104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026 SB1685 Introduced 2/5/2025, by Sen. Christopher Belt SYNOPSIS AS INTRODUCED: New Act30 ILCS 105/6z-2620 ILCS 1205/6205 ILCS 665/2 from Ch. 17, par. 5302225 ILCS 429/Act rep.815 ILCS 505/2JJJ Creates the Debt Resolution Services Act. Provides that no person shall provide or offer to provide debt resolution services without a debt resolution services license. Defines "debt resolution services" as a program or service represented, directly or by implication, to renegotiate, settle, or in any way alter the terms of payment or other terms of the debt between a consumer and one or more unsecured creditors. Sets forth requirements for a debt resolution services license. Sets forth the process for obtaining a debt resolution services license. Provides that specified persons are exempt under the Act. Provides the prerequisites and permitted practices for providing debt resolution services. Provides the requirements for a contract between a licensee and a consumer for debt resolution services. Provides that a consumer may terminate a contract to provide debt resolution services at any time without any penalty. Provides that a licensee may terminate a contract to provide debt resolution services if specified conditions are satisfied. Includes provisions concerning the powers of the Department of Financial and Professional Regulation; prohibited activities under the Act, including prohibitions against false or misleading advertising; annual reports filed by a licensee; fees for debt resolution services; information a licensee must provide to a consumer; records a licensee is required to keep; penalties for violating the Act; and transactions entered into before the effective date of the Act. Repeals the Debt Settlement Consumer Protection Act. Amends various Acts to replace references to the Debt Settlement Consumer Protection Act to the Debt Resolution Services Act. Effective January 9, 2026. LRB104 09822 BAB 19890 b A BILL FOR 104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026 SB1685 Introduced 2/5/2025, by Sen. Christopher Belt SYNOPSIS AS INTRODUCED: New Act30 ILCS 105/6z-2620 ILCS 1205/6205 ILCS 665/2 from Ch. 17, par. 5302225 ILCS 429/Act rep.815 ILCS 505/2JJJ New Act 30 ILCS 105/6z-26 20 ILCS 1205/6 205 ILCS 665/2 from Ch. 17, par. 5302 225 ILCS 429/Act rep. 815 ILCS 505/2JJJ Creates the Debt Resolution Services Act. Provides that no person shall provide or offer to provide debt resolution services without a debt resolution services license. Defines "debt resolution services" as a program or service represented, directly or by implication, to renegotiate, settle, or in any way alter the terms of payment or other terms of the debt between a consumer and one or more unsecured creditors. Sets forth requirements for a debt resolution services license. Sets forth the process for obtaining a debt resolution services license. Provides that specified persons are exempt under the Act. Provides the prerequisites and permitted practices for providing debt resolution services. Provides the requirements for a contract between a licensee and a consumer for debt resolution services. Provides that a consumer may terminate a contract to provide debt resolution services at any time without any penalty. Provides that a licensee may terminate a contract to provide debt resolution services if specified conditions are satisfied. Includes provisions concerning the powers of the Department of Financial and Professional Regulation; prohibited activities under the Act, including prohibitions against false or misleading advertising; annual reports filed by a licensee; fees for debt resolution services; information a licensee must provide to a consumer; records a licensee is required to keep; penalties for violating the Act; and transactions entered into before the effective date of the Act. Repeals the Debt Settlement Consumer Protection Act. Amends various Acts to replace references to the Debt Settlement Consumer Protection Act to the Debt Resolution Services Act. Effective January 9, 2026. LRB104 09822 BAB 19890 b LRB104 09822 BAB 19890 b A BILL FOR
104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026 SB1685 Introduced 2/5/2025, by Sen. Christopher Belt SYNOPSIS AS INTRODUCED:
New Act30 ILCS 105/6z-2620 ILCS 1205/6205 ILCS 665/2 from Ch. 17, par. 5302225 ILCS 429/Act rep.815 ILCS 505/2JJJ New Act 30 ILCS 105/6z-26 20 ILCS 1205/6 205 ILCS 665/2 from Ch. 17, par. 5302 225 ILCS 429/Act rep. 815 ILCS 505/2JJJ
New Act
30 ILCS 105/6z-26
20 ILCS 1205/6
205 ILCS 665/2 from Ch. 17, par. 5302
225 ILCS 429/Act rep.
815 ILCS 505/2JJJ
Creates the Debt Resolution Services Act. Provides that no person shall provide or offer to provide debt resolution services without a debt resolution services license. Defines "debt resolution services" as a program or service represented, directly or by implication, to renegotiate, settle, or in any way alter the terms of payment or other terms of the debt between a consumer and one or more unsecured creditors. Sets forth requirements for a debt resolution services license. Sets forth the process for obtaining a debt resolution services license. Provides that specified persons are exempt under the Act. Provides the prerequisites and permitted practices for providing debt resolution services. Provides the requirements for a contract between a licensee and a consumer for debt resolution services. Provides that a consumer may terminate a contract to provide debt resolution services at any time without any penalty. Provides that a licensee may terminate a contract to provide debt resolution services if specified conditions are satisfied. Includes provisions concerning the powers of the Department of Financial and Professional Regulation; prohibited activities under the Act, including prohibitions against false or misleading advertising; annual reports filed by a licensee; fees for debt resolution services; information a licensee must provide to a consumer; records a licensee is required to keep; penalties for violating the Act; and transactions entered into before the effective date of the Act. Repeals the Debt Settlement Consumer Protection Act. Amends various Acts to replace references to the Debt Settlement Consumer Protection Act to the Debt Resolution Services Act. Effective January 9, 2026.
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A BILL FOR
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SB1685 LRB104 09822 BAB 19890 b
1 AN ACT concerning regulation.
2 Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
4 Section 1. Short title. This Act may be cited as the Debt
5 Resolution Services Act.
6 Section 2. Definitions. As used in this Act:
7 "Agreement" means a contract between a licensee and a
8 consumer that meets the requirements of Section 9.
9 "Bank" means a financial institution, including a
10 commercial bank, savings bank, savings and loan association,
11 credit union, mortgage bank, or trust company, engaged in the
12 business of banking, that is chartered under federal or State
13 law and regulated by a federal or State banking regulatory
14 agency.
15 "Business address" means the designation of the physical
16 location of a business, including the name and number of a
17 street.
18 "Business day" means a calendar day, except for Saturdays,
19 Sundays, and legal holidays.
20 "Consumer" means an individual who has executed an
21 agreement with a licensee.
22 "Creditor" means a person that has extended credit to a
23 consumer, including any agent or assignee of the person.
104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026 SB1685 Introduced 2/5/2025, by Sen. Christopher Belt SYNOPSIS AS INTRODUCED:
New Act30 ILCS 105/6z-2620 ILCS 1205/6205 ILCS 665/2 from Ch. 17, par. 5302225 ILCS 429/Act rep.815 ILCS 505/2JJJ New Act 30 ILCS 105/6z-26 20 ILCS 1205/6 205 ILCS 665/2 from Ch. 17, par. 5302 225 ILCS 429/Act rep. 815 ILCS 505/2JJJ
New Act
30 ILCS 105/6z-26
20 ILCS 1205/6
205 ILCS 665/2 from Ch. 17, par. 5302
225 ILCS 429/Act rep.
815 ILCS 505/2JJJ
Creates the Debt Resolution Services Act. Provides that no person shall provide or offer to provide debt resolution services without a debt resolution services license. Defines "debt resolution services" as a program or service represented, directly or by implication, to renegotiate, settle, or in any way alter the terms of payment or other terms of the debt between a consumer and one or more unsecured creditors. Sets forth requirements for a debt resolution services license. Sets forth the process for obtaining a debt resolution services license. Provides that specified persons are exempt under the Act. Provides the prerequisites and permitted practices for providing debt resolution services. Provides the requirements for a contract between a licensee and a consumer for debt resolution services. Provides that a consumer may terminate a contract to provide debt resolution services at any time without any penalty. Provides that a licensee may terminate a contract to provide debt resolution services if specified conditions are satisfied. Includes provisions concerning the powers of the Department of Financial and Professional Regulation; prohibited activities under the Act, including prohibitions against false or misleading advertising; annual reports filed by a licensee; fees for debt resolution services; information a licensee must provide to a consumer; records a licensee is required to keep; penalties for violating the Act; and transactions entered into before the effective date of the Act. Repeals the Debt Settlement Consumer Protection Act. Amends various Acts to replace references to the Debt Settlement Consumer Protection Act to the Debt Resolution Services Act. Effective January 9, 2026.
LRB104 09822 BAB 19890 b LRB104 09822 BAB 19890 b
LRB104 09822 BAB 19890 b
A BILL FOR
New Act
30 ILCS 105/6z-26
20 ILCS 1205/6
205 ILCS 665/2 from Ch. 17, par. 5302
225 ILCS 429/Act rep.
815 ILCS 505/2JJJ
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1 "Debt resolution services" means any program or service
2 represented, directly or by implication, to renegotiate,
3 settle, or in any way alter the terms of payment or other terms
4 of the debt between a consumer and one or more unsecured
5 creditors, including, but not limited to, a reduction in the
6 balance, interest rate, or fees owed by a consumer to an
7 unsecured creditor.
8 "Dedicated account" means an account that meets the
9 criteria set forth in paragraphs (1), (2), (3), (4), and (5) of
10 subsection (a) of Section 9.
11 "Dedicated account service provider" means an entity that
12 facilitates transactions authorized by the consumer under the
13 terms of 16 CFR 310.4(a)(5)(ii).
14 "Department" means the Department of Financial and
15 Professional Regulation.
16 "Licensee" means a provider of debt resolution services
17 that possesses a valid license issued pursuant to this Act.
18 "Person" means any individual, group, unincorporated
19 association, limited or general partnership, corporation, or
20 other business entity.
21 "State" means any state of the United States, the District
22 of Columbia, Puerto Rico, the Northern Mariana Islands, and
23 any other territory, possession, or protectorate of the United
24 States.
25 Section 3. License required.
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1 (a) No person shall provide or offer to provide debt
2 resolution services in this State unless the person first
3 obtains a debt resolution services license from the
4 Department.
5 (b) A licensee shall obtain a license for the licensee's
6 primary business address.
7 (c) A license may not be transferred or assigned.
8 (d) A licensee shall file a surety bond in favor of this
9 State in an amount and form that the Department determines
10 before the licensee may provide or offer to provide debt
11 resolution services in this State, but in no event shall the
12 amount of the bond be greater than $50,000.
13 (e) A licensee shall not provide debt resolution services
14 in this State under a business name other than the business
15 name that is listed on the licensee's license; however, a
16 licensee may do business under a fictitious business name, if
17 the licensee registers the fictitious business name with the
18 Secretary of State and provides evidence of the registration
19 to the Department.
20 (f) The Department may adopt rules for the licensing of
21 licensees and may require a reasonable license and
22 investigation fee in connection with the issuance or renewal
23 of any license required by this Act.
24 Section 4. Exempt persons.
25 (a) The following persons are exempt from this Act:
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1 (1) Persons organized under Section 501(c) or 501(q)
2 of the Internal Revenue Code.
3 (2) Judicial officers, including individuals acting
4 under the direction of a court.
5 (3) Banks and their agents and their employees.
6 (4) Attorneys licensed to practice law in this State
7 who provide debt resolution services within an
8 attorney-client relationship.
9 (5) Creditors or their employees who negotiate debt
10 resolutions with consumers or with licensees acting on
11 behalf of consumers.
12 (6) Assignees for the benefit of creditors.
13 (7) Officers or employees of the United States or any
14 state who perform debt resolution services on behalf of
15 the federal government, a state, a municipality, or a
16 state agency, and who receive compensation solely from the
17 governmental entity.
18 (8) Certified public accountants licensed in this
19 State who provide debt resolution services within an
20 accountant-client relationship.
21 (9) Dedicated account service providers that do not
22 otherwise provide debt resolution services for consumers.
23 (10) Persons, to the extent that the person provides
24 or agrees to provide debt resolution services to an
25 individual who the person has no reason to know resides in
26 this State at the time the person agrees to provide the
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1 services.
2 (b) The following persons are exempt from the licensing
3 requirement established in Section 3:
4 (1) A licensee's employees.
5 (2) Persons who market on behalf of licensees and do
6 not otherwise provide debt resolution services.
7 Section 5. Application for licensure.
8 (a) The application for a license and the application for
9 a license renewal shall be in a form prescribed by the
10 Department, signed under oath, and shall contain such
11 information as the Department reasonably requires. A license
12 to provide debt resolution services is for a period of 2 years
13 from the date of issuance.
14 (b) The following items are required in any application
15 for a license under this Act:
16 (1) Proof of compliance with all relevant requirements
17 for an entity to engage in business in this State.
18 (2) The applicant's name, principal business address,
19 and telephone number; all business addresses in this
20 State; the principal email address for the business; and
21 the principal website address to be used for the business.
22 (3) The name and business address of each executive
23 officer and member of the board of directors, or
24 equivalent leadership structure, of the applicant.
25 (4) A statement describing, to the extent it is known
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1 or should be known by the applicant, any material civil or
2 criminal judgment in any jurisdiction, or any enforcement
3 action against the applicant, or any of its executive
4 officers or members of its board of directors, or
5 equivalent leadership structure, by any local, state, or
6 federal governmental agency, in each case relating to debt
7 adjusting, debt pooling, prorating, activity as a credit
8 services organization, unfair and deceptive trade
9 practices, false advertising, consumer deception law or
10 regulation, or any other similar law or regulation.
11 (5) A copy of each form of agreement and the schedule
12 of fees and charges that the applicant will use with
13 consumers who reside in this State.
14 (6) Income statements and balance sheets from the
15 applicant for the 2 fiscal years preceding the date of the
16 application. Notwithstanding any other requirement in this
17 Act or elsewhere, material submitted under this paragraph
18 shall be held confidential by the Department.
19 (c) In connection with any application for license
20 renewal, the licensee shall provide access to the licensee's
21 books and records with respect to consumers in this State that
22 are being or have been serviced by the licensee.
23 (d) The Department may participate in a multistate
24 licensing system for the sharing of regulatory information and
25 for the licensing and application, by electronic or other
26 means, of persons engaged in the business of debt resolution
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1 services. The Department may establish requirements for
2 participation by an applicant in a multistate licensing
3 system, which may vary from the provisions in this Act. The
4 applicant shall pay directly to a multistate licensing system
5 any additional fee relating to participation in a multistate
6 licensing system.
7 (e)(1) The Department may require each applicant applying
8 for initial licensure under this Act to submit a full set of
9 fingerprints of each of the applicant's executive officers in
10 order for the Department to obtain and receive national
11 criminal history records from the Federal Bureau of
12 Investigation criminal justice information services division.
13 Unless the Department, as authorized by paragraph (2),
14 contracts, or makes use of any existing contract, the
15 Department may submit each executive officer's fingerprints
16 and the fee required to perform the criminal history record
17 checks to the Illinois State Police and the Federal Bureau of
18 Investigation for state and national criminal history record
19 checks. The Department may require any fingerprints submitted
20 pursuant to this subsection be provided in an electronic
21 format.
22 (2) The Department may contract, or make use of any
23 existing contract with this State, for the collection and
24 transmission of fingerprints authorized under this Section. If
25 the Department contracts, or makes use of an existing
26 contract, the Department may order the applicant to pay the
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1 fee for collecting and transmitting fingerprints to the
2 contractor. The Department may agree to a reasonable
3 fingerprinting fee to be charged by the contractor to the
4 applicant.
5 (3) The Department shall treat and maintain any executive
6 officer's fingerprints and any criminal history record
7 information obtained under this Section as confidential and
8 limit the use of records solely to the purposes authorized in
9 this Section. The fingerprints and any criminal history record
10 information are not subject to subpoena, other than a subpoena
11 issued in a criminal action or investigation, and are
12 confidential by law and privileged, and are not subject to
13 discovery or admissible in evidence in any civil action.
14 (4) The Department shall refuse to issue an initial
15 license to an applicant who does not provide fingerprints in
16 compliance with this subsection.
17 (f) An applicant or licensee shall notify the Department
18 within 30 days after a material change in any of the
19 information submitted in connection with any application or
20 renewal application for a license under this Act, including,
21 but not limited to:
22 (1) a change in the licensee's principal place of
23 business;
24 (2) a merger or dissolution related to the license; or
25 (3) a licensee pleading guilty to or being convicted
26 of any felony in a court of competent jurisdiction.
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1 Section 6. Licensure issuance or denial.
2 (a) The Department may deny a license if:
3 (1) the applicant does not satisfy the criteria set
4 forth in Section 5;
5 (2) the application contains information that is
6 materially erroneous or materially incomplete;
7 (3) the applicant fails to provide in a timely manner
8 such information as the Department reasonably requests;
9 (4) an executive officer or member of the board of
10 directors, or equivalent leadership structure, of the
11 applicant has been convicted of or pled nolo contendere
12 to:
13 (A) a felony; or
14 (B) an act involving fraud, deceit, or dishonesty;
15 or
16 (5) an executive officer or member of the board of
17 directors, or equivalent leadership structure, of the
18 applicant has had a professional license revoked,
19 suspended, or subjected to enforcement action in any
20 state, and the license has not been reinstated.
21 (b) Not later than the 20th day after a license
22 application denial, the Department shall provide to the
23 applicant a written decision and findings containing the
24 reasons supporting a license denial.
25 (c) A license application denial is a final administrative
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1 decision under the Administrative Review Law.
2 Section 7. Licensure suspension, revocation, or denial of
3 renewal.
4 (a) The Department may suspend, revoke, or deny renewal of
5 a license if:
6 (1) the Department asserts that the licensee has
7 materially violated this Act or any rule adopted under
8 this Act or any other law applicable to the conduct of the
9 licensee's business and the licensee has failed to cure
10 the violation after notice and a reasonable opportunity to
11 cure the violation;
12 (2) a fact or condition exists that, if it had existed
13 when the licensee applied for a license, would have
14 warranted the Department refusing to issue the license;
15 (3) the licensee does not satisfy the criteria for
16 licensure set out in Section 5;
17 (4) the licensee has refused to permit the Department
18 to examine the licensee's books and records, failed to
19 comply with Section 12, or made a material
20 misrepresentation or omission in complying with Section
21 12; or
22 (5) the licensee has not responded within a reasonable
23 time and in an appropriate manner to the Department's
24 communications.
25 (b) If the Department suspends, revokes, or denies renewal
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1 of a license, the Department may require the licensee to make
2 available the licensee's books and records with respect to any
3 consumers in this State that are being or have been serviced by
4 the licensee.
5 (c) Except as provided in Section 8, a licensee shall
6 receive notice and a hearing before the Department revokes or
7 suspends a license.
8 (d) A licensee may deliver a written notice to the
9 Department to surrender the licensee's license. However, if a
10 licensee surrenders the licensee's license, the licensee's
11 civil or criminal liability for acts committed before the
12 surrender is not affected.
13 (e) Upon submission of a renewal application for a license
14 and until a renewal application is approved or denied, the
15 licensee may continue to provide or offer to provide debt
16 resolution services, but a suspension or denial of a license
17 terminates any right to provide or offer to provide debt
18 resolution services in this State unless continuation is
19 approved by the Department.
20 Section 8. Powers of the Department.
21 (a) The Illinois Administrative Procedures Act and the
22 Administrative Review Law govern all matters and procedures
23 respecting the hearing and judicial review of any violation or
24 contested case arising under this Act.
25 (b) If the Department finds that a delay in issuing an
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1 order under subsection (a) will irreparably harm the public
2 interest, the Department may summarily suspend the license
3 immediately.
4 (c) Any order issued under this Section is a final
5 administrative decision under the Administrative Review Law.
6 (d) The Department may investigate the books, accounts,
7 records, and files of a licensee or any other person that the
8 Department has reason to believe is providing or offering to
9 provide debt resolution services in this State.
10 Section 9. Prerequisites and permitted practices for
11 providing debt resolution services.
12 (a) A licensee may request or require a consumer, as a
13 condition to the provision of debt resolution services, to
14 establish and place funds into a dedicated account
15 administered by a dedicated account service provider, if:
16 (1) the funds are held in an FDIC-insured bank;
17 (2) the consumer owns the funds held in the account,
18 including all accrued interest on the account, if any;
19 (3) the dedicated account service provider is not
20 owned or controlled by, or affiliated with, the debt
21 resolution services provider. For purposes of this
22 paragraph, (i) "affiliated with" means a dedicated account
23 service provider that controls, is controlled by, or is
24 under common control with a licensee, and (ii) "control"
25 means the direct or indirect possession of the power to
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1 direct or cause the direction of the management of a
2 licensee, whether by contract or through ownership of more
3 than 20% of the voting securities of the licensee;
4 (4) the dedicated account service provider does not
5 give or accept any money or other compensation in exchange
6 for referrals of business involving the debt resolution
7 services;
8 (5) the consumer may terminate the debt resolution
9 services at any time without penalty by giving notice as
10 required in subsection (a) of Section 10, and thereafter,
11 the licensee shall notify the dedicated account service
12 provider of the consumer's termination within 5 business
13 days of the consumer's notice; and
14 (6) the agreement discloses each of the criteria set
15 forth in the preceding paragraphs.
16 (b) A licensee shall, at the time an agreement is executed
17 by a consumer, or as shortly thereafter as practical,
18 distribute or otherwise make available to the consumer a copy
19 of the executed agreement. For purposes of this Act,
20 electronic distribution of an executed agreement is permitted
21 if the consumer agrees.
22 (c) The agreement must disclose:
23 (1) the services that the licensee will perform;
24 (2) the methodology that the licensee will use to
25 calculate fees to be charged for debt resolution services
26 and, if reasonably available at the time the agreement is
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1 executed, the fees that the licensee will charge;
2 (3) the amount of time estimated on a good-faith basis
3 to be necessary to achieve the resolution of all enrolled
4 debts, and to the extent that the service may include a
5 resolution offer to any of the consumer's creditors, the
6 time estimated on a good-faith basis when the debt
7 resolution services provider will make a bona fide
8 resolution offer to each of them;
9 (4) to the extent that the debt resolution services
10 may include a resolution offer to any of the consumer's
11 creditors, the amount of money or the percentage of each
12 outstanding debt that the consumer must accumulate before
13 the debt resolution services provider will make a bona
14 fide resolution offer to each of them;
15 (5) that debt resolution services may not be suitable
16 for all individuals;
17 (6) to the extent that any aspect of the debt
18 resolution services relies upon or results in the
19 consumer's failure to make timely payments to creditors,
20 that the failure to pay one's debts will likely adversely
21 affect the consumer's creditworthiness, may result in the
22 consumer being subject to collections efforts, including
23 lawsuits by creditors, and may increase the amount of
24 money the consumer owes due to the accrual of fees and
25 interest;
26 (7) that, unless the consumer is insolvent, if a
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1 creditor resolves a debt for less than its full amount,
2 the resolution may result in the creation of taxable
3 income to the consumer, even though the consumer does not
4 receive any money;
5 (8) that specific results cannot be predicted or
6 guaranteed and the licensee cannot require a creditor to
7 negotiate or resolve a debt;
8 (9) that debt resolution services programs require
9 that individuals meet regular savings goals in order to
10 enable resolutions;
11 (10) that the licensee does not provide tax,
12 accounting, or legal advice to individuals, unless the
13 licensee is licensed in this State to provide such advice;
14 (11) that the licensee is the consumer's advocate and
15 does not receive compensation of any sort from creditors
16 for providing debt resolution services to the consumer;
17 (12) that the licensee does not make monthly or other
18 payments to the consumer's creditors;
19 (13) the list of debts that the agreement covers; and
20 (14) that, if applicable, the consumer's rights are
21 subject to mandatory arbitration of any and all disputes
22 with the debt resolution services provider.
23 (d) A licensee shall maintain a toll-free
24 telecommunications system, staffed at a level that has
25 adequate capacity to accept requests from the reasonably
26 anticipated volume of consumers contacting the licensee during
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1 ordinary business hours.
2 (e) A licensee may extend credit to a consumer in the form
3 of a deferral of some or all of the licensee's fee for
4 resolving the consumer's debts, at no additional expense to
5 the consumer. A licensee may assist in arranging credit to the
6 consumer if such credit is extended to the consumer by or
7 through a person that is either separately licensed or
8 authorized to perform lending in this State or exempt from
9 such licensure.
10 Section 10. Consumer's right to terminate agreements.
11 (a) A consumer may terminate an agreement at any time
12 without penalty by notifying the licensee electronically, in
13 writing, or telephonically on a recorded line.
14 (b) Upon receipt of a consumer's notice of termination, a
15 licensee shall, as soon as possible but in all instances
16 within 2 business days, advise the consumer of the effect, if
17 any, a termination of the consumer's debt resolution services
18 program would have on previously negotiated installment
19 resolution agreements and pending resolution negotiations. Not
20 later than 5 business days following the delivery of such
21 advice, and absent further instruction from the consumer, a
22 licensee shall notify the dedicated account service provider
23 of the consumer's termination and request that the dedicated
24 account service provider communicate with the consumer
25 regarding disposition of all funds held in the dedicated
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1 account.
2 (c) Notwithstanding the consumer's right to terminate as
3 set forth in subsection (a), the licensee is entitled to
4 recover all fees earned prior to the receipt of any
5 termination notice, provided that the fee is requested or
6 received in compliance with Section 13.
7 Section 11. Licensee's right to terminate agreements. If a
8 consumer fails to honor the consumer's contractual obligations
9 on or before the 60th day after the consumer was required to
10 perform them, then the licensee may terminate its agreement
11 with the consumer electronically or in writing. If the
12 licensee terminates the agreement as permitted in this
13 Section, the consumer will not owe any further payment to the
14 licensee as of the date the licensee terminates the agreement,
15 other than for fees previously earned by the licensee.
16 Notwithstanding this Section, if a consumer refuses to pay any
17 fee to a licensee after the payment has been earned by the
18 licensee, then the licensee may, upon proper notice to the
19 consumer either electronically or in writing, terminate the
20 licensee's agreement with the consumer immediately.
21 Section 12. Annual reports. A licensee shall file with the
22 Department an annual report in writing, under oath, that
23 includes the following information for the calendar year
24 reporting period: total number of active consumers in this
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1 State, total number of enrolled consumers in this State, and
2 total fees collected in this State. If a licensee neglects to
3 file an annual report or fails to amend the same on or before
4 the 30th day after the Department provides notice to the
5 licensee, then the Department may assess civil penalties and
6 suspend, revoke, or refuse to renew any license under this
7 Act.
8 Section 13. Fees for debt resolution services.
9 (a) A licensee shall not impose, directly or indirectly, a
10 fee or other charge on a consumer or receive payment from or on
11 behalf of a consumer for performing debt resolution services
12 except as provided in this Section.
13 (b) A licensee may not request or receive payment of any
14 fee or consideration for any debt resolution services until
15 and unless:
16 (1) the licensee has renegotiated, resolved, reduced,
17 or otherwise altered the terms of at least one debt
18 pursuant to a resolution agreement or other such valid
19 contractual agreement executed by the consumer and the
20 creditor;
21 (2) the consumer has made at least one payment
22 pursuant to that resolution agreement or other valid
23 contractual agreement between the consumer and the
24 creditor; and
25 (3) to the extent that debts enrolled in a service are
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1 renegotiated, resolved, reduced, or otherwise altered
2 individually, the fee or consideration either: (i) bears
3 the same proportional relationship to the total fee for
4 renegotiating, resolving, reducing, or altering the terms
5 of the entire debt balance as the individual debt amount
6 bears to the entire debt amount. The individual debt
7 amount and the entire debt amount are those owed at the
8 time the debt was enrolled in the service; or (ii) is a
9 percentage of the amount saved as a result of the
10 renegotiation, resolution, reduction, or alteration. The
11 percentage charged cannot change from one individual debt
12 to another. The amount saved is the difference between the
13 amount owed at the time the debt was enrolled in the
14 service and the amount actually paid to satisfy the debt.
15 (c) A licensee shall not impose charges or receive payment
16 for debt resolution services until the licensee and the
17 consumer have signed an agreement that complies with Section
18 9.
19 (d) Any fee or other charge imposed by or on behalf of a
20 dedicated account service provider in connection with the
21 administration of a dedicated account shall not be considered
22 a fee or other charge imposed for performing debt resolution
23 services for purposes of this Act.
24 (e) Any fee or other charge imposed by or on behalf of a
25 third-party legal service provider shall not be considered a
26 fee or other charge imposed by a licensee for performing debt
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1 resolution services for purposes of this Act.
2 Section 14. Prohibitions.
3 (a) A licensee, a person who markets debt resolution
4 services on behalf of a licensee, or a person described in
5 paragraph (2) of subsection (b) of Section 4 shall not:
6 (1) take or exercise a power of attorney that
7 authorizes the licensee to resolve a debt. For purposes of
8 this paragraph, "resolve" means entering into a binding
9 agreement to discharge in full a debt in exchange for a
10 payment of a sum certain of money;
11 (2) send to creditors cease and desist notices, or
12 require consumers to notify creditors of changes of
13 address or phone number, meant to divert communication
14 from the creditor to the debt resolution services provider
15 rather than the consumer;
16 (3) exercise or attempt to exercise any authority of
17 the consumer after a licensee has received notice under
18 Section 10 that the consumer has terminated the consumer's
19 agreement with the licensee;
20 (4) initiate, or request that a dedicated account
21 service provider initiate, a transfer from a consumer's
22 bank account unless the transfer is:
23 (A) a return of money to the consumer;
24 (B) before any termination of an agreement and
25 properly authorized by the agreement and this Act for
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1 payment of a fee; or
2 (C) at the express direction of the consumer, to a
3 consumer's creditor to fund a negotiated resolution
4 with that creditor;
5 (5) receive consumer funds or control consumer funds,
6 other than to receive funds in payment of fees earned by
7 the debt resolution services provider;
8 (6) resolve a debt or lead a consumer to believe that a
9 payment to a creditor is in resolution of a debt to the
10 creditor unless, at the time of resolution, the creditor
11 confirms that the payment is in full resolution of the
12 debt or is part of a payment plan that, upon completion,
13 will be in full resolution of the debt;
14 (7) make any representation that:
15 (A) the licensee will furnish money to pay bills
16 or prevent attachments; or
17 (B) participation in a program will prevent
18 litigation, garnishment, attachment, repossession,
19 foreclosure, eviction, or loss of employment;
20 (8) misrepresent that the licensee is able to furnish
21 legal advice or perform legal services;
22 (9) misrepresent, directly or by implication, any
23 material aspect of any debt resolution services program,
24 including, but not limited to, the amount of money or the
25 percentage of the debt amount that a consumer may save by
26 using such service; the amount of time necessary to
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1 achieve the represented results; the amount of money or
2 the percentage of each outstanding debt that the consumer
3 must accumulate before the provider of the debt resolution
4 services will initiate attempts with the consumer's
5 creditors or make a bona fide offer to negotiate, resolve,
6 or modify the terms of the consumer's debt; the effect of
7 the service on a consumer's creditworthiness; the effect
8 of the service on collection efforts of the consumer's
9 creditors; the percentage or number of consumers who
10 attain the represented results; and whether debt
11 resolution services are offered or provided by a nonprofit
12 entity;
13 (10) take a confession of judgment or power of
14 attorney to confess judgment against a consumer;
15 (11) purchase a debt or obligation of the consumer, or
16 obtain a mortgage or other security interest from any
17 person in connection with the services provided to the
18 consumer;
19 (12) receive from or on behalf of a consumer a
20 promissory note or other negotiable instrument other than
21 a check or a demand draft or a post-dated check or demand
22 draft; or
23 (13) except as permitted by federal law or by order of
24 a court of competent jurisdiction, disclose the identity
25 or identifying information of a consumer or the identity
26 of the consumer's creditors, except to the Department,
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1 upon proper demand, or to the extent necessary or
2 appropriate to administer the program, including, but not
3 limited to, a dedicated account service provider or to a
4 creditor of the consumer.
5 (b) An agreement must not:
6 (1) provide for the application of the law of any
7 jurisdiction other than the United States and this State;
8 (2) except as otherwise permitted by the laws of this
9 State and the Federal Arbitration Act (9 U.S.C. 1 et
10 seq.), contain a provision that restricts an individual's
11 remedies under this Act or any other law of this State; or
12 (3) contain a provision that limits or releases the
13 liability of any person for not performing the agreement
14 or for violating this Act.
15 Section 15. Information requirements.
16 (a) A licensee shall distribute or arrange to be
17 distributed a statement of accounting to a consumer:
18 (1) while a debt resolution services agreement is in
19 effect:
20 (A) at least once per month; and
21 (B) on or before the 5th business day after a
22 consumer requests a statement of accounting from a
23 licensee. However, this Act does not require a
24 licensee to provide more than one statement of
25 accounting per month per consumer in response to the
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1 consumer's request; and
2 (2) within 5 business days after the date on which a
3 consumer or a licensee terminates an agreement.
4 (b) A statement of accounting shall contain the following
5 information to the extent applicable:
6 (1) The amount of money that the consumer has
7 deposited into the consumer's Dedicated Account, and all
8 withdrawals therefrom, from initiation of the consumer's
9 debt resolution services program.
10 (2) The amounts, dates, and creditors associated with
11 each resolution obtained by the licensee on behalf of the
12 consumer.
13 (3) The fees that the licensee has charged to and
14 collected from the consumer in connection with each of the
15 consumer's resolutions.
16 (4) The amount of money that the consumer holds in the
17 consumer's Dedicated Account.
18 (5) With respect to each resolution obtained by the
19 licensee for the consumer:
20 (A) the total amount of money that the consumer
21 paid to the creditor in full discharge or satisfaction
22 of the consumer's debt;
23 (B) the amount of the debt at the time the licensee
24 and the consumer entered into the agreement;
25 (C) the amount of the debt at the time the creditor
26 agreed to resolve the debt; and
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1 (D) the amount of compensation that the licensee
2 received or will receive to resolve the debt.
3 (c) Notwithstanding the requirements set forth in
4 paragraphs (1) and (2) of subsection (a), a licensee that
5 enables, or arranges to enable, 24 hours per day, 7 days per
6 week, electronic access by a consumer to all of the consumer's
7 deposit account transaction information, including all deposit
8 and withdrawal activity, and electronic access by a consumer
9 to account activity, including, but not limited to, resolution
10 information, account status, resolution dates, resolution
11 amounts, and fees paid, is deemed to have satisfied the
12 content requirements in subsection (b) and the distribution
13 requirements in subsection (a).
14 Section 16. Prohibition on false and misleading
15 advertising.
16 (a) A licensee shall not, directly or through a person who
17 markets debt resolution services on behalf of a licensee or a
18 person described in paragraph (2) of subsection (b) of Section
19 4, advertise, announce, broadcast, display, distribute, print,
20 publish, televise, or permit any other person to advertise,
21 announce, broadcast, display, distribute, print, publish, or
22 televise on the licensee's behalf a statement or
23 representation related to debt resolution services that is
24 deceptive, false, or misleading.
25 (b) A licensee shall not directly or indirectly provide
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1 anything of value in exchange for favorable treatment in
2 reviews or favorable placement on rankings.
3 (c) Neither a licensee nor any affiliate of a licensee
4 shall directly or indirectly own or operate a website or other
5 public-facing resource presenting rankings or consumer reviews
6 of the licensee.
7 (d) A licensee shall not make any statement or take any
8 action that is likely to mislead consumers regarding whether
9 reviews the licensee uses to advertise its business accurately
10 reflect all reviews consumers have submitted to the licensee.
11 (e) A licensee shall comply with 16 CFR Part 255 and with
12 CFPB Bulletin 2022-05: Unfair and Deceptive Acts or Practices
13 That Impede Consumer Reviews.
14 Section 17. Records.
15 (a) At the time of providing to a consumer any materials or
16 agreements required by this Act, a licensee shall inform the
17 consumer that upon electronic, telephonic, or written request,
18 the licensee shall send the consumer a copy of the materials
19 and shall comply with a request as provided in subsection (b).
20 (b) If a consumer submits a request to a licensee, before
21 the expiration of 90 days after a program is completed or
22 terminated, to send a copy of the materials required by this
23 Act, the licensee shall send them to the consumer at no charge
24 within 5 business days after the request, but the licensee is
25 not required to comply with a request more than once per
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1 calendar month or if it reasonably believes the request is
2 made for purposes of harassment. If a request is made more than
3 90 days and less than 2 years after a program is completed or
4 terminated, the licensee must send within a reasonable time a
5 copy of the materials requested. The licensee is not required
6 to comply with any request from a consumer made more than the
7 later of (i) 2 years after a program is completed or terminated
8 or (ii) the expiration of the statute of limitations governing
9 contracts in this State.
10 (c) A licensee that maintains a website shall disclose on
11 the home page or on a page that is clearly and conspicuously
12 connected to the home page by a link that clearly reveals its
13 contents:
14 (1) the licensee's name and all names under which the
15 licensee does business in this State; and
16 (2) the licensee's principal business address,
17 telephone number, and email address, if any.
18 (d) Any licensee shall keep, for a period of 2 years from
19 the date the record is produced, the following records:
20 (1) All substantially different advertising,
21 brochures, telemarketing scripts, promotional materials,
22 and supportive data.
23 (2) The name and last known address of each consumer,
24 the goods or services purchased, the date such goods or
25 services were first provided or the consumer signed an
26 agreement for the provision of goods or services, and the
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1 amount paid by the consumer for the goods or services.
2 (3) The name, any fictitious name used, the last known
3 home address and telephone number, and the job title for
4 all current and former employees directly involved in
5 sales or solicitations; however, if the licensee permits
6 fictitious names to be used by employees, each fictitious
7 name must be traceable to only one specific employee.
8 (e) In addition to the records required by subsection (d),
9 the licensee must keep a copy of each signed agreement with any
10 consumer for not less than 5 years from the date that the
11 consumer either graduates or terminates the debt resolution
12 services program.
13 (f) A licensee may keep the records required by
14 subsections (d) and (e) in any form, and in the same manner,
15 format, or place as they keep such records in the ordinary
16 course of business. Failure to keep all records required by
17 subsections (d) and (e) is a violation of this Act.
18 (g) In the event of any dissolution or termination of the
19 licensee's business, the principal of that licensee shall
20 maintain all records as required under subsections (d) and
21 (e). In the event of any sale, assignment, or other change in
22 ownership of the licensee's business, the successor business
23 shall maintain all records required under subsections (d) and
24 (e).
25 Section 18. Penalty for violation.
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1 (a) If the Department finds that a person has violated any
2 material provision of this Act, a rule adopted pursuant to
3 this Act, or any other law applicable to the conduct of a
4 licensee, the Department may, after notice and opportunity to
5 cure, order or impose a penalty upon the person, which must not
6 exceed $1,000 per violation of law or rule, up to a maximum of
7 $100,000, plus the costs of investigation. Notwithstanding
8 anything to the contrary herein or elsewhere, a continuing
9 violation shall be deemed to be a singular violation and not be
10 given multiple effect.
11 (b) A finding or order that the Department issues under
12 this Section is a final administrative decision under the
13 Administrative Review Law.
14 Section 19. Statute of limitations. An action or
15 proceeding brought by the Department under this Act must be
16 commenced within the longer of (i) 3 years after the conduct
17 that underlies the complaint is discovered by the Department
18 or the harmed consumer or (ii) if the violation constitutes a
19 criminal offense, the applicable statute of limitations.
20 Section 20. Transitional provisions. Transactions entered
21 into before this Act takes effect, and the rights, duties, and
22 interests resulting from them, may be completed, terminated,
23 or enforced as required or permitted by a law amended,
24 repealed, modified, or preempted by this Act as though the
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1 amendment, repeal, modification, or preemption had not
2 occurred.
3 Section 21. Illinois Administrative Procedure Act. The
4 Illinois Administrative Procedure Act is hereby expressly
5 adopted and incorporated herein as if all of the provisions of
6 that Act were included in this Act.
7 Section 22. Rulemaking. The Department may adopt rules to
8 administer and enforce Section 3.
9 Section 900. The State Finance Act is amended by changing
10 Section 6z-26 as follows:
11 (30 ILCS 105/6z-26)
12 Sec. 6z-26. The Financial Institution Fund. All moneys
13 received by the Department of Financial and Professional
14 Regulation under the Safety Deposit License Act, the Foreign
15 Exchange License Act, the Pawners Societies Act, the Sale of
16 Exchange Act, the Currency Exchange Act, the Sales Finance
17 Agency Act, the Debt Management Service Act, the Consumer
18 Installment Loan Act, the Illinois Development Credit
19 Corporation Act, the Title Insurance Act, the Debt Resolution
20 Services Settlement Consumer Protection Act, the Debt
21 Management Service Consumer Protection Fund, and any other Act
22 administered by the Department of Financial and Professional
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1 Regulation as the successor of the Department of Financial
2 Institutions now or in the future (unless an Act specifically
3 provides otherwise) shall be deposited in the Financial
4 Institution Fund (hereinafter "Fund"), a special fund that is
5 hereby created in the State Treasury.
6 Moneys in the Fund shall be used by the Department,
7 subject to appropriation, for expenses incurred in
8 administering the above named and referenced Acts.
9 The Comptroller and the State Treasurer shall transfer
10 from the General Revenue Fund to the Fund any monies received
11 by the Department after June 30, 1993, under any of the above
12 named and referenced Acts that have been deposited in the
13 General Revenue Fund.
14 As soon as possible after the end of each calendar year,
15 the Comptroller shall compare the balance in the Fund at the
16 end of the calendar year with the amount appropriated from the
17 Fund for the fiscal year beginning on July 1 of that calendar
18 year. If the balance in the Fund exceeds the amount
19 appropriated, the Comptroller and the State Treasurer shall
20 transfer from the Fund to the General Revenue Fund an amount
21 equal to the difference between the balance in the Fund and the
22 amount appropriated.
23 Nothing in this Section shall be construed to prohibit
24 appropriations from the General Revenue Fund for expenses
25 incurred in the administration of the above named and
26 referenced Acts.
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1 Moneys in the Fund may be transferred to the Professions
2 Indirect Cost Fund, as authorized under Section 2105-300 of
3 the Department of Professional Regulation Law of the Civil
4 Administrative Code of Illinois.
5 (Source: P.A. 96-1420, eff. 8-3-10.)
6 Section 905. The Financial Institutions Code is amended by
7 changing Section 6 as follows:
8 (20 ILCS 1205/6)
9 Sec. 6. General powers and duties. In addition to the
10 powers and duties provided by law and imposed elsewhere in
11 this Act, the Division has the following powers and duties:
12 (1) To administer and enforce the Consumer Installment
13 Loan Act and its implementing rules.
14 (2) To administer and enforce the Currency Exchange
15 Act and its implementing rules.
16 (3) To administer and enforce the Debt Management
17 Service Act and its implementing rules.
18 (4) To administer and enforce the Debt Resolution
19 Services Settlement Consumer Protection Act and its
20 implementing rules.
21 (5) To administer and enforce the Illinois Development
22 Credit Corporation Act and its implementing rules.
23 (6) To administer and enforce the Payday Loan Reform
24 Act and its implementing rules.
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1 (7) To administer and enforce the Safety Deposit
2 License Act and its implementing rules.
3 (8) To administer and enforce the Sales Finance Agency
4 Act and its implementing rules.
5 (9) To administer and enforce the Title Insurance Act
6 and its implementing rules.
7 (10) To administer and enforce the Transmitters of
8 Money Act and its implementing rules.
9 (11) To administer and enforce the Predatory Loan
10 Prevention Act and its implementing rules.
11 (12) To administer and enforce the Motor Vehicle
12 Retail Installment Sales Act and its implementing rules.
13 (13) To administer and enforce the Retail Installment
14 Sales Act and its implementing rules.
15 (14) To administer and enforce the Illinois Credit
16 Union Act and its implementing rules.
17 (15) To administer and enforce the Collection Agency
18 Act and its implementing rules.
19 (16) To administer and enforce the Consumer Legal
20 Funding Act and its implementing rules.
21 (17) To administer and enforce this Act and any other
22 Act administered by the Director or Division.
23 (18) To authorize and administer examinations to
24 ascertain the qualifications of applicants and licensees
25 for which the examination is held.
26 (19) To conduct hearings in proceedings to revoke,
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1 suspend, refuse to renew, or take other disciplinary
2 action regarding licenses, charters, certifications,
3 registrations, or authorities of persons as authorized in
4 any Act administered by the Division.
5 Whenever the Division is authorized or required by law to
6 consider some aspect of criminal history record information
7 for the purpose of carrying out its statutory powers and
8 responsibilities, then, upon request and payment of fees in
9 conformance with the requirements of Section 2605-400 of the
10 Illinois State Police Law, the Illinois State Police is
11 authorized to furnish, pursuant to positive identification,
12 the information contained in State files that is necessary to
13 fulfill the request.
14 (Source: P.A. 102-538, eff. 8-20-21; 102-813, eff. 5-13-22;
15 102-975, eff. 1-1-23; 103-154, eff. 6-30-23; 103-1014, eff.
16 8-9-24.)
17 Section 910. The Debt Management Service Act is amended by
18 changing Section 2 as follows:
19 (205 ILCS 665/2) (from Ch. 17, par. 5302)
20 Sec. 2. Definitions. As used in this Act:
21 "Credit counselor" means an individual, corporation, or
22 other entity that is not a debt management service that
23 provides (1) guidance, educational programs, or advice for the
24 purpose of addressing budgeting, personal finance, financial
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1 literacy, saving and spending practices, or the sound use of
2 consumer credit; or (2) assistance or offers to assist
3 individuals and families with financial problems by providing
4 counseling; or (3) a combination of the activities described
5 in items (1) and (2) of this definition.
6 "Debt management service" means the planning and
7 management of the financial affairs of a debtor for a fee and
8 the receiving of money from the debtor for the purpose of
9 distributing it to the debtor's creditors in payment or
10 partial payment of the debtor's obligations or soliciting
11 financial contributions from creditors. The business of debt
12 management is conducted in this State if the debt management
13 business, its employees, or its agents are located in this
14 State or if the debt management business solicits or contracts
15 with debtors located in this State. "Debt management service"
16 does not include "debt resolution services" "debt settlement
17 service" as defined in the Debt Resolution Services Settlement
18 Consumer Protection Act.
19 This term shall not include the following when engaged in
20 the regular course of their respective businesses and
21 professions:
22 (a) Attorneys at law licensed, or otherwise authorized
23 to practice, in Illinois who are engaged in the practice
24 of law.
25 (b) Banks, operating subsidiaries of banks, affiliates
26 of banks, fiduciaries, credit unions, savings and loan
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1 associations, and savings banks as duly authorized and
2 admitted to transact business in the State of Illinois and
3 performing credit and financial adjusting service in the
4 regular course of their principal business.
5 (c) Title insurers, title agents, independent
6 escrowees, and abstract companies, while doing an escrow
7 business.
8 (d) Judicial officers or others acting pursuant to
9 court order.
10 (e) Employers for their employees, except that no
11 employer shall retain the services of an outside debt
12 management service to perform this service unless the debt
13 management service is licensed pursuant to this Act.
14 (f) Bill payment services, as defined in the
15 Transmitters of Money Act.
16 (g) Credit counselors, only when providing services
17 described in the definition of credit counselor in this
18 Section.
19 "Debtor" means the person or persons for whom the debt
20 management service is performed.
21 "Person" means an individual, firm, partnership,
22 association, limited liability company, corporation, or
23 not-for-profit corporation.
24 "Licensee" means a person licensed under this Act.
25 "Secretary" means the Secretary of Financial and
26 Professional Regulation.
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1 (Source: P.A. 100-201, eff. 8-18-17.)
2 (225 ILCS 429/Act rep.)
3 Section 915. The Debt Settlement Consumer Protection Act
4 is repealed.
5 Section 920. The Consumer Fraud and Deceptive Business
6 Practices Act is amended by changing Section 2JJJ as follows:
7 (815 ILCS 505/2JJJ)
8 Sec. 2JJJ. Violations of the Debt Resolution Services
9 Settlement Consumer Protection Act. Any person who violates
10 the Debt Resolution Services Settlement Consumer Protection
11 Act commits an unlawful practice within the meaning of this
12 Act.
13 (Source: P.A. 96-1420, eff. 8-3-10; 97-333, eff. 8-12-11.)
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