summary
Introduced
01/13/2025
01/13/2025
In Committee
01/28/2025
01/28/2025
Crossed Over
Passed
Dead
Introduced Session
104th General Assembly
Bill Summary
Creates the Debt Resolution Services Act. Provides that no person shall provide or offer to provide debt resolution services without a debt resolution services license. Defines "debt resolution services" as a program or service represented, directly or by implication, to renegotiate, settle, or in any way alter the terms of payment or other terms of the debt between a consumer and one or more unsecured creditors. Sets forth requirements for a debt resolution services license. Sets forth the process for obtaining a debt resolution services license. Provides that specified persons are exempt under the Act. Provides the prerequisites and permitted practices for providing debt resolution services. Provides the requirements for a contract between a licensee and a consumer for debt resolution services. Provides that a consumer may terminate a contract to provide debt resolution services at any time without any penalty. Provides that a licensee may terminate a contract to provide debt resolution services if specified conditions are satisfied. Includes provisions concerning the powers of the Department of Financial and Professional Regulation; prohibited activities under the Act, including prohibitions against false or misleading advertising; annual reports filed by a licensee; fees for debt resolution services; information a licensee must provide to a consumer; records a licensee is required to keep; penalties for violating the Act; and transactions entered into before the effective date of the Act. Repeals the Debt Settlement Consumer Protection Act. Amends various Acts to replace references to the Debt Settlement Consumer Protection Act to the Debt Resolution Services Act. Effective one year after becoming law except that certain provisions concerning rulemaking are effective immediately.
AI Summary
This bill establishes the Debt Resolution Services Act, which creates a comprehensive regulatory framework for debt resolution service providers in Illinois. The bill requires any entity providing debt resolution services to obtain a license from the Department of Financial and Professional Regulation, with a two-year licensing period and specific application requirements. Debt resolution services are defined as programs that aim to renegotiate, settle, or modify debt terms between consumers and unsecured creditors. The bill outlines detailed provisions including licensing procedures, consumer protections, fee structures, and prohibited practices. Key consumer protections include the right to terminate an agreement at any time without penalty, mandatory disclosures about potential risks and impacts, and restrictions on how and when fees can be charged. The bill prohibits misleading advertising, prevents providers from taking power of attorney, and mandates specific record-keeping and reporting requirements. Certain entities are exempt from the licensing requirements, such as attorneys, banks, credit unions, and nonprofit organizations. The bill also includes penalties for violations, with potential fines up to $1,000 per violation and a maximum of $100,000. Notably, this act repeals the previous Debt Settlement Consumer Protection Act and updates various related state laws to reflect the new regulatory approach to debt resolution services.
Sponsors (3)
Last Action
Added Chief Co-Sponsor Rep. Nicholas K. Smith (on 03/18/2025)
bill text
bill summary
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bill summary
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bill summary
| Document Type | Source Location |
|---|---|
| State Bill Page | https://www.ilga.gov/legislation/BillStatus.asp?DocNum=1279&GAID=18&DocTypeID=HB&SessionID=114&GA=104 |
| BillText | https://www.ilga.gov/legislation/104/HB/10400HB1279.htm |
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