Financial Inclusion for All Illinois, a project of Heartland Alliance, advocates for policies that help narrow the racial wealth divide, expand savings opportunities to more Illinoisans, and help reduce the prevalence of wealth-stripping products and practices.
Illinois’ legislative session wrapped up in the end of May on the heels of a historic Lame Duck session win in which the Illinois Legislative Black Caucus advanced a 36% APR cap on small consumer loans, like payday and auto-title loans. This bold step makes Illinois one of the most protected states against predatory lenders. Check out this resource guide on safe and affordable alternatives to predatory loans.
After the Lame Duck session ended in early February, we launched into the 102nd General Assembly to advance bold solutions to help narrow the racial wealth divide. Here is a roundup of the legislation we worked on. We are grateful to our legislative and organizational allies the fight for financial inclusion and a more just economy for all Illinoisans.
House Bill 117: Secure Choice Expansion: FIAI has long advocated for bolstering retirement security. The Secure Choice Program Expansion bill, HB 117, passed out of the House and the Senate with bipartisan support and now awaits Governor Pritzker’s signature. The bill expands the Secure Choice retirement savings program to businesses with at least 5 employs (previously at least 25 employees), and automatically increases the savings rate up to 10% unless an employee opts-out of the program. This victory will help ensure that hundreds of thousands of additional workers will have the chance to save for their futures.
Senate Bill 1792 (101st General Assembly): the Predatory Loan Prevention Act: In partnership with Woodstock Institute, Chicago Urban League, New America, Illinois People’s Action, AARP Illinois, and various other partners, we successfully fought off bills that tried to undo portions of the Predatory Loan Prevention Act. Several bills attempted to weaken or water-down the PLPA by imposing loopholes and carve-outs for certain sectors of the industry, like installment lenders and pawnbrokers. These harmful bills would have opened the door to many further attempts to unravel the protections set forth in the Predatory Loan Prevention Act. We are proud to have upheld this crucial protection for Illinoisans.
Protect Tax Returns of Low Income Illinoisans: Although Senate Bill 2139, an effort to protect the tax returns of low-income Illinoisans, did not move this session, IABG successfully advocated for recipients of the state Earned Income Credit to ensure they received their full tax refunds in 2021. Each year, municipalities intercept the tax refunds of low- and moderate-income families through Local Debt Recovery Programs. These programs disproportionately harm low-income families of color. Through administrative advocacy in partnership with the Chicago Jobs Council, COFI/POWER PAC-IL and Woodstock Institute, IABG worked with the Illinois Comptroller’s Office to prevent lower income taxpayers from having their tax refund intercepted to collect on local fines and fees debt in the 2021 tax season.
House Bill 862: Debt Collections Statute of Limitations — Over many years, debt can accumulate to double, triple, or quadruple what it once was. Under current law, municipalities can go after people through grueling debt collection practices in court, even 10 years after the original fine or fee was incurred. Even a decade later, municipalities can sue someone, garnish their wages, and take money from their bank account. HB 862 limits municipalities’ ability to attack decades-old debt by setting a 7-year statute of limitations on using court orders and lawsuits to collect on unpaid debt. The bill awaits Governor Pritzker’s signature.
House Bill 2746: Know Before You Owe: This legislation provides increased transparency of the private student loan market by requiring schools to report on what companies are lending to their students. Additionally, it encourages more awareness about the total sum of debt taken out for school by requiring educational lenders to provide regular statements to student borrowers outlining their outstanding debt and interest rate. Finally, this legislation encourages safer borrowing by requiring schools to analyze whether a student exhausted available federal aid before exploring private lending options. Thanks to advocacy from FIAI, Women Employed, Illinois PIRG, and the Student Borrower Protection Center, this bill heads to Governor Pritzker’s desk.
What Lies Ahead
The Children’s Savings Account (CSA) Working Group of FIAI will continue working with the Illinois Treasurer’s Office to help ensure that the statewide CSA program is equitably implemented 2023. This group also continually advocates for the development of new, local CSA programs in Illinois.
We are disappointed to see that the Illinois General Assembly denied access to up to $1,200 in tax relief to more than a million more low-income Illinoisans when it failed to expand the Earned Income Credit (EIC). The bill, HB 2792/SB 2184, would have expanded the popular and effective tax credit to a projected 500,000 households in every district across the state. Economic Security for Illinois and numerous coalition partners fought to expand the Earned Income Credit to a few key, currently ineligible groups; namely, childless workers aged 18-24 and over 65; immigrants who file taxes with an Individual Taxation Identification Number (ITIN) and caregivers of eligible dependents including, children 6 and under, people with disabilities, and older adults. IABG hopes to support the continued fight to mend our regressive tax structure.
As a part of our consumer protections agenda, FIAI aspires to reform burdensome fines, fees, and debt collections practices in the future. If signed by the Governor, the 7-year statute of limitations bill will achieve modest but necessary progress. Local governments will still be able to engage in other long-term, harmful debt collection practices by partnering with private debt collectors, denying commercial licenses and permits to debtors, and booting, towing and impounding vehicles to enforce payments. We must combat these unjust practices.
Finally, FIAI will also continue to address the racial wealth gap, its root causes, and attempt to narrow the gap between the wealthiest and most asset-poor Illinoisans. We will continue to address wealth stripping and disinvestment in Black and Brown communities. In the wake of the Predatory Loan Prevention Act’s passage, lawmakers can look to bold solutions that increase the amount of cash that people have, so that they do not have to turn to loans to cover their rent, food, or daily living expenses to begin with. This includes efforts such as:
- Prioritizing recurring cash payments (EIPs) at the federal level throughout the economic crisis.
- Creating supports to help the many people who still have not received their stimulus checks (EIPs), including reopening the non-filers IRS page and ensuring people on disability, SSI, Social Security, and veterans benefits receive their checks automatically.
- Expanding the federal and state tax credits like the CTC and the EITC, and making permanent the American Rescue Plan Act expansions.
- Expanding the stimulus check IRS non-filer website to make the EITC more accessible to non-filers.
- Ensuring that public benefits programs like UI, SNAP, and TANF provide adequate support and are accessible to everyone who is experiencing hardship or weathering a crisis – like a job loss, a medical emergency, or having to provide care for a child, aging parent, or loved one.
We look forward to advocating for a more just and inclusive financial system that serves and uplifts all Illinoisans, and are proud of the progress we made during the 2021 legislative session.