State Senator Collins: Check Cashing Rate Compromise Will Spare Some of the State’s Poorest
“We must continue to reform a system where those with the least pay the most.”
SPRINGFIELD – A rate hike on check cashing services will be lower than originally proposed, and rates for those on public assistance will become lower, under a compromise reached.
Illinois State Senator Jacqueline Collins joined activists from a number of groups pushing against a higher proposal at a press conference today to thank advocates and explain the impact of new rates.
“Today is a good day for unbanked households, which are disproportionately lower-income, African-American, Hispanic and working-age people with disabilities,” said Collins (D-Chicago). “working with the Woodstock Institute and other consumer advocates, we were able to protect consumers from an across-the-board double-digit increase on the maximum fees that could be charged for check-cashing by Currency Exchanges. Most importantly, public assistance checks will see a rate decrease. We must continue to reform a system where those with the least pay the most.”
The table below reflects the new rates for different types of checks cashed using services at businesses such as Currency Exchanges.
|
Type of Check (@$100) |
Current Rate |
Proposed Rate Hike |
Agreed |
|
Public assistance |
1.40% + $1 |
2.50% + $1 |
1.50% |
|
Government check (e.g. *EITC) |
1.40% + $1 |
2.50% + $1 |
2.40% + $1 |
|
Printed paycheck |
1.40% + $1 |
2.50% + $1 |
2.40% + $1 |
|
Personal check |
1.40% + $1 |
2.50% + $1 |
2.45% + $1 |
|
All other (e.g., insurance) |
1.40% + $1 |
2.50% + $1 |
2.40% + $1 |
According to an industry report, the average check amount is $463.83.
|
Type of Check (@$500) |
Current Rate |
Proposed Rate Hike |
Agreed |
|
Public assistance |
2.25% |
2.50% |
1.50% |
|
Government check (e.g. *EITC) |
2.25% |
2.50% |
2.33% |
|
Printed paycheck |
2.25% |
2.50% |
2.33% |
|
Personal check |
2.25% |
2.50% |
3.00% |
|
All other (e.g., insurance) |
2.25% |
2.50% |
2.40% |
According to industry data, only 7 percent of checks are greater than $1,250.
|
Type of Check (@$1250.01) |
Current Rate |
IDFPR Rate |
Agreed |
|
Public assistance |
2.25% |
3.00% |
1.50% |
|
Government check (e.g. *EITC) |
2.25% |
3.00% |
3.00% |
|
Printed paycheck |
2.25% |
3.00% |
3.50% |
|
Personal check |
2.25% |
3.00% |
3.50% |
|
All other (e.g., insurance) |
2.25% |
3.00% |
3.50% |
*EITC = Earned Income Tax Credit
