- Published: Friday, May 25, 2018 01:29 PM
Following a regulatory compromise that set new rates on check cashing services, including lowering the rate on government assistance checks, legislation passed the General Assembly without opposition this month requiring industry regulators to consider the impact on consumers and minority communities in future rate changes.
State Senator Jacqueline Collins (D-Chicago) worked alongside consumer advocates to reach the regulatory compromise in the wake of a proposal from the Illinois Department of Financial and Professional Regulation (IDFPR) which would have raised rates on check cashing services like those at a Currency Exchange. The measure now awaiting the governor’s signature would define a number of socioeconomic factors that regulators must consider in the event they set new rates going forward.
“I’m pleased to see this compromise meet with success in the General Assembly without opposition,” Collins said. “This is a service used almost exclusively by the unbanked – those who don’t have access to a bank account for a variety of reasons, and whose income has been virtually stagnant since the recession. We must ensure that this process – which determines what rate to charge the people who can least afford such services offered to bank accountholders for free – is closely regulated and its import carefully considered.”
For people living paycheck to paycheck, an initial deposit for a bank account might not be possible, or even physically reaching a banking institution might not be plausible. For them, the only option is often a check cashing service, which draws a fee.
Senate Bill 2433 calls for IDFPR to consider the impact on consumers and whether an increase in the rate schedule will disproportionately impact anyone on the basis of any protected categories defined in the Illinois Human Rights Act.
