HB1289 IL introduced

DEBT RESOLUTION SERVICES ACT

privacy

Plain-English summary

1. **ONE-SENTENCE SUMMARY:** The Debt Resolution Services Act requires businesses offering debt resolution services to obtain a license and follow specific regulations.

2. **KEY REQUIREMENTS:**
   - Obtain a debt resolution services license before offering any debt resolution services.
   - Provide clear and accurate information to consumers, avoiding false or misleading advertising.
   - Create a written contract with consumers that outlines the terms of the debt resolution services.
   - Allow consumers to terminate contracts at any time without penalty.
   - Maintain records and submit annual reports as required by the Department of Financial and Professional Regulation.

3. **DEADLINES:**
   - The Act becomes effective one year after it is signed into law.
   - Certain rulemaking provisions take effect immediately upon becoming law.

4. **PENALTIES:**
   - Violating the Act can result in fines and enforcement actions by the Department of Financial and Professional Regulation.

5. **SMB IMPACT:** Small businesses offering debt resolution services will need to invest time and resources to obtain the necessary licenses and ensure compliance with the new regulations, which may involve changes to their business practices and contracts. Failure to comply could lead to significant penalties.

Source description

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.

Not legal advice. Summaries are generated by AI from publicly available bill text and may contain errors or omissions. Always consult counsel before making compliance decisions.