CITY OF CHICAGO LICENSING ORDINANCE PASSES

Earlier today, the Chicago City Council passed an ordinance that would require the licensing of debt collectors when collecting on accounts held by residents of the City of Chicago. Chicago became the third municipality in the United States after New York City and Buffalo, NY to adopt a municipal licensing ordinance.

The ordinance which was introduced by Mayor Rahm Emanuel on December 12th underwent substantial revisions in the last five days resulting in the removal of potentially restrictive provisions to our members, including: (1) the provision that required original documents to be included in the initial communication to the consumer; (2) violations punishable by a 6 moth jail sentence; (3) additional consumer notice statement on debt that is beyond the statute of limitations; and (4) the 10 day effective date after passage. These changes were a direct result of a concerted lobbying effort by DBA International who hired a well-regarded Chicago lobbyist, our local DBA members especially Todd Lansky and David Stein, and other industry partners.

Click here for a copy of the ordinance. To summarize:

  • The licensing requirements will take effect on July 1, 2013.
  • It will be the legal duty of a debt collector to comply with Fair Debt Collection Practices Act, the Illinois Collection Agency Act, and the Illinois Consumer Fraud and Deceptive Practices Act.
  • Upon written request, verification of the consumer debt shall include a statement of account that: (1) provides the charge off balance and itemizes the principal, interest, charges, and fees; (2) itemizes post charge-off interest, charges, and fees; and (3) identifies and describes the basis of the debtor’s obligation to pay.
  • Starting July 1, 2013, it will require debt collectors to maintain a separate electronic or physical file for each consumer debt searchable by the name and address of the debtor and the originating creditor that contains: (1) a record of all written communications; (2) a record of each payment received; (3) a copy of the consumer debt payment schedule or settlement agreement; and (4) if applicable, a record of the name and address of entity from which the debt was purchased and the date and amount of the purchase.
  • If you have your licensed revoked you will not be able to reapply for a license for 4 years.
  • Fines can range from $250 to $5,000 for each offense.

DBA will continue to play an instrumental role through our lobbyist as the City Licensing Department develops and modifies the regulations needed for this city ordinance to be implemented in an attempt to get more clarification on the verification requirements (see above) as that remains our greatest concern at this juncture.

DBA has received some contributions towards defraying the costs of hiring a Chicago lobbyist but more funds are needed so as not to deplete the resources designated for other DBA lobbying activities at the state level. Please consider an earmarked donation to help pay for our Chicago efforts by clicking here! Any dollar amount is welcomed and would be appreciated as we continue to work hard for our membership.