summary
Introduced
02/05/2025
02/05/2025
In Committee
02/05/2025
02/05/2025
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 January 9, 2026.
AI Summary
This bill creates the Debt Resolution Services Act, which establishes a comprehensive regulatory framework for companies providing debt resolution services in Illinois. The bill requires any person or company offering to help consumers renegotiate, settle, or modify their unsecured debts to obtain a special license from the Department of Financial and Professional Regulation. The licensing process involves a detailed application, background checks on executive officers, and a requirement to post a surety bond. The law sets strict guidelines for how debt resolution services can operate, including prohibitions on misleading advertising, restrictions on fees (which can only be charged after successfully negotiating a debt reduction), and mandating detailed disclosures to consumers about potential risks and service terms. Consumers are guaranteed the right to terminate their agreement at any time without penalty, and the bill includes provisions to protect consumers from predatory practices, such as forbidding debt resolution services from taking power of attorney, making false promises, or receiving consumer funds directly. The act also requires licensees to maintain extensive records, file annual reports, and provides the Department with enforcement powers, including the ability to impose penalties of up to $1,000 per violation and a maximum of $100,000 for repeated infractions. Importantly, the bill repeals the existing Debt Settlement Consumer Protection Act and updates various related state laws to reflect the new regulatory approach, with an effective date of January 9, 2026.
Sponsors (1)
Last Action
Referred to Assignments (on 02/05/2025)
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=1685&GAID=18&DocTypeID=SB&SessionID=114&GA=104 |
| BillText | https://www.ilga.gov/legislation/104/SB/10400SB1685.htm |
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