New data shows insurance exec compensation ballooned while world suffered

FOR IMMEDIATE RELEASE: Monday, May 9, 2022

CONTACTS:  Abe Scarr, State Director, 312-983-2789, abe@illinoispirg.org
Mark Morgenstein, Media Relations Director, 678-427-1671, markm@publicinterestnetwork.org
Amy Eisenstein, Financial Inclusion for All Illinois, 630-878-9701, aeisenstein@heartlandalliance.org

CHICAGO – The auto insurance industry is attempting to block the publication of data documenting its windfall profits in Illinois during the early waves of the COVID-19 pandemic, when the risks associated with driving plummeted but auto insurers did not lower premiums or offer rebates in proportion to the reduction in risk. In a letter sent last week to the Illinois Department of Insurance, three auto insurance associations challenged the Department’s March call for information documenting insurer profits, losses, and refunds given to consumers between 2019 and 2021. Consumer advocates estimate that auto insurers overcharged Illinois drivers by about $900 million in 2020.

“Not only did auto insurers overcharge Illinois drivers early in the pandemic, they are now trying to keep us in the dark about just how much they overcharged us,” said Illinois PIRG Education Fund Director Abe Scarr. “We encourage the Department of Insurance to take all necessary steps to collect and make this important information public.”

While insurers are now aggressively raising rates, new data show that  Illinois’ major insurance companies rewarded top executives with generous bonuses over the  years in question.  For example, according to filings with the Nebraska Department of Insurance, while Bloomington-basd State Farm paid its Chief Executive Michael Tipsfrd a salary that ranged between $1.94 and $2.15 million in 2019 through 2021, the company dramatically raised the bonuses paid to Tipsord from $8.3 million in 2019 to $18.1 million in 2020 and $22.4 million in 2021.

“I am appalled that these companies overcharged families sheltering at home, refused to report their profits, and have simultaneously raised their personal compensation so exorbitantly,” said Illinois state Sen. Jacqueline Collins, who recruited 15 of her state Senate colleagues to join consumer advocates in asking the Illinois Department of Insurance to call for information from insurers. Sen. Collins also mentioned an unfair aspect of the problem: “Auto insurers indiscriminately charge higher rates in Black communities like those I represent.” 

“This story reflects the pernicious racial wealth gap in action,” said Amy Eisenstein, Coalition Manager, Financial Inclusion for All Illinois (Heartland Alliance). “Auto insurers use non-driving factors to determine rates, unfairly discriminating against low-and moderate-income drivers in communities of color. Meanwhile, corporate executives have not responded to a simple data call with transparency – rather, they have responded by selfishly bumping their own salaries. Illinoisans deserve to know what they are owed.” 

Making matters worse, auto insurers have been increasing rates rapidly in 2022. State Farm recently raised rates by 3%, only two weeks after a 5% increase. In January, Allstate hiked rates by 12%. Illinois regulators have no power to block or modify insurance rate hikes, as regulators in other states do.

The California, New Mexico, and Washington Departments of Insurance have all issued similar data calls to insurance companies. 

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Financial Inclusion for All Illinois is a coalition committed to expanding access to the tools Illinois families need to build financially secure futures.

PRESS RELEASE 

Contact: Amy Eisenstein, 630-878-9701, aeisenstein@heartlandalliance.org 

SPRINGFIELD, Illinois, April 9, 2022 — The Illinois General Assembly approved a state budget that includes $2.5 million in funding for the Illinois Higher Education Savings Program, otherwise known as Children’s Savings Accounts. Parent leaders and advocates of the Financial Inclusion for All Illinois coalition have long called for an investment in the future of Illinois’ children and families. Advocates celebrate that the program, which was signed into law in 2019, will finally be funded in 2023.  

After the budget is signed into law, all children born or adopted after December 31, 2022, will receive a $50 seed deposit in a Bright Start 529 college savings account. However, parents must claim this seed deposit by their child’s 10^th birthday. Advocates warn that only 30% of Illinois families will be able to claim the deposit without further investment and effort by state officials to make the program more robust, accessible, and equitable. The statewide CSA program will be managed by the Illinois State Treasurer’s Office. 

“I have advocated for a statewide Children’s Savings Account program for nearly a decade. In 2019, when the program was signed into law by the Governor, we thought our fight was over. But the pandemic hit, and the program was never funded. We are glad to see this appropriation so that the program can finally get started. It will also take more funding in future years to ensure that all families who could benefit will be able to participate.” — Rosazlia Grillier, Co-President Emeritus of POWER-PAC IL 

Children’s Savings Accounts (CSAs) are proven to boost hope for the future, especially among children who may not already have college-going aspirations. They are also proven to reduce maternal depression, improve early childhood outcomes, and, with the right features, promote equitable access to higher education. The savings accounts can be used for books, computers, college or university tuition, and at other post-secondary institutions like trade schools. 

“As a parent of three children, I have spent years advocating for a CSA program. I didn’t go to college, but my son was lucky enough to receive a scholarship. Once the CSA program is fully funded, we will be sure that more families like mine will have hope for the future and an investment in their children’s potential early on. Thank you to our legislative champions, Senator Pacione-Zayas and Representative Collins!” — Liliana Olayo, Co-President of POWER-PAC IL 

During the Illinois General Assembly’s legislative session, Senator Cristina Pacione-Zayas and Representative Lakesia Collins, champions for the statewide CSA program, also passed a bill to prioritize equity in the program implementation. Once signed into law, the measure requires the State Treasurer’s Office to collect socioeconomic, geographic, racial and ethnic data on program participants to understand whether the program is reaching community members who face systemic barriers to wealth-building and would most benefit from a jump-start in their college savings. It also gives the Treasurer’s Office the option to provide automatic bonus deposits in the accounts of children from financially insecure households. 

“Thank you to the Illinois General Assembly for ensuring that this program can kick-off in 2023. The pandemic has caused many families to lose hope – but this CSA program restores some of that hope for children across Illinois. Our coalition urges legislative leaders to continue to invest in this crucial program over the long-haul.” — Amy Eisenstein, Financial Inclusion for All Illinois Coalition Manager with Heartland Alliance 

Financial Inclusion for All Illinois is a coalition committed to expanding access to the tools Illinois families need to build financially secure futures. Its Children’s Savings Account Committee includes leaders from Community Organizing and Family Issues (COFI), POWER-PAC IL, Woodstock Institute, YWCA Metro Chicago, VOCEL, Start Early, Legal Action Chicago, Chicago Urban League, I-PROMOTE IL, Children’s Home and Aid, and Heartland Alliance.  

Thursday, March 17, 2022

Credit Repair Companies Deceitfully Charge Consumers

Contact: Amy Eisenstein, aeisenstein@heartlandalliance.org, 630-878-9701

SPRINGFIELD – The “credit repair” industry in Illinois siphons savings from people, often without improving their credit scores at all, according to testimony before the Illinois House of Representatives Financial Institutions Committee on Thursday.

Advocates, service providers, and directly-impacted Illinoisans testified on how credit repair companies prey on consumers with low credit scores. These companies typically charge Illinoisans monthly fees up to $100, promising to boost their credit scores.  Many of their customers have paid $1,000 to $3,000 before giving up hope and exiting their contracts.

“Credit repair companies are just out to get peoples’ money,” says Mary Joyce Nunn, a Chicago resident who used credit repair products. “They don’t care about people who are struggling.  They removed things from my credit report that belonged to my mom, but then they promised to get a bankruptcy off my report, and that’s how they really got me. They said to just to be patient. And then months rolled by, and they keep telling me the same story. You don’t realize what’s happening until it’s too late. I didn’t know how to read a credit report, and it cost me dearly.”

Credit repair companies promise to “fix your credit” by disputing negative items on their customers’ credit report, whether the items are accurate or not. Credit repair companies make false promises that their results are lasting. However, only real inaccuracies can be removed permanently, and consumers can dispute negative items on their own for free.

Credit repair companies often dispute accurate items and because of a loophole in the Fair Credit Reporting Act of 1970, they may come off temporarily. But when accurate items are inevitably returned to a consumer’s report (when creditors re-verify the information with the credit bureaus), the consumer’s credit score will again plummet.

“When a consumer notices that an item they thought was removed is still on, they call the credit repair company to complain, and that’s when these companies engage in the most deceptive practice, as they tell consumers to “keep paying, ” so they can “get the item off for good”, says Ricki Lowitz, Founder and Co-CEO of the non-profit organization Working Credit. “Many of our clients have worked with companies over the years, and many have spent thousands of dollars on this service.”

Consumers who use credit repair services can file complaints against companies at the Office of the Illinois Attorney General and the Consumer Financial Protection Bureau. Many of the companies operating in Illinois are violating the Telemarketing Sales Rule, which requires that credit repair companies produce documentation that the disputed items have been removed from a consumer’s report for six months. No consumers should pay up-front or monthly fees before this six-month timeline.

“The Federal Trade Commission’s Telemarketing Sales Rule protects consumers from credit repair organizations that ask for money they’re not entitled to receive,” said Andrew Pizor, staff attorney at the National Consumer Law Center. “But too many providers ignore the law. We urge the Illinois Attorney General to devote more resources to enforcing the rule.”

Financial Inclusion for All Illinois leads this advocacy effort, with membership from organizations including Illinois PIRG, Working Credit NFP, Jane Addams Resource Corporation, and more. Learn more about our work to educate consumers about credit repair here.

Thursday, January 6, 2022 

COMPTROLLER MENDOZA EXTENDS COVID BREAK FOR STRUGGLING TAXPAYERS – Illinois Comptroller’s Office

SPRINGFIELD — Illinois’ continued struggle against COVID-19 leads Illinois Comptroller Susana A. Mendoza to announce that for a second year, low-to-moderate-income working families in Illinois will not have unpaid fines deducted from their state income tax refunds. 

“A year ago, we had hoped the world would be further along in the fight against COVID-19. Unfortunately, we all know that is not the case,” Comptroller Mendoza said. “Again this year, families on the financial edge are counting on their state income tax refunds to pay bills they have been putting off as COVID caused hardships.” 

Last year’s suspension of fine collections gave more than 50,000 families who qualified for the Earned Income Tax Credit (EITC) access to an estimated $18 million that would have been otherwise intercepted. Public-interest groups that advocate for poor families asked for this relief. 

“The community wants to be able to trust government during the ongoing pandemic and to do so requires a focus of care towards community members who are already experiencing severe financial hardship. Thank you to Comptroller Mendoza for suspending debt collections on families in communities experiencing hardship and for not causing further economic harm.”  Rosazlia Grillier, Co-President Emeritus POWER-PAC IL.

“We applaud the Comptroller’s decision to halt collections on people who qualify for the Earned Income Credit for another year, and hope to see similar, sustained reforms promoting financial stability for all Illinois families in the future,” said Amy Eisenstein, Coalition Manager (Heartland Alliance), Financial Inclusion for All Illinois. 

“Extending this program another year means more low-income Illinoisans will keep their full tax refunds – getting them cash at a critical time. This will help underserved communities, who are disproportionately communities of color, weather the ongoing pandemic as many households continue to struggle to pay for basic needs,” said Jane Doyle, Policy & Communication Associate, Woodstock Institute. “Woodstock Institute looks forward to seeing similar, permanent reforms to support the financial security of underserved communities beyond the pandemic.” 

“The pandemic upended the lives of Illinois families across the state, many of whom were already struggling to make ends meet,” said John Bouman, Director, Legal Action Chicago. “Comptroller Mendoza’s decision will help these families rebuild stability and will especially provide much-needed relief to low-income families of color. We hope this decision lays the groundwork for further, lasting changes to support Illinois families.”  

About 11 years ago, the Illinois General Assembly gave cities around the state the right to contract with the Comptroller’s Office to withhold unpaid traffic and parking ticket fines — as well as other court judgments — from state income tax returns. The Comptroller’s Office then sends those collections to the local governments. The Comptroller already performed that function for other state agencies, garnishing unpaid child support for instance. Those garnishments will continue to be withheld and passed on to the custodial parent. 

Two years ago, Comptroller Mendoza announced her Office would no longer withhold unpaid red-light camera ticket fines from taxpayers’ income tax refunds. That decision was made because of corruption uncovered in the red-light camera industry resulting in indictments, as well as reports showing some connected government officials got a cut of those fines. These fines also disproportionately impact low-income families. More than 90% of red-light camera tickets in many jurisdictions are not for running through red lights, but rather for failing to make a full stop during a legal right turn on red. It resulted in a net drop of nearly 87,000 annual claims against residents that would have resulted in income tax withholdings. 

For this tax year, the Comptroller’s Office will not offset state tax refunds going to families or individuals who qualify for the state EITC, which is based on the federal EITC and is a widely accepted standard for determining who is considered low or moderate income.  

For the current tax year (2021), that means a family of four, consisting of a single parent with three children, earning $57,414 a year or less. A single person earning $21,430 a year or less also qualifies. 

All the families benefitting from this policy change are, by definition, “working class.” If you do not earn income and file a tax return, this policy will not affect you. 

Here are a few things the Comptroller’s actions do NOT do: 

• This policy does not eliminate fines, but rather defers collections to help people struggling through this pandemic. This is not an amnesty. The Comptroller’s Office does not have the authority to forgive debt. 
• People still have a legal obligation to pay traffic and parking tickets and other fines. Cities can hire private collectors to collect these unpaid obligations, so the Comptroller’s Office encourages people to pay those fines. 

FOR IMMEDIATE RELEASE: NOVEMBER 10, 2021

Financial Inclusion for All Illinois: Amy Eisenstein, 630-878-9701; National Consumer Law Center Contact: Stephen Rouzer (srouzer@nclc.org)

Download the full report, state maps and state-specific information: http://bit.ly/rpt-no-fresh-start

Illinois Laws Let Debt Collectors Push Families into Poverty as Pandemic Protections Expire

National Consumer Law Center’s 50-State Review: Illinois Receives a D Rating; Consumers Need More Robust Protections from Debt Collectors

Chicago – With millions of families struggling to recover from the economic fallout of the COVID-19 pandemic, and state and federal eviction and utility shut off moratoriums coming to an end, Illinois must take steps to protect households from seizure of essential wages and property to pay old debts. 

Every state has a set of exemption laws that are intended to prevent creditors from pushing families into destitution. But a new report from the National Consumer Law Center, No Fresh Start 2021: Will States Let Debt Collectors Push Families into Poverty as Pandemic Protections Expire?, which surveys state exemption laws that protect wages, assets in a bank account, and property from seizure by creditors, finds that Illinois’s exemption laws fail to meet even the most basic standards. 

“The weak exemption laws in Illinois enable creditors to strip wealth from families, widening the racial wealth gap. Our state should support permanent pathways toward economic stability for Illinois families, not trap them in burdensome cycles of debt.” – Amy Eisenstein, Coalition Manager, Financial Inclusion for All Illinois (“FIAI”).

“Debt collectors wipe out a family’s savings and a big part of its monthly income, often acting on debts the original creditor has already written off. Nobody benefits but the collector. And the family then cannot pay its current bills, prompting a bottomless cycle of debt. There must be a better balance in this system.” – John Bouman, Director of Legal Action Chicago, a member organization of FIAI.

State exemption laws are a fundamental safeguard designed to protect consumers and their families from poverty, and to preserve their ability to be productive members of society and achieve financial security. These protections are particularly important as families struggle to regain financial stability as pandemic protections expire. Yet Illinois fails to meet two of the five most important protection standards, and receives a “C” rating in the other three.

Illinois fails to adequately:

• Preserve the family’s home—at least a median-value home; and
• Prevent seizure and sale of the debtor’s necessary household goods. 

Illinois receives a “C” rating in the areas of:

• Preventing creditors from seizing so much of the debtor’s wages that the debtor is pushed below a living wage; 
• Allowing the debtor to keep a used car of at least average value; and
• Preserving a basic amount in a bank account so that the debtor’s funds to pay essential costs such as rent, utilities, and commuting expenses are not cleaned out.

“In Illinois and other states with weak exemption laws, families will face a wave of debt collector lawsuits that force the seizure of wages and essential property,” said Carolyn Carter, associate director at the National Consumer Law Center. “Weak exemption laws will impede economic recovery and exacerbate the racial wealth gap.” 

By updating our exemption laws, Illinois can prevent creditors and debt buyers from pushing families into poverty. These protections also benefit society at large, by helping families regain their financial footing and contribute to the economy, keeping workers in the workforce, helping families stay together, reducing the demand on funds for unemployment compensation and social services, and keeping money in local communities where it will aid economic recovery. 

Financial Inclusion for All Illinois is a coalition dedicated to advancing policies and practices to narrow the gender and racial wealth divides in Illinois. Coalition members include Heartland Alliance, Legal Action Chicago, POWER-PAC IL, Woodstock Institute, LISC Chicago, Small Business Majority, YWCA Metropolitan Chicago, COFI, and many others. For more information, please contact Amy Eisenstein, Coalition Manager at Heartland Alliance, aeisenstein@heartlandalliance.org.

The nonprofit National Consumer Law Center® (NCLC®) works for economic justice for low-income and other disadvantaged people in the U.S. through policy analysis and advocacy, publications, litigation, and training.

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We are excited to announce our new name and brand: Financial Inclusion for All Illinois! We’re immensely proud of our work as the Illinois Asset Building Group and excited to progress forward as FIAI. Our work will remain the similar, with a renewed focus on gender and racial wealth disparities. 

We champion policies that will close the gender and racial wealth divides in Illinois, and do so in solidarity with and informed by communities most affected by these policies. To that end, we have opportunities to join our committees. We also value and center lived expertise in our work. FIAI has funding for a limited number of community members to join the coalition and help inform the work based on one’s own lived experience with liquid asset poverty. If you are interested in joining as a participant with lived expertise, you can fill out this form.

Our strength comes from our parent leaders, advocates, and allies that have fought tirelessly for a more just economic system that benefits all Illinoisans, provides inter-generational wealth building opportunities, and prevents wealth from being stripped from communities of color. Here’s what our Steering Committee members have to say about the change.

“I am directly impacted by some of the Wealth prevention Policies and Practices that keep some trapped in a vicious cycle of debt and prevent them from moving forward financially and humanly! I am excited about FIAI because they are on FIRE Advocating for Financial wellness for ALL especially those often not included!” — Rosazlia Grillier, parent leader with COFI / POWER-PAC Illinois

“I joined FIAI because I believe working together we can build better policies that  are equitable and can elevate the big problems with the racial wealth gap.” — Liliana Olayo, parent leader with COFI / POWER-PAC Illinois

“For pandemic recovery and beyond, it’s critical to assure equitable access to fair financial systems because it supports small and microbusinesses as the foundation for an inclusive and thriving economy while also supporting generational wealth building. As a member of FIAI, Small Business Majority is thrilled to partner with FIAI members to dismantle the systemic racial and gender barriers to economic security, in order to foster financial inclusion, grow local businesses, and strengthen opportunities for shared prosperity.” — Geri Aglipay, Midwest Director, Small Business Majority

“At LISC Chicago we believe that healthy, sustainable communities are made up of people who have living wage jobs and feel confident about their economic futures. We are a proud member of FIAI because through the work of this coalition we continue to break down barriers that impede on families ability to building financially secure futures.” — Jen McClain, Director of Financial Opportunities, LISC Chicago

“Financial Inclusion promotes financially healthy families, which in turn, promotes financially healthy communities. Families of all backgrounds deserve to live a decent life, provide for their family’s needs, to save and invest, and be able to purchase an affordable home with a fair mortgage) or live in an affordable, clean and safe rental without fear of eviction.” – Alexandria Cummings, Director of Financial Inclusion, YWCA Metropolitan Chicago

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 102^nd 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.

IABG Priorities

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 (101^st 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.

IABG Supported

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.

For Immediate Release: January 13, 2021

Contact: Abe Scarr, Illinois PIRG, abe@illinoispirg.org, 312-983-2789

Taran Volckhausen, Communications Associate, tvolckhausen@publicinterestnetwork.org, 720-212-995

Historic legislation to prevent predatory loans passes Illinois General Assembly

The Predatory Loan Prevention Act establishes a 36 percent interest rate cap on consumer loans

SPRINGFIELD, Ill. — The Illinois General Assembly passed the Predatory Loan Prevention Act today, which will implement a 36 percent interest rate cap on consumer loans, including payday and car title loans. The legislation, SB1792, which passed with a bipartisan vote in both chambers, was filed as part of the Illinois Legislative Black Caucus’ economic equity omnibus bill, and was sponsored by Rep. Sonya Harper and Sen. Chris Belt. Senator Jacqueline Collins, chair of the Senate Financial Institutions, spearheaded the broad coalition that supported the measure.

In Illinois, the average annual percentage rate (APR) on a payday loan is 297 percent, and the average APR on an auto title loan is 179 percent. Federal law already protects active-duty military with a 36 percent APR cap. This bill would extend the same protection to Illinois veterans and all other consumers. Seventeen states plus the District of Columbia have 36 percent caps or lower.

A coalition of more than 50 consumer, faith, labor, community and civil rights organizations, along with financial institutions, Secretary of State Jesse White, Treasurer Michael Frerichs, Cook County Board President Toni Preckwinkle, an and the Offices of the Illinois Treasurer and Secretary of State, support the legislation (full list at bottom). 

In response, advocates from Woodstock Institute, Heartland Alliance, Illinois PIRG, Capital Good Fund, and AARP Illinois made the following statements:

“Today is the culmination of 20 years of hard work by consumer advocates. Predatory lending has stripped billions of dollars from communities of color. In capping APRs at 36%, the Illinois General Assembly has taken a significant step towards racial justice.” — Brent Adams, Senior Vice President of Policy & Communication, Woodstock Institute. 

“Today, the Illinois General Assembly took steps to protect consumers and address the racial wealth gap by moving forward with the Predatory Loan Prevention Act. This is one giant step in the right direction toward financial security for every Illinoisan.” – Amy Eisenstein, Coalition Manager, Illinois Asset Building Group, a project of Heartland Alliance

“This legislation will ensure more Illinoisans land on their feet, not their backs, after taking out a small loan in a time of need. We applaud Representative Harper, Senator Belt, and Senator Collins for championing consumer protection and call on Gov. Pritzker to sign the Predatory Loan Prevention Act.” — Abe Scarr, Director, Illinois PIRG

“As a nonprofit providing loans that serve as an alternative to high-double and triple-digit interest products, every day we see the tremendous harm done to families by predatory lenders. We are delighted that the General Assembly has taken action to protect lower-income Illinoisians and level the playing field for equitable lenders like us.” — Andy Posner, Founder and CEO, Capital Good Fund.

“For far too long, unfair lending practices have hurt older adults across the state, especially those on low and fixed incomes, by luring them into a cycle of debt. On behalf of our 1.7 million members and all older adults in Illinois, we commend lawmakers for passing this legislation, which will protect older adults from unnecessarily high interest rates so they can focus on using their money for essential items like food, health care and medicine.” — Bob Gallo, AARP Illinois State Director.

Note: we can connect reporters to individuals with experience with predatory lending upon request

The Predatory Loan Prevention Act is endorsed by: AARP Illinois, Americans for Financial Reform, Asian Americans Advancing Justice – Chicago, Brighton Park Neighborhood Council, Capital Good Fund, Catholic Conference of Illinois, Center on Tax and Budget Accountability, Chicago Coalition for the Homeless, Chicago Jobs Council, Chicago Urban League, Chinese American Service League, Citizen Action Illinois, COFI, Col. Paul Kantwill, USA (Ret); Distinguished  Prof., Loyola Univ. Chicago School of Law, Community Renewal Society, Congressman Chuy Garcia, Consumer Federation of America, Cook County Board President Toni Preckwinkle, Credit Builders Alliance, Economic Awareness Council, Economic Security for Illinois, Elevate Energy, Faith Coalition for the Common Good, Gamaliel of Illinois, Heartland Alliance, Housing Action Illinois, Illinois Asset Building Group,  Illinois Chapter of the National Association of Consumer Advocates, Illinois People’s Action, Illinois PIRG, Junior Achievement of Chicago, Lawyers Committee for Better Housing, Lending Club, LIFT, Inc., Marketplace Lending Association, Metropolitan Family Services, New America Chicago, North Lawndale Employment Network, Northwest Side Housing Center, Office of the Illinois State Treasurer, POWER-PAC IL, Revolution Workshop, Seaway, a division of Self-Help FCU, Second Federal, a division of Self-Help FCU, SEIU Healthcare IL IN, Illinois Secretary of State Jesse White, Shriver Center on Poverty Law, The Low Income Utility Advocacy Project, The Resurrection Project, United Congregations of Metro East, Veterans for Common Sense, Voices for Illinois Children, Woodstock Institute, Working Credit NFP, YWCA Metropolitan Chicago.

Download our fact sheet to learn more.

IABG advocates for policies that close the racial wealth divide, expand savings opportunities, and protect Illinoisans from wealth-stripping financial products and practices.

Illinois’ legislative session wrapped up in early June, and for the first time in many years, Illinois took steps forward in addressing racial wealth inequity in the state. While we still need big, bold solutions to close the racial wealth divide, we are excited to share progress on many of our policy priorities, including Children’s Savings Accounts and debt collection reform. It was a very productive legislative session, so read on for all of the updates!

End Wealth-Stripping & Strengthen Consumer Protections

HB2468 â€“ Fair Lending Act: Caps interest rates on auto title loans at 36%. HB2468 received significant bipartisan support, with 43 cosponsors. It passed out of committee unanimously, but was not called for a vote in the House due to heavy opposition from the title loan industry. We will work with our coalition partners to advance the campaign in the coming months. Learn more about title loans, the legislation, and our progress this session.

Oppose HB2825 â€“ Sandbox Bill: Creates a barebones sandbox initiative, which allows companies to test “innovative” financial products without commonsense consumer protections. We worked with our partners at Woodstock Institute to oppose HB2825, which is not moving forward this year due to our opposition. This is great news for Illinoisans who won’t bear the burden of risky financial products. Learn more about innovation in financial products.

Expand Access to Higher Education

HB2237 â€“ Statewide Children’s Savings Account Program: Automatically provides a $50 seed deposit into a 529 college savings account for every child born or adopted in Illinois beginning in 2021, and gives the State Treasurer’s Office the ability to develop savings matches and incentives. With great work from our partners and the State Treasurer’s office, HB2237 passed out of the House and the Senate, and is headed to the Governor! Check out our fact sheet and press release, and stay tuned for updates as we work with the Governor to sign the bill, and partner with the Treasurer’s Office on implementation.

HB217 â€“ Ban the Box in Higher Education: Prohibits Illinois higher education institutions from asking about an applicant’s criminal record in the admissions process. HB217 did not have enough support to advance this session. We will continue working to move this forward with our partners.

Reform Burdensome Debt Collection Practices, Fines, & Fees

HB88 â€“ Debt Collection Reform: Helps Illinoisans pay off debt more quickly and build financial security. In Illinois, communities of color have twice as many individuals in collections as white communities – so this legislation will make strides in reducing the racial wealth divide. HB88 passed unanimously out of the House and Senate, and is now on the Governor’s desk. Download the fact sheet and read our press release to learn more.

SB1786 â€“ Driver’s License Suspension Reform: Prohibits driver’s license suspension for non-moving violations, including parking tickets. SB1786 passed out of the Senate, but is still awaiting a vote in the House. Check out the License to Work website for updates.

Expand Access to Safe & Affordable Financial Products

SB1332 â€“ Illinois Bank On: Creates a statewide “Bank On” program to promote access to safe and affordable checking accounts, which are the foundation for financial success. SB1332 passed out of the House and Senate, and is now on the Governor’s desk. Stay tuned for more as this program rolls out.

Strengthen Financial Security and Equity for All

SB1 – Minimum Wage Increase: It has been nearly a decade since low-income workers have received a raise. This law puts Illinois on a path to raise the minimum wage to $15/hour over the next 6 years. The first increase to $9.25/hour will happen on January 1, 2020, the second increase will occur July 1, 2020 to $10/hour, and the minimum wage will continue to increase by $1 on July 1 each year until it reaches $15. This will substantially increase the income of workers across the state.

SJRCA1 – Fair Tax: For decades, Illinois’ taxes have been inequitable, with a flat tax in the constitution. This year, SJRCA1 was adopted, which means that voters will get the chance to decide whether we keep our current flat tax system or allow for a graduated income tax. With a graduated income tax – or Fair Tax – people with higher incomes pay higher tax rates and people with lower incomes pay lower tax rates, so that everyone pays their fair share.

SB687 – Income Tax Rates Bill: SB687 outlines the tax rates that will be enacted if the constitutional amendment is supported by voters. If passed, 97% of Illinois filers will pay the same or less in taxes, and we would raise more than $3 billion a year for investments in human services, schools, and other priorities.

IABG is a project of Heartland Alliance for Human Needs & Human Rights. Our policy team at Heartland Alliance also championed a number of bills that build equity and address poverty.

First Balanced Budget in Years 

SB262 & SB1814 – FY20 Budget Bills: Illinois passed a generally balanced state budget without significant cuts in programs or budgetary gimmicks for the first time in years. Some highlights include:

• Over $100 million to DCFS for new frontline caseworkers, improved training and supervision, and rate increases for foster families and community based providers
• $1.5 million increase for community based domestic violence shelters
• $1.5 million increase for homeless youth services
• $13 million for Violence Prevention statewide
• $1.3 billion to pay down the backlog of old bills

Despite Progress, Big, Bold Solutions are Needed to End the Racial Wealth Divide

We are thrilled with the progress on issues that impact low-wealth communities in Illinois. A minimum wage increase, a statewide Children’s Savings Account program, and lighter debt burdens will help families build financial security and make steps in addressing the racial wealth divide. Thank you to our dedicated partners and legislative champions for your support this session!

However, the racial wealth divide continues to loom large. In Illinois, white families have more than 29 times the net worth of black families, and 4.7 times the net worth of Hispanic families. Moving forward, we are looking forward to working with our partners to advance bold solutions that will close this chasm.

Sign up for our emails and follow us on Twitter and Facebook to stay up to date on issues that support equity and opportunity in Illinois. 

ILLINOIS CSA PROGRAM WOULD BE THE LARGEST IN THE COUNTRY & MAKE IT 3 TIMES MORE LIKELY LOW-INCOME STUDENTS WOULD ENROLL IN COLLEGE

On a bipartisan vote of 40-15-0, Children’s Savings Account legislation (HB2237) passed out of the Illinois Senate today, bringing Illinois one step closer to making higher education a reality for more students by expanding access to college savings accounts for children when they are born. Heartland Alliance and the Illinois Asset Building Group, along with dedicated partners, has long advocated for the creation of a CSA Program.

HB2237, sponsored by Representative Robyn Gabel and Senator Pat McGuire, expands the existing Illinois Bright Start College Saving Program, so that beginning in 2021, all children born or adopted in Illinois will receive a $50 seed deposit into a 529 college savings account at birth.

“We should be helping children build a financially secure future from day one.” said Representative Gabel. “Children’s Savings Accounts provide both hope and the means to expand educational and economic opportunity for Illinois families.”

A small amount of savings can have a substantial impact on whether or not a child attends and graduates from college. Research indicates that children from low-income households with college savings of $500 or less, are three times more likely to enroll in college and four times more likely to graduate, than those without college savings accounts.

“This program removes barriers to saving for college and supports a family’s aspirations for their child’s future,” said Jody Chong, Project Manager for Heartland Alliance. “The 65 CSA programs around the country have shown us that CSAs are a powerful tool. We are excited for Illinois to join that list of communities helping its children access higher education.”

Illinois State Treasurer Michael Frerichs, who is championing this initiative and whose office will implement the program, can work with local government, community foundations, and other partners to create matched savings incentives and other opportunities for low-income families.

“We are excited to provide this opportunity for children in Illinois. Every child should have an opportunity to afford to attend college,” Illinois State Treasurer Michael Frerichs said. “A child is three times more likely to attend college if they know a college savings account has been set up in their name. Starting a college savings account will put our children on the road to success.”

“A $50 investment in every Illinois newborn will reap great rewards for that child and our entire state. The investment will stimulate saving for college by parents. It will let kids know that we believe them to be college material. And putting college within more families’ reach will help close our state’s income gap, upskill our economy, and produce healthier, more civically-engaged Illinoisans,” said Senator McGuire.

If signed into law by Governor Pritzker, Illinois will become the largest CSA program in the country, joining a number of states that are leveraging their existing 529 College Savings Plans to help families save for college.

“This moment is more than 10 years in the making! We as parents understand and have been spreading the word about the impact that college savings can have on our children’s mindsets. This program will help them get excited and determined to go to college and we are glad that the state can now work with us to help make our dreams a reality,” said Rosazlia Grillier, Co-President of POWER-PAC Illinois.

Speaking about the importance of saving, Reemaa Konkimalla, a parent in Chicago, said, “Savings are very important to me, as a woman, wife , mother and a family budget planner. I learned the value of savings at a very young age and it has remained with me ever since. Hence when I became a mother it was important that my son at a tender young age understand and value the importance of money and how best one can save and accumulate wealth.”

The bill adopts policy recommendations from the bipartisan Illinois Children’s Savings Account Taskforce and from Heartland Alliance’s report on CSAs in Illinois. The Illinois CSA program will be a public-private partnership, and we anticipate that it will be supported with funding from both governmental and private philanthropy sources.

“Fostering early childhood development and expanding opportunities to obtain postsecondary education and training for all Illinois children through a Children’s Savings Account program is a dream come true,” said Woodstock Institute President Dory Rand. Rand served as a co-chair of the Illinois Children’s Savings Account Task Force created by the Illinois General Assembly in 2009. “I saw the promise of these programs when I administered the first CSA program in Illinois from 2004 to 2007. Since then, a growing body of research has documented the positive impacts for kids and families of these programs.”

View the factsheet for more information.