101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
HB4430

 

Introduced 2/3/2020, by Rep. Camille Y. Lilly

 

SYNOPSIS AS INTRODUCED:
 
See Index

    Amends the Illinois Credit Union Act, the Transmitters of Money Act, the Sales Finance Agency Act, the Debt Management Service Act, the Consumer Installment Loan Act, the Debt Settlement Consumer Protection Act, and the Payday Loan Reform Act. Requires applicants for a license or renewal of a license to operate a credit union, operate as a transmitter of money, engage in the business of a sales finance agency, engage in a debt management service, make consumer installment loans, operate as a debt settlement provider, or operate as a lender of payday loans to provide an email address of record to the Department of Financial and Professional Regulation. In provisions concerning service of certain notices and orders, allows service by email to the email address of record. Provides that service to an email address of record is deemed complete when sent. Provides that service by certified mail shall be deemed completed when the notice is deposited in the United States mail. Defines the term "email address of record". Makes other changes.


LRB101 16230 BMS 66929 b

 

 

A BILL FOR

 

HB4430LRB101 16230 BMS 66929 b

1    AN ACT concerning regulation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Credit Union Act is amended by
5changing Sections 1.1, 2, 8, 21, and 61 as follows:
 
6    (205 ILCS 305/1.1)  (from Ch. 17, par. 4402)
7    Sec. 1.1. Definitions.
8    Credit Union - The term "credit union" means a cooperative,
9non-profit association, incorporated under this Act, under the
10laws of the United States of America or under the laws of
11another state, for the purposes of encouraging thrift among its
12members, creating a source of credit at a reasonable rate of
13interest, and providing an opportunity for its members to use
14and control their own money in order to improve their economic
15and social conditions. The membership of a credit union shall
16consist of a group or groups each having a common bond as set
17forth in this Act.
18    Common Bond - The term "common bond" refers to groups of
19people who meet one of the following qualifications:
20        (1) Persons belonging to a specific association, group
21    or organization, such as a church, labor union, club or
22    society and members of their immediate families which shall
23    include any relative by blood or marriage or foster and

 

 

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1    adopted children.
2        (2) Persons who reside in a reasonably compact and well
3    defined neighborhood or community, and members of their
4    immediate families which shall include any relative by
5    blood or marriage or foster and adopted children.
6        (3) Persons who have a common employer or who are
7    members of an organized labor union or an organized
8    occupational or professional group within a defined
9    geographical area, and members of their immediate families
10    which shall include any relative by blood or marriage or
11    foster and adopted children.
12    Shares - The term "shares" or "share accounts" means any
13form of shares issued by a credit union and established by a
14member in accordance with standards specified by a credit
15union, including but not limited to common shares, share draft
16accounts, classes of shares, share certificates, special
17purpose share accounts, shares issued in trust, custodial
18accounts, and individual retirement accounts or other plans
19established pursuant to Section 401(d) or (f) or Section 408(a)
20of the Internal Revenue Code, as now or hereafter amended, or
21similar provisions of any tax laws of the United States that
22may hereafter exist.
23    Credit Union Organization - The term "credit union
24organization" means any organization established to serve the
25needs of credit unions, the business of which relates to the
26daily operations of credit unions.

 

 

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1    Department - The term "Department" means the Illinois
2Department of Financial and Professional Regulation.
3    Email address of record – The term "email address of
4record" means an accurate and current email address designated
5by a credit union and recorded by the Division of Financial
6Institutions in the credit union's file maintained by the
7Division of Financial Institutions.
8    Secretary - The term "Secretary" means the Secretary of
9Financial and Professional Regulation or a person authorized by
10the Secretary or this Act to act in the Secretary's stead.
11    Division of Financial Institutions - The term "Division of
12Financial Institutions" means the Division of Financial
13Institutions of the Department of Financial and Professional
14Regulation.
15    Director - The term "Director of Financial Institutions"
16means the Director of the Division of Financial Institutions of
17the Department of Financial and Professional Regulation.
18    Office - The term "office" means the Division of Financial
19Institutions of the Department of Financial and Professional
20Regulation.
21    NCUA - The term "NCUA" means the National Credit Union
22Administration, an agency of the United States Government
23charged with the supervision of credit unions chartered under
24the laws of the United States of America.
25    Central Credit Union - The term "central credit union"
26means a credit union incorporated primarily to receive shares

 

 

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1from and make loans to credit unions and directors, officers,
2committee members and employees of credit unions. A central
3credit union may also accept as members persons who were
4members of credit unions which were liquidated and persons from
5occupational groups not otherwise served by another credit
6union.
7    Corporate Credit Union - The term "corporate credit union"
8means a credit union which is a cooperative, non-profit
9association, the membership of which is limited primarily to
10other credit unions.
11    Insolvent - "Insolvent" means the condition that results
12when the total of all liabilities and shares exceeds net assets
13of the credit union.
14    Danger of insolvency - For purposes of Section 61, a credit
15union is in "danger of insolvency" if its net worth to asset
16ratio falls below 2%. In calculating the danger of insolvency
17ratio, secondary capital shall be excluded. For purposes of
18Section 61, a credit union is also in "danger of insolvency" if
19the Department is unable to ascertain, upon examination, the
20true financial condition of the credit union.
21    Net Worth - "Net worth" means the retained earnings balance
22of the credit union, as determined under generally accepted
23accounting principles, and forms of secondary capital approved
24by the Secretary and the Director pursuant to rulemaking.
25    Charitable Donation Account - The term "charitable
26donation account" means an account owned by a credit union that

 

 

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1is held in a segregated custodial account or special purpose
2entity and specifically identified as a charitable donation
3account whereby, no less frequently than every 5 years and upon
4termination of the account, at least 51% of the total return on
5assets in the account is distributed to one or more charitable
6organizations or non-profit entities.
7(Source: P.A. 97-133, eff. 1-1-12; 98-784, eff. 7-24-14.)
 
8    (205 ILCS 305/2)  (from Ch. 17, par. 4403)
9    Sec. 2. Organization procedure.
10    (1) Any 9 or more persons of legal age, the majority of
11whom shall be residents of the State of Illinois, who have a
12common bond referred to in Section 1.1 may organize a credit
13union or a central credit union by complying with this Section.
14    (2) The subscribers shall execute in duplicate Articles of
15Incorporation and agree to the terms thereof, which Articles
16shall state:
17        (a) The name, which shall include the words "credit
18    union" and which shall not be the same as that of any other
19    existing credit union in this state, and the location where
20    the proposed credit union is to have its principal place of
21    business;
22        (b) The common bond of the members of the credit union;
23        (c) The par value of the shares of the credit union,
24    which must be at least $1;
25        (d) The names, addresses and Social Security numbers of

 

 

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1    the subscribers to the Articles of Incorporation, and the
2    number and the value of shares subscribed to by each;
3        (e) That the credit union may exercise such incidental
4    powers as are necessary or requisite to enable it to carry
5    on effectively the purposes for which it is incorporated,
6    and those powers which are inherent in the credit union as
7    a legal entity;
8        (f) That the existence of the credit union shall be
9    perpetual.
10    (3) The subscribers shall prepare and adopt bylaws for the
11general government of the credit union, consistent with this
12Act, and execute same in duplicate.
13    (4) The subscribers shall forward the articles of
14incorporation and the bylaws to the Secretary in duplicate,
15along with the required charter fee. If they conform to the
16law, and such rules and regulations as the Secretary and the
17Director may prescribe, if the Secretary determines that a
18common bond exists, and that it is economically advisable to
19organize the credit union, he or she shall within 60 days issue
20a certificate of approval attached to the articles of
21incorporation and return a copy of the bylaws and the articles
22of incorporation to the applicants or their representative,
23which shall be preserved in the permanent files of the credit
24union. The subscribers shall file the certificate of approval,
25with the articles of incorporation attached, in the office of
26the recorder (or, if there is no recorder, in the office of the

 

 

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1county clerk) of the county in which the credit union is to
2locate its principal place of business. The recorder or the
3county clerk, as the case may be, shall accept and record the
4documents if they are accompanied by the proper fee. When the
5documents are so recorded, the credit union is incorporated
6under this Act.
7    (5) The subscribers for a credit union charter shall not
8transact any business until the certificate of approval has
9been received.
10    (6) At the time of executing the articles of incorporation,
11the subscribers shall provide an email address of record.
12(Source: P.A. 100-361, eff. 8-25-17.)
 
13    (205 ILCS 305/8)  (from Ch. 17, par. 4409)
14    Sec. 8. Secretary's powers and duties. Credit unions are
15regulated by the Department. The Secretary in executing the
16powers and discharging the duties vested by law in the
17Department has the following powers and duties:
18        (1) To exercise the rights, powers and duties set forth
19    in this Act or any related Act. The Director shall oversee
20    the functions of the Division and report to the Secretary,
21    with respect to the Director's exercise of any of the
22    rights, powers, and duties vested by law in the Secretary
23    under this Act. All references in this Act to the Secretary
24    shall be deemed to include the Director, as a person
25    authorized by the Secretary or this Act to assume

 

 

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1    responsibility for the oversight of the functions of the
2    Department relating to the regulatory supervision of
3    credit unions under this Act.
4        (2) To prescribe rules and regulations for the
5    administration of this Act. The provisions of the Illinois
6    Administrative Procedure Act are hereby expressly adopted
7    and incorporated herein as though a part of this Act, and
8    shall apply to all administrative rules and procedures of
9    the Department under this Act.
10        (3) To direct and supervise all the administrative and
11    technical activities of the Department including the
12    employment of a Credit Union Supervisor who shall have
13    knowledge in the theory and practice of, or experience in,
14    the operations or supervision of financial institutions,
15    preferably credit unions, and such other persons as are
16    necessary to carry out his functions. The Secretary shall
17    ensure that all examiners appointed or assigned to examine
18    the affairs of State-chartered credit unions possess the
19    necessary training and continuing education to effectively
20    execute their jobs.
21        (4) To issue cease and desist orders when in the
22    opinion of the Secretary, a credit union is engaged or has
23    engaged, or the Secretary has reasonable cause to believe
24    the credit union is about to engage, in an unsafe or
25    unsound practice, or is violating or has violated or the
26    Secretary has reasonable cause to believe is about to

 

 

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1    violate a law, rule or regulation or any condition imposed
2    in writing by the Department.
3        (5) To suspend from office and to prohibit from further
4    participation in any manner in the conduct of the affairs
5    of his credit union any director, officer or committee
6    member who has committed any violation of a law, rule,
7    regulation or of a cease and desist order or who has
8    engaged or participated in any unsafe or unsound practice
9    in connection with the credit union or who has committed or
10    engaged in any act, omission, or practice which constitutes
11    a breach of his fiduciary duty as such director, officer or
12    committee member, when the Secretary has determined that
13    such action or actions have resulted or will result in
14    substantial financial loss or other damage that seriously
15    prejudices the interests of the members.
16        (6) To assess a civil penalty against a credit union
17    provided that:
18            (A) the Secretary reasonably determines, based on
19        objective facts and an accurate assessment of
20        applicable legal standards, that the credit union has:
21                (i) committed a violation of this Act, any rule
22            adopted in accordance with this Act, or any order
23            of the Secretary issued pursuant to his or her
24            authority under this Act; or
25                (ii) engaged or participated in any unsafe or
26            unsound practice;

 

 

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1            (B) before a civil penalty is assessed under this
2        item (6), the Secretary must make the further
3        reasonable determination, based on objective facts and
4        an accurate assessment of applicable legal standards,
5        that the credit union's action constituting a
6        violation under subparagraph (i) of paragraph (A) of
7        item (6) or an unsafe and unsound practice under
8        subparagraph (ii) of paragraph (A) of item (6):
9                (i) directly resulted in a substantial and
10            material financial loss or created a reasonable
11            probability that a substantial and material
12            financial loss will directly result; or
13                (ii) constituted willful misconduct or a
14            material breach of fiduciary duty of any director,
15            officer, or committee member of the credit union;
16            Material financial loss, as referenced in this
17        paragraph (B), shall be assessed in light of
18        surrounding circumstances and the relative size and
19        nature of the financial loss or probable financial
20        loss. Certain benchmarks shall be used in determining
21        whether financial loss is material, such as a
22        percentage of total assets or total gross income for
23        the immediately preceding 12-month period. Absent
24        compelling and extraordinary circumstances, no civil
25        penalty shall be assessed, unless the financial loss or
26        probable financial loss is equal to or greater than

 

 

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1        either 1% of the credit union's total assets for the
2        immediately preceding 12-month period, or 1% of the
3        credit union's total gross income for the immediately
4        preceding 12-month period, whichever is less;
5            (C) before a civil penalty is assessed under this
6        item (6), the credit union must be expressly advised in
7        writing of the:
8                (i) specific violation that could subject it
9            to a penalty under this item (6); and
10                (ii) specific remedial action to be taken
11            within a specific and reasonable time frame to
12            avoid imposition of the penalty;
13            (D) Civil penalties assessed under this item (6)
14        shall be remedial, not punitive, and reasonably
15        tailored to ensure future compliance by the credit
16        union with the provisions of this Act and any rules
17        adopted pursuant to this Act;
18            (E) a credit union's failure to take timely
19        remedial action with respect to the specific violation
20        may result in the issuance of an order assessing a
21        civil penalty up to the following maximum amount, based
22        upon the total assets of the credit union:
23                (i) Credit unions with assets of less than $10
24            million................................................$1,000
25                (ii) Credit unions with assets of at least $10
26            million and less than $50 million......................$2,500

 

 

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1                (iii) Credit unions with assets of at least $50
2            million and less than $100 million.....................$5,000
3                (iv) Credit unions with assets of at least $100
4            million and less than $500 million....................$10,000
5                (v) Credit unions with assets of at least $500
6            million and less than $1 billion......................$25,000
7                (vi) Credit unions with assets of $1 billion
8            and greater.....................................$50,000; and
9            (F) an order assessing a civil penalty under this
10        item (6) shall be served by certified mail or email to
11        the email address of record and take effect upon
12        service of the order, unless the credit union makes a
13        written request for a hearing under 38 IL. Adm. Code
14        190.20 of the Department's rules for credit unions
15        within 90 days after issuance of the order; in that
16        event, the order shall be stayed until a final
17        administrative order is entered. Service by certified
18        mail shall be deemed completed when the notice is
19        deposited in the United States mail. Service to the
20        email address of record shall be deemed completed when
21        sent.
22        This item (6) shall not apply to violations separately
23    addressed in rules as authorized under item (7) of this
24    Section.
25        (7) Except for the fees established in this Act, to
26    prescribe, by rule and regulation, fees and penalties for

 

 

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1    preparing, approving, and filing reports and other
2    documents; furnishing transcripts; holding hearings;
3    investigating applications for permission to organize,
4    merge, or convert; failure to maintain accurate books and
5    records to enable the Department to conduct an examination;
6    and taking supervisory actions.
7        (8) To destroy, in his discretion, any or all books and
8    records of any credit union in his possession or under his
9    control after the expiration of three years from the date
10    of cancellation of the charter of such credit unions.
11        (9) To make investigations and to conduct research and
12    studies and to publish some of the problems of persons in
13    obtaining credit at reasonable rates of interest and of the
14    methods and benefits of cooperative saving and lending for
15    such persons.
16        (10) To authorize, foster or establish experimental,
17    developmental, demonstration or pilot projects by public
18    or private organizations including credit unions which:
19            (a) promote more effective operation of credit
20        unions so as to provide members an opportunity to use
21        and control their own money to improve their economic
22        and social conditions; or
23            (b) are in the best interests of credit unions,
24        their members and the people of the State of Illinois.
25        (11) To cooperate in studies, training or other
26    administrative activities with, but not limited to, the

 

 

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1    NCUA, other state credit union regulatory agencies and
2    industry trade associations in order to promote more
3    effective and efficient supervision of Illinois chartered
4    credit unions.
5        (12) Notwithstanding the provisions of this Section,
6    the Secretary shall not:
7            (1) issue an order against a credit union organized
8        under this Act for unsafe or unsound banking practices
9        solely because the entity provides or has provided
10        financial services to a cannabis-related legitimate
11        business;
12            (2) prohibit, penalize, or otherwise discourage a
13        credit union from providing financial services to a
14        cannabis-related legitimate business solely because
15        the entity provides or has provided financial services
16        to a cannabis-related legitimate business;
17            (3) recommend, incentivize, or encourage a credit
18        union not to offer financial services to an account
19        holder or to downgrade or cancel the financial services
20        offered to an account holder solely because:
21                (A) the account holder is a manufacturer or
22            producer, or is the owner, operator, or employee of
23            a cannabis-related legitimate business;
24                (B) the account holder later becomes an owner
25            or operator of a cannabis-related legitimate
26            business; or

 

 

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1                (C) the credit union was not aware that the
2            account holder is the owner or operator of a
3            cannabis-related legitimate business; and
4            (4) take any adverse or corrective supervisory
5        action on a loan made to an owner or operator of:
6                (A) a cannabis-related legitimate business
7            solely because the owner or operator owns or
8            operates a cannabis-related legitimate business;
9            or
10                (B) real estate or equipment that is leased to
11            a cannabis-related legitimate business solely
12            because the owner or operator of the real estate or
13            equipment leased the equipment or real estate to a
14            cannabis-related legitimate business.
15(Source: P.A. 101-27, eff. 6-25-19.)
 
16    (205 ILCS 305/21)  (from Ch. 17, par. 4422)
17    Sec. 21. Record of board and committee members. Within 30
18days after election or appointment, the names and addresses of
19the members of the board of directors, committees and all
20officers of the credit union shall be filed with the Department
21on forms provided by the Department. The form shall also
22include the email address of record of the credit union.
23(Source: P.A. 97-133, eff. 1-1-12.)
 
24    (205 ILCS 305/61)  (from Ch. 17, par. 4462)

 

 

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1    Sec. 61. Suspension.
2    (1) If the Secretary determines that any credit union is
3bankrupt, insolvent, impaired or that it has violated this Act,
4or is operating in an unsafe or unsound manner, he shall issue
5an order temporarily suspending the credit union's operations
6for not more than 60 days. The board of directors shall be
7given notice by registered or certified mail, or by email to
8the email address of record, of such suspension, which notice
9shall include the reasons for such suspension and a list of
10specific violations of the Act. Service by certified mail shall
11be deemed completed when the notice is deposited in the United
12States mail. Service to the email address of record shall be
13deemed completed when sent. The Secretary shall also notify the
14members of the credit union board of advisors of any
15suspension. The Director may assess to the credit union a
16penalty, not to exceed the regulatory fee as set forth in this
17Act, to offset costs incurred in determining the condition of
18the credit union's books and records.
19    (2) Upon receipt of such suspension notice, the credit
20union shall cease all operations, except those authorized by
21the Secretary, or the Secretary may appoint a manager-trustee
22to operate the credit union during the suspension period. The
23board of directors shall, within 10 days of the receipt of the
24suspension notice, file with the Secretary a reply to the
25suspension notice by submitting a corrective plan of action or
26a request for formal hearing on said action pursuant to the

 

 

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1Department's rules and regulations.
2    (3) Upon receipt from the suspended credit union of
3evidence that the conditions causing the order of suspension
4have been corrected, and after determining that the proposed
5corrective plan of action submitted is factual, the Secretary
6shall revoke the suspension notice, permit the credit union to
7resume normal operations, and notify the board of credit union
8advisors of such action.
9    (4) If the Secretary determines that the proposed
10corrective plan of action will not correct such conditions, he
11may take possession and control of the credit union. The
12Secretary may permit the credit union to operate under his
13direction and control and may appoint a manager-trustee to
14manage its affairs until such time as the condition requiring
15such action has been remedied, or in the case of insolvency or
16danger of insolvency where an emergency requiring expeditious
17action exists, the Secretary may involuntarily merge the credit
18union without the vote of the suspended credit union's board of
19directors or members (hereafter involuntary merger) subject to
20rules promulgated by the Secretary. No credit union shall be
21required to serve as a surviving credit union in any
22involuntary merger. Upon the request of the Secretary, a credit
23union by a vote of a majority of its board of directors may
24elect to serve as a surviving credit union in an involuntary
25merger. If the Secretary determines that the suspended credit
26union should be liquidated, he may appoint a liquidating agent

 

 

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1and require of that person such bond and security as he
2considers proper.
3    (5) Upon receipt of a request for a formal hearing, the
4Secretary shall conduct proceedings pursuant to rules and
5regulations of the Department. The credit union may request the
6appropriate court to stay execution of such action. Involuntary
7liquidation or involuntary merger may not be ordered prior to
8the conclusion of suspension procedures outlined in this
9Section.
10    (6) If, within the suspension period, the credit union
11fails to answer the suspension notice or fails to request a
12formal hearing, or both, the Secretary may then (i)
13involuntarily merge the credit union if the credit union is
14insolvent or in danger of insolvency and an emergency requiring
15expeditious action exists or (ii) revoke the credit union's
16charter, appoint a liquidating agent and liquidate the credit
17union.
18(Source: P.A. 97-133, eff. 1-1-12.)
 
19    Section 10. The Transmitters of Money Act is amended by
20changing Sections 5, 25, 40, 80, 90, and 100 as follows:
 
21    (205 ILCS 657/5)
22    Sec. 5. Definitions. As used in this Act, unless the
23context otherwise requires, the words and phrases defined in
24this Section have the meanings set forth in this Section.

 

 

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1    "Authorized seller" means a person not an employee of a
2licensee who engages in the business regulated by this Act on
3behalf of a licensee under a contract between that person and
4the licensee.
5    "Bill payment service" means the business of transmitting
6money on behalf of an Illinois resident for the purpose of
7paying the resident's bills.
8    "Controlling person" means a person owning or holding the
9power to vote 25% or more of the outstanding voting securities
10of a licensee or the power to vote the securities of another
11controlling person of the licensee. For purposes of determining
12the percentage of a licensee controlled by a controlling
13person, the person's interest shall be combined with the
14interest of any other person controlled, directly or
15indirectly, by that person or by a spouse, parent, or child of
16that person.
17    "Department" means the Department of Financial and
18Professional Regulation Institutions.
19    "Director" means the Director of Financial Institutions.
20    "Division of Financial Institutions" means the Division of
21Financial Institutions of the Department of Financial and
22Professional Regulation.
23    "Email address of record" means the designated email
24address recorded by the Division of Financial Institutions in
25the applicant's applicant file or the licensee's license file,
26as maintained by the Division of Financial Institutions'

 

 

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1licensure unit.
2    "Licensee" means a person licensed under this Act.
3    "Location" means a place of business at which activity
4regulated by this Act occurs.
5    "Material litigation" means any litigation that, according
6to generally accepted accounting principles, is deemed
7significant to a licensee's financial health and would be
8required to be referenced in a licensee's annual audited
9financial statements, reports to shareholders, or similar
10documents.
11    "Money" means a medium of exchange that is authorized or
12adopted by a domestic or foreign government as a part of its
13currency and that is customarily used and accepted as a medium
14of exchange in the country of issuance.
15    "Money transmitter" means a person who is located in or
16doing business in this State and who directly or through
17authorized sellers does any of the following in this State:
18        (1) Sells or issues payment instruments.
19        (2) Engages in the business of receiving money for
20    transmission or transmitting money.
21        (3) Engages in the business of exchanging, for
22    compensation, money of the United States Government or a
23    foreign government to or from money of another government.
24    "Outstanding payment instrument" means, unless otherwise
25treated by or accounted for under generally accepted accounting
26principles on the books of the licensee, a payment instrument

 

 

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1issued by the licensee that has been sold in the United States
2directly by the licensee or has been sold in the United States
3by an authorized seller of the licensee and reported to the
4licensee as having been sold, but has not been paid by or for
5the licensee.
6    "Payment instrument" means a check, draft, money order,
7traveler's check, stored value card, or other instrument or
8memorandum, written order or written receipt for the
9transmission or payment of money sold or issued to one or more
10persons whether or not that instrument or order is negotiable.
11Payment instrument does not include an instrument that is
12redeemable by the issuer in merchandise or service, a credit
13card voucher, or a letter of credit. A written order for the
14transmission or payment of money that results in the issuance
15of a check, draft, money order, traveler's check, or other
16instrument or memorandum is not a payment instrument.
17    "Person" means an individual, partnership, association,
18joint stock association, corporation, or any other form of
19business organization.
20    "Stored value card" means any magnetic stripe card or other
21electronic payment instrument given in exchange for money and
22other similar consideration, including but not limited to
23checks, debit payments, money orders, drafts, credit payments,
24and traveler's checks, where the card or other electronic
25payment instrument represents a dollar value that the consumer
26can either use or give to another individual.

 

 

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1    "Transmitting money" means the transmission of money by any
2means, including transmissions to or from locations within the
3United States or to and from locations outside of the United
4States by payment instrument, facsimile or electronic
5transfer, or otherwise, and includes bill payment services.
6(Source: P.A. 92-400, eff. 1-1-02; 93-535, eff. 1-1-04.)
 
7    (205 ILCS 657/25)
8    Sec. 25. Application for license.
9    (a) An application for a license must be in writing, under
10oath, and in the form the Director prescribes. At the time of
11application, each applicant shall provide an email address of
12record. The application must contain or be accompanied by all
13of the following:
14        (1) The name of the applicant and the address of the
15    principal place of business of the applicant and the
16    address of all locations and proposed locations of the
17    applicant in this State.
18        (2) The form of business organization of the applicant,
19    including:
20            (A) a copy of its articles of incorporation and
21        amendments thereto and a copy of its bylaws, certified
22        by its secretary, if the applicant is a corporation;
23            (B) a copy of its partnership agreement, certified
24        by a partner, if the applicant is a partnership; or
25            (C) a copy of the documents that control its

 

 

HB4430- 23 -LRB101 16230 BMS 66929 b

1        organizational structure, certified by a managing
2        official, if the applicant is organized in some other
3        form.
4        (3) The name, business and home address, and a
5    chronological summary of the business experience, material
6    litigation history, and felony convictions over the
7    preceding 10 years of:
8            (A) the proprietor, if the applicant is an
9        individual;
10            (B) every partner, if the applicant is a
11        partnership;
12            (C) each officer, director, and controlling
13        person, if the applicant is a corporation; and
14            (D) each person in a position to exercise control
15        over, or direction of, the business of the applicant,
16        regardless of the form of organization of the
17        applicant.
18        (4) Financial statements, not more than one year old,
19    prepared in accordance with generally accepted accounting
20    principles and audited by a licensed public accountant or
21    certified public accountant showing the financial
22    condition of the applicant and an unaudited balance sheet
23    and statement of operation as of the most recent quarterly
24    report before the date of the application, certified by the
25    applicant or an officer or partner thereof. If the
26    applicant is a wholly owned subsidiary or is eligible to

 

 

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1    file consolidated federal income tax returns with its
2    parent, however, unaudited financial statements for the
3    preceding year along with the unaudited financial
4    statements for the most recent quarter may be submitted if
5    accompanied by the audited financial statements of the
6    parent company for the preceding year along with the
7    unaudited financial statement for the most recent quarter.
8        (5) Filings of the applicant with the Securities and
9    Exchange Commission or similar foreign governmental entity
10    (English translation), if any.
11        (6) A list of all other states in which the applicant
12    is licensed as a money transmitter and whether the license
13    of the applicant for those purposes has ever been
14    withdrawn, refused, canceled, or suspended in any other
15    state, with full details.
16        (7) A list of all money transmitter locations and
17    proposed locations in this State.
18        (8) A sample of the contract for authorized sellers.
19        (9) A sample form of the proposed payment instruments
20    to be used in this State.
21        (10) The name and business address of the clearing
22    banks through which the applicant intends to conduct any
23    business regulated under this Act.
24        (11) A surety bond as required by Section 30 of this
25    Act.
26        (12) The applicable fees as required by Section 45 of

 

 

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1    this Act.
2        (13) A written consent to service of process as
3    provided by Section 100 of this Act.
4        (14) A written statement that the applicant is in full
5    compliance with and agrees to continue to fully comply with
6    all state and federal statutes and regulations relating to
7    money laundering.
8        (15) All additional information the Director considers
9    necessary in order to determine whether or not to issue the
10    applicant a license under this Act.
11    (a-5) The proprietor, partner, officer, director, and
12controlling person of the applicant shall submit their
13fingerprints to the Department of State Police in an electronic
14format that complies with the form and manner for requesting
15and furnishing criminal history record information as
16prescribed by the Department of State Police. These
17fingerprints shall be retained and checked against the
18Department of State Police and Federal Bureau of Investigation
19criminal history record databases now and hereafter filed,
20including latent fingerprint searches. The Department of State
21Police shall charge applicants a fee for conducting the
22criminal history records check, which shall be deposited into
23the State Police Services Fund and shall not exceed the actual
24cost of the records check. The Department of State Police shall
25furnish records of Illinois convictions to the Department
26pursuant to positive identification and shall forward the

 

 

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1national criminal history record information to the
2Department. The Department may require applicants to pay a
3separate fingerprinting fee, either to the Department or to a
4Department-designated or Department-approved vendor. The
5Department, in its discretion, may allow a proprietor, partner,
6officer, director, or controlling person of an applicant who
7does not have reasonable access to a designated vendor to
8provide his or her fingerprints in an alternative manner. The
9Department, in its discretion, may also use other procedures in
10performing or obtaining criminal background checks of
11applicants. Instead of submitting his or her fingerprints, an
12individual may submit proof that is satisfactory to the
13Department that an equivalent security clearance has been
14conducted. The Department may adopt any rules necessary to
15implement this subsection.
16    (b) The Director may, for good cause shown, waive, in part,
17any of the requirements of this Section.
18(Source: P.A. 100-979, eff. 8-19-18.)
 
19    (205 ILCS 657/40)
20    Sec. 40. Renewals of license. As a condition for renewal of
21a license, a licensee must submit to the Director, and the
22Director must receive, on or before December 1 of each year, an
23application for renewal made in writing and under oath on a
24form prescribed by the Director. At the time of renewal, each
25licensee shall provide an email address of record. A licensee

 

 

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1whose application for renewal is not received by the Department
2on or before December 31 shall not have its license renewed and
3shall be required to submit to the Director an application for
4a new license in accordance with Section 25. Upon a showing of
5good cause, the Director may extend the deadline for the filing
6of an application for renewal. The application for renewal of a
7license shall contain or be accompanied by all of the
8following:
9        (1) The name of the licensee and the address of the
10    principal place of business of the licensee.
11        (2) A list of all locations where the licensee is
12    conducting business under its license and a list of all
13    authorized sellers through whom the licensee is conducting
14    business under its license, including the name and business
15    address of each authorized seller.
16        (3) Audited financial statements covering the past
17    year of operations, prepared in accordance with generally
18    accepted accounting principles, showing the financial
19    condition of the licensee. The licensee shall submit the
20    audited financial statement after the application for
21    renewal has been approved. The audited financial statement
22    must be received by the Department no later than 120 days
23    after the end of the licensee's fiscal year. If the
24    licensee is a wholly owned subsidiary or is eligible to
25    file consolidated federal income tax returns with its
26    parent, the licensee may submit unaudited financial

 

 

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1    statements if accompanied by the audited financial
2    statements of the parent company for its most recently
3    ended year.
4        (4) A statement of the dollar amount and number of
5    money transmissions and payment instruments sold, issued,
6    exchanged, or transmitted in this State by the licensee and
7    its authorized sellers for the past year.
8        (5) A statement of the dollar amount of uncompleted
9    money transmissions and payment instruments outstanding or
10    in transit, in this State, as of the most recent quarter
11    available.
12        (6) The annual license renewal fees and any penalty
13    fees as provided by Section 45 of this Act.
14        (7) Evidence sufficient to prove to the satisfaction of
15    the Director that the licensee has complied with all
16    requirements under Section 20 relating to its net worth,
17    under Section 30 relating to its surety bond or other
18    security, and under Section 50 relating to permissible
19    investments.
20        (8) A statement of a change in information provided by
21    the licensee in its application for a license or its
22    previous applications for renewal including, but not
23    limited to, new directors, officers, authorized sellers,
24    or clearing banks and material changes in the operation of
25    the licensee's business.
26(Source: P.A. 92-400, eff. 1-1-02.)
 

 

 

HB4430- 29 -LRB101 16230 BMS 66929 b

1    (205 ILCS 657/80)
2    Sec. 80. Revocation or suspension of licenses.
3    (a) The Director may suspend or revoke a license if the
4Director finds any of the following:
5        (1) The licensee has knowingly made a material
6    misstatement or suppressed or withheld information on an
7    application for a license or a document required to be
8    filed with the Director.
9        (2) A fact or condition exists that, if it had existed
10    or had been known at the time the licensee applied for its
11    license, would have been grounds for denying the
12    application.
13        (3) The licensee is insolvent.
14        (4) The licensee has knowingly violated a material
15    provision of this Act or rules adopted under this Act or an
16    order of the Director.
17        (5) The licensee refuses to permit the Director to make
18    an examination at reasonable times as authorized by this
19    Act.
20        (6) The licensee knowingly fails to make a report
21    required by this Act.
22        (7) The licensee fails to pay a judgment entered in
23    favor of a claimant, plaintiff, or creditor in an action
24    arising out of the licensee's business regulated under this
25    Act within 30 days after the judgment becomes final or

 

 

HB4430- 30 -LRB101 16230 BMS 66929 b

1    within 30 days after expiration or termination of a stay of
2    execution.
3        (8) The licensee has been convicted under the laws of
4    this State, another state, or the United States of a felony
5    or of a crime involving a breach of trust or dishonesty.
6        (9) The licensee has failed to suspend or terminate its
7    authorized seller's authority to act on its behalf when the
8    licensee knew its authorized seller was violating or had
9    violated a material provision of this Act or rules adopted
10    under this Act or an order of the Director.
11    (b) In every case in which a license is suspended or
12revoked or an application for a license or renewal of a license
13is denied, the Director shall serve notice of his action,
14including a statement of the reasons for his action, either
15personally, to the email address of record, or by certified
16mail, return receipt requested. Service by certified mail shall
17be deemed completed if the notice is deposited in the United
18States mail post office, postage paid, addressed to the last
19known address specified in the application for a license.
20Service to the email address of record shall be deemed
21completed when sent.
22    (c) In the case of denial of an application for a license
23or renewal of a license, the applicant or licensee may request
24in writing, within 30 days after the date of service, a
25hearing. In the case of a denial of an application for renewal
26of a license, the expiring license shall be deemed to continue

 

 

HB4430- 31 -LRB101 16230 BMS 66929 b

1in force until 30 days after the service of the notice of
2denial or, if a hearing is requested during that period, until
3a final order is entered pursuant to a hearing.
4    (d) The order of suspension or revocation of a license
5shall take effect upon service of the order. The holder of any
6suspended or revoked license may request in writing, within 30
7days after the date of service, a hearing. In the event a
8hearing is requested, the order shall remain temporary until a
9final order is entered pursuant to the hearing.
10    (e) The hearing shall be held at the time and place
11designated by the Director in either the City of Springfield or
12the City of Chicago. The Director and any administrative law
13judge designated by him shall have the power to administer
14oaths and affirmations, subpoena witnesses and compel their
15attendance, take evidence, authorize the taking of
16depositions, and require the production of books, papers,
17correspondence, and other records or information that he
18considers relevant or material to the inquiry.
19    (f) The Director may issue an order of suspension or
20revocation of a license that takes effect upon service of the
21order and remains in effect regardless of a request for a
22hearing when the Director finds that the public welfare will be
23endangered if the licensee is permitted to continue to operate
24the business regulated by this Act.
25    (g) The decision of the Director to deny any application
26for a license or renewal of a license or to suspend or revoke a

 

 

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1license is subject to judicial review under the Administrative
2Review Law.
3    (h) The costs for administrative hearing shall be set by
4rule.
5    (i) Appeals from all final orders and judgments entered by
6the circuit court under this Section in review of a decision of
7the Director may be taken as in other civil actions by any
8party to the proceeding.
9(Source: P.A. 88-643, eff. 1-1-95.)
 
10    (205 ILCS 657/90)
11    Sec. 90. Enforcement.
12    (a) If it appears to the Director that a person has
13committed or is about to commit a violation of this Act, a rule
14promulgated under this Act, or an order of the Director, the
15Director may apply to the circuit court for an order enjoining
16the person from violating or continuing to violate this Act,
17the rule, or order and for injunctive or other relief that the
18nature of the case may require and may, in addition, request
19the court to assess a civil penalty up to $1,000 along with
20costs and attorney fees.
21    (b) If the Director finds, after an investigation that he
22considers appropriate, that a licensee or other person is
23engaged in practices contrary to this Act or to the rules
24promulgated under this Act, the Director may issue an order
25directing the licensee or person to cease and desist the

 

 

HB4430- 33 -LRB101 16230 BMS 66929 b

1violation. The Director may, in addition to or without the
2issuance of a cease and desist order, assess an administrative
3penalty up to $1,000 against a licensee for each violation of
4this Act or the rules promulgated under this Act. The issuance
5of an order under this Section shall not be a prerequisite to
6the taking of any action by the Director under this or any
7other Section of this Act. The Director shall serve notice of
8his action, including a statement of the reasons for his
9actions, either personally, to the email address of record, or
10by certified mail, return receipt requested. Service by
11certified mail shall be deemed completed if the notice is
12deposited in the United States mail post office, postage paid,
13addressed to the last known address for a license. Service to
14the email address of record shall be deemed completed when
15sent.
16    (c) In the case of the issuance of a cease and desist order
17or assessment order, a hearing may be requested in writing
18within 30 days after the date of service. The hearing shall be
19held at the time and place designated by the Director in either
20the City of Springfield or the City of Chicago. The Director
21and any administrative law judge designated by him shall have
22the power to administer oaths and affirmations, subpoena
23witnesses and compel their attendance, take evidence,
24authorize the taking of depositions, and require the production
25of books, papers, correspondence, and other records or
26information that he considers relevant or material to the

 

 

HB4430- 34 -LRB101 16230 BMS 66929 b

1inquiry.
2    (d) After the Director's final determination under a
3hearing under this Section, a party to the proceedings whose
4interests are affected by the Director's final determination
5shall be entitled to judicial review of that final
6determination under the Administrative Review Law.
7    (e) The costs for administrative hearings shall be set by
8rule.
9    (f) Except as otherwise provided in this Act, a violation
10of this Act shall subject the party violating it to a fine of
11$1,000 for each offense.
12    (g) Each transaction in violation of this Act or the rules
13promulgated under this Act and each day that a violation
14continues shall be a separate offense.
15    (h) A person who engages in conduct requiring a license
16under this Act and fails to obtain a license from the Director
17or knowingly makes a false statement, misrepresentation, or
18false certification in an application, financial statement,
19account record, report, or other document filed or required to
20be maintained or filed under this Act or who knowingly makes a
21false entry or omits a material entry in a document is guilty
22of a Class 3 felony.
23    (i) The Director is authorized to compromise, settle, and
24collect civil penalties and administrative penalties, as set by
25rule, with any person for violations of this Act or of any rule
26or order issued or promulgated under this Act. Any person who,

 

 

HB4430- 35 -LRB101 16230 BMS 66929 b

1without the required license, engages in conduct requiring a
2license under this Act shall be liable to the Department in an
3amount equal to the greater of (i) $5,000 or (ii) an amount of
4money accepted for transmission plus an amount equal to 3 times
5the amount accepted for transmission. The Department shall
6cause any funds so recovered to be deposited in the TOMA
7Consumer Protection Fund.
8    (j) The Director may enter into consent orders at any time
9with a person to resolve a matter arising under this Act. A
10consent order must be signed by the person to whom it is issued
11and must indicate agreement to the terms contained in it. A
12consent order need not constitute an admission by a person that
13this Act or a rule or order issued or promulgated under this
14Act has been violated, nor need it constitute a finding by the
15Director that the person has violated this Act or a rule or
16order promulgated under this Act.
17    (k) Notwithstanding the issuance of a consent order, the
18Director may seek civil or criminal penalties or compromise
19civil penalties concerning matter encompassed by the consent
20order unless the consent order by its terms expressly precludes
21the Director from doing so.
22    (l) Appeals from all final orders and judgments entered by
23the circuit court under this Section in review of a decision of
24the Director may be taken as in other civil actions by any
25party to the proceeding.
26(Source: P.A. 100-201, eff. 8-18-17.)
 

 

 

HB4430- 36 -LRB101 16230 BMS 66929 b

1    (205 ILCS 657/100)
2    Sec. 100. Consent to service of process.
3    (a) A licensee, before doing business in this State, shall
4appoint the Director its true and lawful attorney-in-fact upon
5whom all lawful process in any action or legal proceeding
6against it may be served and shall agree that any lawful
7process against it that may be served upon its attorney shall
8be of the same force and validity as if served on itself. The
9consent to the service of process shall be in the form
10prescribed by the Director, shall be irrevocable, and shall
11provide that actions or proceedings arising out of or founded
12upon the conduct of the licensee's business may be commenced
13against the licensee in any court of competent jurisdiction and
14proper venue within this State by the service of process or
15other notice of the institution of proceedings on the Director.
16    (b) Service of process or other notice, accompanied by the
17fee provided in Section 45, shall be by duplicate copies, one
18of which shall be filed with the Director and the other
19forwarded by the Director within 5 business days by certified
20mail with a return receipt to the licensee against whom the
21process or other notice is directed at its latest address on
22file with the Department or to the email address of record.
23Service by certified mail shall be deemed completed when the
24notice is deposited in the United States mail. Service to the
25email address of record shall be deemed completed when sent.

 

 

HB4430- 37 -LRB101 16230 BMS 66929 b

1    (c) No judgment shall be entered against a licensee
2pursuant to service upon the Director until at least 30 days
3have elapsed after process or notice has been served on the
4Director.
5(Source: P.A. 88-643, eff. 1-1-95.)
 
6    Section 15. The Sales Finance Agency Act is amended by
7changing Sections 2, 6, 10, and 16.5 as follows:
 
8    (205 ILCS 660/2)  (from Ch. 17, par. 5202)
9    Sec. 2. Definitions. In this Act, unless the context
10otherwise requires:
11    "Sales finance agency" means a person, irrespective of his
12or her state of domicile or place of business, engaged in this
13State, in whole or in part, in the business of purchasing, or
14making loans secured by, retail installment contracts, retail
15charge agreements or the outstanding balances under such
16contracts or agreements entered into in this State.
17    "Holder" of a retail installment contract or a retail
18charge agreement means the retail seller of the goods or
19services under the contract or charge agreement, or if the
20outstanding balances thereunder are purchased by or
21transferred as security to a sales finance agency or other
22assignee, the sales finance agency or other assignee.
23    "Person" means an individual, corporation, partnership,
24limited liability company, joint venture, or any other form of

 

 

HB4430- 38 -LRB101 16230 BMS 66929 b

1business association.
2    "Department" means the Department of Financial and
3Professional Regulation Institutions.
4    "Director" means the Director of Financial Institutions.
5    "Division of Financial Institutions" means the Division of
6Financial Institutions of the Department of Financial and
7Professional Regulation.
8    "Email address of record" means the designated email
9address recorded by the Division of Financial Institutions in
10the applicant's applicant file or the licensee's license file,
11as maintained by the Division of Financial Institutions'
12licensure unit.
13    "Motor Vehicle Retail Installment Sales Act" and "Retail
14Installment Sales Act" refer to the Acts having those titles
15enacted by the 75th General Assembly.
16    "Retail installment contract" and "retail charge
17agreement" have the meanings ascribed to them in the Motor
18Vehicle Retail Installment Sales Act and the Retail Installment
19Sales Act.
20    "Special purpose vehicle" means an entity that, in
21connection with a securitization, private placement, or
22similar type of investment transaction, is administered by a
23State or national bank under a management agreement for the
24purpose of purchasing, making loans against, or in pools of,
25receivables, general intangibles, and other financial assets
26including retail installment contracts, retail charge

 

 

HB4430- 39 -LRB101 16230 BMS 66929 b

1agreements, or the outstanding balances or any portion of the
2outstanding balances under those contracts or agreements.
3    "Net Worth" means total assets minus total liabilities.
4(Source: P.A. 89-400, eff. 8-20-95; 90-437, eff. 1-1-98.)
 
5    (205 ILCS 660/6)  (from Ch. 17, par. 5206)
6    Sec. 6. A license fee of $300 for the applicant's principal
7place of business and $100 for each additional place of
8business for which a license is sought must be submitted with
9an application for license made before July 1 of any year. If
10application for a license is made on July 1 or thereafter, a
11license fee of $150 for the principal place of business and of
12$50 for each additional place of business must accompany the
13application. Each license remains in force until surrendered,
14suspended, or revoked. If the application for license is
15denied, the original license fee shall be retained by the State
16in reimbursement of its costs of investigating that
17application.
18    Before the license is granted, the applicant shall prove in
19form satisfactory to the Director, that the applicant has a
20positive net worth of a minimum of $30,000. At the time of
21application, each applicant shall provide an email address of
22record.
23    A licensee must pay to the Department, and the Department
24must receive, by December 1 of each year, the renewal license
25application on forms prescribed by the Director and $300 for

 

 

HB4430- 40 -LRB101 16230 BMS 66929 b

1the license for his principal place of business and $100 for
2each additional license held as a renewal license fee for the
3succeeding calendar year.
4(Source: P.A. 92-398, eff. 1-1-02.)
 
5    (205 ILCS 660/10)  (from Ch. 17, par. 5223)
6    Sec. 10. Denial, revocation, fine, or suspension of
7license.
8    (a) The Director may revoke or suspend a license or fine a
9licensee if the licensee violates any provisions of this Act.
10    (b) In every case in which a license is revoked or
11suspended, a licensee is fined, or an application for a license
12or renewal of a license is denied, the Director shall serve
13notice of his or her action, including a statement of the
14reasons for the action either personally, to the email address
15of record, or by certified mail, return receipt requested.
16Service by certified mail shall be deemed completed when the
17notice is deposited in the United States U.S. mail. Service to
18the email address of record shall be deemed completed when
19sent.
20    (c) An order revoking or suspending a license or an order
21denying renewal of a license shall take effect upon service of
22the order, unless the licensee requests, in writing, within 10
23days after the date of service, a hearing. In the event a
24hearing is requested, the order shall be stayed until a final
25administrative order is entered.

 

 

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1    (d) If the licensee requests a hearing, the Director shall
2schedule a hearing within 30 days after the request for a
3hearing unless otherwise agreed to by the parties.
4    (e) The hearing shall be held at the time and place
5designated by the Director. The Director and any administrative
6law judge designated by him or her shall have the power to
7administer oaths and affirmations, subpoena witnesses and
8compel their attendance, take evidence, and require the
9production of books, papers, correspondence, and other records
10or information that he or she considers relevant or material to
11the inquiry.
12    (f) The costs for the administrative hearing shall be set
13by rule.
14    (g) The Director shall have the authority to prescribe
15rules for the administration of this Section.
16(Source: P.A. 92-398, eff. 1-1-02.)
 
17    (205 ILCS 660/16.5)
18    Sec. 16.5. Cease and desist orders.
19    (a) The Director may issue a cease and desist order to a
20sales finance agency or other person doing business without the
21required license when, in the opinion of the director, the
22licensee or other person is violating or is about to violate
23any provision of this Act or any law, rule, or requirement
24imposed in writing by the Department.
25    (b) The Director may issue a cease and desist order prior

 

 

HB4430- 42 -LRB101 16230 BMS 66929 b

1to a hearing.
2    (c) The Director shall serve notice of his or her action,
3designated as a cease and desist order made pursuant to this
4Section, including a statement of the reasons for the action,
5either personally, to the email address of record, or by
6certified mail, return receipt requested. Service by certified
7mail shall be deemed completed when the notice is deposited in
8the United States U.S. mail. Service to the email address of
9record shall be deemed completed when sent.
10    (d) Within 15 days of service of the cease and desist
11order, the sales finance agency or other person may request, in
12writing, a hearing.
13    (e) The Director shall schedule a hearing within 30 days
14after the request for a hearing unless otherwise agreed to by
15the parties.
16    (f) The Director shall have the authority to prescribe
17rules for the administration of this Section.
18    (g) If it is determined that the Director had the authority
19to issue the cease and desist order, he or she may issue such
20orders as may be reasonably necessary to correct, eliminate, or
21remedy such conduct.
22    (h) The powers vested in the Director by this Section are
23additional to any and all other powers and remedies vested in
24the Director by law, and nothing in this Section shall be
25construed as requiring that the Director shall employ the
26powers conferred in this Section instead of or as a condition

 

 

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1precedent to the exercise of any other power or remedy vested
2in the Director.
3    (i) The cost for the administrative hearing shall be set by
4rule.
5(Source: P.A. 90-437, eff. 1-1-98.)
 
6    Section 20. The Debt Management Service Act is amended by
7changing Sections 2, 4, 10, and 20 as follows:
 
8    (205 ILCS 665/2)  (from Ch. 17, par. 5302)
9    Sec. 2. Definitions. As used in this Act:
10    "Credit counselor" means an individual, corporation, or
11other entity that is not a debt management service that
12provides (1) guidance, educational programs, or advice for the
13purpose of addressing budgeting, personal finance, financial
14literacy, saving and spending practices, or the sound use of
15consumer credit; or (2) assistance or offers to assist
16individuals and families with financial problems by providing
17counseling; or (3) a combination of the activities described in
18items (1) and (2) of this definition.
19    "Debt management service" means the planning and
20management of the financial affairs of a debtor for a fee and
21the receiving of money from the debtor for the purpose of
22distributing it to the debtor's creditors in payment or partial
23payment of the debtor's obligations or soliciting financial
24contributions from creditors. The business of debt management

 

 

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1is conducted in this State if the debt management business, its
2employees, or its agents are located in this State or if the
3debt management business solicits or contracts with debtors
4located in this State. "Debt management service" does not
5include "debt settlement service" as defined in the Debt
6Settlement Consumer Protection Act.
7    This term shall not include the following when engaged in
8the regular course of their respective businesses and
9professions:
10        (a) Attorneys at law licensed, or otherwise authorized
11    to practice, in Illinois who are engaged in the practice of
12    law.
13        (b) Banks, operating subsidiaries of banks, affiliates
14    of banks, fiduciaries, credit unions, savings and loan
15    associations, and savings banks as duly authorized and
16    admitted to transact business in the State of Illinois and
17    performing credit and financial adjusting service in the
18    regular course of their principal business.
19        (c) Title insurers, title agents, independent
20    escrowees, and abstract companies, while doing an escrow
21    business.
22        (d) Judicial officers or others acting pursuant to
23    court order.
24        (e) Employers for their employees, except that no
25    employer shall retain the services of an outside debt
26    management service to perform this service unless the debt

 

 

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1    management service is licensed pursuant to this Act.
2        (f) Bill payment services, as defined in the
3    Transmitters of Money Act.
4        (g) Credit counselors, only when providing services
5    described in the definition of credit counselor in this
6    Section.
7    "Debtor" means the person or persons for whom the debt
8management service is performed.
9    "Department" means the Department of Financial and
10Professional Regulation.
11    "Director" means the Director of Financial Institutions.
12    "Division of Financial Institutions" means the Division of
13Financial Institutions of the Department of Financial and
14Professional Regulation.
15    "Email address of record" means the designated email
16address recorded by the Division of Financial Institutions in
17the applicant's applicant file or the licensee's license file,
18as maintained by the Division of Financial Institutions'
19licensure unit.
20    "Person" means an individual, firm, partnership,
21association, limited liability company, corporation, or
22not-for-profit corporation.
23    "Licensee" means a person licensed under this Act.
24    "Secretary" means the Secretary of Financial and
25Professional Regulation or a person authorized by the Secretary
26to act in the Secretary's stead.

 

 

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1(Source: P.A. 100-201, eff. 8-18-17.)
 
2    (205 ILCS 665/4)  (from Ch. 17, par. 5304)
3    Sec. 4. Application for license. Application for a license
4to engage in the debt management service business in this State
5shall be made to the Secretary and shall be in writing, under
6oath, and in the form prescribed by the Secretary. Each
7applicant shall provide an email address of record.
8    Each applicant, at the time of making such application,
9shall pay to the Secretary the sum of $30.00 as a fee for
10investigation of the applicant, and the additional sum of
11$100.00 as a license fee.
12    Every applicant shall submit to the Secretary, at the time
13of the application for a license, a bond to be approved by the
14Secretary in which the applicant shall be the obligor, in the
15sum of $25,000 or such additional amount as required by the
16Secretary based on the amount of disbursements made by the
17licensee in the previous year, and in which an insurance
18company, which is duly authorized by the State of Illinois, to
19transact the business of fidelity and surety insurance shall be
20a surety.
21    The bond shall run to the Secretary for the use of the
22Department or of any person or persons who may have a cause of
23action against the obligor in said bond arising out of any
24violation of this Act or rules by a license. Such bond shall be
25conditioned that the obligor will faithfully conform to and

 

 

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1abide by the provisions of this Act and of all rules,
2regulations and directions lawfully made by the Secretary and
3will pay to the Secretary or to any person or persons any and
4all money that may become due or owing to the State or to such
5person or persons, from said obligor under and by virtue of the
6provisions of this Act.
7(Source: P.A. 96-1420, eff. 8-3-10.)
 
8    (205 ILCS 665/10)  (from Ch. 17, par. 5310)
9    Sec. 10. Revocation, suspension, or refusal to renew
10license.
11    (a) The Secretary may revoke or suspend or refuse to renew
12any license if he finds that:
13        (1) any licensee has failed to pay the annual license
14    fee, or to maintain in effect the bond required under the
15    provisions of this Act;
16        (2) the licensee has violated any provisions of this
17    Act or any rule, lawfully made by the Secretary within the
18    authority of this Act;
19        (3) any fact or condition exists which, if it had
20    existed at the time of the original application for a
21    license, would have warranted the Secretary in refusing its
22    issuance; or
23        (4) any applicant has made any false statement or
24    representation to the Secretary in applying for a license
25    hereunder.

 

 

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1    (b) In every case in which a license is suspended or
2revoked or an application for a license or renewal of a license
3is denied, the Secretary shall serve notice of his action,
4including a statement of the reasons for his actions, either
5personally, to the email address of record, or by certified
6mail, return receipt requested. Service by mail shall be deemed
7completed if the notice is deposited in the United States mail
8U.S. Mail. Service to the email address of record shall be
9deemed completed when sent.
10    (c) In the case of a denial of an application or renewal of
11a license, the applicant or licensee may request in writing,
12within 30 days after the date of service, a hearing. In the
13case of a denial of a renewal of a license, the license shall
14be deemed to continue in force until 30 days after the service
15of the notice of denial, or if a hearing is requested during
16that period, until a final administrative order is entered.
17    (d) An order of revocation or suspension of a license shall
18take effect upon service of the order unless the licensee
19requests, in writing, within 10 days after the date of service,
20a hearing. In the event a hearing is requested, the order shall
21be stayed until a final administrative order is entered.
22    (e) If the licensee requests a hearing, the Secretary shall
23schedule either a status date or a hearing within 30 days after
24the request for a hearing unless otherwise agreed to by the
25parties.
26    (f) The hearing shall be held at the time and place

 

 

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1designated by the Secretary. The Secretary and any
2administrative law judge designated by him have the power to
3administer oaths and affirmations, subpoena witnesses and
4compel their attendance, take evidence, and require the
5production of books, papers, correspondence, and other records
6or information that he considers relevant or material to the
7injury.
8    (g) The costs for the administrative hearing shall be set
9by rule and shall be borne by the respondent.
10(Source: P.A. 96-1420, eff. 8-3-10.)
 
11    (205 ILCS 665/20)  (from Ch. 17, par. 5323)
12    Sec. 20. Cease and desist orders.
13    (a) The Secretary may issue a cease and desist order to any
14licensee, or other person doing business without the required
15license, when in the opinion of the Secretary, the licensee, or
16other person, is violating or is about to violate any provision
17of the Act or any rule or condition imposed in writing by the
18Department.
19    (b) The Secretary may issue a cease and desist order prior
20to a hearing.
21    (c) The Secretary shall serve notice of his action,
22including a statement of the reasons for his action either
23personally, to the email address of record, or by certified
24mail, return receipt requested. Service by mail shall be deemed
25completed if the notice is deposited in the U.S. Mail. Service

 

 

HB4430- 50 -LRB101 16230 BMS 66929 b

1to the email address of record shall be deemed completed when
2sent.
3    (d) Within 10 days after service of the cease and desist
4order, the licensee or other person may request, in writing, a
5hearing.
6    (e) The Secretary shall schedule either a status date or a
7hearing within 30 days after the request for a hearing unless
8otherwise agreed to by the parties.
9    (g) If it is determined that the Secretary had the
10authority to issue the cease and desist order, he may issue
11such orders as may be reasonably necessary to correct,
12eliminate, or remedy such conduct.
13    (h) The powers vested in the Secretary by this Section are
14additional to any and all other powers and remedies vested in
15the Secretary by law, and nothing in this Section shall be
16construed as requiring that the Secretary shall employ the
17power conferred in this Section instead of or as a condition
18precedent to the exercise of any other power or remedy vested
19in the Secretary.
20    (i) The cost for the administrative hearing shall be set by
21rule and shall be borne by the respondent.
22(Source: P.A. 96-1420, eff. 8-3-10.)
 
23    Section 25. The Consumer Installment Loan Act is amended by
24changing Sections 2, 3, 8, 9, and 20.5 and by adding Section
250.5 as follows:
 

 

 

HB4430- 51 -LRB101 16230 BMS 66929 b

1    (205 ILCS 670/0.5 new)
2    Sec. 0.5. Definitions. As used in this Act:
3    "Department" means the Department of Financial and
4Professional Regulation.
5    "Director" means the Director of the Division of Financial
6Institutions.
7    "Division of Financial Institutions" means the Division of
8Financial Institutions of the Department of Financial and
9Professional Regulation.
10    "Email address of record" means the designated email
11address recorded by the Division of Financial Institutions in
12the applicant's applicant file or the licensee's license file,
13as maintained by the Division of Financial Institutions'
14licensure unit.
15    "Secretary" means the Secretary of Financial and
16Professional Regulation or a person authorized by the Secretary
17to act in the Secretary's stead.
 
18    (205 ILCS 670/2)  (from Ch. 17, par. 5402)
19    Sec. 2. Application; fees; positive net worth. Application
20for such license shall be in writing, and in the form
21prescribed by the Director. Such applicant at the time of
22making such application shall pay to the Director the sum of
23$300 as an application fee and the additional sum of $450 as an
24annual license fee, for a period terminating on the last day of

 

 

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1the current calendar year; provided that if the application is
2filed after June 30th in any year, such license fee shall be
31/2 of the annual license fee for such year. At the time of
4application, each applicant shall provide an email address of
5record.
6    Before the license is granted, every applicant shall prove
7in form satisfactory to the Director that the applicant has and
8will maintain a positive net worth of a minimum of $30,000.
9Every applicant and licensee shall maintain a surety bond in
10the principal sum of $25,000 issued by a bonding company
11authorized to do business in this State and which shall be
12approved by the Director. Such bond shall run to the Director
13and shall be for the benefit of any consumer who incurs damages
14as a result of any violation of the Act or rules by a licensee.
15If the Director finds at any time that a bond is of
16insufficient size, is insecure, exhausted, or otherwise
17doubtful, an additional bond in such amount as determined by
18the Director shall be filed by the licensee within 30 days
19after written demand therefor by the Director. "Net worth"
20means total assets minus total liabilities.
21(Source: P.A. 92-398, eff. 1-1-02; 93-32, eff. 7-1-03.)
 
22    (205 ILCS 670/3)  (from Ch. 17, par. 5403)
23    Sec. 3. Appointment of attorney-in-fact for service of
24process. Every licensee shall appoint, in writing, the Director
25of Financial Institutions (hereinafter called Director) and

 

 

HB4430- 53 -LRB101 16230 BMS 66929 b

1his successors in office or any official who shall hereafter be
2charged with the administration of this Act, as
3attorney-in-fact upon whom all lawful process against such
4licensee may be served with the same legal force and validity
5as if served on such licensee. A copy of such written
6appointment, duly certified, shall be filed in the office of
7the Director; and a copy thereof certified by him shall be
8sufficient evidence. This appointment shall remain in effect
9while any liability remains outstanding in this State against
10the licensee. When summons is served upon the Director as
11attorney-in-fact for such licensee, the Director shall
12immediately notify the licensee by certified registered mail,
13return receipt requested, or by email to the email address of
14record, enclosing the summons and specifying the hour and day
15of service. Service by certified mail shall be deemed completed
16when the notice is deposited in the United States mail. Service
17to the email address of record shall be deemed completed when
18sent.
19(Source: Laws 1963, p. 3526.)
 
20    (205 ILCS 670/8)  (from Ch. 17, par. 5408)
21    Sec. 8. Annual license fee; expenses fee - Expenses. Before
22the 1st day of each December, a licensee must pay to the
23Director, and the Department must receive, the annual license
24fee required by Section 2 for the next succeeding calendar
25year. The license shall expire on the first of January unless

 

 

HB4430- 54 -LRB101 16230 BMS 66929 b

1the license fee has been paid prior thereto. At the time of
2renewal, each licensee shall provide an email address of
3record.
4    In addition to such license fee, the reasonable expense of
5any examination, investigation or custody by the Director under
6any provisions of this Act shall be borne by the licensee.
7    If a licensee fails to renew his or her license by the 31st
8day of December, it shall automatically expire and the licensee
9is not entitled to a hearing; however, the Director, in his or
10her discretion, may reinstate an expired license upon payment
11of the annual renewal fee and proof of good cause for failure
12to renew.
13(Source: P.A. 100-958, eff. 8-19-18.)
 
14    (205 ILCS 670/9)  (from Ch. 17, par. 5409)
15    Sec. 9. Fines; suspension or revocation , Suspension or
16Revocation of license.
17    (a) The Director may, after 10 days notice by certified
18registered mail to the licensee at the address set forth in the
19license, or by email to the email address of record, stating
20the contemplated action and in general the grounds therefor,
21fine such licensee an amount not exceeding $10,000 per
22violation, or revoke or suspend any license issued hereunder if
23he or she finds that:
24        (1) The licensee has failed to comply with any
25    provision of this Act or any order, decision, finding,

 

 

HB4430- 55 -LRB101 16230 BMS 66929 b

1    rule, regulation or direction of the Director lawfully made
2    pursuant to the authority of this Act; or
3        (2) Any fact or condition exists which, if it had
4    existed at the time of the original application for the
5    license, clearly would have warranted the Director in
6    refusing to issue the license.
7    Service by certified mail shall be deemed completed when
8the notice is deposited in the United States mail. Service to
9the email address of record shall be deemed completed when
10sent.
11    (b) The Director may fine, suspend, or revoke only the
12particular license with respect to which grounds for the fine,
13revocation or suspension occur or exist, but if the Director
14shall find that grounds for revocation are of general
15application to all offices or to more than one office of the
16licensee, the Director shall fine, suspend, or revoke every
17license to which such grounds apply.
18    (c) (Blank).
19    (d) No revocation, suspension, or surrender of any license
20shall impair or affect the obligation of any pre-existing
21lawful contract between the licensee and any obligor.
22    (e) The Director may issue a new license to a licensee
23whose license has been revoked when facts or conditions which
24clearly would have warranted the Director in refusing
25originally to issue the license no longer exist.
26    (f) (Blank).

 

 

HB4430- 56 -LRB101 16230 BMS 66929 b

1    (g) In every case in which a license is suspended or
2revoked or an application for a license or renewal of a license
3is denied, the Director shall serve the licensee with notice of
4his or her action, including a statement of the reasons for his
5or her actions, either personally, to the email address of
6record, or by certified mail, return receipt requested. Service
7by certified mail shall be deemed completed when the notice is
8deposited in the United States mail U.S. Mail. Service to the
9email address of record shall be deemed completed when sent.
10    (h) An order assessing a fine, an order revoking or
11suspending a license or, an order denying renewal of a license
12shall take effect upon service of the order unless the licensee
13requests, in writing, within 10 days after the date of service,
14a hearing. In the event a hearing is requested, the order shall
15be stayed until a final administrative order is entered.
16    (i) If the licensee requests a hearing, the Director shall
17schedule a hearing within 30 days after the request for a
18hearing unless otherwise agreed to by the parties.
19    (j) The hearing shall be held at the time and place
20designated by the Director. The Director and any administrative
21law judge designated by him or her shall have the power to
22administer oaths and affirmations, subpoena witnesses and
23compel their attendance, take evidence, and require the
24production of books, papers, correspondence, and other records
25or information that he or she considers relevant or material to
26the inquiry.

 

 

HB4430- 57 -LRB101 16230 BMS 66929 b

1    (k) The costs for the administrative hearing shall be set
2by rule.
3    (l) The Director shall have the authority to prescribe
4rules for the administration of this Section.
5    (m) The Department shall establish by rule and publish a
6schedule of fines that are reasonably tailored to ensure
7compliance with the provisions of this Act and which include
8remedial measures intended to improve licensee compliance.
9Such rules shall set forth the standards and procedures to be
10used in imposing any such fines and remedies.
11(Source: P.A. 98-209, eff. 1-1-14.)
 
12    (205 ILCS 670/20.5)
13    Sec. 20.5. Cease and desist.
14    (a) The Director may issue a cease and desist order to any
15licensee, or other person doing business without the required
16license, when in the opinion of the Director, the licensee, or
17other person, is violating or is about to violate any provision
18of this Act or any rule or requirement imposed in writing by
19the Department as a condition of granting any authorization
20permitted by this Act.
21    (b) The Director may issue a cease and desist order prior
22to a hearing.
23    (c) The Director shall serve notice of his or her action,
24designated as a cease and desist order made pursuant to this
25Section, including a statement of the reasons for the action,

 

 

HB4430- 58 -LRB101 16230 BMS 66929 b

1either personally, to the email address of record, or by
2certified mail, return receipt requested. Service by certified
3mail shall be deemed completed when the notice is deposited in
4the United States U.S. mail. Service to the email address of
5record shall be deemed completed when sent.
6    (d) Within 15 days of service of the cease and desist
7order, the licensee or other person may request, in writing, a
8hearing.
9    (e) The Director shall schedule a hearing within 30 days
10after the request for a hearing unless otherwise agreed to by
11the parties.
12    (f) The Director shall have the authority to prescribe
13rules for the administration of this Section.
14    (g) If it is determined that the Director had the authority
15to issue the cease and desist order, he or she may issue such
16orders as may be reasonably necessary to correct, eliminate, or
17remedy such conduct.
18    (h) The powers vested in the Director by this Section are
19additional to any and all other powers and remedies vested in
20the Director by law, and nothing in this Section shall be
21construed as requiring that the Director shall employ the power
22conferred in this Section instead of or as a condition
23precedent to the exercise of any other power or remedy vested
24in the Director.
25    (i) The cost for the administrative hearing shall be set by
26rule.

 

 

HB4430- 59 -LRB101 16230 BMS 66929 b

1(Source: P.A. 90-437, eff. 1-1-98.)
 
2    Section 30. The Debt Settlement Consumer Protection Act is
3amended by changing Sections 10, 20, 50, 80, and 95 as follows:
 
4    (225 ILCS 429/10)
5    Sec. 10. Definitions. As used in this Act:
6    "Consumer" means any person who purchases or contracts for
7the purchase of debt settlement services.
8    "Consumer settlement account" means any account or other
9means or device in which payments, deposits, or other transfers
10from a consumer are arranged, held, or transferred by or to a
11debt settlement provider for the accumulation of the consumer's
12funds in anticipation of proffering an adjustment or settlement
13of a debt or obligation of the consumer to a creditor on behalf
14of the consumer.
15    "Debt settlement provider" means any person or entity
16engaging in, or holding itself out as engaging in, the business
17of providing debt settlement service in exchange for any fee or
18compensation, or any person who solicits for or acts on behalf
19of any person or entity engaging in, or holding itself out as
20engaging in, the business of providing debt settlement service
21in exchange for any fee or compensation. "Debt settlement
22provider" does not include:
23        (1) attorneys licensed, or otherwise authorized, to
24    practice in Illinois who are engaged in the practice of

 

 

HB4430- 60 -LRB101 16230 BMS 66929 b

1    law;
2        (2) escrow agents, accountants, broker dealers in
3    securities, or investment advisors in securities, when
4    acting in the ordinary practice of their professions and
5    through the entity used in the ordinary practice of their
6    profession;
7        (3) any bank, agent of a bank, operating subsidiary of
8    a bank, affiliate of a bank, trust company, savings and
9    loan association, savings bank, credit union, crop credit
10    association, development credit corporation, industrial
11    development corporation, title insurance company, title
12    insurance agent, independent escrowee or insurance company
13    operating or organized under the laws of a state or the
14    United States, or any other person authorized to make loans
15    under State law while acting in the ordinary practice of
16    that business;
17        (4) any person who performs credit services for his or
18    her employer while receiving a regular salary or wage when
19    the employer is not engaged in the business of offering or
20    providing debt settlement service;
21        (5) a collection agency licensed pursuant to the
22    Collection Agency Act that is collecting a debt on its own
23    behalf or on behalf of a third party;
24        (6) an organization that is described in Section
25    501(c)(3) and subject to Section 501(q) of Title 26 of the
26    United States Code and exempt from tax under Section 501(a)

 

 

HB4430- 61 -LRB101 16230 BMS 66929 b

1    of Title 26 of the United States Code and governed by the
2    Debt Management Service Act;
3        (7) public officers while acting in their official
4    capacities and persons acting under court order;
5        (8) any person while performing services incidental to
6    the dissolution, winding up, or liquidating of a
7    partnership, corporation, or other business enterprise; or
8        (9) persons licensed under the Real Estate License Act
9    of 2000 when acting in the ordinary practice of their
10    profession and not holding themselves out as debt
11    settlement providers.
12    "Debt settlement service" means:
13        (1) offering to provide advice or service, or acting as
14    an intermediary between or on behalf of a consumer and one
15    or more of a consumer's creditors, where the primary
16    purpose of the advice, service, or action is to obtain a
17    settlement, adjustment, or satisfaction of the consumer's
18    unsecured debt to a creditor in an amount less than the
19    full amount of the principal amount of the debt or in an
20    amount less than the current outstanding balance of the
21    debt; or
22        (2) offering to provide services related to or
23    providing services advising, encouraging, assisting, or
24    counseling a consumer to accumulate funds for the primary
25    purpose of proposing or obtaining or seeking to obtain a
26    settlement, adjustment, or satisfaction of the consumer's

 

 

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1    unsecured debt to a creditor in an amount less than the
2    full amount of the principal amount of the debt or in an
3    amount less than the current outstanding balance of the
4    debt.
5    "Debt settlement service" does not include (A) the services
6of attorneys licensed, or otherwise authorized, to practice in
7Illinois who are engaged in the practice of law or (B) debt
8management service as defined in the Debt Management Service
9Act.
10    "Department" means the Department of Financial and
11Professional Regulation.
12    "Director" means the Director of the Division of Financial
13Institutions.
14    "Division of Financial Institutions" means the Division of
15Financial Institutions of the Department of Financial and
16Professional Regulation.
17    "Email address of record" means the designated email
18address recorded by the Division of Financial Institutions in
19the applicant's applicant file or the licensee's license file,
20as maintained by the Division of Financial Institutions'
21licensure unit.
22    "Enrollment or set up fee" means any fee, obligation, or
23compensation paid or to be paid by the consumer to a debt
24settlement provider in consideration of or in connection with
25establishing a contract or other agreement with a consumer
26related to the provision of debt settlement service.

 

 

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1    "Maintenance fee" means any fee, obligation, or
2compensation paid or to be paid by the consumer on a periodic
3basis to a debt settlement provider in consideration of
4maintaining the relationship and services to be provided by a
5debt settlement provider in accordance with a contract with a
6consumer related to the provision of debt settlement service.
7    "Principal amount of the debt" means the total amount or
8outstanding balance owed by a consumer to one or more creditors
9for a debt that is included in a contract for debt settlement
10service at the time when the consumer enters into a contract
11for debt settlement service.
12    "Savings" means the difference between the principal
13amount of the debt and the amount paid by the debt settlement
14provider to the creditor or negotiated by the debt settlement
15provider and paid by the consumer to the creditor pursuant to a
16settlement negotiated by the debt settlement provider on behalf
17of the consumer as full and complete satisfaction of the
18creditor's claim with regard to that debt.
19    "Secretary" means the Secretary of Financial and
20Professional Regulation or a person authorized by the Secretary
21to act in the Secretary's stead.
22    "Settlement fee" means any fee, obligation, or
23compensation paid or to be paid by the consumer to a debt
24settlement provider in consideration of or in connection with a
25completed agreement or other arrangement on the part of a
26creditor to accept less than the principal amount of the debt

 

 

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1as satisfaction of the creditor's claim against the consumer.
2(Source: P.A. 96-1420, eff. 8-3-10.)
 
3    (225 ILCS 429/20)
4    Sec. 20. Application for license. An application for a
5license to operate as a debt settlement provider in this State
6shall be made to the Secretary and shall be in writing, under
7oath, and in the form prescribed by the Secretary. Each
8applicant shall provide an email address of record.
9    Each applicant, at the time of making such application,
10shall pay to the Secretary the required fee as set by rule.
11    Every applicant shall submit to the Secretary, at the time
12of the application for a license, a bond to be approved by the
13Secretary in which the applicant shall be the obligor, in the
14sum of $100,000 or an additional amount as required by the
15Secretary, and in which an insurance company, which is duly
16authorized by the State of Illinois to transact the business of
17fidelity and surety insurance, shall be a surety.
18    The bond shall run to the Secretary for the use of the
19Department or of any person or persons who may have a cause of
20action against the obligor in said bond arising out of any
21violation of this Act or rules by a debt settlement provider.
22Such bond shall be conditioned that the obligor must faithfully
23conform to and abide by the provisions of this Act and of all
24rules, regulations, and directions lawfully made by the
25Secretary and pay to the Secretary or to any person or persons

 

 

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1any and all money that may become due or owing to the State or
2to such person or persons, from the obligor under and by virtue
3of the provisions of this Act.
4(Source: P.A. 96-1420, eff. 8-3-10.)
 
5    (225 ILCS 429/50)
6    Sec. 50. Revocation or suspension of license.
7    (a) The Secretary may revoke or suspend any license if he
8or she finds that:
9        (1) any debt settlement provider has failed to pay the
10    annual license fee or to maintain in effect the bond
11    required under the provisions of this Act;
12        (2) the debt settlement provider has violated any
13    provisions of this Act or any rule lawfully made by the
14    Secretary under the authority of this Act;
15        (3) any fact or condition exists that, if it had
16    existed at the time of the original application for a
17    license, would have warranted the Secretary in refusing its
18    issuance; or
19        (4) any applicant has made any false statement or
20    representation to the Secretary in applying for a license
21    under this Act.
22    (b) In every case in which a license is suspended or
23revoked or an application for a license or renewal of a license
24is denied, the Secretary shall serve notice of his or her
25action, including a statement of the reasons for his or her

 

 

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1actions, either personally, to the email address of record, or
2by certified mail, return receipt requested. Service by mail
3shall be deemed completed if the notice is deposited in the
4United States mail U.S. Mail. Service to the email address of
5record shall be deemed completed when sent.
6    (c) In the case of a denial of an application or renewal of
7a license, the applicant or debt settlement provider may
8request, in writing, a hearing within 30 days after the date of
9service. In the case of a denial of a renewal of a license, the
10license shall be deemed to continue in force until 30 days
11after the service of the notice of denial, or if a hearing is
12requested during that period, until a final administrative
13order is entered.
14    (d) An order of revocation or suspension of a license shall
15take effect upon service of the order unless the debt
16settlement provider requests, in writing, a hearing within 10
17days after the date of service. In the event a hearing is
18requested, the order shall be stayed until a final
19administrative order is entered.
20    (e) If the debt settlement provider requests a hearing,
21then the Secretary shall schedule the hearing within 30 days
22after the request for a hearing unless otherwise agreed to by
23the parties.
24    (f) The hearing shall be held at the time and place
25designated by the Secretary. The Secretary and any
26administrative law judge designated by the Secretary have the

 

 

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1power to administer oaths and affirmations, subpoena witnesses
2and compel their attendance, take evidence, and require the
3production of books, papers, correspondence, and other records
4or information that the Secretary considers relevant or
5material to the injury.
6    (g) The costs for the administrative hearing shall be set
7by rule.
8(Source: P.A. 96-1420, eff. 8-3-10.)
 
9    (225 ILCS 429/80)
10    Sec. 80. Penalties.
11    (a) Any person who operates as a debt settlement provider
12without a license shall be guilty of a Class 4 felony.
13    (b) Any contract of debt settlement service as defined in
14this Act made by an unlicensed person shall be null and void
15and of no legal effect.
16    (c) The Secretary may, after 10 days notice by certified
17registered mail to the debt settlement service provider at the
18address on the license or unlicensed entity engaging in the
19debt settlement service business, or by email to the email
20address of record, stating the contemplated action and in
21general the grounds therefore, fine such debt settlement
22service provider or unlicensed entity an amount not exceeding
23$10,000 per violation, and revoke or suspend any license issued
24hereunder if he or she finds that:
25        (1) The debt settlement service provider has failed to

 

 

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1    comply with any provision of this Act or any order,
2    decision, finding, rule, regulation or direction of the
3    Secretary lawfully made pursuant to the authority of this
4    Act; or
5        (2) Any fact or condition exists which, if it had
6    existed at the time of the original application for the
7    license, clearly would have warranted the Secretary in
8    refusing to issue the license.
9    Service by certified mail shall be deemed completed when
10the notice is deposited in the United States mail. Service to
11the email address of record shall be deemed completed when
12sent.
13(Source: P.A. 96-1420, eff. 8-3-10.)
 
14    (225 ILCS 429/95)
15    Sec. 95. Cease and desist orders.
16    (a) The Secretary may issue a cease and desist order to any
17debt settlement provider or other person doing business without
18the required license when, in the opinion of the Secretary, the
19debt settlement provider or other person is violating or is
20about to violate any provision of the Act or any rule or
21condition imposed in writing by the Department.
22    (b) The Secretary may issue a cease and desist order prior
23to a hearing.
24    (c) The Secretary shall serve notice of his or her action,
25including a statement of the reasons for his or her action

 

 

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1either personally, to the email address of record, or by
2certified mail, return receipt requested. Service by mail shall
3be deemed completed if the notice is deposited in the United
4States mail U.S. Mail. Service to the email address of record
5shall be deemed completed when sent.
6    (d) Within 10 days after service of the cease and desist
7order, the licensee or other person may request, in writing, a
8hearing.
9    (e) The Secretary shall schedule a hearing within 30 days
10after the request for a hearing unless otherwise agreed to by
11the parties.
12    (f) If it is determined that the Secretary had the
13authority to issue the cease and desist order, then he or she
14may issue such orders as may be reasonably necessary to
15correct, eliminate, or remedy that conduct.
16    (g) The powers vested in the Secretary by this Section are
17additional to any and all other powers and remedies vested in
18the Secretary by law, and nothing in this Section shall be
19construed as requiring that the Secretary shall employ the
20power conferred in this Section instead of or as a condition
21precedent to the exercise of any other power or remedy vested
22in the Secretary.
23    (h) The cost for the administrative hearing shall be set by
24rule.
25(Source: P.A. 96-1420, eff. 8-3-10.)
 

 

 

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1    Section 35. The Payday Loan Reform Act is amended by
2changing Sections 1-10, 3-5, and 4-10 as follows:
 
3    (815 ILCS 122/1-10)
4    Sec. 1-10. Definitions. As used in this Act:
5    "Check" means a "negotiable instrument", as defined in
6Article 3 of the Uniform Commercial Code, that is drawn on a
7financial institution.
8    "Commercially reasonable method of verification" or
9"certified database" means a consumer reporting service
10database certified by the Department as effective in verifying
11that a proposed loan agreement is permissible under this Act,
12or, in the absence of the Department's certification, any
13reasonably reliable written verification by the consumer
14concerning (i) whether the consumer has any outstanding payday
15loans, (ii) the principal amount of those outstanding payday
16loans, and (iii) whether any payday loans have been paid in
17full by the consumer in the preceding 7 days.
18    "Consumer" means any natural person who, singly or jointly
19with another consumer, enters into a loan.
20    "Consumer reporting service" means an entity that provides
21a database certified by the Department.
22    "Department" means the Department of Financial and
23Professional Regulation.
24    "Director" means the Director of the Division of Financial
25Institutions.

 

 

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1    "Division of Financial Institutions" means the Division of
2Financial Institutions of the Department of Financial and
3Professional Regulation.
4    "Email address of record" means the designated email
5address recorded by the Division of Financial Institutions in
6the applicant's applicant file or the licensee's license file,
7as maintained by the Division of Financial Institutions'
8licensure unit.
9    "Secretary" means the Secretary of Financial and
10Professional Regulation or a person authorized by the Secretary
11to act in the Secretary's stead.
12    "Gross monthly income" means monthly income as
13demonstrated by official documentation of the income,
14including, but not limited to, a pay stub or a receipt
15reflecting payment of government benefits, for the period 30
16days prior to the date on which the loan is made.
17    "Lender" and "licensee" mean any person or entity,
18including any affiliate or subsidiary of a lender or licensee,
19that offers or makes a payday loan, buys a whole or partial
20interest in a payday loan, arranges a payday loan for a third
21party, or acts as an agent for a third party in making a payday
22loan, regardless of whether approval, acceptance, or
23ratification by the third party is necessary to create a legal
24obligation for the third party, and includes any other person
25or entity if the Department determines that the person or
26entity is engaged in a transaction that is in substance a

 

 

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1disguised payday loan or a subterfuge for the purpose of
2avoiding this Act.
3    "Loan agreement" means a written agreement between a lender
4and consumer to make a loan to the consumer, regardless of
5whether any loan proceeds are actually paid to the consumer on
6the date on which the loan agreement is made.
7    "Member of the military" means a person serving in the
8armed forces of the United States, the Illinois National Guard,
9or any reserve component of the armed forces of the United
10States. "Member of the military" includes those persons engaged
11in (i) active duty, (ii) training or education under the
12supervision of the United States preliminary to induction into
13military service, or (iii) a period of active duty with the
14State of Illinois under Title 10 or Title 32 of the United
15States Code pursuant to order of the President or the Governor
16of the State of Illinois.
17    "Outstanding balance" means the total amount owed by the
18consumer on a loan to a lender, including all principal,
19finance charges, fees, and charges of every kind.
20    "Payday loan" or "loan" means a loan with a finance charge
21exceeding an annual percentage rate of 36% and with a term that
22does not exceed 120 days, including any transaction conducted
23via any medium whatsoever, including, but not limited to,
24paper, facsimile, Internet, or telephone, in which:
25        (1) A lender accepts one or more checks dated on the
26    date written and agrees to hold them for a period of days

 

 

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1    before deposit or presentment, or accepts one or more
2    checks dated subsequent to the date written and agrees to
3    hold them for deposit; or
4        (2) A lender accepts one or more authorizations to
5    debit a consumer's bank account; or
6        (3) A lender accepts an interest in a consumer's wages,
7    including, but not limited to, a wage assignment.
8    The term "payday loan" includes "installment payday loan",
9unless otherwise specified in this Act.
10    "Principal amount" means the amount received by the
11consumer from the lender due and owing on a loan, excluding any
12finance charges, interest, fees, or other loan-related
13charges.
14    "Rollover" means to refinance, renew, amend, or extend a
15loan beyond its original term.
16(Source: P.A. 96-936, eff. 3-21-11.)
 
17    (815 ILCS 122/3-5)
18    Sec. 3-5. Licensure.
19    (a) A license to make a payday loan shall state the
20address, including city and state, at which the business is to
21be conducted and shall state fully the name of the licensee.
22The license shall be conspicuously posted in the place of
23business of the licensee and shall not be transferable or
24assignable.
25    (b) An application for a license shall be in writing and in

 

 

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1a form prescribed by the Secretary. Each applicant shall
2provide an email address of record. The Secretary may not issue
3a payday loan license unless and until the following findings
4are made:
5        (1) that the financial responsibility, experience,
6    character, and general fitness of the applicant are such as
7    to command the confidence of the public and to warrant the
8    belief that the business will be operated lawfully and
9    fairly and within the provisions and purposes of this Act;
10    and
11        (2) that the applicant has submitted such other
12    information as the Secretary may deem necessary.
13    (c) A license shall be issued for no longer than one year,
14and no renewal of a license may be provided if a licensee has
15substantially violated this Act and has not cured the violation
16to the satisfaction of the Department.
17    (d) A licensee shall appoint, in writing, the Secretary as
18attorney-in-fact upon whom all lawful process against the
19licensee may be served with the same legal force and validity
20as if served on the licensee. A copy of the written
21appointment, duly certified, shall be filed in the office of
22the Secretary, and a copy thereof certified by the Secretary
23shall be sufficient evidence to subject a licensee to
24jurisdiction in a court of law. This appointment shall remain
25in effect while any liability remains outstanding in this State
26against the licensee. When summons is served upon the Secretary

 

 

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1as attorney-in-fact for a licensee, the Secretary shall
2immediately notify the licensee by certified registered mail,
3return receipt requested, or to the email address of record,
4enclosing the summons and specifying the hour and day of
5service. Service by certified mail shall be deemed completed
6when the notice is deposited in the United States mail. Service
7to the email address of record shall be deemed completed when
8sent.
9    (e) A licensee must pay an annual fee of $1,000. In
10addition to the license fee, the reasonable expense of any
11examination or hearing by the Secretary under any provisions of
12this Act shall be borne by the licensee. If a licensee fails to
13renew its license by December 1, its license shall
14automatically expire; however, the Secretary, in his or her
15discretion, may reinstate an expired license upon:
16        (1) payment of the annual fee within 30 days of the
17    date of expiration; and
18        (2) proof of good cause for failure to renew.
19    (f) Not more than one place of business shall be maintained
20under the same license, but the Secretary may issue more than
21one license to the same licensee upon compliance with all the
22provisions of this Act governing issuance of a single license.
23The location, except those locations already in existence as of
24June 1, 2005, may not be within one mile of a horse race track
25subject to the Illinois Horse Racing Act of 1975, within one
26mile of a facility at which gambling is conducted under the

 

 

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1Illinois Gambling Act, within one mile of the location at which
2a riverboat subject to the Illinois Gambling Act docks, or
3within one mile of any State of Illinois or United States
4military base or naval installation.
5    (g) No licensee shall conduct the business of making loans
6under this Act within any office, suite, room, or place of
7business in which (1) any loans are offered or made under the
8Consumer Installment Loan Act other than title secured loans as
9defined in subsection (a) of Section 15 of the Consumer
10Installment Loan Act and governed by Title 38, Section 110.330
11of the Illinois Administrative Code or (2) any other business
12is solicited or engaged in unless the other business is
13licensed by the Department or, in the opinion of the Secretary,
14the other business would not be contrary to the best interests
15of consumers and is authorized by the Secretary in writing.
16    (g-5) Notwithstanding subsection (g) of this Section, a
17licensee may obtain a license under the Consumer Installment
18Loan Act (CILA) for the exclusive purpose and use of making
19title secured loans, as defined in subsection (a) of Section 15
20of CILA and governed by Title 38, Section 110.300 of the
21Illinois Administrative Code. A licensee may continue to
22service Consumer Installment Loan Act loans that were
23outstanding as of the effective date of this amendatory Act of
24the 96th General Assembly.
25    (h) The Secretary shall maintain a list of licensees that
26shall be available to interested consumers and lenders and the

 

 

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1public. The Secretary shall maintain a toll-free number whereby
2consumers may obtain information about licensees. The
3Secretary shall also establish a complaint process under which
4an aggrieved consumer may file a complaint against a licensee
5or non-licensee who violates any provision of this Act.
6(Source: P.A. 100-958, eff. 8-19-18; 101-31, eff. 6-28-19.)
 
7    (815 ILCS 122/4-10)
8    Sec. 4-10. Enforcement and remedies.
9    (a) The remedies provided in this Act are cumulative and
10apply to persons or entities subject to this Act.
11    (b) Any material violation of this Act, including the
12commission of an act prohibited under Section 4-5, constitutes
13a violation of the Consumer Fraud and Deceptive Business
14Practices Act.
15    (c) If any provision of the written agreement described in
16subsection (b) of Section 2-20 violates this Act, then that
17provision is unenforceable against the consumer.
18    (d) Subject to the Illinois Administrative Procedure Act,
19the Secretary may hold hearings, make findings of fact,
20conclusions of law, issue cease and desist orders, have the
21power to issue fines of up to $10,000 per violation, refer the
22matter to the appropriate law enforcement agency for
23prosecution under this Act, and suspend or revoke a license
24granted under this Act. All proceedings shall be open to the
25public.

 

 

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1    (e) The Secretary may issue a cease and desist order to any
2licensee or other person doing business without the required
3license, when in the opinion of the Secretary the licensee or
4other person is violating or is about to violate any provision
5of this Act or any rule or requirement imposed in writing by
6the Department as a condition of granting any authorization
7permitted by this Act. The cease and desist order permitted by
8this subsection (e) may be issued prior to a hearing.
9    The Secretary shall serve notice of his or her action,
10including, but not limited to, a statement of the reasons for
11the action, either personally, to the email address of record,
12or by certified mail, return receipt requested. Service by
13certified mail shall be deemed completed when the notice is
14deposited in the United States mail U.S. Mail. Service to the
15email address of record shall be deemed completed when sent.
16    Within 10 days of service of the cease and desist order,
17the licensee or other person may request a hearing in writing.
18The Secretary shall schedule a hearing within 30 days after the
19request for a hearing unless otherwise agreed to by the
20parties.
21    If it is determined that the Secretary had the authority to
22issue the cease and desist order, he or she may issue such
23orders as may be reasonably necessary to correct, eliminate, or
24remedy the conduct.
25    The powers vested in the Secretary by this subsection (e)
26are additional to any and all other powers and remedies vested

 

 

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1in the Secretary by law, and nothing in this subsection (e)
2shall be construed as requiring that the Secretary shall employ
3the power conferred in this subsection instead of or as a
4condition precedent to the exercise of any other power or
5remedy vested in the Secretary.
6    (f) The Secretary may, after 10 days notice by certified
7registered mail to the licensee at the address set forth in the
8license, or by email to the email address of record, stating
9the contemplated action and in general the grounds therefore,
10fine the licensee an amount not exceeding $10,000 per
11violation, or revoke or suspend any license issued hereunder if
12he or she finds that:
13        (1) the licensee has failed to comply with any
14    provision of this Act or any order, decision, finding,
15    rule, regulation, or direction of the Secretary lawfully
16    made pursuant to the authority of this Act; or
17        (2) any fact or condition exists which, if it had
18    existed at the time of the original application for the
19    license, clearly would have warranted the Secretary in
20    refusing to issue the license.
21    The Secretary may fine, suspend, or revoke only the
22particular license with respect to which grounds for the fine,
23revocation, or suspension occur or exist, but if the Secretary
24finds that grounds for revocation are of general application to
25all offices or to more than one office of the licensee, the
26Secretary shall fine, suspend, or revoke every license to which

 

 

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1the grounds apply.
2    The Department shall establish by rule and publish a
3schedule of fines that are reasonably tailored to ensure
4compliance with the provisions of this Act and which include
5remedial measures intended to improve licensee compliance.
6Such rules shall set forth the standards and procedures to be
7used in imposing any such fines and remedies.
8    No revocation, suspension, or surrender of any license
9shall impair or affect the obligation of any pre-existing
10lawful contract between the licensee and any obligor.
11    The Secretary may issue a new license to a licensee whose
12license has been revoked when facts or conditions which clearly
13would have warranted the Secretary in refusing originally to
14issue the license no longer exist.
15    In every case in which a license is suspended or revoked or
16an application for a license or renewal of a license is denied,
17the Secretary shall serve the licensee with notice of his or
18her action, including a statement of the reasons for his or her
19actions, either personally, to the email address of record, or
20by certified mail, return receipt requested. Service by
21certified mail shall be deemed completed when the notice is
22deposited in the United States mail U.S. Mail. Service to the
23email address of record shall be deemed completed when sent.
24    An order assessing a fine, an order revoking or suspending
25a license, or an order denying renewal of a license shall take
26effect upon service of the order unless the licensee requests a

 

 

HB4430- 81 -LRB101 16230 BMS 66929 b

1hearing, in writing, within 10 days after the date of service.
2In the event a hearing is requested, the order shall be stayed
3until a final administrative order is entered.
4    If the licensee requests a hearing, the Secretary shall
5schedule a hearing within 30 days after the request for a
6hearing unless otherwise agreed to by the parties.
7    The hearing shall be held at the time and place designated
8by the Secretary. The Secretary and any administrative law
9judge designated by him or her shall have the power to
10administer oaths and affirmations, subpoena witnesses and
11compel their attendance, take evidence, and require the
12production of books, papers, correspondence, and other records
13or information that he or she considers relevant or material to
14the inquiry.
15    (g) The costs of administrative hearings conducted
16pursuant to this Section shall be paid by the licensee.
17    (h) Notwithstanding any other provision of this Section, if
18a lender who does not have a license issued under this Act
19makes a loan pursuant to this Act to an Illinois consumer, then
20the loan shall be null and void and the lender who made the
21loan shall have no right to collect, receive, or retain any
22principal, interest, or charges related to the loan.
23(Source: P.A. 97-1039, eff. 1-1-13; 98-209, eff. 1-1-14.)

 

 

HB4430- 82 -LRB101 16230 BMS 66929 b

1 INDEX
2 Statutes amended in order of appearance
3    205 ILCS 305/1.1from Ch. 17, par. 4402
4    205 ILCS 305/2from Ch. 17, par. 4403
5    205 ILCS 305/8from Ch. 17, par. 4409
6    205 ILCS 305/21from Ch. 17, par. 4422
7    205 ILCS 305/61from Ch. 17, par. 4462
8    205 ILCS 657/5
9    205 ILCS 657/25
10    205 ILCS 657/40
11    205 ILCS 657/80
12    205 ILCS 657/90
13    205 ILCS 657/100
14    205 ILCS 660/2from Ch. 17, par. 5202
15    205 ILCS 660/6from Ch. 17, par. 5206
16    205 ILCS 660/10from Ch. 17, par. 5223
17    205 ILCS 660/16.5
18    205 ILCS 665/2from Ch. 17, par. 5302
19    205 ILCS 665/4from Ch. 17, par. 5304
20    205 ILCS 665/10from Ch. 17, par. 5310
21    205 ILCS 665/20from Ch. 17, par. 5323
22    205 ILCS 670/0.5 new
23    205 ILCS 670/2from Ch. 17, par. 5402
24    205 ILCS 670/3from Ch. 17, par. 5403
25    205 ILCS 670/8from Ch. 17, par. 5408

 

 

HB4430- 83 -LRB101 16230 BMS 66929 b

1    205 ILCS 670/9from Ch. 17, par. 5409
2    205 ILCS 670/20.5
3    225 ILCS 429/10
4    225 ILCS 429/20
5    225 ILCS 429/50
6    225 ILCS 429/80
7    225 ILCS 429/95
8    815 ILCS 122/1-10
9    815 ILCS 122/3-5
10    815 ILCS 122/4-10