Full Text of SB1088 102nd General Assembly
SB1088sam001 102ND GENERAL ASSEMBLY | Sen. Elgie R. Sims, Jr. Filed: 4/16/2021
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| 1 | | AMENDMENT TO SENATE BILL 1088
| 2 | | AMENDMENT NO. ______. Amend Senate Bill 1088 by replacing | 3 | | everything after the enacting clause with the following:
| 4 | | "Section 1. Short title. This Act may be cited as the | 5 | | Consumer Legal Funding Act. | 6 | | Section 5. Definitions.
| 7 | | "Advertise" means publishing or disseminating any written, | 8 | | electronic, or printed communication, or any communication by | 9 | | means of recorded telephone messages or transmitted on radio, | 10 | | television, the Internet, or similar communications media, | 11 | | including film strips, motion pictures, and videos, published, | 12 | | disseminated, circulated, or placed before the public, | 13 | | directly or indirectly, for the purpose of inducing a consumer | 14 | | to enter into a consumer legal funding.
| 15 | | "Charges" means the fees, as outlined in Section 25, to be | 16 | | paid to the consumer legal funding company by or on behalf of |
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| 1 | | the consumer above the funded amount provided by or on behalf | 2 | | of the company to an Illinois consumer pursuant to this Act.
| 3 | | "Consumer legal funding" means a non-recourse transaction, | 4 | | in an amount that does not exceed $500,000, in which a consumer | 5 | | legal funding company purchases and a consumer assigns to the | 6 | | company a contingent right to receive an amount of the | 7 | | potential proceeds of a settlement, judgment, award, or | 8 | | verdict obtained in the consumer's legal claim.
| 9 | | "Consumer legal funding company" or "company" means a | 10 | | person or entity that enters into a consumer legal funding | 11 | | transaction with an Illinois consumer. "Consumer legal funding | 12 | | company" does not include:
| 13 | | (1) an immediate family member of the consumer;
| 14 | | (2) a bank, lender, financing entity, or other special | 15 | | purpose entity:
| 16 | | (A) that provides financing to a consumer legal | 17 | | funding company; or
| 18 | | (B) to which a consumer legal funding company | 19 | | grants a security interest or transfers any rights or | 20 | | interest in a consumer legal funding; and
| 21 | | (3) an attorney or accountant who provides services to | 22 | | a consumer.
| 23 | | "Consumer" means a natural person who has a pending legal | 24 | | claim and who resides or is domiciled in Illinois.
| 25 | | "Director" means the Director of Financial Institutions. | 26 | | "Division" means the Division of Financial Institutions of |
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| 1 | | the Department of Financial and Professional Regulation.
| 2 | | "Funded amount" means the amount of moneys provided to, or | 3 | | on behalf of, the consumer in the consumer legal funding. | 4 | | "Funded amount" does not include charges.
| 5 | | "Funding date" means the date on which the funded amount | 6 | | is transferred to the consumer by the consumer legal funding | 7 | | company either by personal delivery, via wire, ACH, or other | 8 | | electronic means, or mailed by insured, certified, or | 9 | | registered United States mail.
| 10 | | "Immediate family member" means a parent; sibling; child | 11 | | by blood, adoption, or marriage; spouse; grandparent; or | 12 | | grandchild.
| 13 | | "Legal claim" means a bona fide civil claim or cause of | 14 | | action.
| 15 | | "Resolution amount" means the funded amount plus the | 16 | | agreed-upon charges that are delivered to the consumer legal | 17 | | funding company on the resolution date.
| 18 | | "Resolution date" means the date the resolution amount is | 19 | | delivered to the consumer legal funding company.
| 20 | | Section 10. Contract requirements; right of rescission.
| 21 | | (a) All consumer legal fundings shall meet the following | 22 | | requirements:
| 23 | | (1) the contract shall be completely filled in when | 24 | | presented to the consumer for signature;
| 25 | | (2) the contract shall contain, in bold and boxed |
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| 1 | | type, a right of rescission, allowing the consumer to | 2 | | cancel the contract without penalty or further obligation | 3 | | if, within 5 business days after the funding date, the | 4 | | consumer either:
| 5 | | (A) returns to the consumer legal funding company | 6 | | the full amount of the disbursed funds by delivering | 7 | | the company's uncashed check to the company's office | 8 | | in person; or
| 9 | | (B) mails, by insured, certified, or registered | 10 | | United States mail, to the address specified in the | 11 | | contract, a notice of cancellation and includes in | 12 | | such mailing a return of the full amount of disbursed | 13 | | funds in the form of the company's uncashed check or a | 14 | | registered or certified check or money order; and
| 15 | | (3) the contract shall contain the initials of the | 16 | | consumer on each page.
| 17 | | (b) The contract shall contain a written acknowledgment by | 18 | | the attorney retained by the consumer in the legal claim that | 19 | | attests to the following:
| 20 | | (1) to the best of the attorney's knowledge, all the | 21 | | costs and charges relating to the consumer legal funding | 22 | | have been disclosed to the consumer;
| 23 | | (2) the attorney is being paid on a contingency basis | 24 | | pursuant to a written fee agreement;
| 25 | | (3) all proceeds of the legal claim will be disbursed | 26 | | via either the trust account of the attorney or a |
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| 1 | | settlement fund established to receive the proceeds of the | 2 | | legal claim on behalf of the consumer;
| 3 | | (4) the attorney is following the written instructions | 4 | | of the consumer with regard to the consumer legal funding; | 5 | | and
| 6 | | (5) the attorney has not received a referral fee or | 7 | | other consideration from the consumer legal funding | 8 | | company in connection with the consumer legal funding, nor | 9 | | will the attorney receive such fee or other consideration | 10 | | in the future.
| 11 | | (c) If the acknowledgment required in subsection (b) is | 12 | | not completed by the attorney retained by the consumer in the | 13 | | legal claim, the contract shall be null and void. The contract | 14 | | remains valid and enforceable in the event the consumer | 15 | | terminates the initial attorney or retains a new attorney with | 16 | | respect to the legal claim.
| 17 | | Section 15. Consumer legal funding company prohibitions. A | 18 | | consumer legal funding company shall not:
| 19 | | (1) pay or offer to pay commissions, referral fees, or | 20 | | other forms of consideration to any attorney, law firm, | 21 | | medical provider, chiropractor, or physical therapist or | 22 | | any of their employees for referring a consumer to the | 23 | | company;
| 24 | | (2) accept any commissions, referral fees, rebates, or | 25 | | other forms of consideration from an attorney, law firm, |
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| 1 | | medical provider, chiropractor, or physical therapist or | 2 | | any of their employees;
| 3 | | (3) intentionally advertise materially false or | 4 | | misleading information regarding its products or services;
| 5 | | (4) refer, in furtherance of an initial legal funding, | 6 | | a customer or potential customer to a specific attorney, | 7 | | law firm, medical provider, chiropractor, or physical | 8 | | therapist or any of their employees; however, if a | 9 | | customer needs legal representation, the company may refer | 10 | | the customer to a local or state bar association referral | 11 | | service;
| 12 | | (5) fail to supply a copy of the executed contract to | 13 | | the attorney for the consumer;
| 14 | | (6) knowingly provide funding to a consumer who has | 15 | | previously assigned or sold a portion of the consumer's | 16 | | right to proceeds from his or her legal claim without | 17 | | first making payment to or purchasing a prior unsatisfied | 18 | | consumer legal funding company's entire funded amount and | 19 | | contracted charges, unless a lesser amount is otherwise | 20 | | agreed to in writing by the consumer legal funding | 21 | | companies, except that multiple companies may agree to | 22 | | contemporaneously provide funding to a consumer if the | 23 | | consumer and the consumer's attorney consent to the | 24 | | arrangement in writing;
| 25 | | (7) receive any right to nor make any decisions with | 26 | | respect to the conduct of the underlying legal claim or |
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| 1 | | any settlement or resolution of the legal claim. The right | 2 | | to make such decisions shall remain solely with the | 3 | | consumer and the attorney in the legal claim; or
| 4 | | (8) knowingly pay or offer to pay for court costs, | 5 | | filing fees, or attorney's fees either during or after the | 6 | | resolution of the legal claim using funds from the | 7 | | consumer legal funding transaction.
| 8 | | Section 20. Satisfaction of the contract. A consumer legal | 9 | | funding company shall require the resolution amount to be set | 10 | | as a predetermined amount, based upon intervals of time from | 11 | | the date of origination of the funding through the date of | 12 | | resolution of the legal claim, and not be determined as a | 13 | | percentage of the recovery from the legal claim. | 14 | | Section 25. Fees.
| 15 | | (a) The fee charged by the consumer legal funding company | 16 | | shall not exceed an annual fee of 36% of the funded amount in a | 17 | | 12-month period.
| 18 | | (b) The consumer legal funding company may charge an | 19 | | additional annual servicing fee that does not exceed 10% of | 20 | | the funded amount.
| 21 | | (c) In addition to the annual and servicing fees set forth | 22 | | in subsections (a) and (b), a consumer legal funding company | 23 | | may collect a fee of $100 per consumer legal funding | 24 | | transaction to defray the ordinary costs of opening, |
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| 1 | | administering, and terminating a consumer legal funding.
| 2 | | (d) A consumer legal funding company shall not collect any | 3 | | additional fees unless otherwise specified in this Act.
| 4 | | (e) No fees shall extend past 42 months from the funding | 5 | | date. | 6 | | Section 30. Disclosures. All consumer legal funding | 7 | | contracts shall contain the disclosures specified in this | 8 | | Section, which shall constitute material terms of the | 9 | | contract. Unless otherwise specified, the disclosures shall be | 10 | | typed in at least 12-point bold-type font and be placed | 11 | | clearly and conspicuously within the contract as follows:
| 12 | | (1) On the front page under appropriate headings, | 13 | | language specifying:
| 14 | | (A) the funded amount to be paid to the consumer by | 15 | | the consumer legal funding company;
| 16 | | (B) an itemization of one-time charges;
| 17 | | (C) the total amount to be paid by the consumer to | 18 | | the company, including the funded amount and all | 19 | | charges; and
| 20 | | (D) a payment schedule to include the resolution | 21 | | amount, listing dates, and the amount due at the end of | 22 | | each 6-month period from the funding date, until the | 23 | | date the maximum amount due to the company by the | 24 | | consumer to satisfy the amount due pursuant to the | 25 | | contract.
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| 1 | | (2) Pursuant to the provisions set forth in paragraph | 2 | | (2) of subsection (a) of Section 10, within the body of the | 3 | | contract: "Consumer's Right to Cancellation: You may | 4 | | cancel this contract without penalty or further obligation | 5 | | within five (5) business days after the funding date if | 6 | | you either:
| 7 | | (A) return to the consumer legal funding company | 8 | | the full amount of the disbursed funds by delivering | 9 | | the company's uncashed check to the company's office | 10 | | in person; or
| 11 | | (B) mail by insured, certified, or registered | 12 | | United States mail, to the company at the address | 13 | | specified in the contract, a notice of cancellation | 14 | | and include in such mailing a return of the full amount | 15 | | of disbursed funds in the form of the company's | 16 | | uncashed check or a registered or certified check or | 17 | | money order."
| 18 | | (3) Within the body of the contract: "The consumer | 19 | | legal funding company shall have no role in deciding | 20 | | whether, when, and how much the legal claim is settled | 21 | | for, however, the consumer and consumer's attorney must | 22 | | notify the company of the outcome of the legal claim by | 23 | | settlement or adjudication before the resolution date. The | 24 | | company may seek updated information about the status of | 25 | | the legal claim but in no event shall the company | 26 | | interfere with the independent professional judgment of |
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| 1 | | the attorney in the handling of the legal claim or any | 2 | | settlement thereof."
| 3 | | (4) Within the body of the contract, in all capital | 4 | | letters in at least 12-point bold-type font contained | 5 | | within a box: "THE FUNDED AMOUNT AND AGREED UPON CHARGES | 6 | | SHALL BE PAID ONLY FROM THE PROCEEDS OF YOUR LEGAL CLAIM, | 7 | | AND SHALL BE PAID ONLY TO THE EXTENT THAT THERE ARE | 8 | | AVAILABLE PROCEEDS FROM YOUR LEGAL CLAIM. YOU WILL NOT OWE | 9 | | [INSERT NAME OF THE CONSUMER LEGAL FUNDING COMPANY] | 10 | | ANYTHING IF THERE ARE NO PROCEEDS FROM YOUR LEGAL CLAIM, | 11 | | UNLESS YOU OR YOUR ATTORNEY HAVE VIOLATED ANY MATERIAL | 12 | | TERM OF THIS CONTRACT OR YOU HAVE COMMITTED FRAUD AGAINST | 13 | | THE CONSUMER LEGAL FUNDING COMPANY."
| 14 | | (5) Located immediately above the place on the | 15 | | contract where the consumer's signature is required, in | 16 | | 12-point font: "Do not sign this contract before you read | 17 | | it completely or if it contains any blank spaces. You are | 18 | | entitled to a completely filled-in copy of the contract. | 19 | | Before you sign this contract, you should obtain the | 20 | | advice of an attorney. Depending on the circumstances, you | 21 | | may want to consult a tax, public or private benefits | 22 | | planning, or financial professional. You acknowledge that | 23 | | your attorney in the legal claim has provided no tax, | 24 | | public or private benefit planning, or financial advice | 25 | | regarding this transaction."
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| 1 | | Section 35. Violations.
| 2 | | (a) Nothing in this Act shall be construed to restrict the | 3 | | exercise of powers or the performance of the duties of the | 4 | | Illinois Attorney General that he or she is authorized to | 5 | | exercise or perform by law.
| 6 | | (b) If a court of competent jurisdiction determines that a | 7 | | consumer legal funding company has intentionally violated the | 8 | | provisions of this Act with regard to a specific consumer | 9 | | legal funding, the consumer legal funding company shall only | 10 | | be entitled to recover the funded amount provided to the | 11 | | consumer in such specific consumer legal funding and shall not | 12 | | be entitled to any additional charges.
| 13 | | Section 40. Assignability; liens.
| 14 | | (a) The contingent right to receive an amount of the | 15 | | potential proceeds of a legal claim is assignable by a | 16 | | consumer.
| 17 | | (b) Nothing contained in this Act shall be construed to | 18 | | cause any consumer legal funding transaction conforming to | 19 | | this Act to be deemed a loan or to be subject to any of the | 20 | | provisions governing loans contained in this Act. A consumer | 21 | | legal funding transaction that complies with this Act is not | 22 | | subject to any other statutory or regulatory provisions | 23 | | governing loans or investment contracts. To the extent that | 24 | | this Act conflicts with any other law, this Act supersedes the | 25 | | other law for the purposes of regulating consumer legal |
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| 1 | | funding in Illinois.
| 2 | | (c) Only liens related to the legal claim, including | 3 | | attorney's liens, Medicare, or other statutory liens, shall | 4 | | take priority over any lien of the consumer legal funding | 5 | | company. All other liens shall take priority by normal | 6 | | operation of law.
| 7 | | Section 45. Attorney prohibitions. An attorney or law firm | 8 | | retained by the consumer in the legal claim shall not have a | 9 | | financial interest in the consumer legal funding company | 10 | | offering consumer legal funding to that consumer. | 11 | | Additionally, any attorney who has referred the consumer to | 12 | | his or her retained attorney shall not have a financial | 13 | | interest in the consumer legal funding company offering | 14 | | consumer legal funding to that consumer. | 15 | | Section 50. Effect of communication on privileges. No | 16 | | communication between the consumer's attorney in the legal | 17 | | claim and the consumer legal funding company as it pertains to | 18 | | the consumer legal funding shall limit, waive, or abrogate the | 19 | | scope or nature of any statutory or common law privilege, | 20 | | including the work product doctrine and the attorney-client | 21 | | privilege. | 22 | | Section 55. Application; fees; positive net worth; new | 23 | | funding application.
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| 1 | | (a) Application for a consumer legal funding license shall | 2 | | be in writing and in the form prescribed by the Director. An | 3 | | applicant at the time of making such application shall pay to | 4 | | the Director the sum of $300 as an application fee and the | 5 | | additional sum of $450 as an annual license fee, for a period | 6 | | terminating on the last day of the current calendar year; if | 7 | | the application is filed after June 30 in any year, the license | 8 | | fee shall be one-half of the annual license fee for such year. | 9 | | (b) Before the consumer legal funding license is granted, | 10 | | every applicant shall prove in a form satisfactory to the | 11 | | Director that the applicant has and will maintain a positive | 12 | | net worth of a minimum of $30,000. Every applicant and | 13 | | licensee shall maintain a surety bond in the principal sum of | 14 | | $25,000 issued by a bonding company authorized to do business | 15 | | in this State and that shall be approved by the Director. The | 16 | | surety bond shall run to the Director and shall be for the | 17 | | benefit of any consumer who incurs damages as a result of any | 18 | | violation of this Act or rules by a licensee. If the Director | 19 | | finds at any time that a bond is of insufficient size, is | 20 | | insecure, is exhausted, or is otherwise doubtful, an | 21 | | additional bond in such amount as determined by the Director | 22 | | shall be filed by the licensee within 30 days after written | 23 | | demand therefor by the Director. As used in this subsection, | 24 | | "net worth" means total assets minus total liabilities. | 25 | | (c) A company may not engage in the business of consumer | 26 | | legal funding in this State until it has received a consumer |
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| 1 | | legal funding license from the Division pursuant to this Act, | 2 | | except any company that has a license in good standing under | 3 | | the Consumer Installment Loan Act as of the effective date of | 4 | | this Act shall be entitled to do consumer legal fundings under | 5 | | the terms of this Act so long as that company files an | 6 | | application for a consumer legal funding license within 60 | 7 | | days of the Division issuing forms for the filing of such an | 8 | | application until the Division fully rules on the application | 9 | | and either approves or denies the application for a funding | 10 | | license.
| 11 | | Section 60. Appointment of attorney-in-fact for service of | 12 | | process. Every consumer legal funding licensee shall appoint, | 13 | | in writing, the Director and his or her successors in office or | 14 | | any official who shall hereafter be charged with the | 15 | | administration of this Act as attorney-in-fact upon whom all | 16 | | lawful process against such licensee may be served with the | 17 | | same legal force and validity as if served on such licensee. A | 18 | | copy of such written appointment, duly certified, shall be | 19 | | filed in the office of the Director, and a copy of the written | 20 | | appointment certified by him or her shall be sufficient | 21 | | evidence. This appointment shall remain in effect while any | 22 | | liability remains outstanding in this State against the | 23 | | licensee. When summons is served upon the Director as | 24 | | attorney-in-fact for such licensee, the Director shall | 25 | | immediately notify the licensee by registered mail, enclosing |
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| 1 | | the summons and specifying the hour and day of service. | 2 | | Section 65. Investigation to determine whether to issue a | 3 | | consumer legal funding license. Upon the filing of an | 4 | | application and the payment of the fee, the Director shall | 5 | | investigate to determine (1) that the reputation of the | 6 | | applicant, including the reputation of the managers of a | 7 | | limited liability company, partners, owners, officers or | 8 | | directors of the applicant, is such as to warrant belief that | 9 | | the business will be operated honestly and fairly within the | 10 | | purposes of this Act, and (2) that the applicant meets the | 11 | | positive net worth requirement set forth in Section 55 of this | 12 | | Act. Unless the Director finds that the applicant meets these | 13 | | requirements, he or she shall not issue a consumer legal | 14 | | funding license and shall notify the applicant of the denial | 15 | | and return to the applicant the sum paid by the applicant as a | 16 | | license fee, but shall retain the $300 application fee. The | 17 | | Director shall approve or deny every application for a license | 18 | | within 60 days from the filing of the application with the fee. | 19 | | Section 70. License. The license shall state the address, | 20 | | including city and state, at which the business is to be | 21 | | conducted and shall state fully the name of the licensee. The | 22 | | license shall be conspicuously posted in the place of business | 23 | | of the licensee and shall not be transferable or assignable. |
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| 1 | | Section 75. More than one license to same licensee; | 2 | | changing place of business.
| 3 | | (a) Not more than one place of business shall be | 4 | | maintained under the same license, but the Director may issue | 5 | | more than one license to the same licensee upon compliance | 6 | | with all the provisions of this Act governing an original | 7 | | issuance of a license.
| 8 | | (b) Whenever a licensee changes his or her place of | 9 | | business to a location other than that set forth in his or her | 10 | | license, he or she shall give written notice of the change of | 11 | | place of business to the Director at least 10 days before the | 12 | | relocation. However, if the new location is in excess of 15 | 13 | | miles from the previous location, the licensee shall obtain | 14 | | written approval from the Director before the relocation.
| 15 | | Section 80. Annual license fee; expenses. Before December | 16 | | 1 of each year, a licensee must pay to the Director and the | 17 | | Division must receive the annual license fee required under | 18 | | Section 55 for the next succeeding calendar year. The license | 19 | | shall expire on January 1 unless the license fee has been paid | 20 | | before that date.
| 21 | | In addition to the annual license fee, the reasonable | 22 | | expense of any examination, investigation, or custody by the | 23 | | Director under any provision of this Act shall be borne by the | 24 | | licensee.
| 25 | | If a licensee fails to renew his or her license by December |
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| 1 | | 31, it shall automatically expire and the licensee is not | 2 | | entitled to a hearing; however, the Director, in his or her | 3 | | discretion, may reinstate an expired license upon payment of | 4 | | the annual renewal fee and proof of good cause for failure to | 5 | | renew.
| 6 | | Section 85. Fines; suspension or revocation of license.
| 7 | | (a) The Director may, after 10 days' notice by registered | 8 | | mail to the licensee at the address set forth in the license | 9 | | stating the contemplated action and in general the grounds | 10 | | therefor, fine such licensee an amount not exceeding $10,000 | 11 | | per violation or revoke or suspend any license issued under | 12 | | this Act if he 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 Director lawfully | 16 | | made pursuant to the authority of this Act; or
| 17 | | (2) any fact or condition exists that, if it had | 18 | | existed at the time of the original application for the | 19 | | license, clearly would have warranted the Director in | 20 | | refusing to issue the license.
| 21 | | (b) The Director may fine, suspend, or revoke only the | 22 | | particular license with respect to which grounds for the fine, | 23 | | revocation, or suspension occur or exist, but if the Director | 24 | | finds that grounds for revocation are of general application | 25 | | to all offices or to more than one office of the licensee, the |
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| 1 | | Director shall fine, suspend, or revoke every license to which | 2 | | such grounds apply.
| 3 | | (c) No revocation, suspension, or surrender of any license | 4 | | shall impair or affect the obligation of any preexisting | 5 | | lawful contract between the licensee and any obligor.
| 6 | | (d) The Director may issue a new license to a licensee | 7 | | whose license has been revoked when facts or conditions that | 8 | | clearly would have warranted the Director in refusing | 9 | | originally to issue the license no longer exist.
| 10 | | (e) In every case in which a license is suspended or | 11 | | revoked or an application for a license or renewal of a license | 12 | | is denied, the Director shall serve the licensee with notice | 13 | | of his or her action, including a statement of the reasons for | 14 | | his or her actions, either personally or by certified mail, | 15 | | return receipt requested. Service by certified mail shall be | 16 | | deemed completed when the notice is deposited in the United | 17 | | States mail.
| 18 | | (f) An order assessing a fine, an order revoking or | 19 | | suspending a license, or an order denying renewal of a license | 20 | | shall take effect upon service of the order unless the | 21 | | licensee requests a hearing in writing within 10 days after | 22 | | the date of service. If a hearing is requested, the order shall | 23 | | be stayed until a final administrative order is entered.
| 24 | | (g) If the licensee requests a hearing, the Director shall | 25 | | schedule a hearing within 30 days after the request for a | 26 | | hearing unless otherwise agreed to by the parties.
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| 1 | | (h) The hearing shall be held at the time and place | 2 | | designated by the Director. The Director and any | 3 | | administrative law judge designated by him or her shall have | 4 | | the power to administer oaths and affirmations, subpoena | 5 | | witnesses and compel their attendance, take evidence, and | 6 | | require the production of books, papers, correspondence, and | 7 | | other records or information that he or she considers relevant | 8 | | or material to the inquiry.
| 9 | | (i) The costs for the administrative hearing shall be set | 10 | | by rule.
| 11 | | (j) The Division shall have the authority to adopt rules | 12 | | for the administration of this Section.
| 13 | | (k) The Division shall establish by rule and publish a | 14 | | schedule of fines that are reasonably tailored to ensure | 15 | | compliance with the provisions of this Act and which include | 16 | | remedial measures intended to improve licensee compliance. | 17 | | Such rules shall set forth the standards and procedures to be | 18 | | used in imposing any such fines and remedies.
| 19 | | Section 90. Closing of business; surrender of license. At | 20 | | least 10 days before a licensee ceases operations, closes | 21 | | business, or files for bankruptcy:
| 22 | | (1) The licensee shall notify the Division of its | 23 | | action in writing.
| 24 | | (2) With the exception of filing for bankruptcy, the | 25 | | licensee shall surrender its license to the Director for |
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| 1 | | cancellation; the surrender of the license shall not | 2 | | affect the licensee's civil or criminal liability for acts | 3 | | committed before surrender or entitle the licensee to a | 4 | | return of any part of the annual license fee.
| 5 | | (3) The licensee shall notify the Division of the | 6 | | location where the books, accounts, contracts, and records | 7 | | will be maintained and the procedure to ensure prompt | 8 | | return of contracts, titles, and releases to the | 9 | | customers.
| 10 | | (4) The accounts, books, records, and contracts shall | 11 | | be maintained and serviced by the licensee or another | 12 | | licensee under this Act or an entity exempt from licensure | 13 | | under this Act.
| 14 | | (5) The Division shall have the authority to conduct | 15 | | examinations of the books, records, and funding documents | 16 | | at any time after surrender of the license, filing of | 17 | | bankruptcy, or the cessation of operations.
| 18 | | Section 95. Investigation of conduct of business. For the | 19 | | purpose of discovering violations of this Act or securing | 20 | | information lawfully required by it, the Director may at any | 21 | | time investigate the fundings and business and examine the | 22 | | books, accounts, records, and files used therein, of every | 23 | | licensee and of every person, partnership, association, | 24 | | limited liability company, and corporation engaged in the | 25 | | business described in Section 5 of this Act, whether such |
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| 1 | | person, partnership, association, limited liability company, | 2 | | or corporation shall act or claim to act as principal or agent | 3 | | or within or without the authority of this Act. For such | 4 | | purpose the Director shall have free access to the offices and | 5 | | places of business, books, accounts, papers, records, files, | 6 | | safes, and vaults of such persons, partnerships, associations, | 7 | | limited liability companies, and corporations. The Director | 8 | | may require the attendance of and examine under oath all | 9 | | persons whose testimony he or she may require relative to such | 10 | | fundings or such business, and in such cases the Director | 11 | | shall have power to administer oaths to all persons called as | 12 | | witnesses, and the Director may conduct such examinations. | 13 | | The Director shall make an examination of the affairs, | 14 | | business, office, and records of each licensee at least once | 15 | | each year. The Director shall by rule and regulation set the | 16 | | fee to be charged for each examination day, including travel | 17 | | expenses for out-of-state licensed locations. The fee shall | 18 | | reasonably reflect actual costs. The Director shall also have | 19 | | authority to examine the books and records of any business | 20 | | made by a former licensee which is being liquidated, as the | 21 | | Director deems necessary, and may charge the examination fees | 22 | | otherwise required for licensees. | 23 | | Section 100. Books and records; reports.
| 24 | | (a) Every licensee shall retain and use in his or her | 25 | | business or at another location approved by the Director such |
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| 1 | | records as are required by the Director to enable the Director | 2 | | to determine whether the licensee is complying with the | 3 | | provisions of this Act and the rules and regulations adopted | 4 | | pursuant to this Act. Every licensee shall preserve the | 5 | | records of any funding for at least 2 years after making the | 6 | | final entry for such funding. Accounting systems maintained in | 7 | | whole or in part by mechanical or electronic data processing | 8 | | methods that provide information equivalent to that otherwise | 9 | | required and follow generally accepted accounting principles | 10 | | are acceptable for that purpose if approved by the Director in | 11 | | writing.
| 12 | | (b) Each licensee shall annually, on or before March 1, | 13 | | file a report with the Director giving such relevant | 14 | | information as the Director may reasonably require concerning | 15 | | the business and operations during the preceding calendar year | 16 | | of each licensed place of business conducted by the licensee. | 17 | | The report must be received by the Division on or before March | 18 | | 1. The report shall be made under oath and in a form prescribed | 19 | | by the Director. Whenever a licensee operates 2 or more | 20 | | licensed offices or whenever 2 or more affiliated licensees | 21 | | operate licensed offices, a composite report of such group of | 22 | | licensed offices may be filed instead of individual reports. | 23 | | The Director may make and publish annually an analysis and | 24 | | recapitulation of such reports. The Director may fine each | 25 | | licensee $25 for each day beyond March 1 such report is filed.
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| 1 | | Section 105. Other businesses.
| 2 | | (a) Upon application by the licensee, the Director may | 3 | | approve the conduct of other businesses not specifically | 4 | | permitted by this Act in the licensee's place of business, | 5 | | unless the Director finds that such conduct will conceal or | 6 | | facilitate evasion or violation of this Act. The Director's | 7 | | approval shall be in writing and shall describe the other | 8 | | businesses which may be conducted in the licensed office.
| 9 | | (b) A licensee may without notice to and approval of the | 10 | | Director, in addition to the business permitted by this Act, | 11 | | conduct the following business:
| 12 | | (1) The business of a sales finance agency as defined | 13 | | in the Sales Finance Agency Act.
| 14 | | (2) The business of soliciting or selling any type of
| 15 | | insurance provided that all such insurance transactions | 16 | | are conducted in accordance with and are regulated under | 17 | | the Illinois Insurance Code.
| 18 | | (3) The business of financing premiums for insurance.
| 19 | | (4) Making fundings pursuant to the Illinois Financial | 20 | | Services Development Act. | 21 | | The Division shall make and enforce such reasonable rules | 22 | | and regulations for the conduct of business under this Act in | 23 | | the same office with other businesses as may be necessary to | 24 | | prevent evasions or violations of this Act. The Director may | 25 | | investigate any business conducted in the licensed office to | 26 | | determine whether any evasion or violation of this Act has |
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| 1 | | occurred.
| 2 | | Section 110. Cease and desist.
| 3 | | (a) The Director may issue a cease and desist order to any | 4 | | licensee, or other person doing business without the required | 5 | | license, when in the opinion of the Director, the licensee, or | 6 | | other person, is violating or is about to violate any | 7 | | provision of this Act or any rule or requirement imposed in | 8 | | writing by the Division as a condition of granting any | 9 | | authorization permitted by this Act.
| 10 | | (b) The Director may issue a cease and desist order before | 11 | | a hearing.
| 12 | | (c) The Director shall serve notice of his or her action, | 13 | | designated as a cease and desist order made pursuant to this | 14 | | Section, including a statement of the reasons for the action, | 15 | | either personally or by certified mail, return receipt | 16 | | requested. Service by certified mail shall be deemed completed | 17 | | when the notice is deposited in the United States mail.
| 18 | | (d) Within 15 days after service of the cease and desist | 19 | | order, the licensee or other person may request, in writing, a | 20 | | hearing.
| 21 | | (e) The Director shall schedule a hearing within 30 days | 22 | | after the request for a hearing unless otherwise agreed to by | 23 | | the parties.
| 24 | | (f) The Division shall have the authority to prescribe | 25 | | rules for the administration of this Section.
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| 1 | | (g) If it is determined that the Director had the | 2 | | authority to issue the cease and desist order, he or she may | 3 | | issue such orders as may be reasonably necessary to correct, | 4 | | eliminate, or remedy such conduct.
| 5 | | (h) The powers vested in the Director by this Section are | 6 | | additional to any and all other powers and remedies vested in | 7 | | the Director by law, and nothing in this Section shall be | 8 | | construed as requiring that the Director shall employ the | 9 | | power conferred in this Section instead of or as a condition | 10 | | precedent to the exercise of any other power or remedy vested | 11 | | in the Director.
| 12 | | (i) The cost for the administrative hearing shall be set | 13 | | by rule.
| 14 | | Section 115. Rules and regulations. The Division may make | 15 | | and enforce such reasonable rules, regulations, directions, | 16 | | orders, decisions, and findings as the execution and | 17 | | enforcement of the provisions of this Act require, and as are | 18 | | not inconsistent therewith. In addition, the Division may | 19 | | adopt rules in connection with the activities of licensees | 20 | | that are necessary and appropriate for the protection of | 21 | | consumers in this State. All rules, regulations, and | 22 | | directions of a general character shall be sent electronically | 23 | | to all licensees. | 24 | | Section 120. Judicial review. All final administrative |
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| 1 | | decisions of the Division under this Act, all amendments and | 2 | | modifications of final administrative decisions, and any rules | 3 | | adopted by the Division pursuant to this Act shall be subject | 4 | | to judicial review pursuant to the provisions of the | 5 | | Administrative Review Law. | 6 | | Section 125. Injunction; civil penalty; costs. If it | 7 | | appears to the Director that a person or any entity has | 8 | | committed or is about to commit a violation of this Act, a rule | 9 | | adopted under this Act, or an order of the Director, the | 10 | | Director may apply to the circuit court for an order enjoining | 11 | | the person or entity from violating or continuing to violate | 12 | | this Act, the rule, or order and for injunctive or other relief | 13 | | that the nature of the case may require and may, in addition, | 14 | | request the court to assess a civil penalty up to $1,000 along | 15 | | with costs and attorney's fees. | 16 | | Section 130. Severability. If any clause, sentence, | 17 | | provision or part of this Act or its application to any person | 18 | | or circumstance is adjudged to be unconstitutional or invalid | 19 | | for any reason by any court of competent jurisdiction, that | 20 | | judgment shall not impair, affect, or invalidate other | 21 | | provisions or applications of this Act, which shall remain in | 22 | | full force and effect thereafter.
| 23 | | Section 999. Effective date. This Act takes effect upon |
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| 1 | | becoming law.".
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