Bill Text: IL HB0531 | 2013-2014 | 98th General Assembly | Amended

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Bill Title: Amends the Consumer Installment Loan Act. Makes a technical change in a Section concerning the short title.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Failed) 2014-12-03 - Session Sine Die [HB0531 Detail]

Download: Illinois-2013-HB0531-Amended.html

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Rep. André M. Thapedi

Filed: 4/17/2013

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AMENDMENT TO HOUSE BILL 531
AMENDMENT NO. ______. Amend House Bill 531 by replacing
everything after the enacting clause with the following:
"Section 1-1. Short title. This Act may be cited as the
Non-Recourse Consumer Litigation Funding Act.
Section 1-5. Definitions. In this Act:
"Non-recourse consumer litigation funding company" means a
person or entity that enters into a non-recourse consumer
litigation funding transaction with a consumer. "Non-recourse
consumer litigation funding company" includes any affiliate or
subsidiary of a non-recourse consumer litigation funding
company; an entity or person who buys a whole or partial
interest in a non-recourse consumer litigation funding, acts as
an agent to provide non-recourse consumer litigation funding
from a third party for a fee, or acts as an agent for a third
party in providing non-recourse consumer litigation funding

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for a fee, regardless of whether approval or acceptance by the
third party is necessary to create a legal obligation for the
third party; and any other person or entity if the Department
determines that the person or entity is engaged in a
transaction that is in substance a disguised non-recourse
consumer litigation funding or a subterfuge for the purpose of
avoiding this Act. Notwithstanding anything to the contrary
contained in this Act, a bank, lender, financing entity, or any
other special purpose entity that provides financing to a
non-recourse consumer litigation funding company or to which a
non-recourse consumer litigation funding company grants a
security interest or transfers any rights or interest in
non-recourse consumer litigation funding shall not cause the
bank, lender, financing entity, or special purpose entity to be
deemed a non-recourse consumer litigation funding company.
Notwithstanding anything to the contrary contained in this Act,
an attorney or accountant who provides services to a consumer
shall not be deemed a non-recourse consumer litigation funding
company.
"Consumer" means a natural person residing or domiciled in
Illinois or who elects to enter into a transaction under this
Act in Illinois, whether it be in-person, over the internet, by
facsimile, or any other electronic means, and who has a pending
legal claim and is represented by an attorney at the time he or
she enters into a contract for non-recourse consumer litigation
funding.

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"Contract" means a written agreement between a consumer and
a non-recourse consumer litigation funding company that the
non-recourse consumer litigation funding company agrees to
provide non-recourse consumer litigation funding to the
consumer in compliance with Article 2.
"Department" means the Illinois Department of Financial
and Professional Regulation.
"Funding amount" means the dollar amount of funds provided
to the consumer by the non-recourse consumer litigation funding
company subsequent to the execution of the contract as
consideration for the assignment of or purchase of a contingent
right to receive a portion of the proceeds of the legal claim.
"Funding date" means the date on which the funding amount
is paid to the consumer by the non-recourse consumer litigation
funding company.
"Legal claim" means a civil or statutory claim or action.
"Licensee" means any non-recourse consumer litigation
funding company licensed in accordance with Article 3.
"Non-recourse consumer litigation funding" means a
transaction of any amount in which a non-recourse consumer
litigation funding company purchases and a consumer assigns to
the non-recourse consumer litigation funding company the
contingent right to receive a portion of the potential proceeds
of a settlement, judgment, award, or verdict obtained in the
consumer's legal claim. "Non-recourse consumer litigation
funding" does not include entities that engage in a commercial

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to commercial business transaction.
"Proceeds" means those funds available for payment to the
non-recourse consumer litigation funding company that are
remaining from any settlement, verdict, final judgment,
insurance payment, or award obtained in the consumer's legal
claim after reductions are made under Section 2-15 of this Act.
"Resolution date" means the date the funding amount plus
the agreed upon fees from the legal claim are received by the
non-recourse consumer litigation funding company.
"Secretary" means the Illinois Secretary of Financial and
Professional Regulation.
Article 2. Non-Recourse Consumer Litigation Funding
Section 2-5. Contract provisions. All contracts for
non-recourse consumer litigation funding shall be in writing
and comply with all of the following requirements:
(1) The contract shall contain on the front page,
appropriately headed and in at least 12-point, bold face type,
a chart that clearly contains the following disclosures:
(A) the total funding amount paid to the consumer;
(B) an itemization of one-time fees;
(C) the total dollar amount owed by the consumer to the
non-recourse consumer litigation funding company, set
forth up to 1,080 days beginning at the 11th business day
after the funding date, then at 180 days after the funding

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date and at every 180 days thereafter; the total dollar
amount shall be calculated using the identical methodology
used by the non-recourse consumer litigation funding
company to calculate the contracted fee amount under
Section 2-10.
The Secretary shall prescribe by rule the format of the
chart that clearly discloses to the consumer all the
information in this subsection. Until the Secretary makes such
a rule, each non-recourse consumer litigation funding company
must have a chart format approved for distribution by the
Secretary.
No contract for non-recourse consumer litigation funding
shall be enforceable against the consumer unless it complies
entirely with this subsection.
(2) The contract shall provide that the consumer may cancel
the contract within 7 business days following the consumer's
receipt of the funding amount, without penalty or further
obligation. The contract shall contain the following notice
written in at least 12-point, bold face type:
"Consumer's right to cancellation: You may cancel this
contract without penalty or further obligation within 10
business days after the funding date.".
The contract must also specify that in order for the
cancellation to be effective, the consumer must either return
to the non-recourse consumer litigation funding company the
total amount of the funding amount by (a) delivering the

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non-recourse consumer litigation funding company's uncashed
check to the non-recourse consumer litigation company's
offices in person within 10 business days after receipt of the
funding amount, (b) sending a notice of cancellation via
registered or certified mail and include in the mailing a
return of the total amount of funding amount in the form of the
non-recourse consumer litigation funding company's uncashed
check within 10 business days after receipt of the funding
amount, or (c) sending a registered, certified or cashier's
check or money order, by insured, registered, or certified
United States mail, postmarked within 10 business days after
receipt of the funding amount, to the address specified in the
contract for cancellation.
(3) The contract shall contain all of the following
statements in at least 12-point, bold face type:
"(A) [Insert name of the non-recourse consumer
litigation funding company] agrees that it shall have no
right to and will not make any decisions with respect to
the conduct of the legal claim or any settlement or
resolution thereof and that the right to make those
decisions remains solely with you and your attorney in the
legal claim. [Insert name of the non-recourse consumer
litigation funding company] further agrees that it shall
have no right to pursue the legal claim on your behalf.
(B) [Insert name of the non-recourse consumer
litigation funding company] agrees that it shall only

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accept: (i) an assignment of a contingent right to receive
a portion of the potential proceeds; (ii) the contracted
return of the funding amount; and (iii) any agreed upon
fees. Any agreed upon fees to [insert name of the
non-recourse consumer litigation funding company] shall
not be determined as a percentage of your recovery from the
legal claim but shall be set as a contractually determined
amount based upon intervals of time from the funding date
through the resolution date. [Insert name of the
non-recourse consumer litigation funding company] is not
accepting an assignment of your legal claim.
(C) [Insert name of the non-recourse consumer
litigation funding company] agrees that you may make
payments on a funding at any time without additional cost
or penalty.
(D) [Insert name of the non-recourse consumer
litigation funding company] is not a law firm and is
prohibited from rendering legal advice. Advice about the
conduct of the legal claim or any settlement or resolution
shall be directed to a properly licensed attorney.".
(4) All contracts with the consumer must contain the
following statement, in plain language in a box with 15-point,
bold face type, in all capitalized letters, stating the
following:
"THE FUNDING AMOUNT AND AGREED UPON FEES SHALL ONLY BE PAID
FROM THE PROCEEDS OF YOUR LEGAL CLAIM AND SHALL ONLY BE

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PAID TO THE EXTENT THAT THERE ARE AVAILABLE PROCEEDS FROM
YOUR LEGAL CLAIM. YOU WILL NOT OWE [INSERT NAME OF THE
NON-RECOURSE CONSUMER LITIGATION FUNDING COMPANY] ANYTHING
IF THERE ARE NO PROCEEDS FROM YOUR LEGAL CLAIM.".
(5) The contract shall contain the following statement in
at least 12-point, bold face type located immediately above the
space where the consumer's signature is required:
"Do not sign this Agreement before you read it completely
or if it contains any blank spaces. You are entitled to a
completely filled-in copy of this Agreement. Before you
sign this Agreement you should obtain the advice of an
attorney. Depending on the circumstances, you may want to
consult a tax, public, or private benefit planning or
financial professional. You acknowledge that your attorney
in the legal claim has provided no tax, public, or private
benefit planning regarding this transaction. You further
understand and agree that the funds you receive from
[insert name of the non-recourse consumer litigation
funding company] shall not be used to pay for or applied to
the payment of attorney's fees or litigation costs related
to your legal claim.".
(6) The executed contract shall contain a written
acknowledgment by the consumer that he or she has reviewed the
contract in its entirety.
(7) The non-recourse consumer litigation funding company
shall provide the consumer's attorney with a written

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notification of the non-recourse consumer litigation funding
provided to the consumer 3 business days before the funding
date by way of postal mail, courier service, facsimile, e-mail
return receipt acknowledged, or other means of proof of
delivery method unless there is a written acknowledgment by the
attorney representing the consumer in the legal claim as to the
terms of the contract.
(8) The contracted return of the funding amount, plus any
agreed upon fees assigned to the non-recourse consumer
litigation funding company on the resolution date shall not be
determined as a percentage of the recovery from the legal claim
but shall be set as a contractually determined amount based
upon intervals of time from the funding date through the
resolution date.
Section 2-10. Contracted fee amount.
(a) The non-recourse consumer litigation funding company
shall offer the consumer the option of either entering into a
conventional loan under the Consumer Installment Loan Act or
entering into non-recourse consumer litigation funding.
If the consumer elects to enter into a conventional loan
agreement under the Consumer Installment Loan Act, the interest
charged shall not exceed an annual percentage rate of 36%.
If the consumer elects to enter into non-recourse consumer
litigation funding, the company shall not charge a fee in
excess of 36% annual percentage rate plus a deferment fee not

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to exceed 3% for each month the funding is outstanding with
compounding to occur no more often than quarterly.
(b) No additional fees shall be applied for any period of
time beyond 1,080 days from the funding date.
(c) Except for the fees set forth in this Section and
Section 20, the non-recourse consumer litigation funding
company shall not impose on a consumer any additional finance
charges, interest, fees, or charges of any sort for any
purpose.
(d) Under no circumstances shall the total amount of
finance charges, interest, fees, or any other charges, when
taken together, exceed the award to the consumer.
Section 2-12. Charges permitted.
(a) A licensee may charge an acquisition charge not to
exceed 8% of the amount funded or $100, whichever is less.
(b) A licensee may charge an expedited funds delivery
option charge not to exceed the actual cost of delivery or $20,
whichever is less. Expedited funds delivery options,
including, but not limited to, overnight delivery, electronic
fund transfers, and Automated Clearing House (ACH)
transactions may be offered to the consumer as a choice of the
method of the delivery of funds. The fund delivery charge is
fully earned at the time that each funding transaction is made
and shall not be subject to refund. Details and receipts of
delivery shall be provided in an invoice to the consumer no

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more than 10 business days after the funding date. A no-charge
delivery option must be offered to the consumer as a choice.
Section 2-15. Claim priorities. Any lien arising out of the
underlying consumer's legal claim for subrogation claims,
attorney fees, attorney liens, and litigation costs, health
care providers, employers in worker's compensation
proceedings, health insurers, employers with self-funded
health care plans, Medicare, and Public Aid shall be satisfied
before and take priority over any claim of the non-recourse
consumer litigation funding company. All other holders of
liens, security interests, or subrogation claims shall take
priority over the non-recourse consumer litigation funding
company to the extent allowed by law.
Section 2-20. Standards and practices. Each non-recourse
consumer litigation funding company shall adhere to the
following:
(1) The non-recourse consumer litigation funding company
shall not pay or offer to pay any compensation to any attorney,
law firm, medical provider, chiropractor, physical therapist,
or any of their employees for referring a consumer to the
non-recourse consumer litigation funding company. The
non-recourse consumer litigation funding company agrees not to
accept any compensation from any attorney, law firm, medical
provider, chiropractor, physical therapist, or any of their

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employees, other than the funding amount and any agreed upon
fees the consumer assigned to the non-recourse consumer
litigation funding company out of the potential proceeds of the
legal claim. If a lawyer or law firm represents one or more
consumers with outstanding non-recourse consumer litigation
fundings from the same non-recourse consumer litigation
funding company, that non-recourse consumer litigation funding
company may not provide any type of funding to the lawyer or
law firm.
(2) The non-recourse consumer litigation funding company
shall not advertise false or intentionally misleading
information regarding its product or services.
(3) The non-recourse consumer litigation funding company
shall not knowingly provide funding to a consumer who has
previously sold and assigned an amount of the potential
proceeds of his or her legal claim to another non-recourse
consumer litigation funding company without first purchasing
that non-recourse consumer litigation funding company's entire
accrued balance unless otherwise agreed to in writing by the
consumer and all non-recourse consumer litigation funding
companies that provided non-recourse consumer litigation
funding to the consumer.
(4) The non-recourse consumer litigation funding company
shall not offer single premium credit life, disability, or
unemployment insurance that will be financed through a
non-recourse consumer litigation funding transaction.

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(5) For non-English speaking consumers, the principal
terms of the contract must be translated in writing into the
consumer's primary language. The consumer must sign the
translated document containing the principal terms and initial
each page and the translator must sign an affirmation
confirming that the principal terms have been presented to the
consumer in the consumer's primary language and acknowledged by
the consumer. Principal terms shall include all items that must
be disclosed by Section 2-5.
(6) No communication between a consumer's attorney and a
non-recourse consumer litigation funding company pertaining to
a consumer's non-recourse consumer litigation funding
transaction shall limit, waive, or abrogate any statutory or
common-law privilege, including the attorney-client privilege
or the work-product doctrine.
(7) The return of the funding amount to the non-recourse
consumer litigation funding company, plus any agreed upon fees,
shall be rendered only out of the funds, if any, of the
realized settlement, judgment, award, or verdict the consumer
may receive from the legal claim. Under no circumstances shall
the non-recourse consumer litigation funding company have
recourse for the funding amount beyond the consumer's proceeds
from the legal claim.
(8) The non-recourse consumer litigation funding company
shall have no authority to advise the consumer on any legal
matters or to make any decisions with respect to the conduct of

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the litigation of the legal claim or any settlement or
resolution thereof. The right to make those decisions remains
solely with the consumer and the consumer's attorney
representing the consumer in the legal claim. The non-recourse
consumer litigation funding company shall have no right to
pursue the legal claim on the consumer's behalf.
(9) The non-recourse consumer litigation funding company
shall only accept an assignment of a contingent right to
receive a portion of the potential proceeds, rather than an
assignment of the legal claim. The contracted return of the
funding amount, plus any agreed upon fees assigned to the
non-recourse consumer litigation funding company, shall not be
determined as a percentage of the total recovery from the legal
claim, but shall be set as a contractually determined amount
based upon intervals of time from the funding date through the
resolution date.
(10) Notwithstanding subsection (8) of this Section, the
non-recourse consumer litigation funding company shall allow
the consumer to make payments on a funding at any time without
additional cost or penalty.
(11) Contact between the non-recourse consumer litigation
funding company and the consumer shall be subject to the
following limitations:
(A) Neither a non-recourse consumer litigation funding
company, nor any person acting on behalf of a non-recourse
consumer litigation funding company, shall contact a

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consumer prior to the consumer obtaining legal
representation and initiating a legal claim.
(B) Neither a non-recourse consumer litigation funding
company, nor any person acting on behalf of a non-recourse
consumer litigation funding company, shall contact the
consumer after the funding date in order to influence any
decisions with respect to the conduct of the legal claim or
any settlement or resolution thereof. Notwithstanding the
foregoing, the non-recourse consumer litigation funding
company may contact the consumer to obtain the status of
the legal claim and updated attorney contact information.
(C) After the resolution date, neither a non-recourse
consumer litigation funding company, nor any person acting
on behalf of a non-recourse consumer litigation funding
company, shall seek to collect additional funds or threaten
civil action for any deficiency.
Section 2-25. Information; reporting and examination.
(a) A licensee shall keep and use books, accounts, and
records that will enable the Secretary to determine if the
licensee is complying with the provisions of this Act and
maintain any other records as required by the Secretary.
(b) A licensee shall collect and maintain information
annually for a report that shall disclose in detail and under
appropriate headings:
(1) the total number of non-recourse consumer

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litigation fundings made during the previous calendar
year;
(2) the total number of non-recourse consumer
litigation fundings outstanding as of December 31st of the
preceding calendar year;
(3) the minimum, maximum, and average amount of
non-recourse consumer litigation fundings made during the
preceding calendar year;
(4) the average annual fee rate of the non-recourse
consumer litigation fundings made during the preceding
year; and
(5) the total number of non-recourse consumer
litigation funding transactions in which the non-recourse
consumer litigation funding company received the return of
the funding amount, plus any agreed upon fees; the total
number of non-recourse consumer litigation funding
transactions for which the non-recourse consumer
litigation funding company received no return of the
funding amount or any fees; and the total number of
non-recourse consumer litigation funding transactions in
which the non-recourse consumer litigation funding company
received an amount less than the contracted amount.
The report shall be verified by the oath or affirmation of
the Chief Executive Officer, Chief Financial Officer, or other
duly authorized representative of the licensee. The report must
be filed with the Secretary no later than March 1 of the year

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following the year for which the report discloses the
information specified in this subsection (b). The Secretary may
impose a fine of $50 per day upon the licensee for each day
beyond the filing deadline that the report is not filed.
(c) The Department shall have the authority to conduct
examinations at any time of the books, records, and
non-recourse consumer litigation funding documents of a
licensee or other company or person doing business without the
required license. Any licensee being examined must provide to
the Department convenient and free access at all reasonable
hours at its office or location to all books, records,
non-recourse consumer litigation funding documents. The
officers, directors, and agents of the non-recourse consumer
litigation funding company must facilitate the examination and
aid in the examination so far as it is in their power to do so.
Section 2-30. Applicability.
(a) The contingent right to receive a portion of the
potential proceeds of a legal claim is assignable and valid for
the purposes of obtaining funding from a licensee under this
Section.
(b) Nothing in this Act shall cause any non-recourse civil
litigation funding transaction conforming to this Act to be
deemed to be a loan or investment contract or subject to the
restrictions or provisions governing loans or investment
contracts set forth in the Interest Act, the Consumer

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Installment Loan Act, or any other provisions of State law.
Article 3. Licensure.
Section 3-1. Licensure requirement.
(a) Except as provided in subsection (b), on and after the
effective date of this Act, a non-recourse consumer litigation
funding company as defined by Section 1-5 must be licensed by
the Department as provided in this Article.
(b) A non-recourse consumer litigation funding company
licensed on the effective date of this Act under the Consumer
Installment Loan Act need not comply with subsection (a) until
the Department takes action on the non-recourse consumer
litigation funding company's application for a non-recourse
consumer litigation funding license. The application must be
submitted to the Department within 3 months after the effective
date of this Act. If the application is not submitted within 3
months after the effective date of this Act, the non-recourse
consumer litigation funding company is subject to subsection
(a).
Section 3-5. Licensure.
(a) An application for a license shall be in writing and in
a form prescribed by the Secretary. Applicants must also submit
a non-refundable application fee of $2,500, due at the time of
the application. The Secretary may not issue a non-recourse

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consumer litigation funding license unless and until the
following findings are made:
(1) that the financial responsibility, experience,
character, and general fitness of the applicant are such as
to command the confidence of the public and to warrant the
belief that the business will be operated lawfully and
fairly and within the provisions and purpose of this Act;
(2) that the applicant has submitted such other
information as the Secretary may deem necessary; and
(3) that the applicant is a current licensee under the
Consumer Installment Loan Act.
(b) A license shall be issued for no longer than one year
and no renewal of a license may be provided if a licensee has
substantially violated this Act and has not cured the violation
to the satisfaction of the Department.
(c) A licensee shall appoint, in writing, the Secretary as
attorney-in-fact upon whom all lawful process against the
licensee may be served with the same legal force and validity
as if served on the licensee. A copy of the written
appointment, duly certified, shall be filed in the office of
the Secretary, and a copy thereof certified by the Secretary
shall be sufficient evidence to subject a licensee to
jurisdiction in a court of law. This appointment shall remain
in effect while any liability remains outstanding in this State
against the licensee. When summons is served upon the Secretary
as attorney-in-fact for a licensee, the Secretary shall

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immediately notify the licensee by registered mail, enclosing
the summons and specifying the day of service.
(d) A licensee must pay an annual fee of $1,000. In
addition to the annual license fee, the reasonable expense of
any examination or hearing by the Secretary under any
provisions of this Act shall be borne by the licensee. If a
licensee fails to submit an application for renewal by December
31st of the then current year, its license shall automatically
expire; however, the Secretary, in his or her discretion, may
reinstate an expired license upon:
(1) payment of the annual fee within 30 days of the
date of expiration; and
(2) proof of good cause for failure to renew.
(3) that the applicant is a current licensee under the
Consumer Installment Loan Act.
(e) No licensee shall conduct the business of providing
non-recourse consumer litigation funding under this Act within
any office, suite, room, or place of business in which any
other business is solicited or engaged unless the other
business is licensed by the Department and, in the opinion of
the Secretary, the other business would not be contrary to the
best interests of consumers and is authorized by the Secretary
in writing.
(f) The Secretary shall maintain a list of licensees that
shall be available to interested consumers and lenders and the
public. The Secretary shall maintain a toll-free number whereby

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consumers may obtain information about licensees. The
Secretary shall also establish a complaint process under which
an aggrieved consumer may file a complaint against a licensee
or non-licensee who violates any provision of this Act.
Section 3-10. Closing of business; surrender of license. At
least 10 days before a licensee ceases operations, closes the
business, or files for bankruptcy, the licensee shall:
(1) Notify the Department of its intended action in
writing.
(2) With the exception of filing for bankruptcy, surrender
its license to the Secretary for cancellation. The surrender of
the license shall not affect the licensee's civil or criminal
liability for acts committed before or after the surrender or
entitle the licensee to a return of any part of the annual
license fee.
(3) Notify the Department of the location where the books,
accounts, contracts, and records will be maintained.
The accounts, books, records, and contracts shall be
maintained and serviced by the licensee, by another licensee
under this Act, or by the Department.
Article 4. Administrative Provisions
Section 4-5. Prohibited acts. A licensee or unlicensed
person or entity entering into non-recourse consumer

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litigation funding may not commit, or have committed, on behalf
of the licensee or unlicensed person or entity, any of the
following acts:
(1) Threatening to use or using the criminal process in
this or any other state to collect the assignment.
(2) Using any device or agreement that would have the
effect of charging or collecting more fees or charges than
allowed in this Act, including, but not limited to, entering
into a different type of transaction with the consumer.
(3) Engaging in unfair, deceptive, or fraudulent practices
related to the non-recourse consumer litigation funding.
(4) Threatening to take any action against a consumer that
is prohibited by this Act or making any misleading or deceptive
statements regarding the non-recourse consumer litigation
funding.
(5) Making a misrepresentation of a material fact by an
applicant for licensure in obtaining or attempting to obtain a
license.
(6) Including any of the following provisions in
non-recourse consumer litigation funding contracts:
(A) a confession of judgment clause;
(B) a mandatory arbitration clause that is oppressive,
unfair, unconscionable, or substantially in derogation of
the rights of consumers; or
(C) a provision that the consumer agrees not to assert
any claim or defense arising out of the contract.

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(7) Taking any power of attorney.
Section 4-10. Enforcement and remedies.
(a) The remedies provided in this Act are cumulative and
apply to persons or entities subject to this Act.
(b) Any material violation of this Act, including the
commission of an act prohibited under Section 4-5, constitutes
a violation of the Consumer Fraud and Deceptive Business
Practices Act.
(c) If any provision of the written agreement described in
Section 2-5 violates this Act, then that provision is
unenforceable against the consumer.
(d) Subject to the Illinois Administrative Procedures Act,
the Secretary may hold hearings, make findings of fact,
conclusions of law, issue cease and desist orders, have the
power to issue fines of up to $10,000 per violation, refer the
matter to the appropriate law enforcement agency for
prosecution under this Act, and suspend or revoke a license
granted under this Act. All proceedings shall be open to the
public.
(e) The Secretary may issue a cease and desist order to any
licensee or other person doing business without the required
license, when in the opinion of the Secretary the licensee or
other person is violating or is about to violate any provisions
of this Act or any rule or requirement imposed in writing by
the Department as a condition of granting any authorization

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permitted by this Act. In addition to any other action
authorized by this Act, if the Secretary determines that a
non-recourse consumer litigation funding company is engaged in
or is believed to be engaged in activities that may constitute
a violation of this Act and the Secretary is able to show that
an emergency exists, the Secretary may suspend the non-recourse
consumer litigation funding company's license for a period not
exceeding 180 calendar days. The cease and desist order and
emergency suspension permitted by this subsection (e) may be
issued prior to a hearing.
The Secretary shall serve notice of his or her action,
including, but not limited to, a statement of the reasons for
the action, either personally or by certified mail, return
receipt requested. Service by certified mail shall be deemed
completed when the notice is deposited in the U.S. Mail.
Within 10 business days after service of the cease and
desist order, the licensee or other person may request a
hearing in writing. The Secretary shall schedule a hearing
within 30 days after the request for a hearing unless otherwise
agreed to by the parties. The Secretary shall have the
authority to adopt rules for the administration of this
Section.
If it is determined that the Secretary had the authority to
issue the cease and desist order, he or she may issue such
orders as may be reasonably necessary to correct, eliminate, or
remedy the conduct.

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The powers vested in the Secretary by the subsection (e)
are additional to any and all other powers and remedies vested
in the Secretary by law, and nothing in this subsection (e)
shall be construed as requiring that the Secretary shall employ
the power conferred in this subsection instead of or as a
condition precedent to the exercise of any other power or
remedy vested in the Secretary.
(f) The Secretary may, after 10 business days notice by
registered mail to the licensee at the address set forth in the
license stating the contemplated action an in general the
grounds therefore, fine the licensee an amount not exceeding
$10,000 per violation, or revoke or suspend any license issued
by the Department if found that:
(1) the licensee has failed to comply with any
provision of this Act or any order, decision, finding,
rule, regulation, or direction of the Secretary lawfully
made under the authority of this Act; or
(2) any fact or condition exists that, if it had
existed at the time of the original application for the
license, clearly would have warranted the Secretary in
refusing to issue the license.
No revocation, suspension, or surrender of any license
shall impair or affect the obligation of any pre-existing
lawful contract between the non-recourse consumer
litigation funding company and a consumer.
The Secretary may issue a new license to a licensee

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whose license has been revoked when facts or conditions
that clearly would have warranted the Secretary in refusing
originally to issue the license no longer exist.
In every case in which a license or renewal of a
license is denied, the Secretary shall serve the licensee
with notice of his or her action, including a statement of
the reasons for his or her actions, either personally, or
by certified mail, return receipt requested. Service by
certified mail shall be deemed completed when the notice is
deposited in the U.S. Mail.
An order assessing a fine, an order revoking or
suspending a license, or an order denying or refusing to
renew a license shall take effect upon service of the order
unless the licensee requests a hearing, in writing, within
10 days after the date of service. In the event a hearing
is requested, the order shall be stayed until final
administrative order is entered.
If the licensee requests a hearing, the Secretary shall
schedule a hearing within 30 days after the request for a
hearing unless otherwise agreed to by the parties.
The hearing shall be held at a time and place
designated by the Secretary. The Secretary, and any
administrative law judge designated by him or her, shall
have the power to administer oaths and affirmations,
subpoena witnesses and compel their attendance, take
evidence, and require the production of books, papers,

09800HB0531ham002 - 27 - LRB098 03805 CEL 44817 a
correspondence, and other records or information that he or
she considers relevant or material to the inquiry.
The costs of administrative hearings conducted under
this Section shall be paid by the licensee.
(g) All moneys received by the Department under this Act
shall be deposited in the Financial Institutions Fund.
Section 4-15. Bonding.
(a) A person or entity engaged in non-recourse consumer
litigation funding under this Act shall post a bond to the
Department in the amount of $50,000 per license or irrevocable
letter of credit issued and confirmed by a financial
institution authorized by law to transact business in the State
of Illinois.
(b) A bond posted under subsection (a) must continue in
effect for the period of licensure and for 3 additional years
if the bond is still available. The bond must be available to
pay damages and penalties to be a consumer harmed by a
violation of this Act.
(c) From time to time the Secretary may require a licensee
to file a bond in an additional sum if the Secretary determines
it to be necessary. In no case shall the bond be more than the
outstanding liabilities of the licensee.
Section 4-20. Reporting of violations. The Department
shall report to the Attorney General all material violations of

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this Act of which it becomes aware.
Section 4-25. Rulemaking.
(a) The Department may make and enforce such reasonable
rules, regulations, directions, orders, decisions, and
findings as the execution and enforcement of the provisions of
this Act require, and as are not inconsistent therewith. All
rules, regulations, and directions of a general character shall
be made available to all licensees in an electronic format.
(b) The Department may adopt rules in connection with the
activities of licensees that are necessary and appropriate for
the protection of the consumers in this State. These rules
shall be consistent with this Act.
Section 4-28. Confidentiality. All information collected
by the Department under an examination or investigation of a
non-recourse consumer litigation funding company, including,
but not limited to, information collected to investigate any
complaint against a non-recourse consumer litigation funding
company filed with the Department, shall be maintained for the
confidential use of the Department and shall not be disclosed.
The Department may not disclose such information to anyone
other than the licensee, law enforcement officials, or other
regulatory agencies that have an appropriate regulatory
interest as determined by the Secretary, or to a party
presenting a lawful subpoena to the Department. Information and

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documents disclosed to a federal, State, county, or local law
enforcement agency shall not be disclosed by the agency for any
purpose to any other agency or person. An order issued by the
Department against a non-recourse consumer litigation funding
company shall be a public record and any documents produced in
discovery, filed with the administrative law judge, or
introduced at hearing shall be a public record, except as
otherwise prohibited by law.
Section 4-30. Judicial review. All final administrative
decisions of the Department under this Act are subject to
judicial review under the provisions of the Administrative
Review Law and any rules adopted pursuant thereto.
Section 4-35. Waivers. There shall be no waiver of any
provision of this Act.
Section 4-45. Severability. The provisions of this Act are
severable under Section 1.31 of the Statute of Statutes.
Section 4-48. Consumer protection study. The Department
shall conduct a study to be reported to the Governor and the
leaders of the General Assembly no later than February 1, 2018,
addressing the adequacy of the consumer protections contained
in this Act. The study shall include, but not be limited to:
(1) an analysis of the average percentage of a consumer's

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settlement that is used to return the funding amount in each
transaction; (2) a survey of consumer complaints filed against
non-recourse consumer litigation funding companies; (3) a
description of the benefits and shortcomings of non-recourse
consumer litigation funding to consumers; and (4) any reforms
that the Secretary recommends to better regulate non-recourse
consumer litigation funding companies.
Article 90. Amendatory Provisions
Section 90-1. The Regulatory Sunset Act is amended by
changing Section 4.29 as follows:
(5 ILCS 80/4.29)
Sec. 4.29. Acts repealed in 2019 on January 1, 2019 and
December 31, 2019.
(a) The following Act is repealed on January 1, 2019:
The Environmental Health Practitioner Licensing Act.
(b) The following Act is repealed on May 31, 2019:
The Non-Recourse Consumer Litigation Funding Act.
(c) (b) The following Act is repealed on December 31, 2019:
The Structural Pest Control Act.
(Source: P.A. 95-1020, eff. 12-29-08; 96-473, eff. 8-14-09.)
Section 90-10. The Consumer Fraud and Deceptive Business
Practices Act is amended by changing Section 2Z as follows:

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(815 ILCS 505/2Z) (from Ch. 121 1/2, par. 262Z)
Sec. 2Z. Violations of other Acts. Any person who knowingly
violates the Automotive Repair Act, the Automotive Collision
Repair Act, the Home Repair and Remodeling Act, the Dance
Studio Act, the Physical Fitness Services Act, the Hearing
Instrument Consumer Protection Act, the Illinois Union Label
Act, the Job Referral and Job Listing Services Consumer
Protection Act, the Travel Promotion Consumer Protection Act,
the Credit Services Organizations Act, the Automatic Telephone
Dialers Act, the Pay-Per-Call Services Consumer Protection
Act, the Telephone Solicitations Act, the Illinois Funeral or
Burial Funds Act, the Cemetery Oversight Act, the Cemetery Care
Act, the Safe and Hygienic Bed Act, the Pre-Need Cemetery Sales
Act, the High Risk Home Loan Act, the Payday Loan Reform Act,
the Mortgage Rescue Fraud Act, subsection (a) or (b) of Section
3-10 of the Cigarette Tax Act, subsection (a) or (b) of Section
3-10 of the Cigarette Use Tax Act, the Electronic Mail Act, the
Internet Caller Identification Act, paragraph (6) of
subsection (k) of Section 6-305 of the Illinois Vehicle Code,
Section 11-1431, 18d-115, 18d-120, 18d-125, 18d-135, 18d-150,
or 18d-153 of the Illinois Vehicle Code, Article 3 of the
Residential Real Property Disclosure Act, the Automatic
Contract Renewal Act, the Non-Recourse Consumer Litigation
Funding Act, or the Personal Information Protection Act commits
an unlawful practice within the meaning of this Act.

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(Source: P.A. 96-863, eff. 1-19-10; 96-1369, eff. 1-1-11;
96-1376, eff. 7-29-10; 97-333, eff. 8-12-11.)
Section 99. Effective date. This Act takes effect 180 days
after becoming law.".