Illinois Gov. Pritzger recently signed HB 5290 into law as Public Act 104-0516. This act substantially revised the Illinois Sales Finance Agency Act and created a significantly enhanced licensing, examination, and enforcement framework for entities engaged in purchasing retail installment contracts, retail charge agreements, and related receivables. The law became effective on June 26, 2026. HB 5290 may not dramatically expand who is covered, but it substantially increases the regulatory consequences for entities already subject to the Act.
The new law expands regulatory examination authority, introduces a prohibition against “unfair, deceptive, or abusive business practices,” enhances penalties, mandates annual licensing requirements through the Nationwide Multistate Licensing System (NMLS), and includes new provisions that may affect the ability of unlicensed entities to pursue certain claims related to licensable activities.
The Act defines a “sales finance agency” broadly to include a person engaged in the business of purchasing retail installment contracts, retail charge agreements, or outstanding balances under such contracts entered into in Illinois.
The legislation adds a pleading requirement in new section 14.5 which expressly requires a person subject to Sales Finance Agency licensure to allege and prove licensure when bringing an action to collect “compensation” for licensable activities. The impact of this provision on receivables purchasers and collection litigation remains to be determined.
While the statute contains several exemptions, including for certain depository institutions and specified securitization structures, those exemptions are limited and fact-specific.
RMAI will continue monitoring implementation of HB 5290 and its potential impact on the receivables management industry.
This Member Alert is intended for members of the Receivables Management Association International, is for informational purposes only, and is in no way intended to provide legal advice. Members are encouraged to consult with an attorney of their choice for legal advice concerning this matter.