HB5416eng 102ND GENERAL ASSEMBLY

HB5416 Engrossed LRB102 24800 SPS 34044 b

AN ACT concerning business.

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

Section 1. Findings. The General Assembly finds that given the recent low interest rates for home mortgages leading to an increase in home purchases and mortgage refinancing, the need to protect homeowners from unscrupulous actors seeking to take advantage of this increase by soliciting mortgage refinancing through deceptive practices is warranted, especially following the unethical practices that led to the 2008 subprime mortgage crisis. These protections will especially serve new homeowners not familiar with the process and elderly homeowners who may be more susceptible to deceptive mortgage marketing materials. In addition, they will serve to protect the homeowners' actual mortgage companies that have no affiliation with the solicitors and have had no part in helping the solicitors obtain the homeowners' mortgage information.

Section 5. The Consumer Fraud and Deceptive Business Practices Act is amended by changing Section 2AAA as follows:

(815 ILCS 505/2AAA)

Sec. 2AAA. Mortgage marketing materials.

(a) No person may send marketing materials to a consumer indicating that the person is connected to the consumer's mortgage company, indicating that there is a problem with the consumer's mortgage, or stating that the marketing materials contain information concerning the consumer's mortgage, unless that person sending the marketing materials is actually employed by the consumer's mortgage company or an affiliate of the consumer's mortgage company.

(a-5) Any marketing materials from a mortgage company not connected to the consumer's mortgage company must comply with the following requirements:

(1) no language may be used to state or imply that any response is necessary or imminent, including, but not limited to, the use of the terms "urgent", "action required", "materials inspected", "time sensitive", or "important account information enclosed";

(2) the name of the solicitor's mortgage company must be prominently stated:

(A) in the body of the text;

(B) at the head of the letter or message in a font bigger than the body of the text; and

(C) on any envelope;

(3) the name of the consumer's mortgage company may not be used to state or insinuate in any way that the marketing material is from the consumer's mortgage company rather than the solicitor's mortgage company, and can only be used in the body of the text and when accompanied by clear language explaining that the solicitation is not from or affiliated with the consumer's mortgage company, and is merely a solicitation. The name of the consumer's mortgage company shall not be visible through an envelope window, used in an email subject line, or appear on the envelope itself; and

(4) the text must clearly state if the consumer's mortgage company had no part in helping the solicitor obtain the homeowner's mortgage information.

(b) Any person who violates this Section commits an unlawful practice within the meaning of this Act.

(Source: P.A. 95-508, eff. 1-1-08; 95-876, eff. 8-21-08; 96-328, eff. 8-11-09.)