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 businesses offering debt resolution services in Illinois. The bill requires any person or company providing debt resolution services to obtain a specific license from the Department of Financial and Professional Regulation, with the license valid for two years and non-transferable. Key provisions include mandating detailed consumer agreements that clearly explain the services, fees, potential risks, and estimated timelines for debt resolution. Consumers are granted the right to terminate their agreement at any time without penalty, and licensees can only charge fees after successfully negotiating at least one debt resolution and after the consumer makes a payment under the new agreement. The bill prohibits deceptive advertising, restricts how fees can be calculated, and prevents licensees from engaging in predatory practices such as taking power of attorney or misrepresenting their services. Licensees must maintain extensive records, provide monthly accounting statements to consumers, and are subject to significant penalties (up to $1,000 per violation, with a maximum of $100,000) for non-compliance. The act replaces the previous Debt Settlement Consumer Protection Act and aims to provide stronger consumer protections in the debt resolution industry by establishing clear guidelines and oversight mechanisms.
Sponsors (1)
Last Action
Referred to Rules Committee (on 01/28/2025)
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=1289&GAID=18&DocTypeID=HB&SessionID=114&GA=104 |
| BillText | https://www.ilga.gov/legislation/104/HB/10400HB1289.htm |
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