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Sen. Terry Link
Filed: 4/21/2010
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| AMENDMENT TO HOUSE BILL 4781
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| AMENDMENT NO. ______. Amend House Bill 4781 as follows:
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| on page 6, by replacing lines 11 through 15 with the following: |
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| "Secretary in which the applicant shall be the obligor and in |
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| which an insurance company, which is duly authorized by the |
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| State of Illinois to transact the business of fidelity and |
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| surety insurance, shall be a surety. The surety bond must: |
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| (i) be in effect during the period of registration and |
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| for 2 years after the provider ceases providing |
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| debt-management services to individuals in this State; |
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| (ii) run to this State for the benefit of this State |
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| and of individuals who reside in this State when they agree |
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| to receive debt-settlement services from the provider, as |
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| their interests may appear; and |
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| (iii) be in the amount of $50,000 or other larger or |
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| smaller amount that the Secretary determines is warranted |
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| by the financial condition and business experience of the |
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| provider, the history of the provider in performing debt |
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| settlement services, the risk to individuals, and any other |
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| factor that the Secretary considers appropriate."; and
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| on page 7, immediately below line 1, by inserting the |
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| following: |
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| "Instead of the surety bond required under this Section, a |
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| provider may deliver to the Secretary, in the amount required |
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| under this Section, payable or available to this State and to |
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| individuals who reside in this State when they agree to receive |
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| debt-settlement services from the provider, as their interests |
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| may appear: |
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| (1) a certificate of insurance: |
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| (A) issued by an insurance company authorized to do |
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| business in this State and rated at least A or |
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| equivalent by a nationally recognized rating |
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| organization approved by the Secretary; and |
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| (B) with no deductible, or if the provider supplies |
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| a bond in the amount of $5,000, a deductible not |
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| exceeding $5,000; or |
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| (2) with the approval of the Secretary: |
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| (A) an irrevocable letter of credit, issued or |
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| confirmed by a bank approved by the Secretary, payable |
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| upon presentation of a certificate by the Secretary |
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| stating that the provider or its agent has not complied |
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| with this Act; or |
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| (B) bonds or other obligations of the United States |
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| or guaranteed by the United States or bonds or other |
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| obligations of this State or a political subdivision of |
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| this State, to be deposited and maintained with a bank |
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| approved by the Secretary for this purpose."; and
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| by replacing line 14 on page 31 through line 11 on page 32 with |
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| the following: |
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| "(b) A debt settlement provider may only charge fees as |
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| provided in either paragraph (1) or (2) as follows: |
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| (1) with respect to an agreement that provides for a |
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| flat pay-as-you-go fee based on the overall amount of |
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| included or enrolled debt, the total aggregate amount of |
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| fees charged to any individual under this Section may not |
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| exceed 17% of the principal amount of debt included in the |
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| agreement at the inception of the agreement; the flat |
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| pay-as-you-go fee structure authorized under this |
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| paragraph (1) shall be assessed in equal monthly payments |
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| over at least half the length of the plan, as estimated at |
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| the plan's inception, unless the payment of fees is |
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| voluntarily accelerated by the individual in a separate |
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| record and at least half of the overall amount of |
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| outstanding debt covered by the agreement has been settled; |
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| in the event that a consumer cancels a program being |
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| administered under this fee structure, no further fees |
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| shall be due, owing, or assessed by the provider following |
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| the month in which notice of the termination of the program |
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| is received by the provider; provided that no monthly fees |
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| shall be charged or collected by a debt settlement provider |
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| unless services are provided to an individual during that |
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| calendar month; services shall be documented by the debt |
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| settlement provider and may include, but are not limited |
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| to, the following: |
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| (A) client qualification; |
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| (B) account management; |
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| (C) debt program organization; |
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| (D) negotiation and settlement discussions with |
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| creditors; |
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| (E) consumer rights education and counseling; |
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| (F) referral to legal assistance; and |
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| (G) third-party payment management;
or |
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| (2) with respect to agreements in which fees are |
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| calculated as a percentage of the amount saved by an |
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| individual, a settlement fee may not exceed 30% of the |
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| excess of the outstanding amount of each debt over the |
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| amount actually paid to the creditor, as calculated at the |
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| time of settlement; settlement fees authorized under this |
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| paragraph (2) shall become billable only as debts are |
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| settled, and the total aggregate amount of fees charged to |
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| any individual under this part may not exceed 20% of the |
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| principal amount of debt included in the agreement at the |
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| agreement's inception.
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