[ Search ] [ PDF text ] [ Legislation ]
[ Home ] [ Back ] [ Bottom ]
| [ Introduced ] | [ Engrossed ] | [ Senate Amendment 001 ] |
92_SB0888enr SB888 Enrolled LRB9204552JStm 1 AN ACT concerning certain financial services. 2 Be it enacted by the People of the State of Illinois, 3 represented in the General Assembly: 4 Section 5. The Transmitters of Money Act is amended by 5 changing Sections 5, 20, 25, 30, 40, and 45 and adding 6 Section 92 as follows: 7 (205 ILCS 657/5) 8 Sec. 5. Definitions. As used in this Act, unless the 9 context otherwise requires, the words and phrases defined in 10 this Section have the meanings set forth in this Section. 11 "Authorized seller" means a person not an employee of a 12 licensee who engages in the business regulated by this Act on 13 behalf of a licensee under a contract between that person and 14 the licensee. 15 "Bill payment service" means the business of transmitting 16 money on behalf of an Illinois resident for the purpose of 17 paying the resident's bills. 18 "Controlling person" means a person owning or holding the 19 power to vote 25% or more of the outstanding voting 20 securities of a licensee or the power to vote the securities 21 of another controlling person of the licensee. For purposes 22 of determining the percentage of a licensee controlled by a 23 controlling person, the person's interest shall be combined 24 with the interest of any other person controlled, directly or 25 indirectly, by that person or by a spouse, parent, or child 26 of that person. 27 "Department" means the Department of Financial 28 Institutions. 29 "Director" means the Director of Financial Institutions. 30 "Licensee" means a person licensed under this Act. 31 "Location" means a place of business at which activity SB888 Enrolled -2- LRB9204552JStm 1 regulated by this Act occurs. 2 "Material litigation" means any litigation that, 3 according to generally accepted accounting principles, is 4 deemed significant to a licensee's financial health and would 5 be required to be referenced in a licensee's annual audited 6 financial statements, reports to shareholders, or similar 7 documents. 8 "Money" means a medium of exchange that is authorized or 9 adopted by a domestic or foreign government as a part of its 10 currency and that is customarily used and accepted as a 11 medium of exchange in the country of issuance. 12 "Money transmitter" means a person who is located in or 13 doing business in this State and who directly or through 14 authorized sellers does any of the following in this State: 15 (1) Sells or issues payment instruments. 16 (2) Engages in the business of receiving money for 17 transmission or transmitting money. 18 (3) Engages in the business of exchanging, for 19 compensation, money of the United States Government or a 20 foreign government to or from money of another 21 government. 22 "Outstanding payment instrument" means, unless otherwise 23 treated by or accounted for under generally accepted 24 accounting principles on the books of the licensee, a payment 25 instrument issued by the licensee that has been sold in the 26 United States directly by the licensee or has been sold in 27 the United States by an authorized seller of the licensee and 28 reported to the licensee as having been sold, but has not 29 been paid by or for the licensee. 30 "Payment instrument" means a check, draft, money order, 31 traveler's check, or other instrument or memorandum, written 32 order or written receipt for the transmission or payment of 33 money sold or issued to one or more persons whether or not 34 that instrument or order is negotiable. Payment instrument SB888 Enrolled -3- LRB9204552JStm 1 does not include an instrument that is redeemable by the 2 issuer in merchandise or service, a credit card voucher, or a 3 letter of credit. A written order for the transmission or 4 payment of money that results in the issuance of a check, 5 draft, money order, traveler's check, or other instrument or 6 memorandum is not a payment instrument. 7 "Person" means an individual, partnership, association, 8 joint stock association, corporation, or any other form of 9 business organization. 10 "Transmitting money" means the transmission of money by 11 any means, including transmissions to or from locations 12 within the United States or to and from locations outside of 13 the United States by payment instrument, facsimile or 14 electronic transfer,courieror otherwise, and includes bill 15 payment services. 16 (Source: P.A. 88-643, eff. 1-1-95.) 17 (205 ILCS 657/20) 18 Sec. 20. Qualifications for a license. 19 (a) In order to obtain a license under this Act, an 20 applicant must prove to the satisfaction of the Director all 21 of the following: 22 (1) That the applicant has and maintains the net 23 worth specified in Column A, computed according to 24 generally accepted accounting principles, corresponding 25 to the number of locations in this State at which the 26 applicant is conducting business or proposes to conduct 27 business by itself and by any authorized sellers 28 specified in Column B: 29 Column A Column B 30 $35,000 1 31 50,000 2-3 32 100,000 4-5 33 150,000 6-9 SB888 Enrolled -4- LRB9204552JStm 1 200,000 10-14 2 300,000 15-19 3 400,000 20-24 4 500,000 25 or more 5 (2) That the applicant is in good standing and in 6 statutory compliance in the state or country of 7 incorporation or when the applicant is an entity other 8 than a corporation, is properly registered under the laws 9 of this State or another state or country, and if 10 required, the corporation or entity is authorized to do 11 business in the State of Illinois. 12 (3) That the applicant has not been convicted 13 within the 10 years preceding the application of a felony 14 under the laws of this State, another state, the United 15 States, or a foreign jurisdiction. 16 (4) That no officer, director, controlling person, 17 or principal of the applicant has been convicted within 18 the 10 years preceding the application of a felony under 19 the laws of this State, another state, the United States, 20 or a foreign jurisdiction. 21 (5) That the financial responsibility, financial 22 condition, business experience, character, and general 23 fitness of the applicant and its management are such as 24 to justify the confidence of the public and that the 25 applicant is fit, willing, and able to carry on the 26 proposed business in a lawful and fair manner. 27 (b) The Director may, for good cause shown, waive the 28 requirement of items (3) and (4) of subsection (a) of this 29 Section. 30 (Source: P.A. 88-643, eff. 1-1-95.) 31 (205 ILCS 657/25) 32 Sec. 25. Application for license. 33 (a) An application for a license must be in writing, SB888 Enrolled -5- LRB9204552JStm 1 under oath, and in the form the Director prescribes. The 2 application must contain or be accompanied by all of the 3 following: 4 (1) The name of the applicant and the address of 5 the principal place of business of the applicant and the 6 address of all locations and proposed locations of the 7 applicant in this State. 8 (2) The form of business organization of the 9 applicant, including: 10 (A) a copy of its articles of incorporation 11 and amendments thereto and a copy of its bylaws, 12 certified by its secretary, if the applicant is a 13 corporation; 14 (B) a copy of its partnership agreement, 15 certified by a partner, if the applicant is a 16 partnership; or 17 (C) a copy of the documents that control its 18 organizational structure, certified by a managing 19 official, if the applicant is organized in some 20 other form. 21 (3) The name, business and home address, and a 22 chronological summary of the business experience, 23 material litigation history, and felony convictions over 24 the preceding 10 years of: 25 (A) the proprietor, if the applicant is an 26 individual; 27 (B) every partner, if the applicant is a 28 partnership; 29 (C) each officer, director, and controlling 30 person, if the applicant is a corporation; and 31 (D) each person in a position to exercise 32 control over, or direction of, the business of the 33 applicant, regardless of the form of organization of 34 the applicant. SB888 Enrolled -6- LRB9204552JStm 1 (4) Financial statements, not more than one year 2 old, prepared in accordance with generally accepted 3 accounting principles and audited by a licensed public 4 accountant or certified public accountant showing the 5 financial condition of the applicant and an unaudited 6 balance sheet and statement of operation as of the most 7 recent quarterly report before the date of the 8 application, certified by the applicant or an officer or 9 partner thereof. If the applicant is a wholly owned 10 subsidiary or is eligible to file consolidated federal 11 income tax returns with its parent, however, unaudited 12 financial statements for the preceding year along with 13 the unaudited financial statements for the most recent 14 quarter may be submitted if accompanied by the audited 15 financial statements of the parent company for the 16 preceding year along with the unaudited financial 17 statement for the most recent quarter. 18 (5) Filings of the applicant with the Securities 19 and Exchange Commission or similar foreign governmental 20 entity (English translation), if any. 21 (6) A list of all other states in which the 22 applicant is licensed as a money transmitter and whether 23 the license of the applicant for those purposes has ever 24 been withdrawn, refused, canceled, or suspended in any 25 other state, with full details. 26 (7) A list of all money transmitter locations and 27 proposed locations in this State. 28 (8) A sample of the contract for authorized 29 sellers. 30 (9) A sample form of the proposed payment 31 instruments to be used in this State. 32 (10) The name and business address of the clearing 33 banks through which the applicant intends to conduct any 34 business regulated under this Act. SB888 Enrolled -7- LRB9204552JStm 1 (11) A surety bondor other securityas required by 2 Section 30 of this Act. 3 (12) The applicable fees as required by Section 45 4 of this Act. 5 (13) A written consent to service of process as 6 provided by Section 100 of this Act. 7 (14) A written statement that the applicant is in 8 full compliance with and agrees to continue to fully 9 comply with all state and federal statutes and 10 regulations relating to money laundering. 11 (15) All additional information the Director 12 considers necessary in order to determine whether or not 13 to issue the applicant a license under this Act. 14 (b) The Director may, for good cause shown, waive, in 15 part, any of the requirements of this Section. 16 (Source: P.A. 88-643, eff. 1-1-95.) 17 (205 ILCS 657/30) 18 Sec. 30. Surety bond. 19 (a) An applicant for a license shall post and a licensee 20 must maintain with the Director a bond or bonds issued by 21 corporations qualified to do business as surety companies in 22 this State. 23 (b) The applicant or licensee shall post a bond in the 24 amount of the greater of $100,000 or an amount equal to the 25 daily average of outstanding payment instruments for the 26 preceding 12 months or operational history, whichever is 27 shorter, up to a maximum amount of $2,000,000. When the 28 amount of the required bond exceeds $1,000,000, the applicant 29 or licensee may, in the alternative, post a bond in the 30 amount of $1,000,000 plus a dollar for dollar increase in the 31 net worth of the applicant or licensee over and above the 32 amount required in Section 20, up to a total amount of 33 $2,000,000. SB888 Enrolled -8- LRB9204552JStm 1 (c) The bond must be in a form satisfactory to the 2 Director and shall run to the State of Illinois for the 3 benefit of any claimant against the applicant or licensee 4 with respect to the receipt, handling, transmission, and 5 payment of money by the licensee or authorized seller in 6 connection with the licensed operations. A claimant damaged 7 by a breach of the conditions of a bond shall have a right to 8 action upon the bond for damages suffered thereby and may 9 bring suit directly on the bond, or the Director may bring 10 suit on behalf of the claimant. 11 (d) (Blank).Instead of the bond and net worth12requirements required in this Section, the applicant or13licensee may pledge to the Director cash or securities that14bear a rating of one of the 3 highest grades by Moody's15Investor's Service, Inc. or Standard and Poor's Corporation16in an amount equal to the bond and net worth requirements set17forth in subsection (b). The Director may provide for the18custody of the securities by a trust company or bank located19in this State and qualified to do business under the20Corporate Fiduciary Act. The compensation, if any, of the21custodian must be paid by the pledging applicant or licensee.22 (e) (Blank).The bonds and securities so pledged may,23with the approval of the Director, be exchanged for other24bonds or securities. No bond or security may be sold or25transferred by the Director except on order of the circuit26court or as otherwise provided. As long as the applicant or27licensee pledging the bonds or securities remains solvent and28in good standing under this Act, it shall be permitted to29receive from the Director the interest and dividends on the30deposit.31 (f) After receiving a license, the licensee must 32 maintain the required bond plus net worth (if applicable)or33securitiesuntil 5 years after it ceases to do business in 34 this State unless all outstanding payment instruments are SB888 Enrolled -9- LRB9204552JStm 1 eliminated or the provisions under the Uniform Disposition of 2 Unclaimed Property Act have become operative and are adhered 3 to by the licensee. Notwithstanding this provision, however, 4 the amount required to be maintained may be reduced to the 5 extent that the amount of the licensee's payment instruments 6 outstanding in this State are reduced. 7 (g) If the Director at any time reasonably determines 8 that the required bondor deposit of securitiesis insecure, 9 deficient in amount, or exhausted in whole or in part, he may 10 in writing require the filing of a new or supplemental bond 11or other securityin order to secure compliance with this Act 12 and may demand compliance with the requirement within 30 days 13 following service on the licensee. 14 (Source: P.A. 88-643, eff. 1-1-95.) 15 (205 ILCS 657/40) 16 Sec. 40. Renewals of license. As a condition for renewal 17 of a license, athelicensee must submit to the Director, and 18 the Director must receive, on or before December 1 of each 19 year, an application for renewal made,in writing and under 20 oath,on a form prescribed by the Director. A licensee whose 21failing to submit anapplication for renewal is not received 22 by the Department on or before December 31 shall not have its 23 license renewed and shall be required to submit to the 24 Director an application for a new license in accordance with 25 Section 25. Upon a showing of good cause, the Director may 26 extend the deadline for the filing of an application for 27 renewal. The application for renewal of a license shall 28 contain or be accompanied by all of the following: 29 (1) The name of the licensee and the address of the 30 principal place of business of the licensee. 31 (2) A list of all locations where the licensee is 32 conducting business under its license and a list of all 33 authorized sellers through whom the licensee is conducting SB888 Enrolled -10- LRB9204552JStm 1 business under its license, including the name and business 2 address of each authorized seller. 3 (3) Audited financial statements covering the past year 4 of operations, prepared in accordance with generally accepted 5 accounting principles, showing the financial condition of the 6 licensee. The licensee shall submit the audited financial 7 statement after the application for renewal has been 8 approved. The audited financial statement must be received 9 by the Department no later than 120 days after the end of the 10 licensee's fiscal year, but before April 30 of the year of11the renewed license. If the licensee is a wholly owned 12 subsidiary or is eligible to file consolidated federal income 13 tax returns with its parent, the licensee may submit 14 unaudited financial statements if accompanied by the audited 15 financial statements of the parent company for its most 16 recently ended year. 17 (4) A statement of the dollar amount and number of money 18 transmissions and payment instruments sold, issued, 19 exchanged, or transmitted in this State by the licensee and 20 its authorized sellers for the past year. 21 (5) A statement of the dollar amount of uncompleted 22 money transmissions and payment instruments outstanding or in 23 transit, in this State, as of the most recent quarter 24 available. 25 (6) The annual license renewal fees and any penalty fees 26 as provided by Section 45 of this Act. 27 (7) Evidence sufficient to prove to the satisfaction of 28 the Director that the licensee has complied with all 29 requirements under Section 20 relating to its net worth, 30 under Section 30 relating to its surety bond or other 31 security, and under Section 50 relating to permissible 32 investments. 33 (8) A statement of a change in information provided by 34 the licensee in its application for a license or its previous SB888 Enrolled -11- LRB9204552JStm 1 applications for renewal including, but not limited to, new 2 directors, officers, authorized sellers, or clearing banks 3 and material changes in the operation of the licensee's 4 business. 5 (Source: P.A. 88-643, eff. 1-1-95.) 6 (205 ILCS 657/45) 7 Sec. 45. Fees. 8 (a) The Director shall charge and collect fees, which 9 shall be nonrefundable unless otherwise indicated, in 10 accordance with the provisions of this Act as follows: 11 (1) For applying for a license, an application fee 12 of $100 and a license fee, which shall be refunded if the 13 application is denied or withdrawn, of $100 plus $10 for 14 each location at which the applicant and its authorized 15 sellers are conducting business or propose to conduct 16 business excepting the applicant's principal place of 17 business. 18 (2) For renewal of a license, a fee of $100 plus 19 $10 for each location at which the licensee and its 20 authorized sellers are conducting business, except the 21 licensee's principal place of business. 22 (3) For an application to add an authorized seller 23 location, $10 for each authorized seller location. 24 (4) For service of process or other notice upon the 25 Director as provided by Section 100, a fee of $10. 26 (5) For an application for renewal of a license 27 received by the Departmentsubmittedafter December 1, a 28 penalty fee of $10 per day for each day after December 1 29 in addition to any other fees required under this Act 30 unless an extension of time has been granted by the 31 Director. 32 (6) For failure to submit financial statements as 33 required by Section 40on or before April 30, a penalty SB888 Enrolled -12- LRB9204552JStm 1 fee of $10 per day for each day the statement is late 2after April 30unless an extension of time has been 3 granted by the Director. 4 (b) Beginning one year after the effective date of this 5 Act, the Director may, by rule, amend the fees set forth in 6 this Section. 7 (c) All moneys received by the Department under this Act 8 shall be deposited into the Financial Institutions Fund. 9 (Source: P.A. 88-643, eff. 1-1-95.) 10 (205 ILCS 657/92 new) 11 Sec. 92. Receivership. 12 (a) If the Director determines that a licensee is 13 insolvent or is violating this Act, he or she may appoint a 14 receiver. Under the direction of the Director, the receiver 15 shall, for the purpose of receivership, take possession of 16 and title to the books, records, and assets of the licensee. 17 The Director may require the receiver to provide security in 18 an amount the Director deems proper. Upon appointment of the 19 receiver, the Director shall have published, once each week 20 for 4 consecutive weeks in a newspaper having a general 21 circulation in the community, a notice informing all persons 22 who have claims against the licensee to present them to the 23 receiver. Within 10 days after the receiver takes possession, 24 the licensee may apply to the Circuit Court of Sangamon 25 County to enjoin further proceedings. The receiver may 26 operate the business until the Director determines that 27 possession should be restored to the licensee or that the 28 business should be liquidated. 29 (b) If the Director determines that a business in 30 receivership should be liquidated, he or she shall direct the 31 Attorney General to file a complaint in the Circuit Court of 32 the county in which the business is located, in the name of 33 the People of the State of Illinois, for the orderly SB888 Enrolled -13- LRB9204552JStm 1 liquidation and dissolution of the business and for an 2 injunction restraining the licensee and its officers and 3 directors from continuing the operation of the business. 4 Within 30 days after the day the Director determines that the 5 business should be liquidated, the receiver shall file with 6 the Director and with the clerk of the court that has charge 7 of the liquidation a correct list of all creditors, as shown 8 by the licensee's books and records, who have not presented 9 their claims. The list shall state the amount of the claim 10 after allowing all just credits, deductions, and set-offs as 11 shown by the licensee's books. These claims shall be deemed 12 proven unless some interested party files an objection within 13 the time fixed by the Director or court that has charge of 14 the liquidation. 15 (c) The General Assembly finds and declares that debt 16 management services provide important and vital services to 17 Illinois citizens. It is therefore declared to be the policy 18 of this State that customers who receive these services must 19 be protected from interruptions of services. To carry out 20 this policy and to insure that customers of a licensee are 21 protected if it is determined that a business in receivership 22 should be liquidated, the Director shall make a distribution 23 of moneys collected by the receiver in the following order of 24 priority: 25 (1) Allowed claims for the actual necessary 26 expenses of the receivership of the business being 27 liquidated, including: 28 (A) reasonable receiver's fees and receiver's 29 attorney's fees approved by the Director; 30 (B) all expenses of any preliminary or other 31 examinations into the condition of the receivership; 32 (C) all expenses incurred by the Director that 33 are incident to possession and control of any 34 property or records of the licensee's business; and SB888 Enrolled -14- LRB9204552JStm 1 (D) reasonable expenses incurred by the 2 Director as the result of business agreements or 3 contractual arrangements necessary to insure that 4 the services of the licensee are delivered to the 5 community without interruption. These business 6 agreements or contractual arrangements may include, 7 but are not limited to, agreements made by the 8 Director, or by the receiver with the approval of 9 the Director, with banks, bonding companies, and 10 other types of financial institutions. 11 (2) Allowed unsecured claims for wages or salaries, 12 excluding vacation, severance, and sick leave pay earned 13 by employees within 90 days before the appointment of a 14 receiver. 15 (3) Allowed unsecured claims of any tax, and 16 interest and penalty on the tax. 17 (4) Allowed unsecured claims, other than a kind 18 specified in items (1), (2), and (3) of this subsection, 19 filed with the Director within the time the Director 20 fixes for filing claims. 21 (5) Allowed unsecured claims, other than a kind 22 specified in items (1), (2), and (3) of this subsection, 23 filed with the Director after the time fixed for filing 24 claims by the Director. 25 (6) Allowed creditor claims asserted by an owner, 26 member, or stockholder of the business in liquidation. 27 (7) After one year from the final dissolution of 28 the licensee's business, all assets not used to satisfy 29 allowed claims shall be distributed pro rata to the 30 owner, owners, members, or stockholders of the business. 31 The Director shall pay all claims of equal priority 32 according to the schedule established in this subsection and 33 shall not pay claims of lower priority until all higher 34 priority claims are satisfied. If insufficient assets are SB888 Enrolled -15- LRB9204552JStm 1 available to meet all claims of equal priority, those assets 2 shall be distributed pro rata among those claims. All 3 unclaimed assets of a licensee and the licensee's business 4 shall be deposited with the Director to be paid out when 5 proper claims are presented to the Director. 6 (d) Upon the order of the circuit court of the county in 7 which the business being liquidated is located, the receiver 8 may sell or compound any bad or doubtful debt, and on like 9 order may sell the personal property of the business on such 10 terms as the court approves. The receiver shall succeed to 11 whatever rights or remedies the unsecured creditors of the 12 business may have against the owner or owners, operators, 13 stockholders, directors, members, managers, or officers, 14 arising out of their claims against the licensee's business, 15 but nothing contained in this Section shall prevent those 16 creditors from filing their claims in the liquidation 17 proceeding. The receiver may enforce those rights or remedies 18 in any court of competent jurisdiction. 19 (e) At the close of a receivership, the receiver shall 20 turn over to the Director all books of account and ledgers of 21 the business for preservation. The Director shall hold all 22 records of receiverships received at any time for a period of 23 2 years after the close of the receivership. The records may 24 be destroyed at the termination of the 2-year period. All 25 expenses of the receivership including, but not limited to, 26 reasonable receiver's and attorney's fees approved by the 27 Director, all expenses of any preliminary or other 28 examinations into the condition of the licensee's business or 29 the receivership, and all expenses incident to the possession 30 and control of any property or records of the business 31 incurred by the Director shall be paid out of the assets of 32 the licensee's business. These expenses shall be paid before 33 all other claims. 34 (f) Upon the filing of a complaint by the Attorney SB888 Enrolled -16- LRB9204552JStm 1 General for the orderly liquidation and dissolution of a 2 licensee's business, as provided in this Act, all pending 3 suits and actions upon unsecured claims against the business 4 shall abate. Nothing contained in this Act, however, prevents 5 these claimants from filing their claims in the liquidation 6 proceeding. If a suit or an action is instituted or 7 maintained by the receiver on any bond or policy of insurance 8 issued pursuant to the requirements of this Act, the bonding 9 or insurance company sued shall not have the right to 10 interpose or maintain any counterclaim based upon 11 subrogation, upon any express or implied agreement of, or 12 right to, indemnity or exoneration, or upon any other express 13 or implied agreement with, or right against, the licensee's 14 business. Nothing contained in this Act prevents the bonding 15 or insurance company from filing this type of claim in the 16 liquidation proceeding. 17 (g) A licensee may not terminate its affairs and close 18 up its business unless it has first deposited with the 19 Director an amount of money equal to all of its debts, 20 liabilities, and lawful demands against it including the 21 costs and expenses of a proceeding under this Section, 22 surrendered to the Director its license, and filed with the 23 Director a statement of termination signed by the licensee 24 containing a pronouncement of intent to close up its business 25 and liquidate its liabilities and containing a sworn list 26 itemizing in full all of its debts, liabilities, and lawful 27 demands against it. Corporate licensees must attach to, and 28 make a part of the statement of termination, a copy of a 29 resolution providing for the termination and closing up of 30 the licensee's affairs, certified by the secretary of the 31 licensee and duly adopted at a shareholders' meeting by the 32 holders of at least two-thirds of the outstanding shares 33 entitled to vote at the meeting. Upon the filing with the 34 Director of a statement of termination, the Director shall SB888 Enrolled -17- LRB9204552JStm 1 cause notice of that action to be published once each week 2 for 3 consecutive weeks in a public newspaper of general 3 circulation published in the city or village where the 4 business is located, and if no newspaper is published in that 5 place, then in a public newspaper of general circulation 6 nearest to that city or village. The publication shall give 7 notice that the debts, liabilities, and lawful demands 8 against the business will be redeemed by the Director upon 9 demand in writing made by the owner thereof, at any time 10 within 3 years after the date of first publication. After the 11 expiration of the 3-year period, the Director shall return to 12 the person or persons designated in the statement of 13 termination to receive repayment, and in the proportion 14 specified in that statement, any balance of money remaining 15 in his or her possession after first deducting all unpaid 16 costs and expenses incurred in connection with a proceeding 17 under this Section. The Director shall receive for his or her 18 services, exclusive of costs and expenses, 2% of any amount 19 up to $5,000 and 1% of any amount in excess of $5,000 20 deposited with him or her under this Section by any business. 21 Nothing contained in this Section shall affect or impair the 22 liability of any bonding or insurance company on any bond or 23 insurance policy issued under this Act relating to the 24 business. 25 Section 10. The Debt Management Service Act is amended 26 by changing Sections 2, 4, and 6 and adding Section 20.5 as 27 follows: 28 (205 ILCS 665/2) (from Ch. 17, par. 5302) 29 Sec. 2. Definitions. As used in this Act: 30 "Debt management service" means the planning and 31 management of the financial affairs of a debtor for a fee and 32 the receiving of money from the debtor for the purpose of SB888 Enrolled -18- LRB9204552JStm 1 distributing it to the debtor's creditors in payment or 2 partial payment of the debtor's obligations or soliciting 3 financial contributions from creditors. The business of debt 4 management is conducted in this State if the debt management 5 business, its employees, or its agents are located in this 6 State or if the debt management business solicits or 7 contracts with debtors located in this State. 8 This term shall not include the following when engaged in 9 the regular course of their respective businesses and 10 professions: 11 (a) Attorneys at law. 12 (b) Banks, fiduciaries, credit unions, savings and loan 13 associations, and savings banks as duly authorized and 14 admitted to transact business in the State of Illinois and 15 performing credit and financial adjusting service in the 16 regular course of their principal business. 17 (c) Title insurers and abstract companies, while doing 18 an escrow business. 19 (d) Judicial officers or others acting pursuant to court 20 order. 21 (e) Employers for their employees. 22 (f) Bill payment services, as defined in the 23 Transmitters of Money Act. 24 "Director" means Director of Financial Institutions. 25 "Debtor" means the person or persons for whom the debt 26 management service is performed. 27 "Person" means an individual, firm, partnership, 28 association, limited liability company, corporation, or 29 not-for-profit corporation. 30 "Licensee" means a person licensed under this Act. 31 "Director" means the Director of the Department of 32 Financial Institutions. 33 (Source: P.A. 90-545, eff. 1-1-98.) SB888 Enrolled -19- LRB9204552JStm 1 (205 ILCS 665/4) (from Ch. 17, par. 5304) 2 Sec. 4. Application for license. Application for a 3 license to engage in the debt management service business in 4 this State shall be made to the Director and shall be in 5 writing, under oath, and in the form prescribed by the 6 Director. 7 Each applicant, at the time of making such application, 8 shall pay to the Director the sum of $30.00 as a fee for 9 investigation of the applicant, and the additional sum of 10 $100.00 as a license fee. 11 Every applicant shall submit to the Director, at the time 12 of the application for a license, a bond to be approved by 13 the Director in which the applicant shall be the obligor, in 14 the sum of $25,000 or such additional amount as required by 15 the Director based on the amount of disbursements made by the 16 licensee in the previous year, and in which an insurance 17 company, which is duly authorized by the State of Illinois, 18 to transact the business of fidelity and surety insurance 19 shall be a surety; provided, however, the Director may accept20in lieu of the surety bond, a deposit in cash, a certified21check payable to the Director of Financial Institutions, or22United States Government Bonds in the amount of at least23$25,000. 24 The bond shall run to the Director for the use of the 25 Department or of any person or persons who may have a cause 26 of action against the obligor in said bond arising out of any 27 violation of this Act or rules by a license. Such bond shall 28 be conditioned that the obligor will faithfully conform to 29 and abide by the provisions of this Act and of all rules, 30 regulations and directions lawfully made by the Director and 31 will pay to the Director or to any person or persons any and 32 all money that may become due or owing to the State or to 33 such person or persons, from said obligor under and by virtue 34 of the provisions of this Act. SB888 Enrolled -20- LRB9204552JStm 1 (Source: P.A. 90-545, eff. 1-1-98.) 2 (205 ILCS 665/6) (from Ch. 17, par. 5306) 3 Sec. 6. Renewal of license. Each licensee under the 4 provisions of this Act mayon or before December 1make 5 application to the Director for renewal of its license, which 6 application for renewal shall be on the form prescribed by 7 the Director and shall be accompanied by a fee of $100.00 8 together with a bond or other surety as required, in a 9 minimum amount of $25,000 or such an amount as required by 10 the Director based on the amount of disbursements made by the 11 licensee in the previous year. The application must be 12 received by the Department no later than December 1 of the 13 year preceding the year for which the application applies. 14 (Source: P.A. 90-545, eff. 1-1-98.) 15 (205 ILCS 665/20.5 new) 16 Sec. 20.5. Receivership. 17 (a) If the Director determines that a licensee is 18 insolvent or is violating this Act, he or she may appoint a 19 receiver. Under the direction of the Director, the receiver 20 shall, for the purpose of receivership, take possession of 21 and title to the books, records, and assets of the licensee. 22 The Director may require the receiver to provide security in 23 an amount the Director deems proper. Upon appointment of the 24 receiver, the Director shall have published, once each week 25 for 4 consecutive weeks in a newspaper having a general 26 circulation in the community, a notice informing all persons 27 who have claims against the licensee to present them to the 28 receiver. Within 10 days after the receiver takes possession, 29 the licensee may apply to the Circuit Court of Sangamon 30 County to enjoin further proceedings. The receiver may 31 operate the business until the Director determines that 32 possession should be restored to the licensee or that the SB888 Enrolled -21- LRB9204552JStm 1 business should be liquidated. 2 (b) If the Director determines that a business in 3 receivership should be liquidated, he or she shall direct the 4 Attorney General to file a complaint in the Circuit Court of 5 the county in which the business is located, in the name of 6 the People of the State of Illinois, for the orderly 7 liquidation and dissolution of the business and for an 8 injunction restraining the licensee and its officers and 9 directors from continuing the operation of the business. 10 Within 30 days after the day the Director determines that the 11 business should be liquidated, the receiver shall file with 12 the Director and with the clerk of the court that has charge 13 of the liquidation a correct list of all creditors, as shown 14 by the licensee's books and records, who have not presented 15 their claims. The list shall state the amount of the claim 16 after allowing all just credits, deductions, and set-offs as 17 shown by the licensee's books. These claims shall be deemed 18 proven unless some interested party files an objection within 19 the time fixed by the Director or court that has charge of 20 the liquidation. 21 (c) The General Assembly finds and declares that debt 22 management services provide important and vital services to 23 Illinois citizens. It is therefore declared to be the policy 24 of this State that customers who receive these services must 25 be protected from interruptions of services. To carry out 26 this policy and to insure that customers of a licensee are 27 protected if it is determined that a business in receivership 28 should be liquidated, the Director shall make a distribution 29 of moneys collected by the receiver in the following order of 30 priority: 31 (1) Allowed claims for the actual necessary 32 expenses of the receivership of the business being 33 liquidated, including: 34 (A) reasonable receiver's fees and receiver's SB888 Enrolled -22- LRB9204552JStm 1 attorney's fees approved by the Director; 2 (B) all expenses of any preliminary or other 3 examinations into the condition of the receivership; 4 (C) all expenses incurred by the Director that 5 are incident to possession and control of any 6 property or records of the licensee's business; and 7 (D) reasonable expenses incurred by the 8 Director as the result of business agreements or 9 contractual arrangements necessary to insure that 10 the services of the licensee are delivered to the 11 community without interruption. These business 12 agreements or contractual arrangements may include, 13 but are not limited to, agreements made by the 14 Director, or by the receiver with the approval of 15 the Director, with banks, bonding companies, and 16 other types of financial institutions. 17 (2) Allowed unsecured claims for wages or salaries, 18 excluding vacation, severance, and sick leave pay earned 19 by employees within 90 days before the appointment of a 20 receiver. 21 (3) Allowed unsecured claims of any tax, and 22 interest and penalty on the tax. 23 (4) Allowed unsecured claims, other than a kind 24 specified in items (1), (2), and (3) of this subsection, 25 filed with the Director within the time the Director 26 fixes for filing claims. 27 (5) Allowed unsecured claims, other than a kind 28 specified in items (1), (2), and (3) of this subsection, 29 filed with the Director after the time fixed for filing 30 claims by the Director. 31 (6) Allowed creditor claims asserted by an owner, 32 member, or stockholder of the business in liquidation. 33 (7) After one year from the final dissolution of 34 the licensee's business, all assets not used to satisfy SB888 Enrolled -23- LRB9204552JStm 1 allowed claims shall be distributed pro rata to the 2 owner, owners, members, or stockholders of the business. 3 The Director shall pay all claims of equal priority 4 according to the schedule established in this subsection and 5 shall not pay claims of lower priority until all higher 6 priority claims are satisfied. If insufficient assets are 7 available to meet all claims of equal priority, those assets 8 shall be distributed pro rata among those claims. All 9 unclaimed assets of a licensee and the licensee's business 10 shall be deposited with the Director to be paid out when 11 proper claims are presented to the Director. 12 (d) Upon the order of the circuit court of the county in 13 which the business being liquidated is located, the receiver 14 may sell or compound any bad or doubtful debt, and on like 15 order may sell the personal property of the business on such 16 terms as the court approves. The receiver shall succeed to 17 whatever rights or remedies the unsecured creditors of the 18 business may have against the owner or owners, operators, 19 stockholders, directors, members, managers, or officers, 20 arising out of their claims against the licensee's business, 21 but nothing contained in this Section shall prevent those 22 creditors from filing their claims in the liquidation 23 proceeding. The receiver may enforce those rights or remedies 24 in any court of competent jurisdiction. 25 (e) At the close of a receivership, the receiver shall 26 turn over to the Director all books of account and ledgers of 27 the business for preservation. The Director shall hold all 28 records of receiverships received at any time for a period of 29 2 years after the close of the receivership. The records may 30 be destroyed at the termination of the 2-year period. All 31 expenses of the receivership including, but not limited to, 32 reasonable receiver's and attorney's fees approved by the 33 Director, all expenses of any preliminary or other 34 examinations into the condition of the licensee's business or SB888 Enrolled -24- LRB9204552JStm 1 the receivership, and all expenses incident to the possession 2 and control of any property or records of the business 3 incurred by the Director shall be paid out of the assets of 4 the licensee's business. These expenses shall be paid before 5 all other claims. 6 (f) Upon the filing of a complaint by the Attorney 7 General for the orderly liquidation and dissolution of a 8 licensee's business, as provided in this Act, all pending 9 suits and actions upon unsecured claims against the business 10 shall abate. Nothing contained in this Act, however, prevents 11 these claimants from filing their claims in the liquidation 12 proceeding. If a suit or an action is instituted or 13 maintained by the receiver on any bond or policy of insurance 14 issued pursuant to the requirements of this Act, the bonding 15 or insurance company sued shall not have the right to 16 interpose or maintain any counterclaim based upon 17 subrogation, upon any express or implied agreement of, or 18 right to, indemnity or exoneration, or upon any other express 19 or implied agreement with, or right against, the licensee's 20 business. Nothing contained in this Act prevents the bonding 21 or insurance company from filing this type of claim in the 22 liquidation proceeding. 23 (g) A licensee may not terminate its affairs and close 24 up its business unless it has first deposited with the 25 Director an amount of money equal to all of its debts, 26 liabilities, and lawful demands against it including the 27 costs and expenses of a proceeding under this Section, 28 surrendered to the Director its license, and filed with the 29 Director a statement of termination signed by the licensee 30 containing a pronouncement of intent to close up its business 31 and liquidate its liabilities and containing a sworn list 32 itemizing in full all of its debts, liabilities, and lawful 33 demands against it. Corporate licensees must attach to, and 34 make a part of the statement of termination, a copy of a SB888 Enrolled -25- LRB9204552JStm 1 resolution providing for the termination and closing up of 2 the licensee's affairs, certified by the secretary of the 3 licensee and duly adopted at a shareholders' meeting by the 4 holders of at least two-thirds of the outstanding shares 5 entitled to vote at the meeting. Upon the filing with the 6 Director of a statement of termination, the Director shall 7 cause notice of that action to be published once each week 8 for 3 consecutive weeks in a public newspaper of general 9 circulation published in the city or village where the 10 business is located, and if no newspaper is published in that 11 place, then in a public newspaper of general circulation 12 nearest to that city or village. The publication shall give 13 notice that the debts, liabilities, and lawful demands 14 against the business will be redeemed by the Director upon 15 demand in writing made by the owner thereof, at any time 16 within 3 years after the date of first publication. After the 17 expiration of the 3-year period, the Director shall return to 18 the person or persons designated in the statement of 19 termination to receive repayment, and in the proportion 20 specified in that statement, any balance of money remaining 21 in his or her possession after first deducting all unpaid 22 costs and expenses incurred in connection with a proceeding 23 under this Section. The Director shall receive for his or her 24 services, exclusive of costs and expenses, 2% of any amount 25 up to $5,000 and 1% of any amount in excess of $5,000 26 deposited with him or her under this Section by any business. 27 Nothing contained in this Section shall affect or impair the 28 liability of any bonding or insurance company on any bond or 29 insurance policy issued under this Act relating to the 30 business.