HB0073 EngrossedLRB103 03589 SPS 48595 b HB0073 Engrossed LRB103 03589 SPS 48595 b
HB0073 Engrossed LRB103 03589 SPS 48595 b
1 AN ACT concerning business.
2 Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
4 Section 5. The Consumer Legal Funding Act is amended by
5 changing Sections 5 and 55 as follows:
6 (815 ILCS 121/5)
7 Sec. 5. Definitions.
8 "Advertise" means publishing or disseminating any written,
9 electronic, or printed communication, or any communication by
10 means of recorded telephone messages or transmitted on radio,
11 television, the Internet, or similar communications media,
12 including film strips, motion pictures, and videos, published,
13 disseminated, circulated, or placed before the public,
14 directly or indirectly, for the purpose of inducing a consumer
15 to enter into a consumer legal funding.
16 "Charges" means the fees, as set forth in Section 25, to be
17 paid to the consumer legal funding company by or on behalf of
18 the consumer above the funded amount provided by or on behalf
19 of the company to an Illinois consumer pursuant to this Act.
20 "Consumer" means a natural person who has a pending legal
21 claim and who resides or is domiciled in Illinois.
22 "Consumer legal funding" or "funding" means a nonrecourse
23 transaction in which a company purchases and a consumer
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1 transfers to the company an unvested, contingent future
2 interest in the potential net proceeds of a settlement or
3 judgment obtained from the consumer's legal claim; and in
4 which, if no proceeds are obtained from the consumer's legal
5 claim, the consumer is not required to repay the company the
6 consumer legal funding amount or charges.
7 "Consumer legal funding company" or "company" means a
8 person or entity that enters into, purchases, or services a
9 consumer legal funding transaction with an Illinois consumer.
10 "Consumer legal funding company" does not include:
11 (1) an immediate family member of the consumer;
12 (2) a bank, lender, financing entity, or other special
13 purpose entity:
14 (A) that provides financing to a consumer legal
15 funding company; or
16 (B) to which a consumer legal funding company
17 grants a security interest or transfers any rights or
18 interest in a consumer legal funding; or
19 (3) an attorney or accountant who provides services to
20 a consumer.
21 "Department" means the Department of Financial and
22 Professional Regulation.
23 "Funded amount" means the amount of moneys provided to, or
24 on behalf of, the consumer in the consumer legal funding.
25 "Funded amount" does not include charges except for charges
26 that are deducted from the funded amount.
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1 "Funding date" means the date on which the funded amount
2 is transferred to the consumer by the consumer legal funding
3 company either by personal delivery; via wire, ACH, or other
4 electronic means; or mailed by insured, certified, or
5 registered United States mail.
6 "Immediate family member" means a parent; sibling; child
7 by blood, adoption, or marriage; spouse; grandparent; or
8 grandchild.
9 "Legal claim" means a bona fide civil claim or cause of
10 action.
11 "Resolution amount" means the funded amount plus the
12 agreed-upon charges that are delivered to the consumer legal
13 funding company on the resolution date.
14 "Resolution date" means the date the resolution amount is
15 delivered to the consumer legal funding company.
16 "Secretary" means the Secretary of Financial and
17 Professional Regulation or the Secretary's designee.
18 (Source: P.A. 102-987, eff. 5-27-22.)
19 (815 ILCS 121/55)
20 Sec. 55. Consumer legal funding license scope.
21 (a) It shall be unlawful for any person or entity to
22 operate as a consumer legal funding provider in this State
23 except as authorized by this Act and without first having
24 obtained a license in accordance with this Act. No person or
25 entity may engage in any device, subterfuge, or pretense to
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1 evade the requirements of this Act. However, any company that
2 has a license in good standing under the Consumer Installment
3 Loan Act on the effective date of this Act shall be entitled to
4 make consumer legal fundings under the terms of this Act upon
5 the effective date of this Act if that company files an
6 application for a consumer legal funding license within 60
7 days after the Department issues forms for the filing of that
8 application and until the Department approves or denies the
9 application for a funding license. Any consumer legal funding
10 contract made by any person or entity in violation of this
11 subsection shall be null and void and the person or entity who
12 entered into the consumer legal funding transaction shall have
13 no right to collect, attempt to collect, receive, or retain
14 any principal, interest, or charges related to the consumer
15 legal funding transaction.
16 (b) The provisions of this Act do not apply to a bank,
17 savings bank, savings association, or credit union organized
18 under the laws of this State, any other state, or under the
19 laws of the United States.
20 (b-1) The provisions of this Act do not apply to consumer
21 legal funding if (i) the amount of funding is greater than
22 $500,000 and (ii) the consumer does not use or intend to use
23 any of the proceeds for personal, family, or household
24 expenses.
25 (c) Any consumer legal funding made by a person not
26 licensed under this Act, including a person holding an
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1 inactive license, and not exempt under this Act shall be null
2 and void, and no person or entity shall have any right to
3 collect, attempt to collect, receive, or retain any principal,
4 fee, interest, or charges related to the funding.
5 (Source: P.A. 102-987, eff. 5-27-22.)
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