By James M. Morphew, ICA Lobbyist Sorling, Northrup, Hanna, Cullen
and Cochran, Ltd.
Legislation that would place in state law an agreement
reached with the Illinois Department of Professional Regulation
on the issue of contingency fees has passed the Illinois House and
is advancing in the Illinois Senate.
Representative Skip Saviano introduced HB3046, which
amends the disciplinary provsions of the Collection Agency Act to
provide that if a contingency or hourly fee arrangement is 1) established
under an agreement between the collection agency and a creditor
to collect a debt, and 2) is paid by the debtor pursuant to a contract
between the creditor and debtor, then that fee arrangement does
not subject the licensee to potential disciplinary action unless
the fee is unreasonable.
Senators Patrick O'Malley and Robert Madigan are the
HB3046 contains the language proposed by Governor
Ryan in his amendatory veto of SB801 that was considered last session.
The motion to accept the Governor's amendatory veto was adopted
by a unanimous vote in the Senate. However, the motion to accept
was called in the House because of the scope of the changes made
by the Governor's amendatory veto. This necessitated the introduction
The need for this legislation arose when attorneys
for IDPR took position that a collection fee calculated on a percentage
basis and added on the debt could result in disciplinary action
against the collection agency. IDPR attorneys maintained the position
even though the debtor has agreed in his contract with the creditor
to pay colleciton fees.
After several meetings with IDPR, the language contained
in HB3046 was developed.
On January 1, 2001 this bill became law. Now you,
as an Illinois creditor would use the lagnuage spelled out on the
next page, our agency can add on our collection agency costs.
New Legislation in Illinois
The Illinois Collectors Association, Inc. (I.C.A.)
scored a hard fought victory when Gov. George Ryan signed into law
H.B.3046 (Saviono) on June 9.
Effective January 1, 2001, collection agencies will
be protected from disciplinary action when collecting a contingency
or hourly fee, provided that:
The arrangement is established under an agreement
between a collection agency and a creditor to collect the debt;
The fee is paid by a debtor pursuant to a contract
between the creditor and the debtor; and
The fee is not "unreasonable."
The bill was originally introduced as S.B. 801 on
Feb. 24, 1999, and had passed both houses. However, the governor,
acting on the Illinois Department of Professional REgulation's recommendation,
signed an amendatory veto. The Department opposed the bill, claiming
the fees would harm consumers. This prompted the governor to insert
language that would grant the Department the power to determine
whether the cotningency or hourly fees charged to debtors were indeed
unreasonable. The House Speaker refused to allow a vote on the bill,
arguing that the governor had abused his amendatory veto.
For more information, contact Ron Bronstein, Chief
Operating Officer of Keynote Collections, Inc. at
or via email.