As you may recall, an Illinois appellate court held in 2012 unreported opinion that mortgage servicers may be subject to Illinois Collection Agency Act, 225 ILCS 425/1, et seq. ("ICAA"), including the licensing and other requirements of the ICAA.
The Court held that, "[d]epending on what a mortgage servicer does other than elicit and receive routine or timely mortgage payments and attempt to collect delinquent payments, it may or may not be a debt collector" under the ICAA.
A copy of the opinion is available at: http://www.illinoiscourts.gov/R23_Orders/AppellateCourt/2012/1stDistrict/1113501_R23.pdf
The State of Illinois recently amended ICAA to among other things:
1. Clarify that non-bank mortgage lenders and servicers, and other "entities licensed pursuant to the Residential Mortgage License Act of 1987" are exempt from the ICAA;
2. Increase the scope of the ICAA to now apply to "commercial" debts, as well as "consumer" debts;
3. Clarify that emails "or any other Internet communication" can constitute collection activity subject to the ICAA;
4. Increase the civil penalty for unlicensed activity to $10,000 per violation;
5. Clarify that "credit unions" are subject to the ICAA if they own or operate a collection agency, just like "banks" and "financing and lending institutions;"
6. Clarify that entities engaged "in the business of collection of a check or other payment that is returned unpaid by the financial institution upon which it is drawn" are subject to the ICAA; and
7. Extend the automatic repeal date of the ICAA to January 1, 2026.
The amendments became effective immediately, on August 3, 2015.
A copy of the Public Act is available at:
Ralph T. Wutscher
Maurice Wutscher LLP
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