Illinois General Assembly - Full Text of SB1099
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Full Text of SB1099  102nd General Assembly

SB1099enr 102ND GENERAL ASSEMBLY



 


 
SB1099 EnrolledLRB102 04923 BMS 14942 b

1    AN ACT concerning regulation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 1. Short title. This Act may be cited as the
5Consumer Legal Funding Act.
 
6    Section 5. Definitions.
7    "Advertise" means publishing or disseminating any written,
8electronic, or printed communication, or any communication by
9means of recorded telephone messages or transmitted on radio,
10television, the Internet, or similar communications media,
11including film strips, motion pictures, and videos, published,
12disseminated, circulated, or placed before the public,
13directly or indirectly, for the purpose of inducing a consumer
14to enter into a consumer legal funding.
15    "Charges" means the fees, as set forth in Section 25, to be
16paid to the consumer legal funding company by or on behalf of
17the consumer above the funded amount provided by or on behalf
18of the company to an Illinois consumer pursuant to this Act.
19    "Consumer" means a natural person who has a pending legal
20claim and who resides or is domiciled in Illinois.
21    "Consumer legal funding" or "funding" means a nonrecourse
22transaction in which a company purchases and a consumer
23transfers to the company an unvested, contingent future

 

 

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1interest in the potential net proceeds of a settlement or
2judgment obtained from the consumer's legal claim; if no
3proceeds are obtained from the consumer's legal claim, the
4consumer is not required to repay the company the consumer
5legal funding amount or charges.
6    "Consumer legal funding company" or "company" means a
7person or entity that enters into, purchases, or services a
8consumer legal funding transaction with an Illinois consumer.
9"Consumer legal funding company" does not include:
10        (1) an immediate family member of the consumer;
11        (2) a bank, lender, financing entity, or other special
12    purpose entity:
13            (A) that provides financing to a consumer legal
14        funding company; or
15            (B) to which a consumer legal funding company
16        grants a security interest or transfers any rights or
17        interest in a consumer legal funding; or
18        (3) an attorney or accountant who provides services to
19    a consumer.
20    "Department" means the Department of Financial and
21Professional Regulation.
22    "Funded amount" means the amount of moneys provided to, or
23on behalf of, the consumer in the consumer legal funding.
24"Funded amount" does not include charges except for charges
25that are deducted from the funded amount.
26    "Funding date" means the date on which the funded amount

 

 

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1is transferred to the consumer by the consumer legal funding
2company either by personal delivery; via wire, ACH, or other
3electronic means; or mailed by insured, certified, or
4registered United States mail.
5    "Immediate family member" means a parent; sibling; child
6by blood, adoption, or marriage; spouse; grandparent; or
7grandchild.
8    "Legal claim" means a bona fide civil claim or cause of
9action.
10    "Resolution amount" means the funded amount plus the
11agreed-upon charges that are delivered to the consumer legal
12funding company on the resolution date.
13    "Resolution date" means the date the resolution amount is
14delivered to the consumer legal funding company.
15    "Secretary" means the Secretary of Financial and
16Professional Regulation or the Secretary's designee.
 
17    Section 10. Contract requirements; right of rescission.
18    (a) All consumer legal fundings shall meet the following
19requirements:
20        (1) the contract shall be completely filled in when
21    presented to the consumer for signature with all blanks
22    marked "not applicable", "n/a", or "none";
23        (2) the contract shall contain, in bold and boxed
24    type, a right of rescission, allowing the consumer to
25    cancel the contract without penalty or further obligation

 

 

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1    if, within 14 business days after the funding date, the
2    consumer either:
3            (A) returns to the consumer legal funding company
4        the full amount of the disbursed funds by delivering
5        the company's uncashed check to the company's office
6        in person; or
7            (B) mails, by insured, certified, or registered
8        United States mail, to the address specified in the
9        contract, a notice of cancellation and includes in the
10        mailing a return of the full amount of disbursed funds
11        in the form of the company's uncashed check or a
12        registered or certified check or money order; and
13        (3) the contract shall contain the initials of the
14    consumer on each page.
15    (b) The contract shall contain a written acknowledgment by
16the attorney retained by the consumer in the legal claim that
17attests to the following:
18        (1) to the best of the attorney's knowledge, all the
19    costs and charges relating to the consumer legal funding
20    have been disclosed to the consumer;
21        (2) the attorney is being paid on a contingency basis
22    pursuant to a written fee agreement;
23        (3) all proceeds of the legal claim will be disbursed
24    via either the trust account of the attorney or a
25    settlement fund established to receive the proceeds of the
26    legal claim on behalf of the consumer;

 

 

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1        (4) the attorney is following the written instructions
2    of the consumer with regard to the consumer legal funding;
3    and
4        (5) the attorney has not received a referral fee or
5    other consideration from the consumer legal funding
6    company in connection with the consumer legal funding, nor
7    will the attorney receive such fee or other consideration
8    in the future.
9    (c) If the acknowledgment required in subsection (b) is
10not completed by the attorney retained by the consumer in the
11legal claim, the contract shall be null and void. The contract
12remains valid and enforceable if the consumer terminates
13representation by the initial attorney who completed the
14acknowledgment required in subsection (b) or retains a new
15attorney with respect to the legal claim.
16    (d) No licensee shall permit an obligor to owe the
17licensee, an agent of the licensee, or an affiliate of the
18licensee, including a corporation owned or managed by the
19licensee, an aggregate principal amount in excess of $100,000,
20unless permitted by rule, at any time for consumer legal
21fundings transacted pursuant to this Act.
22    (e) Any transaction that does not exactly meet the
23definition of a consumer legal funding under Section 5 is
24subject to the Interest Act and any other applicable law.
 
25    Section 15. Consumer legal funding company prohibitions. A

 

 

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1consumer legal funding company shall not:
2        (1) pay or offer to pay commissions, referral fees, or
3    other forms of consideration to any attorney, law firm,
4    medical provider, chiropractic physician, or physical
5    therapist or any of their employees or agents for
6    referring a consumer to the company;
7        (2) accept any commissions, referral fees, rebates, or
8    other forms of consideration from an attorney, law firm,
9    medical provider, chiropractor, or physical therapist or
10    any of their employees or agents;
11        (3) advertise materially false or misleading
12    information regarding its products or services;
13        (4) refer, in furtherance of an initial consumer legal
14    funding, a customer or potential customer to a specific
15    attorney, law firm, medical provider, chiropractor, or
16    physical therapist or any of their employees; however, if
17    a customer needs legal representation, the company may
18    refer the customer to a local or State bar association
19    referral service or to a legal aid organization;
20        (5) fail to supply a true copy of the executed
21    contract to the attorney for the consumer upon execution
22    and if the consumer or their attorney requests a copy;
23        (6) knowingly provide funding to a consumer who has
24    previously assigned or sold a portion of the consumer's
25    right to proceeds from his or her legal claim without
26    first making payment to or purchasing a prior unsatisfied

 

 

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1    consumer legal funding company's entire funded amount and
2    contracted charges, unless a lesser amount is otherwise
3    agreed to in writing by the consumer legal funding
4    companies, except that multiple companies may agree to
5    contemporaneously provide funding to a consumer if the
6    consumer and the consumer's attorney consent to the
7    arrangement in writing;
8        (7) receive any right to, nor make any decisions with
9    respect to, the conduct of the underlying legal claim or
10    any settlement or resolution of the legal claim; the right
11    to make such decisions shall remain solely with the
12    consumer and the consumer's attorney in the legal claim;
13    or
14        (8) knowingly pay or offer to pay for court costs,
15    filing fees, or attorney's fees either during or after the
16    resolution of the legal claim using funds from the
17    consumer legal funding transaction.
 
18    Section 20. Satisfaction of the contract. A consumer legal
19funding company shall require the resolution amount to be set
20as a predetermined amount, based upon intervals of time from
21the date of origination of the funding through the date of
22resolution of the legal claim, and not be determined as a
23percentage of the recovery from the legal claim.
 
24    Section 25. Fees.

 

 

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1    (a) The fee charged by a consumer legal funding company to
2the consumer shall be calculated as not more than 18% of the
3funded amount, assessed on the outset of every 6 months.
4    (b) In addition, a consumer legal funding company may
5charge a document preparation fee not to exceed $75, which may
6be deducted from the funded amount. This fee is to be used to
7defray the ordinary cost of opening, administering, and
8terminating a consumer legal funding.
9    (c) A consumer legal funding company shall not collect any
10additional fees unless otherwise specified in this Act.
11    (d) No charges may accrue on a consumer legal funding for
12more than 42 months after the funding date of the consumer
13legal funding. No consumer legal funding may be refinanced
14except as authorized by rule. Notwithstanding the foregoing, a
15consumer legal funding company may assess charges on any
16additional amounts provided after the funding date for 42
17months after the additional funding date.
 
18    Section 30. Disclosures. All consumer legal funding
19contracts shall contain the disclosures specified in this
20Section, which shall constitute material terms of the
21contract. Unless otherwise specified, the disclosures shall be
22typed in at least 12-point bold-type font and be placed
23clearly and conspicuously within the contract as follows:
24        (1) On the front page under appropriate headings,
25    language specifying:

 

 

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1            (A) the funded amount to be paid to the consumer or
2        on the consumer's behalf by the consumer legal funding
3        company;
4            (B) an itemization of charges;
5            (C) the maximum total amount to be paid by the
6        consumer to the company, including the funded amount
7        and all fees; and
8            (D) a payment schedule to include the resolution
9        amount, listing dates, and the amount due at the end of
10        each 6-month period from the funding date, until the
11        date the maximum amount is due to the company by the
12        consumer to satisfy the amount due pursuant to the
13        contract.
14        (2) Pursuant to the provisions set forth in paragraph
15    (2) of subsection (a) of Section 10, within the body of the
16    contract: "CONSUMER'S RIGHT TO CANCELLATION: You may
17    cancel this contract without penalty or further obligation
18    within 14 business days after the funding date if you
19    either:
20            (A) return to the consumer legal funding company
21        the full amount of the funds disbursed to you or on
22        your behalf by delivering the company's uncashed check
23        to the company's office in person; or
24            (B) place in the mail, by mail service materially
25        equivalent to United States Postal Service certified
26        mail, addressed to the company at the address

 

 

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1        specified in the contract, a notice of cancellation
2        and include in such mailing a return of the full amount
3        of funds disbursed to you or on your behalf in the form
4        of the company's uncashed check or a registered or
5        certified check or money order."
6        (3) Within the body of the contract: "The consumer
7    legal funding company shall have no role in deciding
8    whether, when, and how much the legal claim is settled
9    for, however, the consumer and consumer's attorney must
10    notify the company of the outcome of the legal claim by
11    settlement or adjudication before the resolution date. The
12    company may seek updated information about the status of
13    the legal claim but in no event shall the company
14    interfere with the independent professional judgment of
15    the attorney in the handling of the legal claim or any
16    settlement thereof."
17        (4) Within the body of the contract, in all capital
18    letters in at least 12-point bold-type font contained
19    within a box: "THE FUNDED AMOUNT AND AGREED-UPON CHARGES
20    SHALL BE PAID ONLY FROM THE PROCEEDS OF YOUR LEGAL CLAIM,
21    AND SHALL BE PAID ONLY TO THE EXTENT THAT THERE ARE
22    AVAILABLE PROCEEDS FROM YOUR LEGAL CLAIM. YOU WILL NOT OWE
23    [INSERT NAME OF THE CONSUMER LEGAL FUNDING COMPANY]
24    ANYTHING IF THERE ARE NO REMAINING PROCEEDS AVAILABLE FROM
25    YOUR LEGAL CLAIM, UNLESS YOU OR YOUR ATTORNEY HAVE
26    COMMITTED FRAUD AGAINST THE CONSUMER LEGAL FUNDING

 

 

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1    COMPANY."
2        (5) Located immediately above the place on the
3    contract where the consumer's signature is required, in
4    12-point font: "Do not sign this contract before you read
5    it completely or if it contains any blank spaces. You are
6    entitled to a completely filled-in copy of the contract.
7    Before you sign this contract, you should obtain the
8    advice of an attorney. Depending on the circumstances, you
9    may want to consult a tax, public or private benefits
10    planning, or financial professional. You acknowledge that
11    your attorney in the legal claim has provided no tax,
12    public or private benefit planning, or financial advice
13    regarding this transaction."
14        (6) The consumer legal funding company shall provide
15    the consumer with information on accessing a financial
16    coaching program no later than the funding date.
 
17    Section 35. Violations.
18    (a) Nothing in this Act shall be construed to restrict the
19exercise of powers or the performance of the duties of the
20Illinois Attorney General that he or she is authorized to
21exercise or perform by law.
22    (b) Any violation of this Act constitutes a violation of
23the Consumer Fraud and Deceptive Business Practices Act.
24    (c) The Illinois Attorney General may enforce a violation
25of this Act as an unlawful practice under the Consumer Fraud

 

 

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1and Deceptive Business Practices Act.
 
2    Section 40. Assignability; liens.
3    (a) The contingent right to receive an amount of the
4potential proceeds of a legal claim is assignable by a
5consumer.
6    (b) Only liens related to the legal claim, including
7attorney's liens, Medicare, or other statutory liens, shall
8take priority over any lien of the consumer legal funding
9company. All other liens shall take priority by normal
10operation of law.
11    (c) A consumer legal funding transaction does not
12constitute an assignment of a personal injury claim or chose
13in action.
14    (d) A consumer legal funding transaction does not
15constitute the assignment of any present right; the
16transaction constitutes the transfer of an unvested,
17contingent future interest in an amount of the potential
18proceeds of a legal claim or cause of action.
 
19    Section 45. Attorney prohibitions. An attorney or law firm
20retained by the consumer in the legal claim shall not have a
21financial interest in the consumer legal funding company
22offering consumer legal funding to that consumer.
23Additionally, any attorney who has referred the consumer to
24the consumer's retained attorney shall not have a financial

 

 

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1interest in the consumer legal funding company offering
2consumer legal funding to that consumer. A consumer legal
3funding that violates this Section is null and void and no
4person or entity shall have any right to collect, attempt to
5collect, receive, or retain any funded amount or charges
6related to the consumer legal funding.
 
7    Section 50. Effect of communication on privileges. No
8communication between the consumer's attorney in the legal
9claim and the consumer legal funding company as it pertains to
10the consumer legal funding shall limit, waive, or abrogate the
11scope or nature of any statutory or common law privilege,
12including the work product doctrine and the attorney-client
13privilege.
 
14    Section 55. Consumer legal funding license scope.
15    (a) It shall be unlawful for any person or entity to
16operate as a consumer legal funding provider in this State
17except as authorized by this Act and without first having
18obtained a license in accordance with this Act. No person or
19entity may engage in any device, subterfuge, or pretense to
20evade the requirements of this Act. However, any company that
21has a license in good standing under the Consumer Installment
22Loan Act on the effective date of this Act shall be entitled to
23make consumer legal fundings under the terms of this Act upon
24the effective date of this Act if that company files an

 

 

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1application for a consumer legal funding license within 60
2days after the Department issues forms for the filing of that
3application and until the Department approves or denies the
4application for a funding license. Any consumer legal funding
5contract made by any person or entity in violation of this
6subsection shall be null and void and the person or entity who
7entered into the consumer legal funding transaction shall have
8no right to collect, attempt to collect, receive, or retain
9any principal, interest, or charges related to the consumer
10legal funding transaction.
11    (b) The provisions of this Act do not apply to a bank,
12savings bank, savings association, or credit union organized
13under the laws of this State, any other state, or under the
14laws of the United States.
15    (c) Any consumer legal funding made by a person not
16licensed under this Act, including a person holding an
17inactive license, and not exempt under this Act shall be null
18and void, and no person or entity shall have any right to
19collect, attempt to collect, receive, or retain any principal,
20fee, interest, or charges related to the funding.
 
21    Section 60. Licensee name. No person, partnership,
22association, corporation, limited liability company, or other
23entity engaged in a business regulated by this Act shall
24operate the business under a name other than the real names of
25the entity and individuals conducting the business. The

 

 

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1business may in addition operate under an assumed corporate
2name pursuant to the Business Corporation Act of 1983, an
3assumed limited liability company name pursuant to the Limited
4Liability Company Act, or an assumed business name pursuant to
5the Assumed Business Name Act.
 
6    Section 65. License application process; investigation.
7    (a) The Secretary may issue a license upon completion of
8all of the following:
9        (1) the filing of an application for a license with
10    the Secretary or the Nationwide Multistate Licensing
11    System and Registry as required by the Secretary;
12        (2) the filing with the Secretary of a listing of
13    judgments entered against and bankruptcy petitions by the
14    license applicant for the preceding 10 years;
15        (3) the filing of an audited balance sheet, including
16    all footnotes prepared by a certified public accountant in
17    accordance with generally accepted accounting principles
18    and generally accepted auditing standards; notwithstanding
19    the requirements of this subsection, an applicant that is
20    a subsidiary may submit audited consolidated financial
21    statements of its parent, intermediary parent, or ultimate
22    parent if the consolidated statements are supported by
23    consolidating statements that include the applicant's
24    financial statement; if the consolidating statements are
25    unaudited, the applicant's chief financial officer shall

 

 

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1    attest to the applicant's financial statements disclosed
2    in the consolidating statements; and
3        (4) an investigation of the averments required by
4    Section 80, which investigation must allow the Secretary
5    to issue positive findings stating that the financial
6    responsibility, experience, character, and general fitness
7    of the license applicant; of the members thereof if the
8    license applicant is a partnership or association; of the
9    officers and directors thereof if the license applicant is
10    a corporation; and of the managers and members that retain
11    any authority or responsibility under the operating
12    agreement if the license applicant is a limited liability
13    company are such as to command the confidence of the
14    community and to warrant belief that the business will be
15    operated honestly, fairly, and efficiently within the
16    purpose of this Act; if the Secretary does not so find, he
17    or she shall not issue the license and shall notify the
18    license applicant of the denial. The Secretary may impose
19    conditions on a license if the Secretary determines that
20    those conditions are necessary or appropriate. These
21    conditions shall be imposed in writing and shall continue
22    in effect for a period prescribed by the Secretary.
23    (b) All licenses shall be issued to the license applicant.
24Upon receipt of the license, a consumer legal funding licensee
25shall be authorized to engage in the business regulated by
26this Act. The license shall remain in full force and effect

 

 

SB1099 Enrolled- 17 -LRB102 04923 BMS 14942 b

1until it expires, it is surrendered by the licensee, or it is
2revoked or suspended as provided by this Act.
 
3    Section 70. License application form.
4    (a) An application for a consumer legal funding company
5license must be made in accordance with Section 65 and, if
6applicable, in accordance with requirements of the Nationwide
7Multistate Licensing System and Registry. The application
8shall be in writing, under oath, and on a form obtained from
9and prescribed by the Secretary, or may be submitted
10electronically with attestation to the Nationwide Multistate
11Licensing System and Registry.
12    (b) The application shall contain the name and complete
13business and residential address or addresses of the license
14applicant. If the license applicant is a partnership,
15association, corporation, or other form of business
16organization, the application shall contain the names and
17complete business and residential addresses of each member,
18director, and principal officer of the business. The
19application shall also include a description of the activities
20of the license applicant in such detail and for such periods as
21the Secretary may require, including all of the following:
22        (1) an affirmation of financial solvency noting such
23    capitalization requirements as may be required by the
24    Secretary and access to such credit as may be required by
25    the Secretary;

 

 

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1        (2) an applicant shall prove in a form satisfactory to
2    the Secretary that the applicant has and will maintain a
3    positive net worth of a minimum of $30,000;
4        (3) an applicant shall submit to the Secretary with
5    the application for a license and every licensee shall
6    maintain a bond to be approved by the Secretary in which
7    the applicant shall be the obligor, in the sum of $50,000
8    or such additional amount as required by the Secretary
9    based on the amount of consumer legal fundings made,
10    purchased, or serviced by the licensee in the previous
11    year, and in which an insurance company that is duly
12    authorized by this State to transact the business of
13    fidelity and surety insurance shall be a surety. The
14    surety bond shall run to the Secretary and shall be for the
15    benefit of the Department and of any consumer who incurs
16    damages as a result of any violation of this Act or rules
17    adopted pursuant to this Act by a licensee;
18        (4) an affirmation that the license applicant or its
19    members, directors, or principals, as may be appropriate,
20    are at least 18 years of age;
21        (5) information as to the character, fitness,
22    financial and business responsibility, background,
23    experience, and criminal record of any:
24            (i) person, entity, or ultimate equitable owner
25        that owns or controls, directly or indirectly, 10% or
26        more of any class of stock of the license applicant;

 

 

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1            (ii) person, entity, or ultimate equitable owner
2        that is not a depository institution, as defined in
3        Section 1007.50 of the Savings Bank Act, that lends,
4        provides, or infuses, directly or indirectly, in any
5        way, funds to or into a license applicant in an amount
6        equal to or more than 10% of the license applicant's
7        net worth;
8            (iii) person, entity, or ultimate equitable owner
9        that controls, directly or indirectly, the election of
10        25% or more of the members of the board of directors of
11        a license applicant; or
12            (iv) person, entity, or ultimate equitable owner
13        that the Secretary finds influences management of the
14        license applicant; the provisions of this subparagraph
15        shall not apply to a public official serving on the
16        board of directors of a State guaranty agency;
17        (6) upon written request by the licensee and
18    notwithstanding the provisions of paragraphs (1), (2), and
19    (3) of this subsection, the Secretary may permit the
20    licensee to omit all or part of the information required
21    by those paragraphs if instead of the omitted information,
22    the licensee submits an affidavit stating that the
23    information submitted on the licensee's previous renewal
24    application is still true and accurate; the Department may
25    adopt rules prescribing the form and content of the
26    affidavit that are necessary to accomplish the purposes of

 

 

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1    this paragraph; and
2        (7) any other information as required by rule.
 
3    Section 75. License application; Nationwide Multistate
4Licensing System and Registry.
5    (a) Applicants for a license shall apply in a form
6prescribed by the Secretary. Each form shall contain content
7as set forth by rule, regulation, instruction, or procedure of
8the Department and may be changed or updated as necessary by
9the Department in order to carry out the purposes of this Act.
10    (b) In order to fulfill the purposes of this Act, the
11Secretary is authorized to establish relationships or
12contracts with the Nationwide Multistate Licensing System and
13Registry or other entities designated by the Nationwide
14Multistate Licensing System and Registry to collect and
15maintain records and process transaction fees or other fees
16related to licensees or other persons subject to this Act.
17    (c) In connection with an application for licensing, the
18applicant may be required, at a minimum, to furnish to the
19Nationwide Multistate Licensing System and Registry
20information concerning the applicant's identity, including
21personal history and experience in a form prescribed by the
22Nationwide Multistate Licensing System and Registry, including
23the submission of authorization for the Nationwide Multistate
24Licensing System and Registry and the Secretary to obtain:
25        (1) an independent credit report obtained from a

 

 

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1    consumer reporting agency described in Section 603(p) of
2    the Fair Credit Reporting Act, 15 U.S.C. 1681a(p); and
3        (2) information related to any administrative, civil,
4    or criminal findings by any governmental jurisdiction.
5    (d) For the purposes of this Section, and in order to
6reduce the points of contact that the Secretary may have to
7maintain for purposes of paragraph (2) of subsection (c), the
8Secretary may use the Nationwide Multistate Licensing System
9and Registry as a channeling agent for requesting and
10distributing information to and from any source as directed by
11the Secretary.
 
12    Section 80. Averments of applicant. Each application for
13license shall be accompanied by the following averments
14stating that the applicant:
15        (1) will file with the Secretary or Nationwide
16    Multistate Licensing System and Registry, as applicable,
17    any report or reports that it is required to file under any
18    of the provisions of this Act when due;
19        (2) has not committed a crime against the law of this
20    State, any other state, or of the United States involving
21    moral turpitude or fraudulent or dishonest dealing, and
22    that no final judgment has been entered against it in a
23    civil action upon grounds of fraud, misrepresentation, or
24    deceit that has not been previously reported to the
25    Secretary;

 

 

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1        (3) has not engaged in any conduct that would be cause
2    for denial of a license;
3        (4) has not become insolvent;
4        (5) has not submitted an application for a license
5    under this Act that contains a material misstatement;
6        (6) has not demonstrated by course of conduct,
7    negligence or incompetence in performing any act for which
8    it is required to hold a license under this Act;
9        (7) will advise the Secretary in writing or the
10    Nationwide Multistate Licensing System and Registry, as
11    applicable, of any changes to the information submitted on
12    the most recent application for license or averments of
13    record within 30 days after the change; the written notice
14    must be signed in the same form as the application for the
15    license being amended;
16        (8) will comply with the provisions of this Act and
17    with any lawful order, rule, or regulation made or issued
18    under the provisions of this Act;
19        (9) will submit to periodic examination by the
20    Secretary as required by this Act; and
21        (10) will advise the Secretary in writing of judgments
22    entered against and bankruptcy petitions by the license
23    applicant within 5 days after the occurrence.
24    A licensee who fails to fulfill the obligations of an
25averment, fails to comply with averments made, or otherwise
26violates any of the averments made under this Section shall be

 

 

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1subject to the penalties of this Act.
 
2    Section 85. Refusal to issue license. The Secretary may
3refuse to issue or renew a license if:
4        (1) it is determined that the applicant is not in
5    compliance with any provisions of this Act;
6        (2) there is substantial continuity between the
7    applicant and any violator of this Act; or
8        (3) the Secretary cannot make the findings specified
9    in subsection (a) of Section 65.
 
10    Section 90. Closing of business; surrender of license. At
11least 10 days before a licensee ceases operations, closes
12business, or files for bankruptcy:
13        (1) The licensee shall notify the Department of its
14    action in writing.
15        (2) With the exception of filing for bankruptcy, the
16    licensee shall surrender its license to the Secretary for
17    cancellation; the surrender of the license shall not
18    affect the licensee's civil or criminal liability for acts
19    committed before surrender or entitle the licensee to a
20    return of any part of the annual license fee.
21        (3) The licensee shall notify the Department of the
22    location where the books, accounts, contracts, and records
23    will be maintained and the procedure to ensure prompt
24    return of contracts, titles, and releases to the

 

 

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1    customers.
2        (4) The accounts, books, records, and contracts shall
3    be maintained and serviced by the licensee or another
4    licensee under this Act or an entity exempt from licensure
5    under this Act.
6        (5) The Department shall have the authority to conduct
7    examinations of the books, records, and funding documents
8    at any time after surrender of the license, filing of
9    bankruptcy, or the cessation of operations.
 
10    Section 95. License renewal; fees.
11    (a) Licenses shall be renewed every year using the common
12renewal date of the Nationwide Multistate Licensing System and
13Registry, as required by the Secretary. Properly completed
14renewal application forms and filing fees may be received by
15the Secretary 60 days before the license expiration date, but
16to be deemed timely the completed renewal application forms
17and filing fees must be received by the Secretary no later than
1830 days before the license expiration date.
19    (b) It shall be the responsibility of each licensee to
20accomplish renewal of its license. Failure by a licensee to
21submit a properly completed renewal application form and fees
22in a timely fashion, absent a written extension from the
23Secretary, shall result in the license becoming inactive.
24    (c) No activity regulated by this Act shall be conducted
25by the licensee when a license becomes inactive. An inactive

 

 

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1license may be reactivated by the Secretary upon payment of a
2renewal fee and payment of a reactivation fee equal to the
3renewal fee.
4    (d) A licensee ceasing an activity or activities regulated
5by this Act and desiring to no longer be licensed shall inform
6the Secretary in writing and, at the same time, convey any
7license issued and all other symbols or indicia of licensure.
8The licensee shall include a plan for the withdrawal from the
9regulated business, including a timetable for the disposition
10of the business, and comply with the surrender guidelines or
11rules of the Department. Upon receipt of such written notice,
12the Secretary shall post the cancellation or issue a certified
13statement canceling the license.
14    (e) The expenses of administering this Act, including
15investigations and examinations provided for in this Act,
16shall be borne by and assessed against entities regulated by
17this Act. The fees listed in this Section shall be payable to
18the Department or to the Nationwide Multistate Licensing
19System and Registry for transfer to the required recipients by
20the Secretary. The Secretary will specify the form of payment
21to the Department or to the Nationwide Multistate Licensing
22System and Registry, which may include certified check, money
23order, credit card, or other forms of payment authorized by
24the Secretary. The Nationwide Multistate Licensing System and
25Registry shall be authorized to collect and process
26transaction fees or other fees related to licensees or other

 

 

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1persons subject to the Act.
2    (f) Applicants and licensees shall be subject to the
3following fees:
4        (1) For each application for an initial license, the
5    applicant shall pay a nonrefundable initial application
6    fee of $1,000 and a nonrefundable background investigation
7    fee of $800.
8        (2) For each application for an annual renewal of a
9    license, the applicant shall pay a nonrefundable renewal
10    fee of $1,000. For each application for a renewal of an
11    inactive license, the applicant shall pay the
12    nonrefundable renewal fee of $1,000 and an additional
13    nonrefundable reactivation fee equal to the renewal fee.
14        (3) The licensee shall pay a nonrefundable fee of
15    $1,000 for each notice of change of ownership or control
16    filed.
17        (4) The licensee shall pay a nonrefundable fee of $50
18    for each notice of change of officers or directors or
19    change of name or address filed.
20        (5) Any licensee or person who delivers a check or
21    other payment to the Department that is returned unpaid by
22    the financial institution upon which it is drawn shall pay
23    to the Department, in addition to the amount already owed,
24    a fee of $50.
25        (6) Time expended in the conduct of any examination of
26    the affairs of any licensee or its affiliates shall be

 

 

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1    billed by the Department at a rate of $510 per examiner
2    day. Examination fees shall be billed following completion
3    of the examination and shall be paid within 30 days after
4    receipt of the billing.
5        (7) If out-of-state travel occurs in the conduct of
6    any examination, the licensee shall make arrangements to
7    reimburse the Department for all charges for services,
8    including travel expenses, including airfare, hotel and
9    per diem expenses incurred by the employee. These expenses
10    are to be in accord with applicable travel regulations
11    published by the Department of Central Management Services
12    and approved by the Governor's Travel Control Board.
13        (8) Each licensee shall pay to the Department its pro
14    rata share of the cost for administration of the Act that
15    exceeds other fees listed in this Section, as estimated by
16    the Department, for the current year and any deficit
17    actually incurred in the administration of the Act in
18    prior years. The calculation method for each licensee's
19    pro rata share shall be established by rule.
20    (g) Beginning one year after the effective date of this
21Act, the Department may, by rule, amend the fees set forth in
22this Section.
 
23    Section 100. Secretary of Financial and Professional
24Regulation; functions and powers. The functions and powers of
25the Secretary shall include the following:

 

 

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1        (1) to issue or refuse to issue any license as
2    provided by this Act;
3        (2) to revoke or suspend for cause any license issued
4    under this Act;
5        (3) to keep records of all licenses issued under this
6    Act;
7        (4) to receive, consider, investigate, and act upon
8    complaints made by any person in connection with any
9    licensed consumer legal funding company in this State or
10    unlicensed consumer legal funding activity;
11        (5) to prescribe the forms of and receive:
12            (A) applications for licenses; and
13            (B) all reports and all books and records required
14        to be made by any licensee under this Act, including
15        annual audited financial statements and annual reports
16        of consumer legal funding activity;
17        (6) to subpoena documents and witnesses and compel
18    their attendance and production, to administer oaths, and
19    to require the production of any books, papers, or other
20    materials relevant to any inquiry authorized by this Act;
21        (7) to issue orders against any person:
22            (A) if the Secretary has reasonable cause to
23        believe that an unsafe, unsound, or unlawful practice
24        has occurred, is occurring, or is about to occur;
25            (B) if any person has violated, is violating, or
26        is about to violate any law, rule, or written

 

 

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1        agreement with the Secretary; or
2            (C) for the purpose of administering the
3        provisions of this Act and any rule adopted in
4        accordance with this Act;
5        (8) to address any inquiries to any licensee, or the
6    officers of the licensee, in relation to the licensee's
7    activities and conditions or any other matter connected
8    with its affairs, and it shall be the duty of any licensee
9    or person so addressed to promptly reply in writing to
10    those inquiries; the Secretary may also require reports
11    from any licensee at any time the Secretary chooses;
12        (9) to examine the books and records of every licensee
13    under this Act;
14        (10) to enforce the provisions of this Act;
15        (11) to levy fees, fines, and charges for services
16    performed in administering this Act; the aggregate of all
17    fees collected by the Secretary on and after the effective
18    date of this Act shall be paid promptly after receipt,
19    accompanied by a detailed statement of fees paid, into the
20    Financial Institutions Fund; the amounts deposited into
21    that Fund shall be used for the ordinary and contingent
22    expenses of the Department; nothing in this Act shall
23    prevent the continuation of the practice of paying
24    expenses involving salaries, retirement, social security,
25    and State-paid insurance of State officers by
26    appropriation from the General Revenue Fund or any other

 

 

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1    fund;
2        (12) to appoint examiners, supervisors, experts, and
3    special assistants as needed to effectively and
4    efficiently administer this Act;
5        (13) to conduct hearings for the purpose of:
6            (A) appeals of orders of the Secretary;
7            (B) suspensions or revocations of licenses;
8            (C) fining of licensees or unlicensed persons or
9        entities;
10            (D) investigating:
11                (i) complaints against licensees or unlicensed
12            persons or entities; or
13                (ii) annual gross delinquency rates; and
14            (E) carrying out the purposes of this Act;
15        (14) to exercise visitorial power over a licensee;
16        (15) to enter into cooperative agreements with state
17    regulatory authorities of other states to provide for
18    examination of corporate offices or branches of those
19    states and to accept reports of those examinations;
20        (16) to assign an examiner or examiners to monitor the
21    affairs of a licensee with whatever frequency the
22    Secretary determines appropriate and to charge the
23    licensee for reasonable and necessary expenses of the
24    Secretary if in the opinion of the Secretary an emergency
25    exists or appears likely to occur;
26        (17) to impose civil penalties of up to $50 per day

 

 

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1    against a licensee for failing to respond to a regulatory
2    request or reporting requirement; and
3        (18) to enter into agreements in connection with the
4    Nationwide Multistate Licensing System and Registry.
 
5    Section 105. Other businesses.
6    (a) Upon application by the licensee and payment of a $500
7fee, the Secretary may approve the conduct of other businesses
8not specifically permitted by this Act in the licensee's place
9of business, unless the Secretary finds that such conduct will
10conceal or facilitate evasion or violation of this Act. The
11Secretary's approval shall be in writing and shall describe
12the other businesses which may be conducted in the licensed
13office.
14    (b) The Department shall adopt and enforce such reasonable
15rules and regulations for the conduct of business under this
16Act in the same office with other businesses as may be
17necessary to prevent evasions or violations of this Act. The
18Secretary may investigate any business conducted in the
19licensed office.
 
20    Section 110. Financial Institution Fund. All moneys
21received by the Secretary under this Act in conjunction with
22the provisions relating to consumer legal funding companies
23shall be paid into the Financial Institution Fund and all
24expenses incurred by the Secretary under this Act in

 

 

SB1099 Enrolled- 32 -LRB102 04923 BMS 14942 b

1conjunction with the provisions relating to consumer legal
2funding companies shall be paid from the Financial Institution
3Fund.
 
4    Section 115. Examination; prohibited activities.
5    (a) The business affairs of a licensee under this Act
6shall be examined for compliance with this Act as often as the
7Secretary deems necessary and proper. The Department may adopt
8rules with respect to the frequency and manner of examination.
9The Secretary shall appoint a suitable person to perform an
10examination. The Secretary and his or her appointees may
11examine the entire books, records, documents, and operations
12of each licensee and its subsidiary, affiliate, or agent, and
13may examine any of the licensee's or its subsidiary's,
14affiliate's, or agent's officers, directors, employees, and
15agents under oath.
16    (b) The Secretary shall prepare a sufficiently detailed
17report of each licensee's examination, shall issue a copy of
18the report to each licensee's principals, officers, or
19directors, and shall take appropriate steps to ensure
20correction of violations of this Act.
21    (c) Affiliates of a licensee shall be subject to
22examination by the Secretary on the same terms as the
23licensee, but only when reports from or examination of a
24licensee provides for documented evidence of unlawful activity
25between a licensee and affiliate benefiting, affecting, or

 

 

SB1099 Enrolled- 33 -LRB102 04923 BMS 14942 b

1deriving from the activities regulated by this Act.
2    (d) The expenses of any examination of the licensee and
3affiliates shall be borne by the licensee and assessed by the
4Secretary as may be established by rule.
5    (e) Upon completion of the examination, the Secretary
6shall issue a report to the licensee. All confidential
7supervisory information, including the examination report and
8the work papers of the report, shall belong to the Secretary's
9office and may not be disclosed to anyone other than the
10licensee, law enforcement officials or other regulatory
11agencies that have an appropriate regulatory interest as
12determined by the Secretary, or to a party presenting a lawful
13subpoena to the Department. The Secretary may, through the
14Attorney General, immediately appeal to the court of
15jurisdiction the disclosure of such confidential supervisory
16information and seek a stay of the subpoena pending the
17outcome of the appeal. Reports required of licensees by the
18Secretary under this Act and results of examinations performed
19by the Secretary under this Act shall be the property of only
20the Secretary, but may be shared with the licensee. Access
21under this Act to the books and records of each licensee shall
22be limited to the Secretary and his or her agents as provided
23in this Act and to the licensee and its authorized agents and
24designees. No other person shall have access to the books and
25records of a licensee under this Act. Any person upon whom a
26demand for production of confidential supervisory information

 

 

SB1099 Enrolled- 34 -LRB102 04923 BMS 14942 b

1is made, whether by subpoena, order, or other judicial or
2administrative process, must withhold production of the
3confidential supervisory information and must notify the
4Secretary of the demand, at which time the Secretary is
5authorized to intervene for the purpose of enforcing the
6limitations of this Section or seeking the withdrawal or
7termination of the attempt to compel production of the
8confidential supervisory information. The Secretary may impose
9any conditions and limitations on the disclosure of
10confidential supervisory information that are necessary to
11protect the confidentiality of that information. Except as
12authorized by the Secretary, no person obtaining access to
13confidential supervisory information may make a copy of the
14confidential supervisory information. The Secretary may
15condition a decision to disclose confidential supervisory
16information on entry of a protective order by the court or
17administrative tribunal presiding in the particular case or on
18a written agreement of confidentiality. In a case in which a
19protective order or agreement has already been entered between
20parties other than the Secretary, the Secretary may
21nevertheless condition approval for release of confidential
22supervisory information upon the inclusion of additional or
23amended provisions in the protective order. The Secretary may
24authorize a party who obtained the records for use in one case
25to provide them to another party in another case, subject to
26any conditions that the Secretary may impose on either or both

 

 

SB1099 Enrolled- 35 -LRB102 04923 BMS 14942 b

1parties. The requester shall promptly notify other parties to
2a case of the release of confidential supervisory information
3obtained and, upon entry of a protective order, shall provide
4copies of confidential supervisory information to the other
5parties.
 
6    Section 120. Judicial review. All final administrative
7decisions of the Department under this Act, all amendments and
8modifications of final administrative decisions, and any rules
9adopted by the Department pursuant to this Act shall be
10subject to judicial review pursuant to the provisions of the
11Administrative Review Law.
 
12    Section 125. Subpoena power.
13    (a) The Secretary shall have the power to issue and to
14serve subpoenas and subpoenas duces tecum to compel the
15attendance of witnesses and the production of all books,
16accounts, records, and other documents and materials relevant
17to an examination or investigation. The Secretary, or his or
18her duly authorized representative, shall have power to
19administer oaths and affirmations to any person.
20    (b) In the event of noncompliance with a subpoena or
21subpoena duces tecum issued or caused to be issued by the
22Secretary, the Secretary may, through the Attorney General,
23petition the circuit court of the county in which the person
24subpoenaed resides or has its principal place of business for

 

 

SB1099 Enrolled- 36 -LRB102 04923 BMS 14942 b

1an order requiring the subpoenaed person to appear and testify
2and to produce such books, accounts, records, and other
3documents as are specified in the subpoena duces tecum. The
4court may grant injunctive relief restraining the person from
5advertising, promoting, soliciting, entering into, offering to
6enter into, continuing, or completing any consumer legal
7funding transaction. The court may grant other relief,
8including, but not limited to, the restraint, by injunction or
9appointment of a receiver, of any transfer, pledge,
10assignment, or other disposition of the person's assets or any
11concealment, alteration, destruction, or other disposition of
12books, accounts, records, or other documents and materials as
13the court deems appropriate, until the person has fully
14complied with the subpoena or subpoena duces tecum and the
15Secretary has completed an investigation or examination.
16    (c) If it appears to the Secretary that the compliance
17with a subpoena or subpoena duces tecum issued or caused to be
18issued by the Secretary pursuant to this Section is essential
19to an investigation or examination, the Secretary may, in
20addition to the other remedies provided for in this Act,
21through the Attorney General, apply for relief to the circuit
22court of the county in which the subpoenaed person resides or
23has its principal place of business. The court shall thereupon
24direct the issuance of an order against the subpoenaed person
25requiring sufficient bond conditioned on compliance with the
26subpoena or subpoena duces tecum. The court shall cause to be

 

 

SB1099 Enrolled- 37 -LRB102 04923 BMS 14942 b

1endorsed on the order a suitable amount of bond or payment
2pursuant to which the person named in the order shall be freed,
3having a due regard to the nature of the case.
4    (d) In addition, the Secretary may, through the Attorney
5General, seek a writ of attachment or an equivalent order from
6the circuit court having jurisdiction over the person who has
7refused to obey a subpoena, who has refused to give testimony,
8or who has refused to produce the matters described in the
9subpoena duces tecum.
 
10    Section 130. Report required of licensee. In addition to
11any reports required under this Act, every licensee shall file
12any other report that the Secretary requires.
 
13    Section 135. Suspension; revocation of licenses; fines.
14    (a) Upon written notice to a licensee, the Secretary may
15suspend or revoke any license issued pursuant to this Act if,
16in the notice, he or she makes a finding of one or more of the
17following:
18        (1) that through separate acts or an act or a course of
19    conduct, the licensee has violated any provisions of this
20    Act, any rule adopted by the Department, or any other law,
21    rule, or regulation of this State or the United States;
22        (2) that any fact or condition exists that, if it had
23    existed at the time of the original application for the
24    license, would have warranted the Secretary in refusing

 

 

SB1099 Enrolled- 38 -LRB102 04923 BMS 14942 b

1    originally to issue the license; or
2        (3) that if a licensee is other than an individual,
3    any ultimate equitable owner, officer, director, or member
4    of the licensed partnership, association, corporation, or
5    other entity has acted or failed to act in a way that would
6    be cause for suspending or revoking a license to that
7    party as an individual.
8    (b) No license shall be suspended or revoked, except as
9provided in this Section, nor shall any licensee be fined
10without notice of his or her right to a hearing as provided in
11subsection (n).
12    (c) The Secretary, on good cause shown that an emergency
13exists, may suspend any license for a period not exceeding 180
14days, pending investigation.
15    (d) The provisions of subsection (d) of Section 95 shall
16not affect a licensee's civil or criminal liability for acts
17committed before surrender of a license.
18    (e) No revocation, suspension, or surrender of any license
19shall impair or affect the obligation of any preexisting
20lawful contract between the licensee and any person.
21     (f) Every license issued under this Act shall remain in
22force and effect until the license expires without renewal, is
23surrendered, is revoked, or is suspended in accordance with
24the provisions of this Act, but the Secretary shall have
25authority to reinstate a suspended license or to issue a new
26license to a licensee whose license has been revoked if no fact

 

 

SB1099 Enrolled- 39 -LRB102 04923 BMS 14942 b

1or condition then exists which would have warranted the
2Secretary in refusing originally to issue that license under
3this Act.
4    (g) Whenever the Secretary revokes or suspends a license
5issued pursuant to this Act or fines a licensee under this Act,
6he or she shall execute a written order to that effect. The
7Secretary shall serve a copy of the order upon the licensee.
8Any such order may be reviewed in the manner provided by
9Section 170.
10    (h) If the Secretary finds any person in violation of the
11grounds set forth in subsection (p), he or she may enter an
12order imposing one or more of the following penalties:
13        (1) revocation of license;
14        (2) suspension of a license subject to reinstatement
15    upon satisfying all reasonable conditions the Secretary
16    may specify;
17        (3) placement of the licensee or applicant on
18    probation for a period of time and subject to all
19    reasonable conditions as the Secretary may specify;
20        (4) issuance of a reprimand;
21        (5) imposition of a fine not to exceed $25,000 for
22    each count of separate offense; except that a fine may be
23    imposed that shall not exceed $75,000 for each separate
24    count of offense in violation of paragraph (2) of
25    subsection (i);
26        (6) denial of a license; or

 

 

SB1099 Enrolled- 40 -LRB102 04923 BMS 14942 b

1        (7) restitution for the benefit of consumers.
2    (i) The Secretary may, after 10 days' notice by certified
3mail to the licensee at the address set forth in the license
4stating the contemplated action and in general the grounds
5therefor, fine the licensee an amount not exceeding $10,000
6per violation or revoke or suspend any license issued under
7this Act if he or she finds that:
8        (1) the licensee has failed to comply with any
9    provision of this Act, any rule adopted pursuant to this
10    Act, or any order, decision, finding, or direction of the
11    Secretary lawfully made pursuant to the authority of this
12    Act; or
13        (2) any fact or condition exists which, if it had
14    existed at the time of the original application for the
15    license, clearly would have warranted the Secretary in
16    refusing to issue the license.
17    (j) The Secretary may fine, suspend, or revoke only the
18particular license with respect to which grounds for the fine,
19revocation, or suspension occur or exist, but if the Secretary
20finds that grounds for revocation are of general application
21to all offices or to more than one office of the licensee, the
22Secretary shall fine, suspend, or revoke every license to
23which the grounds apply.
24    (k) No revocation, suspension, or surrender of any license
25shall impair or affect the obligation of any preexisting
26lawful contract between the licensee and any obligor.

 

 

SB1099 Enrolled- 41 -LRB102 04923 BMS 14942 b

1    (l) The Secretary may issue a new license to a licensee
2whose license has been revoked when facts or conditions which
3clearly would have warranted the Secretary in refusing
4originally to issue the license no longer exist.
5    (m) In every case in which a license is suspended or
6revoked or an application for a license or renewal of a license
7is denied, the Secretary shall serve the licensee with notice
8of his or her action, including a statement of the reasons for
9his or her actions, either personally or by certified mail.
10Service by certified mail shall be deemed completed when the
11notice is deposited in the U.S. mail.
12    (n) An order assessing a fine, an order revoking or
13suspending a license, or an order denying renewal of a license
14shall take effect upon service of the order unless the
15licensee requests a hearing, in writing, within 10 days after
16the date of service. If a hearing is requested, the order shall
17be stayed until a final administrative order is entered.
18        (1) If the licensee requests a hearing, the Secretary
19    shall schedule a hearing within 30 days after the request
20    for a hearing unless otherwise agreed to by the parties.
21        (2) The hearing shall be held at the time and place
22    designated by the Secretary. The Secretary and any
23    administrative law judge designated by him or her shall
24    have the power to administer oaths and affirmations,
25    subpoena witnesses and compel their attendance, take
26    evidence, and require the production of books, papers,

 

 

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1    correspondence, and other records or information that he
2    or she considers relevant or material to the inquiry.
3    (o) The costs of administrative hearings conducted
4pursuant to this Section shall be paid by the licensee.
5    (p) The following acts shall constitute grounds for which
6the disciplinary actions specified in subsection (h) may be
7taken:
8        (1) being convicted or found guilty, regardless of
9    pendency of an appeal, of a crime in any jurisdiction that
10    involves fraud, dishonest dealing, or any other act of
11    moral turpitude;
12        (2) fraud, misrepresentation, deceit, or negligence in
13    any relation to any consumer legal funding;
14        (3) a material or intentional misstatement of fact on
15    an initial or renewal application;
16        (4) insolvency or filing under any provision of the
17    United States Bankruptcy Code as a debtor;
18        (5) failure to account or deliver to any person any
19    property, such as any money, fund, deposit, check, draft,
20    or other document or thing of value, that has come into his
21    or her hands and that is not his or her property or that he
22    or she is not in law or equity entitled to retain, under
23    the circumstances and at the time which has been agreed
24    upon or is required by law, or, in the absence of a fixed
25    time, upon demand of the person entitled to such
26    accounting and delivery;

 

 

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1        (6) failure to disburse funds in accordance with
2    agreements;
3        (7) having a license, or the equivalent, to practice
4    any profession or occupation revoked, suspended, or
5    otherwise acted against, including the denial of licensure
6    by a licensing authority of this State or another state,
7    territory, or country, for fraud, dishonest dealing, or
8    any other act of moral turpitude;
9        (8) failure to comply with an order of the Secretary
10    or rule adopted under the provisions of this Act;
11        (9) engaging in activities regulated by this Act
12    without a current, active license unless specifically
13    exempted by this Act;
14        (10) failure to pay in a timely manner any fee,
15    charge, or fine under this Act;
16        (11) failure to maintain, preserve, and keep available
17    for examination all books, accounts, or other documents
18    required by the provisions of this Act and the rules of the
19    Department;
20        (12) refusing, obstructing, evading, or unreasonably
21    delaying an investigation, information request, or
22    examination authorized under this Act, or refusing,
23    obstructing, evading, or unreasonably delaying compliance
24    with the Secretary's subpoena or subpoena duces tecum;
25        (13) failure to comply with or a violation of any
26    provision of this Act; and

 

 

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1        (14) any unfair, deceptive, or abusive business
2    practice.
3    (q) A licensee shall be subject to the disciplinary
4actions specified in this Act for violations of subsection (i)
5by any officer, director, shareholder, joint venture, partner,
6ultimate equitable owner, or employee of the licensee.
7    (r) A licensee shall be subject to suspension or
8revocation for unauthorized employee actions only if there is
9a pattern of repeated violations by employees, the licensee
10has knowledge of the violations, or there is substantial harm
11to a consumer. A licensee may be subject to fine for employee
12actions, whether authorized or unauthorized, whether there is
13a pattern of repeated violations or no pattern of repeated
14violations.
15    (s) Any licensee may submit an application to surrender a
16license, but, upon the Secretary approving the surrender, it
17shall not affect the licensee's civil or criminal liability
18for acts committed before surrender or entitle the licensee to
19a return of any part of the license fee.
 
20    Section 140. Investigation of complaints. The Secretary
21may receive, record, and investigate complaints and inquiries
22made by any person concerning this Act and any licensees under
23this Act. Each licensee shall open its books, records,
24documents, and offices wherever situated to the Secretary or
25his or her appointees as needed to facilitate such

 

 

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1investigations.
 
2    Section 145. Additional investigation and examination
3authority. In addition to any authority allowed under this
4Act, the Secretary shall have the authority to conduct
5investigations and examinations as follows:
6        (1) For purposes of initial licensing, license
7    renewal, license suspension, license conditioning, license
8    revocation or termination, or general or specific inquiry
9    or investigation to determine compliance with this Act,
10    the Secretary shall have the authority to access, receive,
11    and use any books, accounts, records, files, documents,
12    information, or evidence, including, but not limited to,
13    the following:
14            (A) criminal, civil, and administrative history
15        information, including nonconviction data as specified
16        in the Criminal Code of 2012;
17            (B) personal history and experience information,
18        including independent credit reports obtained from a
19        consumer reporting agency described in Section 603(p)
20        of the federal Fair Credit Reporting Act; and
21            (C) any other documents, information, or evidence
22        the Secretary deems relevant to the inquiry or
23        investigation, regardless of the location, possession,
24        control, or custody of the documents, information, or
25        evidence.

 

 

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1        (2) For the purposes of investigating violations or
2    complaints arising under this Act or for the purposes of
3    examination, the Secretary may review, investigate, or
4    examine any licensee, individual, or person subject to
5    this Act as often as necessary in order to carry out the
6    purposes of this Act. The Secretary may direct, subpoena,
7    or order the attendance of and examine under oath all
8    persons whose testimony may be required about the consumer
9    legal fundings or the business or subject matter of any
10    such examination or investigation, and may direct,
11    subpoena, or order the person to produce books, accounts,
12    records, files, and any other documents the Secretary
13    deems relevant to the inquiry.
14        (3) Each licensee, individual, or person subject to
15    this Act shall make available to the Secretary upon
16    request the books and records relating to the operations
17    of the licensee, individual, or person subject to this
18    Act. The Secretary shall have access to those books and
19    records and may interview the officers, principals,
20    employees, independent contractors, agents, and customers
21    of the licensee, individual, or person subject to this Act
22    concerning their business.
23        (4) Each licensee, individual, or person subject to
24    this Act shall make or compile reports or prepare other
25    information as directed by the Secretary in order to carry
26    out the purposes of this Section, including, but not

 

 

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1    limited to:
2            (A) accounting compilations;
3            (B) information lists and data concerning consumer
4        legal fundings in a format prescribed by the
5        Secretary; or
6            (C) other information deemed necessary to carry
7        out the purposes of this Section.
8        (5) In making any examination or investigation
9    authorized by this Act, the Secretary may control access
10    to any documents and records of the licensee or person
11    under examination or investigation. The Secretary may take
12    possession of the documents and records or place a person
13    in exclusive charge of the documents and records in the
14    place where they are usually kept. During the period of
15    control, no person shall remove or attempt to remove any
16    of the documents or records, except pursuant to a court
17    order or with the consent of the Secretary. Unless the
18    Secretary has reasonable grounds to believe the documents
19    or records of the licensee have been or are at risk of
20    being altered or destroyed for purposes of concealing a
21    violation of this Act, the licensee or owner of the
22    documents and records shall have access to the documents
23    or records as necessary to conduct its ordinary business
24    affairs.
25        (6) In order to carry out the purposes of this
26    Section, the Secretary may:

 

 

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1            (A) retain attorneys, accountants, or other
2        professionals and specialists as examiners, auditors,
3        or investigators to conduct or assist in the conduct
4        of examinations or investigations;
5            (B) enter into agreements or relationships with
6        other government officials or regulatory associations
7        in order to improve efficiencies and reduce regulatory
8        burden by sharing resources, standardized or uniform
9        methods or procedures, and documents, records,
10        information, or evidence obtained under this Section;
11            (C) use, hire, contract, or employ publicly or
12        privately available analytical systems, methods, or
13        software to examine or investigate the licensee,
14        individual, or person subject to this Act;
15            (D) accept and rely on examination or
16        investigation reports made by other government
17        officials within or outside this State; or
18            (E) accept audit reports made by an independent
19        certified public accountant for the licensee,
20        individual, or person subject to this Act in the
21        course of that part of the examination covering the
22        same general subject matter as the audit and may
23        incorporate the audit report in the report of the
24        examination, report of investigation, or other writing
25        of the Secretary.
26        (7) The authority of this Section shall remain in

 

 

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1    effect if a licensee, individual, or person subject to
2    this Act acts or claims to act under any licensing or
3    registration law of this State or claims to act without
4    the authority.
5        (8) No licensee, individual, or person subject to
6    investigation or examination under this Section may
7    knowingly withhold, abstract, remove, mutilate, destroy,
8    or secrete any books, records, computer records, or other
9    information.
 
10    Section 150. Confidential information. In hearings
11conducted under this Act, information presented into evidence
12that was acquired by the licensee when serving any individual
13in connection with a consumer legal funding, including all
14financial information of the individual, shall be deemed
15strictly confidential and shall be made available only as part
16of the record of a hearing under this Act or otherwise (i) when
17the record is required, in its entirety, for purposes of
18judicial review or (ii) upon the express written consent of
19the individual served, or in the case of his or her death or
20disability, the consent of his or her personal representative.
 
21    Section 155. Information sharing. In order to promote more
22effective regulation and reduce regulatory burden through
23supervisory information sharing:
24        (1) Except as otherwise provided in any federal law or

 

 

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1    State law regarding the privacy or confidentiality of any
2    information or material provided to the Nationwide
3    Mortgage Licensing System and Registry, any privilege
4    arising under federal or State law, including the rules of
5    any federal or State court, with respect to such
6    information or material shall continue to apply to
7    information or material after the information or material
8    has been disclosed to the Nationwide Mortgage Licensing
9    System and Registry. The information and material may be
10    shared with all State and federal regulatory officials
11    with relevant oversight authority without the loss of
12    privilege or the loss of confidentiality protections
13    provided by federal law or State law.
14        (2) The Secretary is authorized to enter into
15    agreements or sharing arrangements with other governmental
16    agencies, the Conference of State Bank Supervisors, or
17    other associations representing governmental agencies as
18    established by rule or order of the Department. The
19    sharing of confidential supervisory information or any
20    information or material described in paragraph (1)
21    pursuant to an agreement or sharing arrangement shall not
22    result in the loss of privilege or the loss of
23    confidentiality protections provided by federal law or
24    State law.
25        (3) Information or material that is subject to a
26    privilege or confidentiality under paragraph (1) shall not

 

 

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1    be subject to the following:
2            (A) disclosure under any State law governing the
3        disclosure to the public of information held by an
4        officer or an agency of the State; or
5            (B) subpoena, discovery, or admission into
6        evidence in any private civil action or administrative
7        process, unless with respect to any privilege held by
8        the Nationwide Mortgage Licensing System and Registry
9        with respect to the information or material, the
10        person to whom such information or material pertains
11        waives, in whole or in part, in the discretion of that
12        person, that privilege.
13        (4) Any other law relating to the disclosure of
14    confidential supervisory information or any information or
15    material described in paragraph (1) that is inconsistent
16    with paragraph (1) shall be superseded by the requirements
17    of this Section to the extent the other law provides less
18    confidentiality or a weaker privilege.
 
19    Section 160. Reports of violations. Any person licensed
20under this Act or any other person may report to the Secretary
21any information to show that a person subject to this Act is or
22may be in violation of this Act. A person who files a report
23with the Department that a licensee is engaged in one or more
24violations pursuant to this Act shall not be the subject of
25disciplinary action by the Department, unless the Department

 

 

SB1099 Enrolled- 52 -LRB102 04923 BMS 14942 b

1determines, by a preponderance of the evidence available to
2the Department, that the reporting person knowingly and
3willingly participated in the violation that was reported.
 
4    Section 165. Rules of the Department.
5    (a) In addition to such powers as may be prescribed by this
6Act, the Department is hereby authorized and empowered to
7adopt rules consistent with the purposes of this Act,
8including, but not limited to:
9        (1) rules in connection with the activities of
10    licensees or unlicensed consumer legal funding companies
11    as may be necessary and appropriate for the protection of
12    consumers in this State;
13        (2) rules as may be necessary and appropriate to
14    define improper or fraudulent business practices in
15    connection with the activities of licensees in servicing
16    consumer legal fundings;
17        (3) rules that define the terms used in this Act and as
18    may be necessary and appropriate to interpret and
19    implement the provisions of this Act; and
20        (4) rules as may be necessary for the enforcement and
21    administration of this Act.
22    (b) The Secretary is hereby authorized and empowered to
23make specific rulings, demands, and findings that he or she
24deems necessary for the proper conduct of the consumer legal
25funding company industry.
 

 

 

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1    Section 170. Appeal and review.
2    (a) The Department may, in accordance with the Illinois
3Administrative Procedure Act, adopt rules to provide for
4review within the Department of the Secretary's decisions
5affecting the rights of persons or entities under this Act.
6The review shall provide for, at a minimum:
7        (1) appointment of a hearing officer other than a
8    regular employee of the Department;
9        (2) appropriate procedural rules, specific deadlines
10    for filings, and standards of evidence and of proof; and
11        (3) provision for apportioning costs among parties to
12    the appeal.
13    (b) All final agency determinations of appeals to
14decisions of the Secretary may be reviewed in accordance with
15and under the provisions of the Administrative Review Law.
16Appeals from all final orders and judgments entered by a court
17in review of any final administrative decision of the
18Secretary or of any final agency review of a decision of the
19Secretary may be taken as in other civil cases.
 
20    Section 175. Collection of compensation. Unless exempt
21from licensure under this Act, no person engaged in or
22offering to engage in any act or service for which a license
23under this Act is required may bring or maintain any action in
24any court of this State to collect compensation for the

 

 

SB1099 Enrolled- 54 -LRB102 04923 BMS 14942 b

1performance of the licensable services without alleging and
2proving that he or she was the holder of a valid consumer legal
3funding company license under this Act at all times during the
4performance of those services.
 
5    Section 180. Cease and desist order.
6    (a) The Secretary may issue a cease and desist order to any
7licensee or other person doing business without the required
8license, when in the opinion of the Secretary the licensee or
9other person is violating or is about to violate any provision
10of this Act or any rule or requirement imposed in writing by
11the Department as a condition of granting any authorization
12permitted by this Act. The cease and desist order permitted by
13this Section may be issued before a hearing.
14    (b) The Secretary shall serve notice of his or her action,
15including, but not limited to, a statement of the reasons for
16the action, either personally or by certified mail. Service by
17certified mail shall be deemed completed when the notice is
18deposited in the U.S. Mail.
19    (c) Within 10 days after service of the cease and desist
20order, the licensee or other person may request a hearing in
21writing. The Secretary shall schedule a hearing within 90 days
22after the request for a hearing unless otherwise agreed to by
23the parties.
24    (d) If it is determined that the Secretary had the
25authority to issue the cease and desist order, he or she may

 

 

SB1099 Enrolled- 55 -LRB102 04923 BMS 14942 b

1issue such orders as may be reasonably necessary to correct,
2eliminate, or remedy the conduct.
3    (e) The powers vested in the Secretary by this Section are
4in addition to any and all other powers and remedies vested in
5the Secretary by law, and nothing in this Section shall be
6construed as requiring that the Secretary shall employ the
7power conferred in this subsection instead of or as a
8condition precedent to the exercise of any other power or
9remedy vested in the Secretary.
 
10    Section 185. Injunction. The Secretary may, through the
11Attorney General, maintain an action in the name of the people
12of the State of Illinois and may apply for an injunction in the
13circuit court to enjoin a person from violating this Act or
14engaging in unlicensed consumer legal funding activity.
 
15    Section 190. Pledge or sale of consumer legal funding.
16    (a) No licensee or other person shall pledge, hypothecate,
17or sell a consumer legal funding entered into under the
18provisions of this Act by a consumer except to another
19licensee under this Act, a bank, savings bank, savings and
20loan association, or credit union created under the laws of
21this State or the United States, or to other persons or
22entities authorized by the Secretary in writing. Sales of such
23notes by licensees under this Act or other persons shall be
24made by agreement in writing and shall authorize the Secretary

 

 

SB1099 Enrolled- 56 -LRB102 04923 BMS 14942 b

1to examine the consumer legal funding documents so
2hypothecated, pledged, or sold.
3    (b) A consumer may pay the original consumer legal funding
4company until he or she receives notification of assignment of
5rights to payment pursuant to a consumer legal funding and
6that payment is to be made to the assignee. A notification
7which does not reasonably identify the rights assigned is
8ineffective. If requested by the consumer, the assignee shall
9seasonably furnish reasonable proof that the assignment has
10been made and, unless the assignee does so, the consumer may
11pay the original consumer legal funding company.
12    (c) An assignee of the rights of the consumer legal
13funding company is subject to all claims and defenses of the
14consumer against the consumer legal funding company arising
15from the consumer legal funding. A claim or defense of a
16consumer may be asserted against the assignee under this
17Section only if the consumer has made a good faith attempt to
18obtain satisfaction from the consumer legal funding company
19with respect to the claim or defense and then only to the
20extent of the amount owing to the assignee with respect to the
21consumer legal funding company claim or defense that arose at
22the time the assignee has notice of the claim or defense.
23Notice of the claim or defense may be given before the attempt
24specified in this subsection. Oral notice is effective unless
25the assignee requests written confirmation when or promptly
26after oral notice is given and the consumer fails to give the

 

 

SB1099 Enrolled- 57 -LRB102 04923 BMS 14942 b

1assignee written confirmation within the period of time, not
2less than 14 days, stated to the consumer when written
3confirmation is requested. An agreement may not limit or waive
4the claims or defenses of a consumer under this Section.
 
5    Section 195. Penalties. Any person who engages in business
6as a licensee without the license required by this Act commits
7a Class 4 felony.
 
8    Section 200. Civil action. A claim of violation of this
9Act may be asserted in a civil action. Additionally, a
10prevailing consumer may be awarded reasonable attorney's fees
11and court costs.
 
12    Section 205. Evasion. An agreement, contract, or
13transaction that is structured to evade the definition of
14consumer legal funding shall be deemed a consumer legal
15funding for the purposes of this Act.
 
16    Section 210. Severability. If any clause, sentence,
17provision, or part of this Act or its application to any person
18or circumstance is adjudged to be unconstitutional or invalid
19for any reason by any court of competent jurisdiction, that
20judgment shall not impair, affect, or invalidate other
21provisions or applications of this Act, which shall remain in
22full force and effect thereafter.
 

 

 

SB1099 Enrolled- 58 -LRB102 04923 BMS 14942 b

1    Section 905. The Interest Act is amended by changing
2Section 4 as follows:
 
3    (815 ILCS 205/4)  (from Ch. 17, par. 6404)
4    Sec. 4. General interest rate.
5    (1) Except as otherwise provided in Section 4.05, in all
6written contracts it shall be lawful for the parties to
7stipulate or agree that an annual percentage rate of 9%, or any
8less sum, shall be taken and paid upon every $100 of money
9loaned or in any manner due and owing from any person to any
10other person or corporation in this state, and after that rate
11for a greater or less sum, or for a longer or shorter time,
12except as herein provided.
13    The maximum rate of interest that may lawfully be
14contracted for is determined by the law applicable thereto at
15the time the contract is made. Any provision in any contract,
16whether made before or after July 1, 1969, which provides for
17or purports to authorize, contingent upon a change in the
18Illinois law after the contract is made, any rate of interest
19greater than the maximum lawful rate at the time the contract
20is made, is void.
21    It is lawful for a state bank or a branch of an
22out-of-state bank, as those terms are defined in Section 2 of
23the Illinois Banking Act, to receive or to contract to receive
24and collect interest and charges at any rate or rates agreed

 

 

SB1099 Enrolled- 59 -LRB102 04923 BMS 14942 b

1upon by the bank or branch and the borrower. It is lawful for a
2savings bank chartered under the Savings Bank Act or a savings
3association chartered under the Illinois Savings and Loan Act
4of 1985 to receive or contract to receive and collect interest
5and charges at any rate agreed upon by the savings bank or
6savings association and the borrower.
7    It is lawful to receive or to contract to receive and
8collect interest and charges as authorized by this Act and as
9authorized by the Consumer Installment Loan Act, the Payday
10Loan Reform Act, the Retail Installment Sales Act, the
11Illinois Financial Services Development Act, or the Motor
12Vehicle Retail Installment Sales Act, or the Consumer Legal
13Funding Act. It is lawful to charge, contract for, and receive
14any rate or amount of interest or compensation, except as
15otherwise provided in the Predatory Loan Prevention Act, with
16respect to the following transactions:
17        (a) Any loan made to a corporation;
18        (b) Advances of money, repayable on demand, to an
19    amount not less than $5,000, which are made upon warehouse
20    receipts, bills of lading, certificates of stock,
21    certificates of deposit, bills of exchange, bonds or other
22    negotiable instruments pledged as collateral security for
23    such repayment, if evidenced by a writing;
24        (c) Any credit transaction between a merchandise
25    wholesaler and retailer; any business loan to a business
26    association or copartnership or to a person owning and

 

 

SB1099 Enrolled- 60 -LRB102 04923 BMS 14942 b

1    operating a business as sole proprietor or to any persons
2    owning and operating a business as joint venturers, joint
3    tenants or tenants in common, or to any limited
4    partnership, or to any trustee owning and operating a
5    business or whose beneficiaries own and operate a
6    business, except that any loan which is secured (1) by an
7    assignment of an individual obligor's salary, wages,
8    commissions or other compensation for services, or (2) by
9    his household furniture or other goods used for his
10    personal, family or household purposes shall be deemed not
11    to be a loan within the meaning of this subsection; and
12    provided further that a loan which otherwise qualifies as
13    a business loan within the meaning of this subsection
14    shall not be deemed as not so qualifying because of the
15    inclusion, with other security consisting of business
16    assets of any such obligor, of real estate occupied by an
17    individual obligor solely as his residence. The term
18    "business" shall be deemed to mean a commercial,
19    agricultural or industrial enterprise which is carried on
20    for the purpose of investment or profit, but shall not be
21    deemed to mean the ownership or maintenance of real estate
22    occupied by an individual obligor solely as his residence;
23        (d) Any loan made in accordance with the provisions of
24    Subchapter I of Chapter 13 of Title 12 of the United States
25    Code, which is designated as "Housing Renovation and
26    Modernization";

 

 

SB1099 Enrolled- 61 -LRB102 04923 BMS 14942 b

1        (e) Any mortgage loan insured or upon which a
2    commitment to insure has been issued under the provisions
3    of the National Housing Act, Chapter 13 of Title 12 of the
4    United States Code;
5        (f) Any mortgage loan guaranteed or upon which a
6    commitment to guaranty has been issued under the
7    provisions of the Veterans' Benefits Act, Subchapter II of
8    Chapter 37 of Title 38 of the United States Code;
9        (g) Interest charged by a broker or dealer registered
10    under the Securities Exchange Act of 1934, as amended, or
11    registered under the Illinois Securities Law of 1953,
12    approved July 13, 1953, as now or hereafter amended, on a
13    debit balance in an account for a customer if such debit
14    balance is payable at will without penalty and is secured
15    by securities as defined in Uniform Commercial
16    Code-Investment Securities;
17        (h) Any loan made by a participating bank as part of
18    any loan guarantee program which provides for loans and
19    for the refinancing of such loans to medical students,
20    interns and residents and which are guaranteed by the
21    American Medical Association Education and Research
22    Foundation;
23        (i) Any loan made, guaranteed, or insured in
24    accordance with the provisions of the Housing Act of 1949,
25    Subchapter III of Chapter 8A of Title 42 of the United
26    States Code and the Consolidated Farm and Rural

 

 

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1    Development Act, Subchapters I, II, and III of Chapter 50
2    of Title 7 of the United States Code;
3        (j) Any loan by an employee pension benefit plan, as
4    defined in Section 3 (2) of the Employee Retirement Income
5    Security Act of 1974 (29 U.S.C.A. Sec. 1002), to an
6    individual participating in such plan, provided that such
7    loan satisfies the prohibited transaction exemption
8    requirements of Section 408 (b) (1) (29 U.S.C.A. Sec. 1108
9    (b) (1)) or Section 2003 (a) (26 U.S.C.A. Sec. 4975 (d)
10    (1)) of the Employee Retirement Income Security Act of
11    1974;
12        (k) Written contracts, agreements or bonds for deed
13    providing for installment purchase of real estate,
14    including a manufactured home as defined in subdivision
15    (53) of Section 9-102 of the Uniform Commercial Code that
16    is real property as defined in the Conveyance and
17    Encumbrance of Manufactured Homes as Real Property and
18    Severance Act;
19        (l) Loans secured by a mortgage on real estate,
20    including a manufactured home as defined in subdivision
21    (53) of Section 9-102 of the Uniform Commercial Code that
22    is real property as defined in the Conveyance and
23    Encumbrance of Manufactured Homes as Real Property and
24    Severance Act;
25        (m) Loans made by a sole proprietorship, partnership,
26    or corporation to an employee or to a person who has been

 

 

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1    offered employment by such sole proprietorship,
2    partnership, or corporation made for the sole purpose of
3    transferring an employee or person who has been offered
4    employment to another office maintained and operated by
5    the same sole proprietorship, partnership, or corporation;
6        (n) Loans to or for the benefit of students made by an
7    institution of higher education.
8    (2) Except for loans described in subparagraph (a), (c),
9(d), (e), (f) or (i) of subsection (1) of this Section, and
10except to the extent permitted by the applicable statute for
11loans made pursuant to Section 4a or pursuant to the Consumer
12Installment Loan Act:
13        (a) Whenever the rate of interest exceeds an annual
14    percentage rate of 8% on any written contract, agreement
15    or bond for deed providing for the installment purchase of
16    residential real estate, or on any loan secured by a
17    mortgage on residential real estate, it shall be unlawful
18    to provide for a prepayment penalty or other charge for
19    prepayment.
20        (b) No agreement, note or other instrument evidencing
21    a loan secured by a mortgage on residential real estate,
22    or written contract, agreement or bond for deed providing
23    for the installment purchase of residential real estate,
24    may provide for any change in the contract rate of
25    interest during the term thereof. However, if the Congress
26    of the United States or any federal agency authorizes any

 

 

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1    class of lender to enter, within limitations, into
2    mortgage contracts or written contracts, agreements or
3    bonds for deed in which the rate of interest may be changed
4    during the term of the contract, any person, firm,
5    corporation or other entity not otherwise prohibited from
6    entering into mortgage contracts or written contracts,
7    agreements or bonds for deed in Illinois may enter into
8    mortgage contracts or written contracts, agreements or
9    bonds for deed in which the rate of interest may be changed
10    during the term of the contract, within the same
11    limitations.
12    (3) In any contract or loan which is secured by a mortgage,
13deed of trust, or conveyance in the nature of a mortgage, on
14residential real estate, the interest which is computed,
15calculated, charged, or collected pursuant to such contract or
16loan, or pursuant to any regulation or rule promulgated
17pursuant to this Act, may not be computed, calculated, charged
18or collected for any period of time occurring after the date on
19which the total indebtedness, with the exception of late
20payment penalties, is paid in full.
21    (4) For purposes of this Section, a prepayment shall mean
22the payment of the total indebtedness, with the exception of
23late payment penalties if incurred or charged, on any date
24before the date specified in the contract or loan agreement on
25which the total indebtedness shall be paid in full, or before
26the date on which all payments, if timely made, shall have been

 

 

SB1099 Enrolled- 65 -LRB102 04923 BMS 14942 b

1made. In the event of a prepayment of the indebtedness which is
2made on a date after the date on which interest on the
3indebtedness was last computed, calculated, charged, or
4collected but before the next date on which interest on the
5indebtedness was to be calculated, computed, charged, or
6collected, the lender may calculate, charge and collect
7interest on the indebtedness for the period which elapsed
8between the date on which the prepayment is made and the date
9on which interest on the indebtedness was last computed,
10calculated, charged or collected at a rate equal to 1/360 of
11the annual rate for each day which so elapsed, which rate shall
12be applied to the indebtedness outstanding as of the date of
13prepayment. The lender shall refund to the borrower any
14interest charged or collected which exceeds that which the
15lender may charge or collect pursuant to the preceding
16sentence. The provisions of this amendatory Act of 1985 shall
17apply only to contracts or loans entered into on or after the
18effective date of this amendatory Act, but shall not apply to
19contracts or loans entered into on or after that date that are
20subject to Section 4a of this Act, the Consumer Installment
21Loan Act, the Payday Loan Reform Act, the Predatory Loan
22Prevention Act, or the Retail Installment Sales Act, or that
23provide for the refund of precomputed interest on prepayment
24in the manner provided by such Act.
25    (5) For purposes of items (a) and (c) of subsection (1) of
26this Section, a rate or amount of interest may be lawfully

 

 

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1computed when applying the ratio of the annual interest rate
2over a year based on 360 days. The provisions of this
3amendatory Act of the 96th General Assembly are declarative of
4existing law.
5    (6) For purposes of this Section, "real estate" and "real
6property" include a manufactured home, as defined in
7subdivision (53) of Section 9-102 of the Uniform Commercial
8Code that is real property as defined in the Conveyance and
9Encumbrance of Manufactured Homes as Real Property and
10Severance Act.
11(Source: P.A. 101-658, eff. 3-23-21.)
 
12    Section 910. The Consumer Fraud and Deceptive Business
13Practices Act is amended by adding Section 2AAAA as follows:
 
14    (815 ILCS 505/2AAAA new)
15    Sec. 2AAAA. Violations of the Consumer Legal Funding Act.
16Any person who violates the Consumer Legal Funding Act commits
17an unlawful practice within the meaning of this Act.
 
18    Section 999. Effective date. This Act takes effect upon
19becoming law.