Full Text of SB2480 96th General Assembly
SB2480 96TH GENERAL ASSEMBLY
|
|
|
96TH GENERAL ASSEMBLY
State of Illinois
2009 and 2010 SB2480
Introduced 10/15/2009, by Sen. Iris Y. Martinez - Jacqueline Y. Collins SYNOPSIS AS INTRODUCED: |
|
|
Amends the Debt Management Service Act and renames the Act to the Debt Relief and Consumer Protection Act, including all cross-references in various other Acts. Changes the requirements for a license to include someone who operates a debt relief service (instead of debt management service). Changes the requirements concerning the (1) application for, (2) qualification for, (3) examination of, (4) renewal of, (5) fees for, and (6) revocation or suspension of a license from the Department of Financial and Professional Regulation. Changes provisions concerning the display and location of a license. Adds provisions concerning a written debt relief agreement between a debtor and licensee. Adds (1) disclosure requirements, (2) required terms, (3) accounting, and (4) the debtor's right to cancel with respect to debt relief services. Changes provisions concerning prohibited actions by a licensee. Adds provisions concerning the advertisement and solicitation of debt relief services. Requires the Department to post an annual report concerning debt relief agencies. Makes other changes. Effective immediately.
|
| |
|
|
| FISCAL NOTE ACT MAY APPLY | |
|
|
A BILL FOR
|
|
|
|
|
SB2480 |
|
LRB096 14868 MJR 29734 b |
|
| 1 |
| AN ACT concerning financial regulation.
| 2 |
| Be it enacted by the People of the State of Illinois,
| 3 |
| represented in the General Assembly:
| 4 |
| Section 5. The State Finance Act is amended by changing | 5 |
| Section 6z-26 as follows:
| 6 |
| (30 ILCS 105/6z-26)
| 7 |
| Sec. 6z-26. The Financial Institution Fund. All moneys | 8 |
| received by the
Department of Financial and Professional | 9 |
| Regulation under the Safety Deposit License Act, the
Foreign | 10 |
| Exchange License Act, the Pawners Societies Act, the Sale of | 11 |
| Exchange
Act, the Currency Exchange Act, the Sales Finance | 12 |
| Agency Act, the Debt Relief and Consumer Protection Management | 13 |
| Service Act, the Consumer Installment Loan Act, the Illinois | 14 |
| Development Credit
Corporation Act, the Title Insurance Act, | 15 |
| and any other Act administered by the Department of Financial | 16 |
| and Professional Regulation as the successor of the
Department | 17 |
| of Financial Institutions now or in the future (unless an Act
| 18 |
| specifically provides otherwise) shall be deposited in the | 19 |
| Financial
Institution Fund (hereinafter "Fund"), a special | 20 |
| fund that is hereby created in
the State Treasury.
| 21 |
| Moneys in the Fund shall be used by the Department, subject | 22 |
| to appropriation,
for expenses incurred in administering the | 23 |
| above named and referenced Acts.
|
|
|
|
SB2480 |
- 2 - |
LRB096 14868 MJR 29734 b |
|
| 1 |
| The Comptroller and the State Treasurer shall transfer from | 2 |
| the General
Revenue Fund to the Fund any monies received by the | 3 |
| Department after June 30,
1993, under any of the above named | 4 |
| and referenced Acts that have been deposited
in the General | 5 |
| Revenue Fund.
| 6 |
| As soon as possible after the end of each calendar year, | 7 |
| the Comptroller
shall compare the balance in the Fund at the | 8 |
| end of the calendar year with the
amount appropriated from the | 9 |
| Fund for the fiscal year beginning on July 1 of
that calendar | 10 |
| year. If the balance in the Fund exceeds the amount
| 11 |
| appropriated, the Comptroller and the State Treasurer shall | 12 |
| transfer from the
Fund to the General Revenue Fund an amount | 13 |
| equal to the difference between the
balance in the Fund and the | 14 |
| amount appropriated.
| 15 |
| Nothing in this Section shall be construed to prohibit | 16 |
| appropriations from
the General Revenue Fund for expenses | 17 |
| incurred in the administration of the
above named and | 18 |
| referenced Acts.
| 19 |
| Moneys in the Fund may be transferred to the Professions | 20 |
| Indirect Cost Fund, as authorized under Section 2105-300 of the | 21 |
| Department of Professional Regulation Law of the Civil | 22 |
| Administrative Code of Illinois.
| 23 |
| (Source: P.A. 94-91, eff. 7-1-05.)
| 24 |
| Section 10. The Debt Management Service Act is amended by | 25 |
| changing the title of the Act and Sections 1, 2, 3, 4, 5, 6, 7, |
|
|
|
SB2480 |
- 3 - |
LRB096 14868 MJR 29734 b |
|
| 1 |
| 10, 11, 11.5, 12, 12.1, 13, 14, 15, 15.1, 15.3, 16, 17, 20.5, | 2 |
| and 22 and by adding Sections 10.1, 10.2, 10.3, 10.4, 13.2, | 3 |
| 13.3, and 13.8 as follows:
| 4 |
| (205 ILCS 665/Act title)
| 5 |
| An Act in relation to the
regulation, licensing, and | 6 |
| bonding of persons engaged in rendering debt relief
management | 7 |
| services to individuals by receiving funds from individuals and
| 8 |
| managing
and distributing the same to the creditors thereof.
| 9 |
| (205 ILCS 665/1) (from Ch. 17, par. 5301)
| 10 |
| Sec. 1. Declaration of policy.
The business of
providing | 11 |
| debt relief
management services to
individuals is a matter of | 12 |
| public interest and concern and is subject to
regulation and | 13 |
| control in the public interest.
| 14 |
| (Source: P.A. 90-545, eff. 1-1-98.)
| 15 |
| (205 ILCS 665/2) (from Ch. 17, par. 5302)
| 16 |
| Sec. 2. Definitions. As used in this Act:
| 17 |
| "Debt relief management
service" means any of the | 18 |
| following: (1)
the planning and management of the financial | 19 |
| affairs of
a debtor for the purposes of addressing debt; (2) a | 20 |
| fee and the receiving
of money
from the debtor for the purpose
| 21 |
| of distributing it, directly or indirectly, to the debtor's | 22 |
| creditors in payment or partial payment of
the debtor's | 23 |
| obligations or soliciting financial contributions from |
|
|
|
SB2480 |
- 4 - |
LRB096 14868 MJR 29734 b |
|
| 1 |
| creditors ; and (3) any service representing, directly or by | 2 |
| implication, to renegotiate, settle, or in any way alter or | 3 |
| seek to alter the terms of payment or other terms of the debt | 4 |
| between a consumer and one or more unsecured creditors or debt | 5 |
| collectors to an unsecured creditor or debt collector. "Debt | 6 |
| relief service" includes the activities of debt settlement, | 7 |
| credit counseling, debt management, and debt consolidation .
| 8 |
| The business of providing debt relief management is conducted | 9 |
| in this State if the debt relief
management business, its | 10 |
| employees, or its agents are located in this State or
if the
| 11 |
| debt relief management business solicits or contracts with | 12 |
| debtors located in this
State.
| 13 |
| "Debt settlement" means any one or more of the following | 14 |
| activities: | 15 |
| (1) Offering to provide advice, or offering to act or | 16 |
| acting as an intermediary between a debtor and one or more | 17 |
| of the debtor's creditors, where the primary purpose of the | 18 |
| advice or action is to obtain a settlement for less than | 19 |
| the full amount of debt, whether in principal, interest, | 20 |
| fees, or other charges, incurred primarily for personal, | 21 |
| family, or household purposes, including, but not limited | 22 |
| to, offering debt negotiation, debt reduction, or debt | 23 |
| relief services. | 24 |
| (2) Advising, encouraging, assisting, or counseling a | 25 |
| debtor to accumulate funds in an account for future payment | 26 |
| of a reduced amount of debt to one or more of the debtor's |
|
|
|
SB2480 |
- 5 - |
LRB096 14868 MJR 29734 b |
|
| 1 |
| creditors. | 2 |
| Any person so engaged or holding out as so engaged is | 3 |
| deemed to be engaged in the provision of debt settlement | 4 |
| services, regardless of whether or not a fee is charged for | 5 |
| such services. | 6 |
| The terms "debt relief service" and "debt settlement" This | 7 |
| term shall not include the following when engaged in
the | 8 |
| regular course of their respective businesses and professions:
| 9 |
| (a) Attorneys at law.
| 10 |
| (b) Banks, fiduciaries, credit unions, savings and | 11 |
| loan associations,
and savings banks as duly
authorized and | 12 |
| admitted to transact business in the State of Illinois and
| 13 |
| performing credit and financial adjusting service in the | 14 |
| regular course of
their principal business.
| 15 |
| (c) Title insurers and abstract companies, while doing | 16 |
| an escrow
business.
| 17 |
| (d) Judicial officers or others acting pursuant to | 18 |
| court
order.
| 19 |
| (e) Employers for their employees.
| 20 |
| (f) Bill payment services, as defined in the | 21 |
| Transmitters of Money Act.
| 22 |
| "Creditor" means any party: | 23 |
| (1) named by the debtor as a creditor in the debt | 24 |
| relief plan or debt relief agreement; | 25 |
| (2) that acquires or holds the debt; or | 26 |
| (3) to whom interactions with the debt relief agency is |
|
|
|
SB2480 |
- 6 - |
LRB096 14868 MJR 29734 b |
|
| 1 |
| assigned in relation to the debt listed in the debt relief | 2 |
| plan or the debt relief agreement. | 3 |
| "Debt relief agreement" means the written contract between | 4 |
| the debt relief agency (licensee) and the debtor. | 5 |
| "Debt relief plan" means the debtor's individualized | 6 |
| package of debt relief services set forth in the debt relief | 7 |
| agreement. | 8 |
| "Director" means Director of the Division of Financial | 9 |
| Institutions of the Department of Financial and Professional | 10 |
| Regulation .
| 11 |
| "Debtor" means the person or persons for whom the debt | 12 |
| relief
management service is performed.
| 13 |
| "Person" means an individual, firm, partnership,
| 14 |
| association, limited liability company,
corporation, or | 15 |
| not-for-profit corporation.
| 16 |
| "Lead generator" means a person that, without providing | 17 |
| debt relief services: | 18 |
| (1) solicits debtors to engage in debt relief through | 19 |
| mail, in person, through electronic web-based | 20 |
| solicitation, or through any other means; | 21 |
| (2) acts as an intermediary or referral agent between a | 22 |
| debtor and an entity actually providing debt relief | 23 |
| services; or | 24 |
| (3) obtains a debtor's personally identifiable | 25 |
| information and transmits that information to a debt relief | 26 |
| company. |
|
|
|
SB2480 |
- 7 - |
LRB096 14868 MJR 29734 b |
|
| 1 |
| "Licensee" means a person or business or entity licensed | 2 |
| under this Act.
| 3 |
| (Source: P.A. 95-331, eff. 8-21-07.)
| 4 |
| (205 ILCS 665/3) (from Ch. 17, par. 5303)
| 5 |
| Sec. 3. Requirement of license. It shall be unlawful for | 6 |
| any person to
operate a debt relief management service or
| 7 |
| engage in that
business as herein defined except as authorized | 8 |
| by this Act and without
first having obtained a license as | 9 |
| hereinafter provided.
| 10 |
| (Source: P.A. 90-545, eff. 1-1-98.)
| 11 |
| (205 ILCS 665/4) (from Ch. 17, par. 5304)
| 12 |
| Sec. 4. Application for license. Application for a license | 13 |
| to engage in the debt relief
management
service
business in | 14 |
| this State shall be made to the Director and shall
be in | 15 |
| writing, under oath, and in the form prescribed by the | 16 |
| Director. The form of this application shall be determined and | 17 |
| provided for by administrative rule by the Director. The | 18 |
| application shall require that the applicant identify the form | 19 |
| of business practice used to help consumers.
| 20 |
| Each applicant, at the time of making such application, | 21 |
| shall pay to the
Director the sum of $30.00 as a fee for | 22 |
| investigation of the applicant, and
the additional sum of | 23 |
| $100.00 as a license fee.
| 24 |
| Every applicant shall submit to the Director, at the time |
|
|
|
SB2480 |
- 8 - |
LRB096 14868 MJR 29734 b |
|
| 1 |
| of the
application for a license, a bond to be approved by the | 2 |
| Director in which
the applicant shall be the obligor, in the | 3 |
| sum of $25,000 or
such additional amount as required by the | 4 |
| Director based on the amount of
disbursements made by the
| 5 |
| licensee in the
previous year, and in which an
insurance | 6 |
| company, which is duly authorized by the State of Illinois, to
| 7 |
| transact the business of fidelity and surety insurance shall be | 8 |
| a surety. Those applicants intending to engage in services | 9 |
| defined as "debt settlement" in this Act shall submit to the | 10 |
| Director, at the time of the application for a license, a bond | 11 |
| to be approved by the Director in which the application shall | 12 |
| be the obligor in the sum of $75,000, or such additional amount | 13 |
| as required by the Director based on the amount of | 14 |
| disbursements made by the licensee in the previous year, and in | 15 |
| which an insurance company, which is duly authorized by the | 16 |
| State of Illinois, to transact the business of fidelity and | 17 |
| surety insurance shall be a surety.
| 18 |
| The bond shall run to the Director for the use of
the | 19 |
| Department of Financial and Professional Regulation or
of any | 20 |
| person or persons who may have a cause of action against the | 21 |
| obligor
in said bond arising out
of any violation of this
Act | 22 |
| or rules by a license.
Such
bond
shall be conditioned that the | 23 |
| obligor will faithfully conform to
and abide
by the provisions | 24 |
| of this Act and of all rules, regulations and directions
| 25 |
| lawfully made by the Director and will pay to the Director or | 26 |
| to
any person or persons any and all money that may become due |
|
|
|
SB2480 |
- 9 - |
LRB096 14868 MJR 29734 b |
|
| 1 |
| or owing
to the State or to such person or persons, from said | 2 |
| obligor under and by
virtue of the provisions of this Act.
| 3 |
| (Source: P.A. 92-400, eff. 1-1-02.)
| 4 |
| (205 ILCS 665/5) (from Ch. 17, par. 5305)
| 5 |
| Sec. 5. Qualifications for license. Upon the filing of the | 6 |
| application and
the approval of the bond and the payment of the | 7 |
| specified fees, the Director
shall issue a license if he finds:
| 8 |
| (1) That the financial responsibility, experience, | 9 |
| character and general
fitness of the applicant, the managers | 10 |
| thereof, if the applicant is a limited
liability company, the | 11 |
| partners thereof, if the applicant is a partnership, and
of the | 12 |
| officers and directors thereof, if the applicant is a | 13 |
| corporation or a
not-for-profit corporation, are such as to | 14 |
| command the confidence of the
community and to warrant belief | 15 |
| that the business will be operated fairly,
honestly and | 16 |
| efficiently within the purposes of this Act, and
| 17 |
| (2) That the applicant, if an individual, the managers | 18 |
| thereof, if the
applicant is a limited liability company, the | 19 |
| partners thereof, if the
applicant is a partnership, and the | 20 |
| officers and directors thereof, if the
applicant is a | 21 |
| corporation, have not been convicted of a felony or a
| 22 |
| misdemeanor involving dishonesty or untrustworthiness, and
| 23 |
| (3) That the person or persons have not had a record of | 24 |
| having defaulted in
the payment of money collected for others, | 25 |
| including the discharge of such
debts through bankruptcy |
|
|
|
SB2480 |
- 10 - |
LRB096 14868 MJR 29734 b |
|
| 1 |
| proceedings, and
| 2 |
| (4) The applicant, or any officers, directors, partners or | 3 |
| managers, have
not previously violated any provision of this | 4 |
| Act or any rule lawfully made
by the Director, and
| 5 |
| (5) The applicant has not made any false statement or | 6 |
| representation to the
Director in applying for a license | 7 |
| hereunder.
| 8 |
| The Director shall deliver a license to the applicant to | 9 |
| engage in the debt relief
management service business in | 10 |
| accordance with the provisions of this Act at
the location | 11 |
| specified in the said application, which license shall remain | 12 |
| in
full force and effect until it is surrendered by the | 13 |
| licensee or revoked by the
Director as herein provided; | 14 |
| provided, however, that each license shall expire
by the terms | 15 |
| thereof on January 1 next following the issuance thereof unless
| 16 |
| the same be renewed as hereinafter provided. A license, | 17 |
| however, may not be
surrendered without the approval of the | 18 |
| Director.
| 19 |
| More than one license may be issued to the same person for | 20 |
| separate
places of business, but separate applications shall be | 21 |
| made for each place
of business.
| 22 |
| (Source: P.A. 90-545, eff. 1-1-98.)
| 23 |
| (205 ILCS 665/6) (from Ch. 17, par. 5306)
| 24 |
| Sec. 6. Renewal of license. Each licensee under the | 25 |
| provisions of this Act may
make application to the
Director for |
|
|
|
SB2480 |
- 11 - |
LRB096 14868 MJR 29734 b |
|
| 1 |
| renewal of its license, which
application for renewal shall be | 2 |
| on the form prescribed by the Director and
shall be accompanied | 3 |
| by a fee of $100.00 together with a bond or other
surety as | 4 |
| required, in a minimum amount of $25,000 or $75,000, whichever | 5 |
| sum is required by Section 4 of this Act, or such an amount as
| 6 |
| required by the Director based on the amount of disbursements | 7 |
| made by the
licensee in the previous year. The application must | 8 |
| be received by the
Department no later than December 1 of the | 9 |
| year preceding the year for which
the application applies.
| 10 |
| (Source: P.A. 92-400, eff. 1-1-02.)
| 11 |
| (205 ILCS 665/7) (from Ch. 17, par. 5307)
| 12 |
| Sec. 7. License, display and location. Each license issued | 13 |
| shall be kept conspicuously posted in the
place of business of | 14 |
| the licensee. The business
location may be changed by any | 15 |
| licensee upon
10 days prior written notice to the Director. A | 16 |
| copy of the license shall also be available via any website | 17 |
| operated by the licensee and designed for the purposes of | 18 |
| marketing to new and potential clients.
A license must operate | 19 |
| under the name as stated in its original
application.
| 20 |
| (Source: P.A. 90-545, eff. 1-1-98.)
| 21 |
| (205 ILCS 665/10) (from Ch. 17, par. 5310)
| 22 |
| Sec. 10. Revocation or suspension of license.
| 23 |
| (a) The Director may revoke or suspend any license if he | 24 |
| finds that:
|
|
|
|
SB2480 |
- 12 - |
LRB096 14868 MJR 29734 b |
|
| 1 |
| (1) any licensee has failed to pay the annual license | 2 |
| fee, or to maintain
in
effect the bond required under the | 3 |
| provisions of this Act;
| 4 |
| (2) the licensee
has violated any
provisions
of this | 5 |
| Act or any rule, lawfully made by the Director within
the | 6 |
| authority of this Act;
| 7 |
| (3) any fact or condition exists
which, if it had | 8 |
| existed at the time of the original application for a
| 9 |
| license, would have warranted the Director in refusing its | 10 |
| issuance; or
| 11 |
| (4) any applicant has made any false
statement or | 12 |
| representation to the Director in applying for a license
| 13 |
| hereunder or in its application for renewal of a license .
| 14 |
| (b) In every case in which a license is suspended or | 15 |
| revoked or an
application for a license or renewal of a license | 16 |
| is denied, the Director shall
serve notice of his action, | 17 |
| including a statement of the reasons for his
actions, either | 18 |
| personally or by certified mail, return receipt requested.
| 19 |
| Service by mail shall be deemed completed if the notice is | 20 |
| deposited in the
U.S. Mail.
| 21 |
| (c) In the case of a denial of an application or renewal of | 22 |
| a license,
the applicant or licensee may request in writing, | 23 |
| within
30 days after the date of service, a hearing. In the | 24 |
| case of a denial of a
renewal of a license, the license shall | 25 |
| be deemed to continue in force until 30
days after the service | 26 |
| of the notice of denial, or if a hearing is requested
during |
|
|
|
SB2480 |
- 13 - |
LRB096 14868 MJR 29734 b |
|
| 1 |
| that period, until a final administrative order is entered.
| 2 |
| (d) An order of revocation or suspension of a license shall | 3 |
| take effect upon
service of the order unless the licensee | 4 |
| requests, in writing, within 10 days
after the date of service, | 5 |
| a hearing. In the event a hearing is requested, the
order shall | 6 |
| be stayed until a final administrative order is entered. A | 7 |
| licensee whose license is suspended or revoked must inform all | 8 |
| debtors with a debt relief agreement signed by the debtor and | 9 |
| the licensee within 10 business days after the event of | 10 |
| suspension or revocation.
| 11 |
| (e) If the licensee requests a hearing, the Director shall | 12 |
| schedule the
hearing within 30 days after the request for a | 13 |
| hearing unless otherwise agreed
to by the parties.
| 14 |
| (f) The hearing shall be held at the time and place | 15 |
| designated by the
Director. The Director and any administrative | 16 |
| law judge designated by him have
the power to administer oaths | 17 |
| and affirmations, subpoena witnesses and compel
their | 18 |
| attendance, take evidence, and require the production of books, | 19 |
| papers,
correspondence, and other records or information that | 20 |
| he considers relevant or
material to the injury.
| 21 |
| (g) The costs for the administrative hearing shall be set | 22 |
| by rule.
| 23 |
| (h) The Director shall have the authority to prescribe | 24 |
| rules for the
administration of this Section.
| 25 |
| (Source: P.A. 90-545, eff. 1-1-98.)
|
|
|
|
SB2480 |
- 14 - |
LRB096 14868 MJR 29734 b |
|
| 1 |
| (205 ILCS 665/10.1 new)
| 2 |
| Sec. 10.1. Written debt relief agreement. | 3 |
| (a) A debt relief services provider shall not perform, or | 4 |
| impose any charges or receive any payment for, any debt relief | 5 |
| services until the licensee and the debtor have executed a | 6 |
| written debt relief agreement that contains all terms of the | 7 |
| agreement between the licensee and the debtor, and the licensee | 8 |
| complies with all applicable requirements of this Act. | 9 |
| (b) A debt relief agreement must: | 10 |
| (1) be in writing, dated, and signed by the licensee | 11 |
| and the debtor; | 12 |
| (2) conspicuously indicate whether or not the licensee | 13 |
| is licensed by the Department of Financial and Professional | 14 |
| Regulation; and | 15 |
| (3) be written in the debtor's primary language if the | 16 |
| licensee advertises in that language. | 17 |
| (c) The licensee must furnish the debtor with a copy of the | 18 |
| signed contract upon execution. | 19 |
| (d) No licensee may provide debt relief services for a | 20 |
| debtor or execute a debt relief services agreement unless the | 21 |
| licensee has first: | 22 |
| (1) prepared in writing and provided to the debtor, in | 23 |
| a form the debtor may keep, an individualized financial | 24 |
| analysis of the debtor's financial circumstances, | 25 |
| including income and liabilities, and made a determination | 26 |
| supported by the individualized financial analysis that: |
|
|
|
SB2480 |
- 15 - |
LRB096 14868 MJR 29734 b |
|
| 1 |
| (A) the debt relief plan proposed for addressing | 2 |
| the debt is suitable for the individual debtor; | 3 |
| (B) the debtor can reasonably meet the | 4 |
| requirements of the proposed debt relief plan; and | 5 |
| (C) based on the totality of the circumstances, | 6 |
| there is a net tangible benefit to the debtor of | 7 |
| entering into the proposed debt relief plan; and | 8 |
| (2) provided, on a document separate from any other | 9 |
| document, the total amount and an itemization of fees, | 10 |
| including any origination fees, monthly fees, and | 11 |
| settlement fees reasonably anticipated to be paid by the | 12 |
| debtor over the term of the agreement. | 13 |
| (e) Before executing a debt relief agreement or providing | 14 |
| any services, a licensee must make a determination, supported | 15 |
| by sufficient bases, which creditors listed by the debtor are | 16 |
| reasonably likely, and which are not reasonably likely, to | 17 |
| participate in the debt relief plan set forth in the debt | 18 |
| relief agreement. | 19 |
| (f) A licensee has a defense against a claim that no | 20 |
| sufficient basis existed to make a determination that a | 21 |
| creditor was likely to participate if the licensee can produce | 22 |
| either of the following: | 23 |
| (1) written confirmation from the creditor that, at the | 24 |
| time the determination was made, the creditor and the | 25 |
| licensee were engaged in negotiations to settle a debt for | 26 |
| another debtor; or |
|
|
|
SB2480 |
- 16 - |
LRB096 14868 MJR 29734 b |
|
| 1 |
| (2) evidence that the licensee and the creditor had | 2 |
| entered into a settlement of a debt for another debtor | 3 |
| within the 6 months prior to the date of the determination. | 4 |
| (g) The licensee must notify the debtor within 3 business | 5 |
| days after receiving the debtor's list of creditors of the | 6 |
| licensee's determination of the likelihood of participation or | 7 |
| nonparticipation of all the creditors listed for inclusion in | 8 |
| the debt relief agreement or the debt relief plan. The | 9 |
| notification shall be done by oral communication, with written | 10 |
| and electronic confirmation following. If not all creditors | 11 |
| listed in the agreement are reasonably likely to participate in | 12 |
| the debt relief plan, then the licensee must obtain the written | 13 |
| authorization from the debtor to proceed with the debt relief | 14 |
| agreement without the likely participation of all listed | 15 |
| creditors. | 16 |
| (205 ILCS 665/10.2 new)
| 17 |
| Sec. 10.2. Disclosures. | 18 |
| (a) Before entering into a contract with a debtor, a | 19 |
| licensee must provide the disclosures as required by this | 20 |
| Section. | 21 |
| (b) A person offering to provide or providing debt relief | 22 |
| services must disclose both orally and in writing whether or | 23 |
| not the person is licensed by the Department of Financial and | 24 |
| Professional Regulation and any license number. | 25 |
| (c) No person or licensee may provide those services |
|
|
|
SB2480 |
- 17 - |
LRB096 14868 MJR 29734 b |
|
| 1 |
| defined as debt settlement under this Act unless the debtor has | 2 |
| acknowledged and signed a single sheet of paper, separate from | 3 |
| any other document or writing, where the following verbatim | 4 |
| notice is provided: | 5 |
| WARNING | 6 |
| We CANNOT GUARANTEE that you will successfully reduce or | 7 |
| eliminate your debt. Debt settlement is not appropriate for all | 8 |
| debtors. | 9 |
| If you stop paying your creditors, there is a strong | 10 |
| likelihood some or all of the following may happen: | 11 |
| YOUR WAGES OR BANK ACCOUNT MAY STILL BE GARNISHED. | 12 |
| YOU MAY STILL BE CONTACTED BY CREDITORS. | 13 |
| YOU MAY STILL BE SUED BY CREDITORS FOR ALL THE MONEY | 14 |
| YOU OWE. | 15 |
| FEES, INTEREST, AND OTHER CHARGES WILL CONTINUE TO | 16 |
| MOUNT UP DURING THE (INSERT NUMBER) MONTHS THIS PLAN IS IN | 17 |
| EFFECT. | 18 |
| Even if we do settle your debt, YOU MAY STILL HAVE TO PAY | 19 |
| TAXES on the amount forgiven. | 20 |
| Your credit rating may be adversely affected. | 21 |
| (c) The heading, "WARNING", must be in bold, underlined, | 22 |
| 28-point type, and the remaining text must be in 14-point type, | 23 |
| with a double space between each statement. | 24 |
| (d) The disclosures and notices required under this Section | 25 |
| must be provided in the debtor's primary language if the debt | 26 |
| settlement services provider advertises in that language. |
|
|
|
SB2480 |
- 18 - |
LRB096 14868 MJR 29734 b |
|
| 1 |
| (e) These disclosures shall also be displayed in a | 2 |
| conspicuous location on the licensee's website, if any, and in | 3 |
| any emails to debtors or in advertisements. | 4 |
| (205 ILCS 665/10.3 new)
| 5 |
| Sec. 10.3. Required terms in debt relief agreements. | 6 |
| (a) Each debt relief agreement must contain on the front | 7 |
| page of the agreement, segregated by bold lines from all other | 8 |
| information on the page and disclosed prominently and clearly | 9 |
| in bold print, the total amount and itemization of fees, | 10 |
| including any origination fees, monthly fees, and settlement | 11 |
| fees reasonably anticipated to be paid by the debtor over the | 12 |
| term of the agreement. | 13 |
| (b) Each debt relief agreement must also contain the | 14 |
| following: | 15 |
| (1) a prominent statement describing the terms upon | 16 |
| which the debtor may cancel the contract, as set forth in | 17 |
| Section 10.4 of this Act; | 18 |
| (2) a detailed description of all services to be | 19 |
| performed by the licensee for the provider; | 20 |
| (3) the licensee's refund policy; | 21 |
| (4) the licensee's principal business address, which | 22 |
| must not be a post office box, and the name and address of | 23 |
| its agent in Illinois authorized to receive service of | 24 |
| process; and | 25 |
| (5) the name of each creditor the debtor has listed and |
|
|
|
SB2480 |
- 19 - |
LRB096 14868 MJR 29734 b |
|
| 1 |
| the aggregate debt owed to each creditor that will be the | 2 |
| subject of the debt relief plan. | 3 |
| (205 ILCS 665/10.4 new)
| 4 |
| Sec. 10.4. Right to cancel. | 5 |
| (a) A debtor has the right to cancel a debt relief | 6 |
| agreement without cause at any time upon 10 days' written | 7 |
| notice to the licensee. If the written notice of cancellation | 8 |
| is received by the licensee within 90 days after entering into | 9 |
| the debt relief agreement, then the licensee shall return all | 10 |
| fees and moneys paid to date by the debtor within 10 days after | 11 |
| receiving the written notice. The debtor will sign an | 12 |
| acknowledgement that all funds paid were received by the | 13 |
| debtor. The acknowledgement must be dated. | 14 |
| (b) In the event of cancellation, the licensee must, within | 15 |
| 10 days after cancellation, notify in writing the debtor's | 16 |
| creditors with whom the licensee is or has been, under the | 17 |
| terms of the debt relief agreement, in communication, of the | 18 |
| cancellation. | 19 |
| (c) Upon cancellation, the licensee must cease collection | 20 |
| of any monthly fees beginning in the calendar month following | 21 |
| cancellation. | 22 |
| (d) A contract for debt relief services must contain on its | 23 |
| face, in an easily readable type immediately adjacent to the | 24 |
| space for signature by the debtor, the following notice: "Right | 25 |
| to Cancel: You have the right to cancel this contract at any |
|
|
|
SB2480 |
- 20 - |
LRB096 14868 MJR 29734 b |
|
| 1 |
| time on 10 days' written notice.". | 2 |
| (e) Upon the payment of all debts and fees listed out on | 3 |
| the face of the debt relief agreement, the debt relief | 4 |
| agreement must automatically terminate, and all funds held by | 5 |
| the licensee that exceed the amount of the fees allowed under | 6 |
| Section 12 of this Act must immediately be returned to the | 7 |
| debtor. | 8 |
| (f) A licensee may cancel a debt relief agreement with good | 9 |
| cause upon 30 days' written notice to the debtor. Within 10 | 10 |
| days after the cancellation, the licensee must notify in | 11 |
| writing the debtor's creditors with whom the licensee is or has | 12 |
| been, under the terms of the debt relief agreement, in | 13 |
| communication, of the cancellation. Upon cancellation, the | 14 |
| licensee must cease collection of any monthly fees beginning in | 15 |
| the month following cancellation. If such cancellation occurs | 16 |
| within 90 days after entering into the debt relief agreement, | 17 |
| the licensee shall return all fees and moneys paid to date by | 18 |
| the debtor.
| 19 |
| (205 ILCS 665/11) (from Ch. 17, par. 5311)
| 20 |
| Sec. 11. Contracts, books, and records and contract | 21 |
| cancellation . Each licensee shall furnish to the Director, when | 22 |
| requested, a copy of
the debt relief agreement contract entered | 23 |
| into between the licensee and the debtor. The
licensee shall | 24 |
| furnish the debtor with a copy of the written contract, at the
| 25 |
| time of execution,
which shall set forth the charges, if any, |
|
|
|
SB2480 |
- 21 - |
LRB096 14868 MJR 29734 b |
|
| 1 |
| agreed upon for the services of
the licensee.
| 2 |
| Each licensee shall maintain records and accounts which | 3 |
| will
enable any debtor contracting with the licensee, at any
| 4 |
| reasonable
time, to ascertain the amounts paid to creditors of | 5 |
| the debtor. The records shall be furnished to the Director if | 6 |
| requested A
statement showing the total amount received and the | 7 |
| total disbursements to
each creditor shall be furnished by the | 8 |
| licensee to any individual within
seven days of a request | 9 |
| therefor by the said debtor . Each
licensee shall issue a | 10 |
| receipt for each payment made by the
debtor at a licensee's | 11 |
| office. Each licensee
shall prepare and
retain in the
file of | 12 |
| each debtor a written analysis of debtor's income and expenses | 13 |
| to
substantiate that the plan of payment is feasible and | 14 |
| practical.
| 15 |
| (Source: P.A. 90-545, eff. 1-1-98.)
| 16 |
| (205 ILCS 665/11.5)
| 17 |
| Sec. 11.5. Examination of licensee. The Director at any | 18 |
| time, either in
person or through an appointed representative, | 19 |
| may examine the condition and
affairs of a
licensee. In | 20 |
| connection with any
examination, the Director may examine on | 21 |
| oath any licensee and
any
director,
officer, employee, | 22 |
| customer, manager, partner, member, creditor or stockholder
of | 23 |
| a licensee concerning the affairs and business of the licensee. | 24 |
| The
Director shall ascertain whether the licensee transacts its | 25 |
| business in the
manner prescribed by law and the rules issued |
|
|
|
SB2480 |
- 22 - |
LRB096 14868 MJR 29734 b |
|
| 1 |
| thereunder. The
licensee shall pay the cost of the examination | 2 |
| as determined by the Director by
administrative rule. Failure | 3 |
| to pay the examination fee within 30 days after
receipt of | 4 |
| demand from the Director may result in the suspension of the | 5 |
| license
until the fee is paid. The Director shall have the | 6 |
| right to investigate and
examine any person, whether licensed | 7 |
| or not, who is engaged in the debt relief
management service | 8 |
| business. The Director shall have the power to subpoena the
| 9 |
| production of any books and records pertinent to any | 10 |
| investigation.
| 11 |
| (Source: P.A. 90-545, eff. 1-1-98.)
| 12 |
| (205 ILCS 665/12) (from Ch. 17, par. 5312)
| 13 |
| Sec. 12. Fees and charges of licensees. A licensee may only | 14 |
| charge a debtor a total fee that shall not exceed 35% of the | 15 |
| debt the licensee saved for the consumer. In any event, a A | 16 |
| licensee may not charge a debtor any
fees or penalties except | 17 |
| the following:
| 18 |
| (1) an initial counseling fee not to exceed $50 per
debtor | 19 |
| counseled, provided the average initial counseling fee does not
| 20 |
| exceed $30 per debtor for all debtors counseled; and
| 21 |
| (2) additional fees at the completion of the initial | 22 |
| counseling services
which shall not exceed $50 per month, | 23 |
| provided the average monthly fee does not
exceed $30 per debtor | 24 |
| for all debtors counseled.
| 25 |
| (Source: P.A. 90-545, eff. 1-1-98.)
|
|
|
|
SB2480 |
- 23 - |
LRB096 14868 MJR 29734 b |
|
| 1 |
| (205 ILCS 665/12.1)
| 2 |
| Sec. 12.1.
All moneys received by the Department of | 3 |
| Financial and Professional Regulation Financial Institutions
| 4 |
| under this Act shall be deposited in the Financial Institutions | 5 |
| Fund created
under Section 6z-26 of the State Finance Act.
| 6 |
| (Source: P.A. 88-13.)
| 7 |
| (205 ILCS 665/13) (from Ch. 17, par. 5313)
| 8 |
| Sec. 13. Prohibitions.
| 9 |
| (1) No licensee shall advertise, in any manner whatsoever, | 10 |
| any statement
or
representation with regard to the rates, terms | 11 |
| or conditions of debt relief management
service which is false, | 12 |
| misleading, or deceptive , nor may any licensee misrepresent the | 13 |
| timing of any settlement negotiations with a debtor's | 14 |
| creditors .
| 15 |
| (2) No licensee shall require as a part of the agreement | 16 |
| between the
licensee and any debtor, the purchase of any stock, | 17 |
| insurance, commodity,
service or other property or any interest | 18 |
| therein.
| 19 |
| (3) No licensee shall, directly or indirectly, accept | 20 |
| payment or any other
consideration, whether in cash or in kind, | 21 |
| from any entity for referring
applicants to that entity. The | 22 |
| licensee shall not, directly or indirectly,
make payments in | 23 |
| any form, whether in cash or in kind, to any person,
| 24 |
| corporation, or other entity for referring applicants or |
|
|
|
SB2480 |
- 24 - |
LRB096 14868 MJR 29734 b |
|
| 1 |
| clients to the
licensee.
| 2 |
| (4) No licensee shall make any loans.
| 3 |
| (5) No licensee shall issue credit cards or act as an agent | 4 |
| in procuring
customers for a credit card company or any | 5 |
| financial institution.
| 6 |
| (6) No licensee shall act as a loan broker.
| 7 |
| (7) No licensee shall operate any other business at the | 8 |
| licensed location
without another business authorization from | 9 |
| the Director, pursuant to Section
13.5. | 10 |
| (8) No licensee shall advise a debtor to stop making | 11 |
| payments to a creditor or advise a debtor to stop communicating | 12 |
| with creditors. | 13 |
| (9) No licensee shall imply, infer, or in any manner | 14 |
| represent that: | 15 |
| (a) fees, interest, and other charges will not continue | 16 |
| to accrue prior to the time debts are settled; | 17 |
| (b) wages or bank accounts are not subject to | 18 |
| garnishment; | 19 |
| (c) creditors will not continue to contact the debtor; | 20 |
| (d) the debtor is not subject to legal action; and | 21 |
| (e) the debtor will not be subject to tax consequences | 22 |
| for the portion of any debts forgiven.
| 23 |
| (Source: P.A. 90-545, eff. 1-1-98.)
| 24 |
| (205 ILCS 665/13.2 new) | 25 |
| Sec. 13.2. Accounting. |
|
|
|
SB2480 |
- 25 - |
LRB096 14868 MJR 29734 b |
|
| 1 |
| (a) Starting in the calendar month following the date on | 2 |
| which the contract between licensee and debtor was signed, each | 3 |
| licensee is required to mail to its debt relief client every | 4 |
| calendar month an accounting statement. This statement shall | 5 |
| contain the following information: | 6 |
| (1) dollar amount of money received from the debtor, | 7 |
| for that calendar month and in total; | 8 |
| (2) dollar amount paid to creditors in that calendar | 9 |
| month. | 10 |
| (b) In any event, a statement showing the total amount | 11 |
| received and the total disbursements to each creditor shall be | 12 |
| furnished by the licensee to any individual within 7 days after | 13 |
| a request therefor by the said debtor. | 14 |
| (205 ILCS 665/13.3 new)
| 15 |
| Sec. 13.3. Advertisement and solicitation of debt relief | 16 |
| services. | 17 |
| (a) No licensee or lead generator may: | 18 |
| (1) make any false, deceptive, or misleading | 19 |
| statements or omissions about the rates, terms, or | 20 |
| conditions of an actual or proposed debt settlement | 21 |
| services plan, or create the likelihood of consumer | 22 |
| confusion or misunderstanding regarding its services; | 23 |
| (2) represent that the licensee is a nonprofit or | 24 |
| not-for-profit or has similar status or characteristics if | 25 |
| some or all of the debt relief services will be provided by |
|
|
|
SB2480 |
- 26 - |
LRB096 14868 MJR 29734 b |
|
| 1 |
| a for-profit company that is a controlling or affiliated | 2 |
| party to the licensee; | 3 |
| (3) make any communication that gives the impression | 4 |
| that the licensee is acting on behalf of a government | 5 |
| agency; or | 6 |
| (4) represent, claim, imply, or infer that secured | 7 |
| debts may be settled. | 8 |
| (b) In all print, electronic, and nonprint solicitations, | 9 |
| including web sites, unsolicitated email notifications, and | 10 |
| radio or television advertising, a lead generator must | 11 |
| prominently make the following verbatim disclosure: "This | 12 |
| company does not actually provide any debt relief, debt | 13 |
| settlement, debt consolidation, or other credit counseling | 14 |
| services. We ONLY refer you to companies that want to provide | 15 |
| some or all of those services.". | 16 |
| (c) A lead generator may not, in any advertising or | 17 |
| solicitation to debtors: | 18 |
| (1) represent that any service is guaranteed; or | 19 |
| (2) misrepresent the benefits of debt settlement | 20 |
| or debt consolidation in comparison to credit | 21 |
| counseling, debt management, or bankruptcy. | 22 |
| (205 ILCS 665/13.8 new)
| 23 |
| Sec. 13.8. Annual report. On an annual basis, the Director | 24 |
| shall post on the website of the Department of Financial and | 25 |
| Professional Regulation a report detailing the following: |
|
|
|
SB2480 |
- 27 - |
LRB096 14868 MJR 29734 b |
|
| 1 |
| (1) the number of licensed debt relief agencies in the | 2 |
| State of Illinois; | 3 |
| (2) the number of debt relief licenses suspended or revoked | 4 |
| during the past calendar year, and the number of those | 5 |
| disciplined licenses belonging to licensees providing debt | 6 |
| settlement services, as defined in this Act; and | 7 |
| (3) the name, business address, license number, and summary | 8 |
| of conduct leading to a suspension or a revocation of license.
| 9 |
| The report shall be written in consumer-friendly language and | 10 |
| posted in a conspicuous location on the website. The first | 11 |
| annual report shall be published on the first January 31 | 12 |
| following the effective date of this amendatory Act of the 96th | 13 |
| General Assembly, and shall be published on each following | 14 |
| January 31 thereafter.
| 15 |
| (205 ILCS 665/14) (from Ch. 17, par. 5314)
| 16 |
| Sec. 14. Trust funds; requirements and restrictions.
| 17 |
| (a) All funds received by a licensee or his agent from and | 18 |
| for the purpose
of paying bills, invoices, or accounts of a | 19 |
| debtor shall constitute trust funds
owned by and belonging to | 20 |
| the debtor from whom they were received. All such
funds | 21 |
| received by a licensee shall be separated from the funds of the | 22 |
| licensee
not later than the end of the business day following | 23 |
| receipt by the
licensee. All such funds shall be kept separate | 24 |
| and apart at all times from
funds belonging to the licensee or | 25 |
| any of its officers, employees or agents and
may be used for no |
|
|
|
SB2480 |
- 28 - |
LRB096 14868 MJR 29734 b |
|
| 1 |
| purpose other than paying bills, invoices, or accounts of
the | 2 |
| debtor. All such trust funds received at the main or branch | 3 |
| offices of a
licensee shall be deposited in a bank in an | 4 |
| account in the name of the licensee
designated "trust account", | 5 |
| or by some other appropriate name indicating that
the funds are | 6 |
| not the funds of the licensee or its officers, employees, or
| 7 |
| agents, on or before the close of the business day following | 8 |
| receipt. Debtor funds may be held in trust for no longer than | 9 |
| 42 days.
| 10 |
| (b) Prior to separation and deposit by the licensee, such | 11 |
| funds may be
used by the licensee only for the making of change | 12 |
| or the cashing of checks
in the normal course of its business. | 13 |
| Such funds are not subject to
attachment, lien, levy of | 14 |
| execution, or sequestration by order of court except
by a | 15 |
| debtor for whom a licensee is acting as an agent in paying | 16 |
| bills,
invoices, or accounts.
| 17 |
| (c) Each licensee shall make remittances within 30 days | 18 |
| after
initial receipt of funds, and thereafter remittances | 19 |
| shall be made within
15 days of receipt, less fees and costs , | 20 |
| unless the reasonable
payment of one or more of the debtor's | 21 |
| obligations requires that the funds
be held for a longer period | 22 |
| so as to accumulate a sum certain .
| 23 |
| (d) At least once every quarter, the licensee shall render | 24 |
| an accounting to
the debtor which shall itemize the total | 25 |
| amount received from the debtor, the
total amount paid each | 26 |
| creditor, the amount of charges deducted, and any amount
held |
|
|
|
SB2480 |
- 29 - |
LRB096 14868 MJR 29734 b |
|
| 1 |
| in reserve. A licensee shall, in addition thereto, provide such | 2 |
| an
accounting to a debtor within 7 days after written demand, | 3 |
| but not more
than 3 times per 6 month period.
| 4 |
| (Source: P.A. 90-545, eff. 1-1-98.)
| 5 |
| (205 ILCS 665/15.1) (from Ch. 17, par. 5316)
| 6 |
| Sec. 15.1. Advisory Board; appointment. There is created a | 7 |
| Board of Debt Relief
Management Service
Advisors composed of 5 | 8 |
| persons appointed by the Governor.
The majority of members | 9 |
| shall be active in a debt relief
management or consumer credit | 10 |
| counseling service.
Each Board member
shall serve without | 11 |
| compensation, but shall be reimbursed for necessary
expenses. | 12 |
| Initially, the Board shall consist of members appointed for | 13 |
| terms
beginning on July 1, 1965, and one member shall serve
| 14 |
| until July 1, 1966, 2
members shall serve until July 1, 1967, | 15 |
| and 2 members shall serve
until
July 1, 1968, as designated by | 16 |
| the Governor at the time of the
initial
appointments. As terms | 17 |
| of appointment expire, successors shall be appointed
for terms | 18 |
| to expire on July 1, 3 years subsequent to the date of
| 19 |
| appointment. Each member of the board shall serve until his | 20 |
| respective
successor is appointed.
| 21 |
| (Source: P.A. 89-400, eff. 8-20-95; 90-545, eff. 1-1-98.)
| 22 |
| (205 ILCS 665/15.3) (from Ch. 17, par. 5318)
| 23 |
| Sec. 15.3. Advisory Board; powers. The Board shall have the | 24 |
| following powers:
|
|
|
|
SB2480 |
- 30 - |
LRB096 14868 MJR 29734 b |
|
| 1 |
| 1. To make recommendations to the Director concerning | 2 |
| matters which he
may refer to the Board for consideration;
| 3 |
| 2. To recommend on its own initiative policies and | 4 |
| practices to the
Director, the Governor and the General | 5 |
| Assembly;
| 6 |
| 3. To make recommendations to the Director for the purpose | 7 |
| of preventing
unsound practices in the field of debt relief
| 8 |
| management
service;
| 9 |
| 4. To foster the interest and cooperation of persons | 10 |
| rendering debt relief
management service in improvement of | 11 |
| their services to the
people of the State of Illinois.
| 12 |
| (Source: P.A. 90-545, eff. 1-1-98.)
| 13 |
| (205 ILCS 665/16) (from Ch. 17, par. 5319)
| 14 |
| Sec. 16. Penalties.
| 15 |
| (a) Any person who engages in the business of debt relief | 16 |
| management service
without a license as provided for in this | 17 |
| Act shall be guilty of a Class 4 felony.
| 18 |
| (b) Any contract of debt relief management service as | 19 |
| defined in this Act, made by
an unlicensed
person, shall be | 20 |
| null and void and of no legal effect.
| 21 |
| (c) The Director may set by rule monetary penalties for | 22 |
| violation of this
Act.
| 23 |
| (Source: P.A. 90-545, eff. 1-1-98.)
| 24 |
| (205 ILCS 665/17) (from Ch. 17, par. 5320)
|
|
|
|
SB2480 |
- 31 - |
LRB096 14868 MJR 29734 b |
|
| 1 |
| Sec. 17. Injunction. To engage in debt relief management | 2 |
| service, render financial service, or accept debtors'
funds, as | 3 |
| defined
in this Act, without a valid license so to do, is | 4 |
| hereby declared
to be
inimical to the public welfare and to | 5 |
| constitute a public nuisance. The
Director may, in the name of | 6 |
| the people of the State of Illinois, through
the Attorney | 7 |
| General of the State of Illinois, file a complaint for
an | 8 |
| injunction in the circuit court to enjoin such person,
from
| 9 |
| engaging in said business. Such injunction proceeding shall
be | 10 |
| in addition to, and not in lieu of, penalties and remedies | 11 |
| otherwise in this
Act provided.
| 12 |
| (Source: P.A. 90-545, eff. 1-1-98.)
| 13 |
| (205 ILCS 665/20.5)
| 14 |
| Sec. 20.5. Receivership.
| 15 |
| (a) If the Director determines that a licensee is insolvent | 16 |
| or is violating
this Act,
he or she may appoint a receiver. | 17 |
| Under the direction of the Director, the
receiver shall,
for | 18 |
| the purpose of receivership, take possession of and title to | 19 |
| the books,
records, and
assets of the licensee. The Director | 20 |
| may require the receiver to provide
security in an
amount the | 21 |
| Director deems proper. Upon appointment of the receiver, the
| 22 |
| Director shall
have published, once each week for 4 consecutive | 23 |
| weeks in a newspaper having a
general
circulation in the | 24 |
| community, a notice informing all persons who have claims
| 25 |
| against the
licensee to present them to the receiver. Within 10 |
|
|
|
SB2480 |
- 32 - |
LRB096 14868 MJR 29734 b |
|
| 1 |
| days after the receiver
takes
possession, the licensee may | 2 |
| apply to the Circuit Court of Sangamon County to
enjoin
further | 3 |
| proceedings. The receiver may operate the business until the | 4 |
| Director
determines
that possession should be restored to the | 5 |
| licensee or that the business should
be
liquidated.
| 6 |
| (b) If the Director determines that a business in | 7 |
| receivership should be
liquidated,
he or she shall direct the | 8 |
| Attorney General to file a complaint in the Circuit
Court of | 9 |
| the
county in which the business is located, in the name of the | 10 |
| People of the State
of Illinois,
for the orderly liquidation | 11 |
| and dissolution of the business and for an
injunction | 12 |
| restraining
the licensee and its officers and directors from | 13 |
| continuing the operation
of the business.
Within 30 days after | 14 |
| the day the Director determines that the business
should be
| 15 |
| liquidated, the receiver shall file
with the Director and with | 16 |
| the clerk of the court that has charge
of the liquidation
a | 17 |
| correct list of all
creditors, as shown by
the licensee's books | 18 |
| and records,
who
have not presented their claims.
The list | 19 |
| shall state the amount of the claim after allowing all
just | 20 |
| credits, deductions, and
set-offs as shown by the licensee's | 21 |
| books. These claims
shall be deemed proven unless
some | 22 |
| interested party files an objection within the time fixed by | 23 |
| the Director
or court that
has charge of the liquidation.
| 24 |
| (c) The General Assembly finds and declares that debt | 25 |
| relief management services
provide important and vital | 26 |
| services to Illinois citizens. It is therefore
declared to be |
|
|
|
SB2480 |
- 33 - |
LRB096 14868 MJR 29734 b |
|
| 1 |
| the
policy of this State that customers who receive these | 2 |
| services must be
protected from
interruptions of services. To | 3 |
| carry out this policy and to insure that
customers of a
| 4 |
| licensee are protected if it is determined that a business in | 5 |
| receivership
should be
liquidated, the Director shall make a | 6 |
| distribution of moneys collected by the
receiver in
the | 7 |
| following order of priority:
| 8 |
| (1) Allowed claims for the actual necessary expenses of | 9 |
| the receivership
of
the business being liquidated, | 10 |
| including:
| 11 |
| (A) reasonable receiver's fees and receiver's | 12 |
| attorney's fees
approved by the Director;
| 13 |
| (B) all expenses of any preliminary or other | 14 |
| examinations into
the condition of the receivership;
| 15 |
| (C) all expenses incurred by the Director that are | 16 |
| incident to
possession and control of any property or | 17 |
| records of the licensee's
business; and
| 18 |
| (D) reasonable expenses incurred by the Director | 19 |
| as the result of
business agreements or contractual | 20 |
| arrangements necessary to insure
that the services of | 21 |
| the licensee are delivered to the community without
| 22 |
| interruption.
These business agreements or contractual | 23 |
| arrangements may include, but
are not limited to, | 24 |
| agreements made by the Director, or by the receiver | 25 |
| with
the
approval of the Director, with banks, bonding | 26 |
| companies, and other types of
financial institutions.
|
|
|
|
SB2480 |
- 34 - |
LRB096 14868 MJR 29734 b |
|
| 1 |
| (2) Allowed unsecured claims for wages or salaries, | 2 |
| excluding vacation,
severance, and sick leave pay earned by | 3 |
| employees within 90 days before
the appointment of a | 4 |
| receiver.
| 5 |
| (3) Allowed unsecured claims of any tax, and interest | 6 |
| and penalty on
the
tax.
| 7 |
| (4) Allowed unsecured claims, other than a kind | 8 |
| specified in items (1),
(2),
and (3) of this subsection, | 9 |
| filed with the Director within the time the
Director
fixes
| 10 |
| for filing claims.
| 11 |
| (5) Allowed unsecured claims, other than a kind | 12 |
| specified in items (1),
(2),
and (3) of this subsection, | 13 |
| filed with the Director after the time fixed for
filing
| 14 |
| claims by the Director.
| 15 |
| (6) Allowed creditor claims asserted by an owner, | 16 |
| member, or stockholder
of the business in liquidation.
| 17 |
| (7) After one year from the final dissolution of the | 18 |
| licensee's business,
all
assets not
used to satisfy allowed | 19 |
| claims shall be distributed pro rata to the owner,
owners,
| 20 |
| members, or stockholders of the business.
| 21 |
| The Director shall pay all claims of equal priority | 22 |
| according to the schedule
established in this subsection and | 23 |
| shall not pay claims of lower priority until
all higher
| 24 |
| priority claims are satisfied. If insufficient assets are | 25 |
| available to meet all
claims of equal
priority, those assets | 26 |
| shall be distributed pro rata among those claims. All
unclaimed
|
|
|
|
SB2480 |
- 35 - |
LRB096 14868 MJR 29734 b |
|
| 1 |
| assets of a licensee and the licensee's business shall be | 2 |
| deposited with the
Director to be
paid out when proper claims | 3 |
| are presented to the Director.
| 4 |
| (d) Upon the order of the circuit court of the county in | 5 |
| which the business
being
liquidated is located, the receiver | 6 |
| may sell or compound any bad or doubtful
debt, and on
like | 7 |
| order may sell the personal property of the business on such | 8 |
| terms as the
court
approves. The receiver shall succeed to | 9 |
| whatever rights or remedies the
unsecured
creditors of the | 10 |
| business may have against the owner or owners, operators,
| 11 |
| stockholders,
directors, members, managers, or officers, | 12 |
| arising out of their claims
against the
licensee's business, | 13 |
| but nothing contained in this Section shall prevent those
| 14 |
| creditors
from filing their claims in the liquidation | 15 |
| proceeding. The receiver may
enforce those
rights or remedies | 16 |
| in any court of competent jurisdiction.
| 17 |
| (e) At the close of a receivership, the receiver shall turn | 18 |
| over to the
Director all
books of account and ledgers of the | 19 |
| business for preservation. The Director
shall hold all
records | 20 |
| of receiverships received at any time for a period of 2 years | 21 |
| after the
close of the
receivership. The records may be | 22 |
| destroyed at the termination of the 2-year
period. All
expenses | 23 |
| of the receivership including, but not limited to, reasonable
| 24 |
| receiver's and
attorney's fees approved by the Director, all | 25 |
| expenses of any preliminary or
other
examinations into the | 26 |
| condition of the licensee's business or the
receivership, and |
|
|
|
SB2480 |
- 36 - |
LRB096 14868 MJR 29734 b |
|
| 1 |
| all
expenses incident to the possession and control of any | 2 |
| property or records of
the business
incurred by the Director | 3 |
| shall be paid out of the assets of the licensee's
business. | 4 |
| These
expenses shall be paid before all other claims.
| 5 |
| (f) Upon the filing of a complaint by the Attorney General | 6 |
| for the orderly
liquidation and dissolution of a licensee's | 7 |
| business, as provided in this Act,
all pending
suits and | 8 |
| actions upon unsecured claims against the business shall abate.
| 9 |
| Nothing
contained in this Act, however, prevents these | 10 |
| claimants from filing their
claims in the
liquidation | 11 |
| proceeding. If a suit or an action is instituted or maintained | 12 |
| by
the receiver on
any bond or policy of insurance issued | 13 |
| pursuant to the requirements of this
Act, the
bonding or | 14 |
| insurance company sued shall not have the right to interpose or
| 15 |
| maintain any
counterclaim based upon subrogation, upon any | 16 |
| express or implied agreement of,
or right
to, indemnity or | 17 |
| exoneration, or upon any other express or implied agreement
| 18 |
| with, or
right against, the licensee's business. Nothing | 19 |
| contained in this Act prevents
the bonding
or insurance company | 20 |
| from filing this type of claim in the liquidation
proceeding.
| 21 |
| (g) A licensee may not terminate its affairs and close up | 22 |
| its business
unless it has
first deposited with the Director an | 23 |
| amount of money equal to all of its debts,
liabilities,
and | 24 |
| lawful demands against it including the costs and expenses of a | 25 |
| proceeding
under this
Section, surrendered to the Director its | 26 |
| license, and filed with the Director a
statement of
termination |
|
|
|
SB2480 |
- 37 - |
LRB096 14868 MJR 29734 b |
|
| 1 |
| signed by the licensee containing a pronouncement of intent to
| 2 |
| close up its
business and liquidate its liabilities and | 3 |
| containing a sworn list itemizing in
full all of its
debts, | 4 |
| liabilities, and lawful demands against it. Corporate | 5 |
| licensees must
attach to,
and make a part of the statement of | 6 |
| termination, a copy of a resolution
providing for the
| 7 |
| termination and closing up of the licensee's affairs, certified | 8 |
| by the
secretary of the
licensee and duly adopted at a | 9 |
| shareholders' meeting by the holders of at least
two-thirds
of | 10 |
| the outstanding shares entitled to vote at the meeting. Upon | 11 |
| the filing with
the Director
of a statement of termination, the | 12 |
| Director shall cause notice of that action
to be published
once | 13 |
| each week for 3 consecutive weeks in a public newspaper of | 14 |
| general
circulation
published in the city or village where the | 15 |
| business is located, and if no
newspaper is
published in that | 16 |
| place, then in a public newspaper of general circulation
| 17 |
| nearest to that
city or village. The publication shall give | 18 |
| notice that the debts,
liabilities, and lawful
demands against | 19 |
| the business will be redeemed by the Director upon demand in
| 20 |
| writing
made by the owner thereof, at any time within 3 years | 21 |
| after the date of first
publication.
After the expiration of | 22 |
| the 3-year period, the Director shall return to the
person or | 23 |
| persons
designated in the statement of termination to receive | 24 |
| repayment, and in the
proportion
specified in that statement, | 25 |
| any balance of money remaining in his or her
possession after
| 26 |
| first deducting all unpaid costs and expenses incurred in |
|
|
|
SB2480 |
- 38 - |
LRB096 14868 MJR 29734 b |
|
| 1 |
| connection with
a
proceeding under this Section. The Director | 2 |
| shall receive for his or her
services, exclusive
of costs
and | 3 |
| expenses, 2% of any amount up to $5,000 and 1% of any amount in | 4 |
| excess of
$5,000 deposited
with him or her under this Section | 5 |
| by any business. Nothing contained
in this
Section shall affect | 6 |
| or impair the liability of any bonding or insurance
company on
| 7 |
| any bond
or insurance policy issued under this Act relating to | 8 |
| the business.
| 9 |
| (Source: P.A. 92-400, eff. 1-1-02.)
| 10 |
| (205 ILCS 665/22) (from Ch. 17, par. 5325)
| 11 |
| Sec. 22. Title of Act. This Act may be cited as the Debt | 12 |
| Relief and Consumer Protection Management Service Act.
| 13 |
| (Source: P.A. 90-545, eff. 1-1-98.)
| 14 |
| Section 15. The Viatical Settlements Act is amended by | 15 |
| changing Section 5 as follows:
| 16 |
| (215 ILCS 158/5)
| 17 |
| (Section scheduled to be repealed on July 1, 2010)
| 18 |
| Sec. 5. Definitions. As used in this Act, the following | 19 |
| definitions
apply:
| 20 |
| "Director" means the Director of Insurance.
| 21 |
| "Person" means any natural or artificial entity including, | 22 |
| but not limited
to, individuals, partnerships, associations, | 23 |
| trusts, or corporations.
|
|
|
|
SB2480 |
- 39 - |
LRB096 14868 MJR 29734 b |
|
| 1 |
| "Viatical settlement agent" means an individual, | 2 |
| partnership, corporation,
or
other entity who through | 3 |
| appointment by at least one viatical settlement
provider and | 4 |
| for a fee, commission, or other
valuable consideration, offers | 5 |
| or advertises the availability of viatical
settlements, | 6 |
| introduces viators to viatical settlement providers, or offers | 7 |
| or
attempts to negotiate viatical settlements between a viator | 8 |
| and one or more
viatical settlement providers. "Viatical | 9 |
| settlement agent" does not include
an attorney licensed to | 10 |
| practice law, a public accountant as defined in the
Illinois | 11 |
| Public Accounting Act, or a person licensed under the Debt | 12 |
| Relief and Consumer Protection Management Service Act retained | 13 |
| to represent the viator
whose compensation is not paid by the | 14 |
| viatical settlement provider.
| 15 |
| "Viatical settlement contract" means a written agreement | 16 |
| entered into between
a viatical settlement provider and a | 17 |
| person who owns a life insurance policy or
who owns or is | 18 |
| covered under a group policy, insuring the life of a person who
| 19 |
| has a catastrophic or life threatening illness or condition. | 20 |
| The agreement
shall establish the terms under which the | 21 |
| viatical settlement provider will pay
compensation or anything | 22 |
| of value, which compensation or value is less than the
expected | 23 |
| death benefit of the insurance policy or certificate, in return | 24 |
| for
the policyowner's assignment, transfer, sale, devise, or | 25 |
| bequest of the death
benefit or ownership of the insurance | 26 |
| policy or certificate to the viatical
settlement provider.
|
|
|
|
SB2480 |
- 40 - |
LRB096 14868 MJR 29734 b |
|
| 1 |
| "Viatical settlement provider" means an individual, | 2 |
| partnership, corporation,
or other entity that enters into an | 3 |
| agreement with a person who owns a life
insurance policy, or | 4 |
| who owns or is covered under a group policy, insuring the
life | 5 |
| of a person who has a catastrophic or life threatening illness | 6 |
| or
condition,
under the terms of which the viatical settlement | 7 |
| provider pays compensation or
anything of value, which | 8 |
| compensation or value is less than the expected death
benefit | 9 |
| of the insurance policy or certificate, in return for the | 10 |
| policyowner's
assignment, transfer, sale, devise, or bequest | 11 |
| of the death benefit or
ownership
of the insurance policy or | 12 |
| certificate to the viatical settlement provider.
"Viatical | 13 |
| settlement provider" does not include:
| 14 |
| (1) a licensed insurance company, bank, savings bank, | 15 |
| savings and loan
association, credit union, commercial | 16 |
| finance company or other licensed lending
institution, | 17 |
| investment company registered under the Investment Company | 18 |
| Act of
1940, pension plan qualified under Section 401(a) of | 19 |
| the Internal Revenue Code
of 1986, or trust funding such a | 20 |
| pension plan that takes an assignment of a
life insurance | 21 |
| policy only as collateral for a loan;
| 22 |
| (2) sophisticated investors meeting the standards of | 23 |
| subsection H of
Section 4 of the Illinois Securities Law of | 24 |
| 1953 who invest in or lend to a
licensed viatical | 25 |
| settlement provider or other persons who so
invest pursuant | 26 |
| to a registered security offering; or
|
|
|
|
SB2480 |
- 41 - |
LRB096 14868 MJR 29734 b |
|
| 1 |
| (3) the issuer of a life insurance policy providing | 2 |
| accelerated benefits
under the Illinois Insurance Code.
| 3 |
| "Viaticated policy" means a life insurance policy held by a | 4 |
| viatical
settlement provider, directly or indirectly, through | 5 |
| a viatical settlement
contract.
| 6 |
| "Viator" means a person who owns a life insurance policy, | 7 |
| or who owns or is
covered under a group policy, insuring the | 8 |
| life of a
person with a catastrophic or life threatening | 9 |
| illness or condition
who enters into an agreement under which | 10 |
| the viatical
settlement provider will pay compensation or | 11 |
| anything of value, which
compensation or value is less than the | 12 |
| expected death benefit of the insurance
policy or certificate, | 13 |
| in return for the viator's assignment, transfer, sale,
devise, | 14 |
| or bequest of the death benefit or ownership of the insurance | 15 |
| policy or
certificate to the viatical settlement provider.
| 16 |
| (Source: P.A. 89-484, eff. 6-21-96; 90-545, eff. 1-1-98. | 17 |
| Repealed by P.A. 96-736, eff. 7-1-10.)
| 18 |
| Section 20. The General Not For Profit Corporation Act of | 19 |
| 1986 is amended by changing Section 103.05 as follows:
| 20 |
| (805 ILCS 105/103.05) (from Ch. 32, par. 103.05)
| 21 |
| Sec. 103.05. Purposes and authority of corporations;
| 22 |
| particular purposes; exemptions.
| 23 |
| (a) Not-for-profit corporations may be organized under | 24 |
| this Act for any
one or more of the following or similar |
|
|
|
SB2480 |
- 42 - |
LRB096 14868 MJR 29734 b |
|
| 1 |
| purposes:
| 2 |
| (1) Charitable.
| 3 |
| (2) Benevolent.
| 4 |
| (3) Eleemosynary.
| 5 |
| (4) Educational.
| 6 |
| (5) Civic.
| 7 |
| (6) Patriotic.
| 8 |
| (7) Political.
| 9 |
| (8) Religious.
| 10 |
| (9) Social.
| 11 |
| (10) Literary.
| 12 |
| (11) Athletic.
| 13 |
| (12) Scientific.
| 14 |
| (13) Research.
| 15 |
| (14) Agricultural.
| 16 |
| (15) Horticultural.
| 17 |
| (16) Soil improvement.
| 18 |
| (17) Crop improvement.
| 19 |
| (18) Livestock or poultry improvement.
| 20 |
| (19) Professional, commercial, industrial, or trade | 21 |
| association.
| 22 |
| (20) Promoting the development, establishment, or | 23 |
| expansion
of industries.
| 24 |
| (21) Electrification on a cooperative basis.
| 25 |
| (22) Telephone service on a mutual or cooperative | 26 |
| basis.
|
|
|
|
SB2480 |
- 43 - |
LRB096 14868 MJR 29734 b |
|
| 1 |
| (23) Ownership and operation of water supply | 2 |
| facilities for
drinking and general domestic use on a | 3 |
| mutual or cooperative basis.
| 4 |
| (24) Ownership or administration of residential | 5 |
| property on a
cooperative basis.
| 6 |
| (25) Administration and operation of property owned on | 7 |
| a
condominium basis or by a homeowner association.
| 8 |
| (26) Administration and operation of an organization | 9 |
| on a
cooperative basis producing or furnishing goods, | 10 |
| services,
or facilities primarily for the benefit of its | 11 |
| members who
are consumers of those goods, services, or | 12 |
| facilities.
| 13 |
| (27) Operation of a community mental health board or | 14 |
| center
organized pursuant to the Community Mental Health | 15 |
| Act for the purpose of
providing direct patient services.
| 16 |
| (28) Provision of debt management services as | 17 |
| authorized by the Debt
Relief and Consumer Protection | 18 |
| Management Service Act.
| 19 |
| (29) Promotion, operation, and administration of a
| 20 |
| ridesharing arrangement as defined in Section 1-176.1 of
| 21 |
| the Illinois Vehicle Code.
| 22 |
| (30) The administration and operation of an | 23 |
| organization for the
purpose of assisting low-income | 24 |
| consumers in the acquisition of utility and
telephone | 25 |
| services.
| 26 |
| (31) Any purpose permitted to be exempt from taxation |
|
|
|
SB2480 |
- 44 - |
LRB096 14868 MJR 29734 b |
|
| 1 |
| under
Sections 501(c) or 501(d)
of the United States | 2 |
| Internal Revenue Code,
as now in
or hereafter amended.
| 3 |
| (32) Any purpose that would qualify for tax-deductible | 4 |
| gifts under the
Section 170(c) of the United States | 5 |
| Internal Revenue Code, as now
or hereafter amended. Any | 6 |
| such purpose is deemed to be charitable
under subsection | 7 |
| (a)(1) of this Section.
| 8 |
| (33) Furnishing of natural gas on a cooperative basis.
| 9 |
| (b) A corporation may be organized hereunder to serve in an
| 10 |
| area that adjoins or borders (except for any intervening
| 11 |
| natural watercourse) an area located in an adjoining state
| 12 |
| intended to be similarly served, and the corporation may
join | 13 |
| any corporation created by the adjoining state having
an | 14 |
| identical purpose and organized as a not-for-profit
| 15 |
| corporation. Whenever any corporation organized under this
Act | 16 |
| so joins with a foreign corporation having an identical
| 17 |
| purpose, the corporation shall be permitted to do business
in | 18 |
| Illinois as one corporation; provided (1) that the name,
bylaw | 19 |
| provisions, officers, and directors of each
corporation are | 20 |
| identical, (2) that the foreign corporation
complies with the | 21 |
| provisions of this Act relating to the
admission of foreign | 22 |
| corporation, and (3) that the Illinois
corporation files a | 23 |
| statement with the Secretary of State
indicating that it has | 24 |
| joined with a foreign corporation
setting forth the name | 25 |
| thereof and the state of its incorporation.
| 26 |
| (Source: P.A. 94-738, eff. 5-4-06.)
|
|
|
|
SB2480 |
- 45 - |
LRB096 14868 MJR 29734 b |
|
| 1 |
| Section 99. Effective date. This Act takes effect upon | 2 |
| becoming law.
|
|
|
|
SB2480 |
- 46 - |
LRB096 14868 MJR 29734 b |
|
| 1 |
|
INDEX
| 2 |
|
Statutes amended in order of appearance
|
| 3 |
| 30 ILCS 105/6z-26 |
|
| 4 |
| 205 ILCS 665/Act title |
|
| 5 |
| 205 ILCS 665/1 |
from Ch. 17, par. 5301 |
| 6 |
| 205 ILCS 665/2 |
from Ch. 17, par. 5302 |
| 7 |
| 205 ILCS 665/3 |
from Ch. 17, par. 5303 |
| 8 |
| 205 ILCS 665/4 |
from Ch. 17, par. 5304 |
| 9 |
| 205 ILCS 665/5 |
from Ch. 17, par. 5305 |
| 10 |
| 205 ILCS 665/6 |
from Ch. 17, par. 5306 |
| 11 |
| 205 ILCS 665/7 |
from Ch. 17, par. 5307 |
| 12 |
| 205 ILCS 665/10 |
from Ch. 17, par. 5310 |
| 13 |
| 205 ILCS 665/10.1 new |
|
| 14 |
| 205 ILCS 665/10.2 new |
|
| 15 |
| 205 ILCS 665/10.3 new |
|
| 16 |
| 205 ILCS 665/10.4 new |
|
| 17 |
| 205 ILCS 665/11 |
from Ch. 17, par. 5311 |
| 18 |
| 205 ILCS 665/11.5 |
|
| 19 |
| 205 ILCS 665/12 |
from Ch. 17, par. 5312 |
| 20 |
| 205 ILCS 665/12.1 |
|
| 21 |
| 205 ILCS 665/13 |
from Ch. 17, par. 5313 |
| 22 |
| 205 ILCS 665/13.2 new |
|
| 23 |
| 205 ILCS 665/13.3 new |
|
| 24 |
| 205 ILCS 665/13.8 new |
|
| 25 |
| 205 ILCS 665/14 |
from Ch. 17, par. 5314 |
|
|
|
|
SB2480 |
- 47 - |
LRB096 14868 MJR 29734 b |
|
| 1 |
| 205 ILCS 665/15.1 |
from Ch. 17, par. 5316 |
| 2 |
| 205 ILCS 665/15.3 |
from Ch. 17, par. 5318 |
| 3 |
| 205 ILCS 665/16 |
from Ch. 17, par. 5319 |
| 4 |
| 205 ILCS 665/17 |
from Ch. 17, par. 5320 |
| 5 |
| 205 ILCS 665/20.5 |
|
| 6 |
| 205 ILCS 665/22 |
from Ch. 17, par. 5325 |
| 7 |
| 215 ILCS 158/5 |
|
| 8 |
| 805 ILCS 105/103.05 |
from Ch. 32, par. 103.05 |
| |
|