Illinois General Assembly - Bill Status for HB4781

Creates the Debt Settlement Consumer Protection Act. Provides that it shall be unlawful for any person to operate as a debt settlement provider or engage in debt settlement service except as authorized by the Act and without first having obtained a license under the Act. Contains provisions concerning the (1) application for a license, (2) qualifications for licensure, (3) renewal of a license, (4) display requirements for a license, (5) temporary licensed locations, (6) denial of a license, (7) revocation or suspension of a license, (8) maintenance of records by a licensee, (9) examination of a licensee, (10) maintenance of trust funds by a licensee, and (11) other licensee businesses. With respect to the Director of Financial Institutions, contains provisions concerning the (1) adoption of rules by the Director, (2) penalties for violations of the Act, (3) procedure the Director may take to obtain an injunction, (4) review of decisions, (5) issuance of cease and desist orders. Contains provisions concerning (1) advertising practices, (2) individualized financial analysis, (3) required disclosures, (4) debt settlement contracts, (5) fees, (6) consumer settlement accounts, (7) cancellation of contracts, (8) obligations of good faith, (9) prohibited practices and noncompliance with the Act, and (10) civil remedies. Amends the Debt Management Service Act to exclude "debt settlement service" and attorneys engaged in specific practices from the Act. Amends the State Finance Act to provide that moneys collected under the Debt Settlement Consumer Protection Act shall be deposited into the Financial Institution Fund. Contains a severability clause. Amends the Consumer Fraud and Deceptive Business Practices Act to specify that a violation of the Debt Settlement Consumer Protection Act is a violation of the Act. Effective immediately.

Deletes everything after the enacting clause. Reinserts the contents of the introduced bill with the following changes. Changes references from "licensees" to "debt settlement provider" and "Director of Financial Institutions" to "Secretary of Financial and Professional Regulation". Changes language in provisions excluding parties from the definition of "debt settlement provider". Provides that every applicant shall submit to the Secretary, at the time of the application for a license, a bond to be approved by the Secretary in which the applicant shall be the obligor, in the sum of $100,000 (rather than $1,000,000) or an additional amount as required by the Secretary, and in which an insurance company, which is duly authorized by the State of Illinois to transact the business of fidelity and surety insurance, shall be a surety. Changes language with respect to the required annual report. Removes language concerning other business. Adds language concerning additional liability for unlicensed activity. Provides that moneys received by the Division under the Act that shall be deposited in the Financial Institution Fund does not include moneys received for the Debt Settlement Consumer Protection Fund. Changes provisions concerning advertising and marketing practices. Changes provisions concerning required pre-sale consumer disclosures and warnings. Changes provisions concerning prohibited practices. Amends the Debt Management Service Act. Sets forth the purpose of the Act. Provides that the term "debt management service" does not include "debt settlement service" as defined in the Debt Settlement Consumer Protection Act. Changes the criteria for exempt parties who provide debt management service. Changes references from the "Director of the Division of Financial Institutions" to the "Secretary of Financial and Professional Regulation". Provides that more than one license may be issued to the same person for separate places of business, but separate applications shall be made for each location conducting business with Illinois residents (instead of the place of business). Provides that the renewal licensee fee for debt management service provider shall be $200 (rather than $100). Changes language concerning the revocation, suspension of, or refusal to renew a license to include provisions that the respondent in a hearing for a matter shall bear the costs for the hearing. Removes language providing that the Director shall have the authority to prescribe rules for the administration of specified provisions. Changes references from "licensee" to "debt management service provider" in provisions concerning its contracts, books, records and contract cancellation, examination, and fees and charges of debt management service providers. Provides that all moneys received by the Department of Financial and Professional Regulation under the Act, except moneys received for the Debt Management Service Consumer Protection Fund, shall be deposited in the Financial Institutions Fund. Changes penalties for a debt management service provider under the Act. Adds provisions concerning additional liability for unlicensed activity. Creates the Debt Management Service Consumer Protection Fund as a special non-appropriated income-earning fund in the State treasury for the purpose of providing restitution to specified parties. In provisions concerning cease and desist orders, removes language providing that the Secretary shall have the authority to prescribe rules for those provisions. Amends the Consumer Fraud and Deceptive Business Practices Act to provide that any person who violates the Debt Settlement Consumer Protection Act commits an unlawful practice within the meaning of the Consumer Fraud and Deceptive Business Practices Act. Repeals provisions in the Debt Management Service Act concerning other businesses in a licensee's place of business and the Board of Debt Management Service Advisors. Effective immediately.

Replaces everything after the enacting clause with the bill as amended by House Amendment No. 1 with the following changes. In the provision prohibiting a debt settlement provider from charging or receiving from a consumer certain fees, provides for an exception of a one-time enrollment fee of no more than $50. Provides that a debt settlement provider may charge a settlement fee, which shall not exceed an amount greater than 15% (instead of 10%) of the savings. In the provision requiring a debt settlement provider to refund all fees and compensation if a consumer cancels a contract or if there is a material violation of the Act on the part of the debt settlement provider, provides for an exception of the application fee. Provides that the application fee be set by rule (rather than a specified amount). In provisions amending the Debt Management Service Act, removes changes concerning application, license, and renewal fees. Makes other changes. Effective immediately.

×