“Our priority here is simple: we will not sit by as bad actors attempt to take advantage of the working families of Illinois,” said Governor JB Pritzker. “We’re safeguarding the financial health of all our people – and we’re doing it at no cost to taxpayers. We’re helping people access banking, and in turn, the financial independence they need to live with dignity.”
With one in five Illinois households conducting their financial business outside of the traditional banking system according to the FDIC, the new law aims to connect these consumers with reliable, affordable and equitable financial products and reduce their reliance on predatory lenders that charge exorbitant fees for basic services, like auto title lenders, cash checkers, payday lenders and pawnshops.
Housed in the Illinois Office of the Comptroller, the Illinois Bank On Initiative will authorize certified financial products that provide fair financial service options such as no maintenance fees, low minimum deposits, low or no overdraft fees and alternative IDs. The comptroller’s office will publish a list of certified financial products online and conduct statewide outreach to promote their use.
The initiative’s work will be guided by a 13-member commission comprised of four local elected officials from geographically diverse regions in this state, three members representing financial institutions, four members representing community and social service groups and two federal or state financial regulators.
According to the Brookings Institute, a full-time worker who doesn’t use traditional banking faces about $40,000 in lifetime fees.
The governor signed the Senate Bill 1332 at Devon Bank in Chicago’s West Ridge neighborhood, a community bank that has tailored financial products to meet their community’s needs for more than 70 years. The new law takes effect immediately.
“If you are paying part of every paycheck to check-cashers or payday loaners, how can you save for your family and start to build wealth?” said Comptroller Susana A. Mendoza. “Bank On should help steer the 1-in-5 Illinois households currently unbanked away from predatory lenders and toward a more sold financial future.”
“Middle class families in Illinois have suffered from the ill effects of crippling bank fees for long enough,” said Sen. Cristina Castro (D-Elgin). “I’m proud to have sponsored and fought for the passage of legislation that will give working families in Illinois some peace of mind, and I’m glad to see it become law.”
“I am proud to have been the House sponsor of the ‘Illinois Bank On Initiative’ which helps the unbanked and the underbanked population in Illinois gain accessibility to traditional retail banking products,” said Rep. Debbie Meyers-Martin (D-Olympia Fields).
“The Community Bankers Association of Illinois appreciates the efforts of the Governor, Comptroller and General Assembly to highlight the needs of the unbanked and under-banked population,” said Jerry Peck, SVP Governmental Relations of the Community Bankers Association of Illinois. “It is important to integrate these consumers into the mainstream financial world as an alternative to predatory actors like payday lenders and title loans who charge as much as 500% interest for basic financial services.”