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Illinois Collection Agency Act Amended to Exclude Non-Bank Mortgage Servicers

illinoissealAs 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: Link to Opinion.

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 Jan. 1, 2026.

The amendments became effective immediately, on Aug. 3, 2015.

A copy of the Public Act is available at: Link to Act.

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Ralph Wutscher's practice focuses primarily on representing consumer and commercial financial services companies, including depository and non-depository mortgage lenders and servicers, as well as mortgage loan investors, financial asset buyers and sellers, loss mitigation companies, third-party debt collectors, and other financial services providers. He represents the lending and financial services industry as a litigator, and as regulatory compliance counsel. For more information, see