Consumers Push Back Against Check-Cashing Rate Increase

CONSUMERS PUSH BACK AGAINST CHECK-CASHING RATE INCREASE

Agency Holds Hearing to Receive Testimony on Its Regressive Proposal

 

For Immediate Release

Wednesday, September 13, 2017

 

Contacts: Brent Adams, Woodstock  (o) 312-368-0310  (c)  773-844-5544

Tracy Occomy, COFI/POWER-PAC (o)312-226-5141

Angelica Rosales, consumer (Contact Nick Lurie-Moroni 630-768-7941)          

 

CHICAGO, IL – Concerned consumers gathered Wednesday morning to speak out about the double-digit  rate increase proposed by Governor Rauner’s administration. The Department of Financial and Professional Regulation (IDFPR) was compelled to hold a public hearing because it received more than 25 requests for a hearing.  In fact, more than 66 requests were submitted. One consumer, Angelica Rosales, is pleading for the IDFPR to reconsider, “As a mother of three already living paycheck to paycheck, we cannot afford to pay more for basic services like check cashing. We have nothing left.”

 The IDFPR’s proposal, which is now in the midst of a rule-making process that will require the assent of a legislative committee known as the Joint Committee on Administrative Rules (JCAR), is as follows:

Old Rate

New Rate

Check Amount

Percent Increase

1.4%+$1.00

2.5% + $1.00

$100 or less

46%

2.25%

2.5%

$100.01-$1250.00

11%

2.25%

3.0%

$1250.01 or more

33%

 

If IDFPR’s decision becomes law, the unbanked and underbanked will be hit the hardest. Research indicates that the populations that disproportionately rely on currency exchanges for check cashing are low-income households, less-educated households, younger households, African American and Hispanic households, and working-age persons with disabilities.

Illinois State Senator Jaqueline Collins is helping lead the fight against the regressive proposal. “I refuse to stand by and allow the currency exchange industry to increase profits on the backs of the most financially vulnerable. If IDFPR refuses to appropriately modify its proposal, I plan to explore all legislative options to address this misguided and dangerous plan,” said Collins (16th), chair of the Financial Institutions Committee.  Her colleague Senator Daniel Biss also took issue with the IDFPR’s decision, “The proposed rate hike prioritizes profit over people. Those with lower incomes and people of color should not be expected to pay more to fund this industry.”

Among these advocates in attendance were Community Organizing and Family Issues (COFI), a non-for-profit that empowers parents of low-income families to organize in and advocate for their communities. Parent leader and Co-Chair of POWER-PAC and its Stepping Out of Poverty Committee Rosazlia Grillier stated, “With our debt campaign we have seen that fees and fines, such as these, threaten low-income families and push them further and further into debt.”

Also in attendance was Woodstock Institute, a leading not-for-profit that advocates for a more fair and inclusive financial system. Brent Adams, Woodstock’s Senior Vice President of Policy, who used to lead IDFPR in the Quinn Administration, testified but was denied the chance to respond to the industry’s testimony. “The industry said that we’re essentially proposing that each of its customers be ‘means tested,’ that is, examined to determine their ability to pay. That’s ridiculous. Besides, here’s your means test: they can’t afford it,” said Adams.

Woodstock has tendered a counter-proposal to the IDFPR’s proposal. Woodstock’s counterproposal would exempt government checks, like public assistance, from the rate increase.

 

Woodstock Institute is a leading nonprofit research and policy organization in the areas of equitable lending and investments, wealth creation and preservation, and safe and affordable financial products and services. Woodstock Institute works locally and nationally to create a financial system in which lower-wealth persons and communities of color can safely borrow, save, and build wealth so that they can achieve economic security and community prosperity.

POWER-PAC is a project of COFI, whose mission is to strengthen the power and voice of low-income and working families at all levels of civic life—from local institutions and communities to local, state, and federal policy arenas.