Illinois General Assembly - Full Text of SB2991
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Full Text of SB2991  103rd General Assembly

SB2991 103RD GENERAL ASSEMBLY

 


 
103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
SB2991

 

Introduced 1/31/2024, by Sen. Bill Cunningham

 

SYNOPSIS AS INTRODUCED:
 
815 ILCS 121/25
815 ILCS 121/30
815 ILCS 121/165

    Amends the Consumer Legal Funding Act. Provides that, notwithstanding any other law, a consumer legal funding may be refinanced as authorized by rule. Provides that the Department of Financial and Professional Regulation shall publish first notice of a rule concerning the refinancing of consumer legal fundings in the Illinois Register in accordance with the Illinois Administrative Procedure Act within 120 days after the effective date of the amendatory Act. Authorizes the Department to adopt rules to permit the refinancing of consumer legal fundings. Makes conforming changes to contract disclosures.


LRB103 37062 SPS 67179 b

 

 

A BILL FOR

 

SB2991LRB103 37062 SPS 67179 b

1    AN ACT concerning business.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Consumer Legal Funding Act is amended by
5changing Sections 25, 30, and 165 as follows:
 
6    (815 ILCS 121/25)
7    Sec. 25. Fees.
8    (a) The fee charged by a consumer legal funding company to
9the consumer shall be calculated as not more than 18% of the
10funded amount, assessed on the outset of every 6 months.
11    (b) In addition, a consumer legal funding company may
12charge a document preparation fee not to exceed $75, which may
13be deducted from the funded amount. This fee is to be used to
14defray the ordinary cost of opening, administering, and
15terminating a consumer legal funding.
16    (c) A consumer legal funding company shall not collect any
17additional fees unless otherwise specified in this Act.
18    (d) No charges may accrue on a consumer legal funding for
19more than 42 months after the funding date of the consumer
20legal funding. No consumer legal funding may be refinanced
21except as authorized by rule. Notwithstanding the foregoing, a
22consumer legal funding company may assess charges on any
23additional amounts provided after the funding date for 42

 

 

SB2991- 2 -LRB103 37062 SPS 67179 b

1months after the additional funding date.
2    (e) Notwithstanding any other law, a consumer legal
3funding may be refinanced as authorized by rule. The
4Department shall publish first notice of a rule concerning the
5refinancing of consumer legal fundings in the Illinois
6Register in accordance with the Illinois Administrative
7Procedure Act within 120 days after the effective date of this
8amendatory Act of the 103rd General Assembly.
9(Source: P.A. 102-987, eff. 5-27-22.)
 
10    (815 ILCS 121/30)
11    Sec. 30. Disclosures. All consumer legal funding contracts
12shall contain the disclosures specified in this Section, which
13shall constitute material terms of the contract. Unless
14otherwise specified, the disclosures shall be typed in at
15least 12-point bold-type font and be placed clearly and
16conspicuously within the contract as follows:
17        (1) On the front page under appropriate headings,
18    language specifying:
19            (A) the funded amount to be paid to the consumer or
20        on the consumer's behalf by the consumer legal funding
21        company;
22            (B) an itemization of charges;
23            (C) the maximum total amount to be paid by the
24        consumer to the company, including the funded amount
25        and all fees; and

 

 

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1            (D) a payment schedule to include the resolution
2        amount, listing dates, and the amount due at the end of
3        each 6-month period from the funding date, until the
4        date the maximum amount is due to the company by the
5        consumer to satisfy the amount due pursuant to the
6        contract.
7        (2) Pursuant to the provisions set forth in paragraph
8    (2) of subsection (a) of Section 10, within the body of the
9    contract: "CONSUMER'S RIGHT TO CANCELLATION: You may
10    cancel this contract without penalty or further obligation
11    within 14 business days after the funding date if you
12    either:
13            (A) return to the consumer legal funding company
14        the full amount of the funds disbursed to you or on
15        your behalf by delivering the company's uncashed check
16        to the company's office in person; or
17            (B) place in the mail, by mail service materially
18        equivalent to United States Postal Service certified
19        mail, addressed to the company at the address
20        specified in the contract, a notice of cancellation
21        and include in such mailing a return of the full amount
22        of funds disbursed to you or on your behalf in the form
23        of the company's uncashed check or a registered or
24        certified check or money order."
25        (3) Within the body of the contract: "The consumer
26    legal funding company shall have no role in deciding

 

 

SB2991- 4 -LRB103 37062 SPS 67179 b

1    whether, when, and how much the legal claim is settled
2    for, however, the consumer and consumer's attorney must
3    notify the company of the outcome of the legal claim by
4    settlement or adjudication before the resolution date. The
5    company may seek updated information about the status of
6    the legal claim but in no event shall the company
7    interfere with the independent professional judgment of
8    the attorney in the handling of the legal claim or any
9    settlement thereof."
10        (4) Within the body of the contract, in all capital
11    letters in at least 12-point bold-type font contained
12    within a box: "THE FUNDED AMOUNT AND AGREED-UPON CHARGES
13    SHALL BE PAID ONLY FROM THE PROCEEDS OF YOUR LEGAL CLAIM,
14    AND SHALL BE PAID ONLY TO THE EXTENT THAT THERE ARE
15    AVAILABLE PROCEEDS FROM YOUR LEGAL CLAIM. YOU WILL NOT OWE
16    [INSERT NAME OF THE CONSUMER LEGAL FUNDING COMPANY]
17    ANYTHING IF THERE ARE NO REMAINING PROCEEDS AVAILABLE FROM
18    YOUR LEGAL CLAIM, UNLESS YOU OR YOUR ATTORNEY HAVE
19    COMMITTED FRAUD AGAINST THE CONSUMER LEGAL FUNDING
20    COMPANY. NOTWITHSTANDING ANYTHING TO THE CONTRARY, YOU MAY
21    REFINANCE THE FUNDED AMOUNT AND AGREED UPON CHARGES AS
22    AUTHORIZED BY RULE."
23        (5) Located immediately above the place on the
24    contract where the consumer's signature is required, in
25    12-point font: "Do not sign this contract before you read
26    it completely or if it contains any blank spaces. You are

 

 

SB2991- 5 -LRB103 37062 SPS 67179 b

1    entitled to a completely filled-in copy of the contract.
2    Before you sign this contract, you should obtain the
3    advice of an attorney. Depending on the circumstances, you
4    may want to consult a tax, public or private benefits
5    planning, or financial professional. You acknowledge that
6    your attorney in the legal claim has provided no tax,
7    public or private benefit planning, or financial advice
8    regarding this transaction."
9        (6) The consumer legal funding company shall provide
10    the consumer with information on accessing a financial
11    coaching program no later than the funding date.
12(Source: P.A. 102-987, eff. 5-27-22.)
 
13    (815 ILCS 121/165)
14    Sec. 165. Rules of the Department.
15    (a) In addition to such powers as may be prescribed by this
16Act, the Department is hereby authorized and empowered to
17adopt rules consistent with the purposes of this Act,
18including, but not limited to:
19        (1) rules in connection with the activities of
20    licensees or unlicensed consumer legal funding companies
21    as may be necessary and appropriate for the protection of
22    consumers in this State;
23        (2) rules as may be necessary and appropriate to
24    define improper or fraudulent business practices in
25    connection with the activities of licensees in servicing

 

 

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1    consumer legal fundings;
2        (3) rules that define the terms used in this Act and as
3    may be necessary and appropriate to interpret and
4    implement the provisions of this Act; and
5        (4) rules as may be necessary for the enforcement and
6    administration of this Act; and .
7        (5) rules to permit the refinancing of consumer legal
8    fundings.
9    (b) The Secretary is hereby authorized and empowered to
10make specific rulings, demands, and findings that he or she
11deems necessary for the proper conduct of the consumer legal
12funding company industry.
13(Source: P.A. 102-987, eff. 5-27-22.)