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May , 2018
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State regulatory body has postponed vote

 

SPRINGFIELD, IL – In opposition to a proposal that would charge working families higher fees just to cash their paychecks, State Sen. Jacqueline Collins praised a state regulatory commission for postponing a vote on the issue and called on the community to make raise its voice.

“Raising check-cashing fees would primarily hurt households without bank accounts — commonly referred to as the unbanked,” Collins said. “Unbanked households are disproportionately lower-income, African-American and Hispanic, and working-age people with disabilities. A large portion of unbanked households are already skimping on basic necessities such as soap, heat, and medication, including their children’s medication. Forcing them to pay more to cash their checks would make a dire situation worse.”

Businesses like Currency Exchanges charge fees to cash checks, a solution that for some is the only way to receive their paychecks. The Rauner administration has proposed an increase in the maximum allowable rate that can be charged for check-cashing services. In response to a request from Sen. Collins and other activists, a state regulatory committee ruled today to delay consideration of the rate hike. Gov. Bruce Rauner’s administration proposed this rate hike following a request by the currency exchange industry.

Sen. Collins also spoke about her legislation, Senate Bill 2433, the Check Cashing Fairness Act. The legislation would cut and cap the rates on certain types of checks such as public assistance checks.

Brent Adams of the Woodstock Institute also spoke about research arguing against the burden a rate increase would place on consumers, whose median household incomes have declined since 2005.

“The bottom line is that the population expected to pay for this rate increase simply cannot afford it,” Adams said. “How long has it been since consumers had a ‘rate increase?’ When I say a rate increase for consumers, of course, I mean an increase in wages and/or income that would enable them to absorb a check-cashing rate hike without cutting into necessary expenses such as rent, gas, and prescriptions.”

Collins is the chair of the Senate Financial Institutions Committee. Senate Bill 2433 has been introduced in the Senate and details of it can be viewed here. More information about the Woodstock Institute’s check cashing rate research can be viewed here.

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