SB2480sam002 96TH GENERAL ASSEMBLY

Sen. Terry Link

Filed: 3/17/2010

09600SB2480sam002 LRB096 14868 RPM 39177 a

AMENDMENT TO SENATE BILL 2480

AMENDMENT NO. ______. Amend Senate Bill 2480, AS AMENDED, with reference to page and line numbers of Senate Amendment No. 1, as follows:

on page 6, by replacing lines 19 through 23 with the following: "Secretary in which the applicant shall be the obligor and in which an insurance company, which is duly authorized by the State of Illinois to transact the business of fidelity and surety insurance, shall be a surety. The surety bond must:

(i) be in effect during the period of registration and for 2 years after the provider ceases providing debt-management services to individuals in this State;

(ii) run to this State for the benefit of this State and of individuals who reside in this State when they agree to receive debt-settlement services from the provider, as their interests may appear; and

(iii) be in the amount of $50,000 or other larger or smaller amount that the Secretary determines is warranted by the financial condition and business experience of the provider, the history of the provider in performing debt settlement services, the risk to individuals, and any other factor that the Secretary considers appropriate."; and

on page 7, immediately below line 10, by inserting the following:

"Instead of the surety bond required under this Section, a provider may deliver to the Secretary, in the amount required under this Section, payable or available to this State and to individuals who reside in this State when they agree to receive debt-settlement services from the provider, as their interests may appear:

(1) a certificate of insurance:

(A) issued by an insurance company authorized to do business in this State and rated at least A or equivalent by a nationally recognized rating organization approved by the Secretary; and

(B) with no deductible, or if the provider supplies a bond in the amount of $5,000, a deductible not exceeding $5,000; or

(2) with the approval of the Secretary:

(A) an irrevocable letter of credit, issued or confirmed by a bank approved by the Secretary, payable upon presentation of a certificate by the Secretary stating that the provider or its agent has not complied with this Act; or

(B) bonds or other obligations of the United States or guaranteed by the United States or bonds or other obligations of this State or a political subdivision of this State, to be deposited and maintained with a bank approved by the Secretary for this purpose."; and

by replacing line 23 on page 31 through line 19 on page 32 with the following:

"(b) A debt settlement provider may only charge fees as provided in either paragraph (1) or (2) as follows:

(1) with respect to an agreement that provides for a flat pay-as-you-go fee based on the overall amount of included or enrolled debt, the total aggregate amount of fees charged to any individual under this Section may not exceed 17% of the principal amount of debt included in the agreement at the inception of the agreement; the flat pay-as-you-go fee structure authorized under this paragraph (1) shall be assessed in equal monthly payments over at least half the length of the plan, as estimated at the plan's inception, unless the payment of fees is voluntarily accelerated by the individual in a separate record and at least half of the overall amount of outstanding debt covered by the agreement has been settled; in the event that a consumer cancels a program being administered under this fee structure, no further fees shall be due, owing, or assessed by the provider following the month in which notice of the termination of the program is received by the provider; or

(2) with respect to agreements in which fees are calculated as a percentage of the amount saved by an individual, a settlement fee may not exceed 30% of the excess of the outstanding amount of each debt over the amount actually paid to the creditor, as calculated at the time of settlement; settlement fees authorized under this paragraph (2) shall become billable only as debts are settled, and the total aggregate amount of fees charged to any individual under this part may not exceed 20% of the principal amount of debt included in the agreement at the agreement's inception.

A provider may not impose or receive fees under both paragraphs (1) and (2) of this subsection.".