone System Act.

(k) Law enforcement officer identification information or driver identification information compiled by a law enforcement agency or the Department of Transportation under Section 11-212 of the Illinois Vehicle Code.

(l) Records and information provided to a residential health care facility resident sexual assault and death review team or the Executive Council under the Abuse Prevention Review Team Act.

(m) Information provided to the predatory lending database created pursuant to Article 3 of the Residential Real Property Disclosure Act, except to the extent authorized under that Article.

(n) Defense budgets and petitions for certification of compensation and expenses for court appointed trial counsel as provided under Sections 10 and 15 of the Capital Crimes Litigation Act (repealed). This subsection (n) shall apply until the conclusion of the trial of the case, even if the prosecution chooses not to pursue the death penalty prior to trial or sentencing.

(o) Information that is prohibited from being disclosed under Section 4 of the Illinois Health and Hazardous Substances Registry Act.

(p) Security portions of system safety program plans, investigation reports, surveys, schedules, lists, data, or information compiled, collected, or prepared by or for the Department of Transportation under Sections 2705-300 and 2705-616 of the Department of Transportation Law of the Civil Administrative Code of Illinois, the Regional Transportation Authority under Section 2.11 of the Regional Transportation Authority Act, or the St. Clair County Transit District under the Bi-State Transit Safety Act (repealed).

(q) Information prohibited from being disclosed by the Personnel Record Review Act.

(r) Information prohibited from being disclosed by the Illinois School Student Records Act.

(s) Information the disclosure of which is restricted under Section 5-108 of the Public Utilities Act.

(t) (Blank).

(u) Records and information provided to an independent team of experts under the Developmental Disability and Mental Health Safety Act (also known as Brian's Law).

(v) Names and information of people who have applied for or received Firearm Owner's Identification Cards under the Firearm Owners Identification Card Act or applied for or received a concealed carry license under the Firearm Concealed Carry Act, unless otherwise authorized by the Firearm Concealed Carry Act; and databases under the Firearm Concealed Carry Act, records of the Concealed Carry Licensing Review Board under the Firearm Concealed Carry Act, and law enforcement agency objections under the Firearm Concealed Carry Act.

(v-5) Records of the Firearm Owner's Identification Card Review Board that are exempted from disclosure under Section 10 of the Firearm Owners Identification Card Act.

(w) Personally identifiable information which is exempted from disclosure under subsection (g) of Section 19.1 of the Toll Highway Act.

(x) Information which is exempted from disclosure under Section 5-1014.3 of the Counties Code or Section 8-11-21 of the Illinois Municipal Code.

(y) Confidential information under the Adult Protective Services Act and its predecessor enabling statute, the Elder Abuse and Neglect Act, including information about the identity and administrative finding against any caregiver of a verified and substantiated decision of abuse, neglect, or financial exploitation of an eligible adult maintained in the Registry established under Section 7.5 of the Adult Protective Services Act.

(z) Records and information provided to a fatality review team or the Illinois Fatality Review Team Advisory Council under Section 15 of the Adult Protective Services Act.

(aa) Information which is exempted from disclosure under Section 2.37 of the Wildlife Code.

(bb) Information which is or was prohibited from disclosure by the Juvenile Court Act of 1987.

(cc) Recordings made under the Law Enforcement Officer-Worn Body Camera Act, except to the extent authorized under that Act.

(dd) Information that is prohibited from being disclosed under Section 45 of the Condominium and Common Interest Community Ombudsperson Act.

(ee) Information that is exempted from disclosure under Section 30.1 of the Pharmacy Practice Act.

(ff) Information that is exempted from disclosure under the Revised Uniform Unclaimed Property Act.

(gg) Information that is prohibited from being disclosed under Section 7-603.5 of the Illinois Vehicle Code.

(hh) Records that are exempt from disclosure under Section 1A-16.7 of the Election Code.

(ii) Information which is exempted from disclosure under Section 2505-800 of the Department of Revenue Law of the Civil Administrative Code of Illinois.

(jj) Information and reports that are required to be submitted to the Department of Labor by registering day and temporary labor service agencies but are exempt from disclosure under subsection (a-1) of Section 45 of the Day and Temporary Labor Services Act.

(kk) Information prohibited from disclosure under the Seizure and Forfeiture Reporting Act.

(ll) Information the disclosure of which is restricted and exempted under Section 5-30.8 of the Illinois Public Aid Code.

(mm) Records that are exempt from disclosure under Section 4.2 of the Crime Victims Compensation Act.

(nn) Information that is exempt from disclosure under Section 70 of the Higher Education Student Assistance Act.

(oo) Communications, notes, records, and reports arising out of a peer support counseling session prohibited from disclosure under the First Responders Suicide Prevention Act.

(pp) Names and all identifying information relating to an employee of an emergency services provider or law enforcement agency under the First Responders Suicide Prevention Act.

(qq) Information and records held by the Department of Public Health and its authorized representatives collected under the Reproductive Health Act.

(rr) Information that is exempt from disclosure under the Cannabis Regulation and Tax Act.

(ss) Data reported by an employer to the Department of Human Rights pursuant to Section 2-108 of the Illinois Human Rights Act.

(tt) Recordings made under the Children's Advocacy Center Act, except to the extent authorized under that Act.

(uu) Information that is exempt from disclosure under Section 50 of the Sexual Assault Evidence Submission Act.

(vv) Information that is exempt from disclosure under subsections (f) and (j) of Section 5-36 of the Illinois Public Aid Code.

(ww) Information that is exempt from disclosure under Section 16.8 of the State Treasurer Act.

(xx) Information that is exempt from disclosure or information that shall not be made public under the Illinois Insurance Code.

(yy) Information prohibited from being disclosed under the Illinois Educational Labor Relations Act.

(zz) Information prohibited from being disclosed under the Illinois Public Labor Relations Act.

(aaa) Information prohibited from being disclosed under Section 1-167 of the Illinois Pension Code.

(bbb) Information that is prohibited from disclosure by the Illinois Police Training Act and the Illinois State Police Act.

(ccc) Records exempt from disclosure under Section 2605-304 of the Illinois State Police Law of the Civil Administrative Code of Illinois.

(ddd) Information prohibited from being disclosed under Section 35 of the Address Confidentiality for Victims of Domestic Violence, Sexual Assault, Human Trafficking, or Stalking Act.

(eee) Information prohibited from being disclosed under subsection (b) of Section 75 of the Domestic Violence Fatality Review Act.

(fff) Images from cameras under the Expressway Camera Act. This subsection (fff) is inoperative on and after July 1, 2025.

(ggg) Information prohibited from disclosure under paragraph (3) of subsection (a) of Section 14 of the Nurse Agency Licensing Act.

(hhh) Information submitted to the Illinois State Police in an affidavit or application for an assault weapon endorsement, assault weapon attachment endorsement, .50 caliber rifle endorsement, or .50 caliber cartridge endorsement under the Firearm Owners Identification Card Act.

(iii) Data exempt from disclosure under Section 50 of the School Safety Drill Act.

(jjj) Information exempt from disclosure under Section 30 of the Insurance Data Security Law.

(kkk) Confidential business information prohibited from disclosure under Section 45 of the Paint Stewardship Act.

(lll) Data exempt from disclosure under Section 2-3.196 of the School Code.

(mmm) Information prohibited from being disclosed under subsection (e) of Section 1-129 of the Illinois Power Agency Act.

(nnn) Materials received by the Department of Commerce and Economic Opportunity that are confidential under the Music and Musicians Tax Credit and Jobs Act.

(ooo) (nnn) Data or information provided pursuant to Section 20 of the Statewide Recycling Needs and Assessment Act.

(ppp) (nnn) Information that is exempt from disclosure under Section 28-11 of the Lawful Health Care Activity Act.

(qqq) (nnn) Information that is exempt from disclosure under Section 7-101 of the Illinois Human Rights Act.

(rrr) (mmm) Information prohibited from being disclosed under Section 4-2 of the Uniform Money Transmission Modernization Act.

(sss) (nnn) Information exempt from disclosure under Section 40 of the Student-Athlete Endorsement Rights Act.

(ttt) Information exempt from disclosure under Section 165 of the Small Business Financing Transparency Act.

(Source: P.A. 102-36, eff. 6-25-21; 102-237, eff. 1-1-22; 102-292, eff. 1-1-22; 102-520, eff. 8-20-21; 102-559, eff. 8-20-21; 102-813, eff. 5-13-22; 102-946, eff. 7-1-22; 102-1042, eff. 6-3-22; 102-1116, eff. 1-10-23; 103-8, eff. 6-7-23; 103-34, eff. 6-9-23; 103-142, eff. 1-1-24; 103-372, eff. 1-1-24; 103-472, eff. 8-1-24; 103-508, eff. 8-4-23; 103-580, eff. 12-8-23; 103-592, eff. 6-7-24; 103-605, eff. 7-1-24; 103-636, eff. 7-1-24; 103-724, eff. 1-1-25; 103-786, eff. 8-7-24; 103-859, eff. 8-9-24; 103-991, eff. 8-9-24; 103-1049, eff. 8-9-24; revised 11-26-24.)

Section 905. The Consumer Fraud and Deceptive Business Practices Act is amended by adding Section 2HHHH as follows:

(815 ILCS 505/2HHHH new)

Sec. 2HHHH. Violations of the Small Business Financing Transparency Act. Any person who violates the Small Business Financing Transparency Act commits an unlawful practice within the meaning of this Act.

Section 995. No acceleration or delay. Where this Act makes changes in a statute that is represented in this Act by text that is not yet or no longer in effect (for example, a Section represented by multiple versions), the use of that text does not accelerate or delay the taking effect of (i) the changes made by this Act or (ii) provisions derived from any other Public Act.

Section 999. Effective date. This Act takes effect upon becoming law.