On a vote of 55-0-0, the Consumer Fairness Act of 2019 (HB88) passed out of the Senate today with unanimous and bipartisan support. This legislation brings long-overdue relief to consumers who are trying to pay off their debts and achieve financial stability.

“The Consumer Fairness Act gives a fighting chance to thousands of Illinoisans who, up to this point, have been faced with the crippling reality of years of debt accumulation with a 9% interest rate,” said Kevin Herrera, staff attorney at the Sargent Shriver National Center on Poverty Law. “Critically, this new legislation also provides clarity around the debt collections process, letting people know what debts are being collected on ─and how long the collections process will last ─ sooner. We are thrilled that Illinois is on its way to joining several other states around the country in leveling the playing field between people who owe judgment debts and the collections industry.”

Nearly one in five Illinois consumers have debt that is in collections.[1] For decades, Illinois’ laws have made it difficult for families to pay their debts while also meeting their basic needs because the automatic interest rate on judgments is set so high, at 9%. As a result, Illinois has one of the highest bankruptcy rates in the country.[2]

Moreover, the burden of debt falls disproportionally on communities of color. In Illinois, predominantly nonwhite communities have twice as many individuals in collections as in predominantly white communities.[3]

“The racial wealth divide is massive in Illinois, with white households having 29 times more net worth than black households,” said Jody Blaylock, Project Manager for Financial Justice Policy at Heartland Alliance. “HB88 is an important step towards closing that divide by helping families get out of debt and build financial security.”

A coalition of legal aid and community organizations, along with Representative Will Guzzardi and Assistant Majority Leader Senator Iris Y. Martinez, led efforts to pass HB88 in the Illinois General Assembly to help consumers who are stuck in debt.

“With debt judgments collecting 9% interest for up to 26 years, debt is plaguing families across this state,” said lead bill sponsor Representative Will Guzzardi. “This legislation brings much-needed relief to Illinoisans who are trying to balance their budgets and get ahead.”

“The people of Illinois deserve the opportunity to get ahead,” said Assistant Majority Leader Senator Iris Y. Martinez, lead sponsor for the bill in the Senate. “I am proud to sponsor this legislation, which will help low-income families become financially stable.”

Under our current law, judgments accrue 9% interest for up to 26 years and the Consumer Fairness Act of 2019 is an important step towards giving all Illinoisans the opportunity to thrive by decreasing the post-judgment interest rate from 9% to 5%, and decreasing the timeframe to collect on a debt from 26 to 17 years. Taken together, these reforms will make debt more manageable and help families more quickly balance their budget and build financial security.

“Debt collection laws should reflect modern realities and treat everyone fairly,” said Ashlee Highland, Supervising Attorney at CARPLS. “The changes in HB88 will allow many of our clients to pay off their judgments rather than being saddled with financially debilitating wage garnishments, or filing for bankruptcy.”

A coalition of legal aid and community organizations urges the Governor to sign HB88 into law, ensuring that Illinoisans have a fair shot at paying their debt.

Check out the fact sheet for more information.

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[1] Federal Reserve Bank of New York/Equifax Consumer Credit Panel, tabulated by the Federal Reserve Banks of Philadelphia and Minneapolis and accessed via the Consumer Credit Explorer (date accessed: May 2, 2019). Found at: https://www.philadelphiafed.org/eqfx/webstat/index.

[2] Prosperity Now Scorecard. 2019. Found at: https://scorecard.prosperitynow.org/data-by-location#state/il

[3] Illinois Debt Collection Fact Sheet. National Consumer Law Center. 2018.

By Sarah Martin, Policy & Advocacy Intern for Heartland Alliance

IABG advocates for policies that address the growing racial wealth divide, expand savings opportunities, and protect Illinoisans from wealth-stripping financial products and practices. Since the legislative session began in January, we have supported bills in the Illinois General Assembly that would cap interest rates on title loans, create universal children’s savings accounts, reform debt collection practices, and more. Here is an update on our 2019 policy priorities.

Strengthen Consumer Protections

HB2468 – Fair Lending Act: Caps interest rates on auto title loans at 36%.

HB2468 has received significant bi-partisan support from legislators, and currently has 42 co-sponsors. It passed out of committee unanimously and is waiting to be called for a vote on the Floor of the House. Learn more about the bill.

Oppose HB2825 – Regulatory Sandbox Act: Creates a barebones sandbox initiative, which allows companies to test “innovative” financial products for one year without commonsense consumer protections

Due to our opposition, HB2825 is not moving forward this year. This is great news for Illinois consumers who won’t bear the burden of companies testing risky financial products. 

Expand Access to Higher Education

HB2237 – Universal Children’s Savings Accounts: Automatically provides a $50 seed deposit into a 529 college savings account for every child born or adopted in Illinois and gives the State Treasurer’s Office the ability to develop savings matches and incentives.

After a lot of great work from IABG partners and the State Treasurer’s office, HB2237 passed out of the House and is now in the Senate Appropriations II committee. Read more about the bill, and stay tuned for future action alerts.  

HB217 – 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 campaign forward in the coming months.

Reform Burdensome Debt Collection Practices, Fines, & Fees

HB88 (Previously HB281) – Debt Collection Reform: Lowers the post-judgment interest rate and decreases the time frame to collect on a judgment.

HB88 passed unanimously out of the House and is currently in the Senate Judiciary committee. Download the fact sheet to learn more about the legislation.

SB1786 – Driver’s License Suspension Reform: Prohibits driver’s license suspension for non-moving violations, including parking and tollway violations.

SB1786 passed out of the Senate, and has been assigned to the Transportation: Vehicles & Safety Committee in the House. Check out the License to Work website for more information.

Expand Access to Safe & Affordable Financial Products

SB1332 – Illinois Bank On: Creates a statewide “Bank On” program that promotes access to safe and affordable checking accounts, which are foundations for financial success.

SB1332 passed out of the Senate unanimously, and is now in the House. We will keep working to advance the bill this session.  

More to Come

We have made some great advances so far this legislative session, and there is still a lot of work to be done to advance economic stability for all Illinoisans. Sign up for our emails and follow us on Twitter and Facebook to stay up to date and receive action alerts for these bills that support equity and opportunity in Illinois. 

This year, we are continuing our campaign to pass the Fair Lending Act (HB2468), which caps interest rates on car title loans at 36%. This legislation was introduced in the Senate last year, but did not have enough support to move forward due to strong opposition from the auto title lending industry.

We just reached a big milestone — the House Executive Committee voted unanimously to pass the bill out of committee! The bill is spearheaded by Rep. Chris Welch and Leader Kimberly Lightford and has strong bipartisan support.

Billie, a member of Illinois People’s Action, gave testimony in the committee hearing about her experience taking out a title loan. She shared a copy of her loan contract with the committee that showed that she was expected to pay over $3000 for the $595 she borrowed, due to the predatory 304.17% interest rate.

We urge members of the House to support HB2468 to cap interest rates on title loans at 36%, so that borrowers like Billie are no longer trapped in debt and at risk of losing their cars.

Take Action!

Help us fight predatory title loans by contacting your state representative and asking them to cosponsor HB2468. You can find the contact information for your state representative here.

You can download the fact sheet to learn more, and your organization can still sign on in support of the legislation. Email Jody at jblaylock (at) heartlandalliance.org if you would like to get more involved!

By Sarah Martin, Policy & Advocacy Intern for Heartland Alliance

Prosperity Now’s annual Scorecard provides an overview of American households’ financial health. The Scorecard assesses the 50 states and District of Columbia on 53 outcomes focused on five categories: financial assets and income; businesses and jobs, home ownership and housing; health care; and education.

The new data continues to show that Illinois has work to do to improve financial security for all Illinoisans, but particularly for Illinoisans of color. While Illinois sits near the middle of states in its overall Scorecard ranking, this average score masks significant disparities in outcomes between white residents and residents of color.

New to this year’s Scorecard is a racial disparity rank, which highlights how wealth and financial well-being is not equally shared amongst people of different races. In Illinois, racial disparities exist for all 26 measures.

Racial disparities exist for all reported outcomes.

 

Key findings from this year’s Scorecard show us that many families in Illinois do not have financial security.

Illinois families are ill prepared to handle a financial emergency.

Three in 10 households would not have access to sufficient resources to put food on the table, pay their rent, and cover their car payment if they experienced a loss of income. This number doubles for black households, where 6 in 10 families experience liquid asset poverty.

Illinois continues to have one of the highest bankruptcy rates in the nation.

Illinois ranks 47^th in the nation for our bankruptcy rates. Bankruptcy often stems from a financial emergency, which may start as a parking ticket, job loss, or illness resulting in increasing debt. In Illinois, our debt collection practices can push more Illinoisans into filing for bankruptcy as Illinois law does not adequately protect individuals’ homes, vehicles, or bank accounts from debt collection.

Income inequality remains high.

The richest 20% of households in Illinois make five times as much as the poorest 20% of households. Wages have continued to stagnate for low-wage earners, and 1 in 5 residents has a low-wage job. Low-wage work puts families in a challenging financial position, where they may be unable to meet their basic needs or find they are one small emergency away from falling into poverty. Illinois has not taken steps to ensure that all workers are paid a living wage.

What Can Be Done?

It is clear from the Scorecard data that Illinois needs to improve the financial well-being of its residents.  Out of the 28 policies recommended by Prosperity Now to support financial security, Illinois has enacted less than half of them. However, it is clear that racial equity drive any policy or programmatic changes. Any actions taken to improve the financial security of Illinois residents must also work to close the racial wealth divide.

In the 2019 legislative session, legislators should prioritize increasing the minimum wage, capping interest rates on predatory title loans at 36%, reforming our debt collection laws, and passing legislation to create a statewide Children’s Savings Account program.

Check out our policy agenda to learn more about policies we’re advancing to close the racial wealth divide and help all Illinoisans thrive.

To learn more about the Scorecard, take a look at Illinois’ 2019 Scorecard Profile and read Prosperity Now’s main findings.

By Sarah Martin, Policy & Advocacy Intern for Heartland Alliance

Nationwide, the poverty rate for adults with disabilities is more than twice as high as those without disabilities. If we hope to address this disparity and enhance financial stability for people with disabilities, it is crucial that they have access to banks and financial services that meet their needs.

Part one of this series outlines some of the barriers people with disabilities face when trying to access financial services. In this post, we’ll share steps banks, credit unions, and organizations can take to make financial services more accessible for people with disabilities.

Reduce Physical & Online Barriers

Reducing barriers may seem like an obvious suggestion, but there are many buildings that do not comply with the 2010 ADA accessible design standards. A building may be constructed to meet accessible design standards, but can still become inaccessible due to poor furniture placement, audio/visual systems that don’t work, or ramps that need repairs. Websites and mobile apps also regularly fail to meet the ADA and Web Content Accessibility Guidelines. The initial website or app may be tested for accessibility, but updates, new features, or technology bugs may mean that people with disabilities are no longer able to use the website or app to access financial services.

Education

Financial education is not a standalone solution to increasing access and inclusion for people with disabilities, but it is an important component. Financial education for people with disabilities may involve one-on-one coaching or interactive online courses, and ideally should be tailored to work with each person’s abilities. The employees of financial institutions also need to receive targeted education and training focusing on disability benefit rules, relevant financial products, available accommodations, and customer service.

Inclusive Financial Products

People with disabilities comprise over 12% of the adult population in the United States and are estimated to hold over $645 billion in disposable income. However, existing financial products are not fully meeting the needs of individuals with disabilities. There are some excellent products, such as ABLE accounts, that are specifically meant to help people with disabilities build savings. Unfortunately, many people with disabilities do not benefit from these products because they do not know they exist. Financial institutions, governmental agencies, and community organizations need to promote existing products and dedicate resources to developing new financial products and services for people with disabilities. New financial products may include loans to help people purchase assistive technology or expanding the SMS platform to allow mobile banking via text.

Collaboration

Creating financial products for people with disabilities is only the first step. Collaboration between the government, financial institutions, and organizations that provide support for people with disabilities is needed to ensure that products work with federal disability programs, people know about the products, and they know how to participate. This collaborative work must involve the direct input and support from people with disabilities in order to be effective and ensure that solutions are actually meeting people’s needs.

Learn More

These are just a few of many recommendations to improve banking access for people with disabilities. To learn more, read our memo to the Financial Advisory Council for the Empowerment of People with Disabilities (FACED).

By Sarah Martin, Policy & Advocacy Intern for Heartland Alliance

In Illinois 1 in 5 households is not engaged with the financial system. These families are either completely unbanked, meaning they have no traditional checking or savings accounts at a bank or credit union, or underbanked, meaning they have a traditional account but still rely on alternative financial services such as pawnshops or currency exchanges. For people living with disabilities, that number is estimated to double, at 2 in 5 households.

This reveals the unique challenges individuals with disabilities face when it comes to accessing banking services. We believe that everyone should have access to safe and affordable financial products that help them build financial security. Given the unique barriers faced by individuals with disabilities, financial institutions and other stakeholders should make efforts to provide safe and affordable services that meet the needs of people with disabilities.

In this first part of a 2-part blog series, we’ll highlight the barriers individuals with disabilities face in the banking system.

Unique Barriers Facing Individuals with a Disability

In Person and Online Access to Banking

People living with a disability experience challenges accessing banks and credit unions both in person and online. People with a disability may have mobility limitations, which can be worsened when someone doesn’t have a car or reliable public transportation. What’s more, low-income individuals are more than twice as likely to live in a banking desert where there is no physical bank branch within 10 miles. Combine that with potential mobility limitations, and many are left with no options.

While online banking can eliminate the physical barriers to banking, there are hurdles to accessing services online as well. First, only 61% of people with a disability report even owning a computer and 58% report owning a smartphone. That leaves a substantial portion of people without easy access to online services.

Those who do have access to the internet may encounter banking websites that do not meet ADA guidelines. People with disabilities have a range of auditory, cognitive, physical, speech, and visual abilities, which may not be accounted for in all sections of a website or are lost in website updates. Even with assistive technology such as screen readers, a poorly designed website can make it difficult or impossible to successfully use online financial services.

Financial System ≠ Financial Reality

The existing financial system does not support the financial reality of many people living with a disability. People living with a disability may have limited and unstable income due to the low benefit levels of assistance programs, high medical expenses, and jobs that are low-wage or temporary. Having limited or unstable income can make maintaining a checking account challenging because banks or credit unions often require you set up a direct deposit or maintain a minimum balance.

People with disabilities may also experience barriers to saving or participating in asset building programs. For example, many matched savings programs require earned income, which individuals with disabilities may not have. As a further restriction on savings, people who receive Social Security Income may be subject to an asset limit – meaning they will lose their benefits if their assets exceed a certain amount.

Learn More

While these barriers are substantial, there are steps that can be taken today to change this. In the next part of this series, we’ll outline steps that financial institutions can take to make financial services more accessible for people with disabilities.

For more in-depth information about financial inclusion for people with disabilities, read our memo to the Financial Advisory Council for the Empowerment of People with Disabilities (FACED).

We are facing a national retirement savings crisis. Increasingly, older adults do not have enough savings to meet their basic needs in retirement, and younger adults do not have the money or the tools to build retirement savings. Here in Illinois, over 2.5 million workers in Illinois lack access to an employment-based retirement plan, an important tool to build wealth.

IABG led the campaign to address this crisis, and with the help of our partners, Illinois became the first state to enact Secure Choice legislation in 2015. This legislation creates a program that will automatically enroll workers at qualifying businesses in a retirement plan, and we are excited to see it come to life as it rolls out this year.

Secure Choice Pilot Program Launches!

The Secure Choice pilot program is now underway, and individuals at a number of employers are now using it to build retirement savings! The pilot program began in the spring, and the first contributions were made last month.

Eight employers from varying industries are currently enrolled in the program, including a home health agency, staffing company, and a restaurant. The Illinois State Treasurer’s Office, who administers the program on behalf of the Secure Choice Board, is working with these employers to refine the enrollment process and make the program as simple and easy-to-use as possible for the full roll out in the fall.

How Secure Choice Works

Workers at qualifying businesses – businesses that have been operating for at least two years, employ 25 or more workers per year, and don’t already offer a qualified retirement savings option – will be automatically enrolled in the program. Workers can opt out of the program at any time.

Workers that choose to participate will save a portion of their paycheck into a Roth IRA through automatic deductions from their paycheck. Workers may choose an account type and determine their level of contribution. If workers choose the default option, they will contribute 5% of every paycheck to a target date life-cycle fund.

The Timeline

The first wave of enrollment, and the official launch of Secure Choice, will be in November 2018, with the largest employers enrolling in the program. Workers at these employers will see the first payroll deductions in January 2019. All eligible workers will be enrolled in Secure Choice by 2020.

Learn More and Spread the Word

With workers now being enrolled in Secure Choice, it is time to spread the word about this new retirement savings program so that workers and employers throughout Illinois can take part in this wealth building opportunity!

Learn more at the Secure Choice website, and use our fact sheets in English, Spanish, Polish, Arabic, Chinese, and Tagalog to raise awareness in your community and equip workers with the information they need about the program.

We’ll soon be announcing two webinars about Secure Choice, so sign up for our e-news to get the details!

This blog post is written by Katherine Liu, Communications Intern with Heartland Alliance.

 

IABG held its first biannual Coalition Connection meeting last month. These new coalition meetings provide opportunities to network with asset building practitioners and community leaders, learn about financial capability programs, and work together to advance policies that support the financial prosperity of Illinois families.

After an icebreaker (fueled by M&Ms and a shared commitment for equity and economic security) and a presentation on Secure Choice, a new retirement savings program, we split into breakout conversations where topics included everything from financial coaching models to fines and fees, cryptocurrency and the digital divide, and new policies that will affect Illinois families.

See the full agenda to view all of the breakout sessions and learn more.

 

Session Close-up: New Policies Affecting Illinois Families

I attended the breakout conversation on new policies that will impact Illinoisans. It was facilitated by United Way of Metropolitan Chicago’s Ayom Siengo, who was joined by Brent Adams from the Woodstock Institute and Kim Drew from Heartland Alliance. They shared four important policies that will be rolling out this summer and fall, and what you can do to support each policy.

1. SNAP Eligibility Expansions

SNAP (Supplemental Nutrition Assistance Program) eligibility has been expanded to community college students enrolled in certain career and technical education courses of study. Approximately 40,000 new community college students are now eligible for SNAP. These students include those from SNAP-eligible families who did not previously qualify and individuals who are at school and employed part time or more.

What you can do: Get the word out to your participants, organizations, and organization partners so that newly-eligible students can learn about this policy change and enroll in SNAP!

 

2. TANF Cash Grant Increases

The new budget implementation bill increases Temporary Assistance for Needy Families (TANF) grant amounts from the current level (on average 22.25% of the Federal Poverty Level or FPL) to 30% of the FPL.

What you can do: Families receiving TANF will automatically see an increase in their grant amounts on October 1, 2018. However, there has been a decline in the uptake of TANF, and some eligible families are even discouraged from applying. You can help by making sure that caseworkers know the TANF eligibility requirements and actively encourage families to apply. You can also read the press release about the TANF increase.

 

3. Rate Changes at Currency Exchanges

On July 1, currency exchanges were required to decrease their current check cashing rates for public assistance checks to 1.50%. Previous rates were 1.40% + $1 for public assistance checks $100 and below, and 2.25% for public assistance checks above $100. For other types of checks, some may see an increase to the check cashing rates.

What you can do: While the rate decrease for public assistance checks is an important move in the right direction, use of currency exchanges is still not ideal. In that regard, you can encourage community members who are unbanked and/or underbanked to open safe, affordable accounts with financial institutions that support low/moderate income communities — such as partners of Bank On Chicago.

 

4. Changes at the Consumer Financial Protection Bureau

The federal Consumer Financial Protection Bureau‘s current leadership is not supportive of strong consumer protections. While these changes don’t have an immediate impact on consumers, the Bureau’s actions send a signal to predatory businesses like payday lenders that consumer violations are okay. Thankfully, most of the Bureau’s consumer protection authority remains intact.

What you can do: To increase the likelihood a complaint is addressed, encourage participants to file consumer complaints with both the Illinois Attorney General’s Office and the Consumer Bureau.

 

We are so grateful to everyone who joined us for this first coalition meeting. We hope that you’ll join us for the second Coalition Connection meeting, which will be held outside of Chicago later this year. More information is to come, so in the meantime, sign up to receive our emails so that you’ll be the first to know about the next meeting and also receive asset building information and resources every month.

IABG, a project of Heartland Alliance, advocates for policies that address the growing racial wealth divide, expand savings opportunities, and protect Illinoisans from predatory financial products and practices. Our legislative efforts looked to ensure that ALL can achieve equity and opportunity. Illinois’ regular legislative session concluded at the end of May, and we saw progress on many of our policy priorities.

IABG Priorities

SB2843 – The Fair Lending Act: Caps interest rates on car title loans at 36%. Interest rates on title loans can be as high as 360%, stripping wealth from families and causing thousands to lose their car every year. The bill gained significant support, but ultimately did not have enough support to advance this session. We will continue working to move this campaign forward in the coming months and years. Read more about the campaign’s progress and how you can get involved.

SB1246 â€“ Protect Savings for Individuals with Disabilities: Protects ABLE accounts, new savings accounts for people with disabilities, from debt collection attempts. SB1246 passed both the House and the Senate unanimously, and is heading to the Governor’s desk. Read more about the bill.

Legislation we Supported

SB2433 – Check Cashing Fairness Act: Establishes that the impact on consumers must be considered when determining check cashing rates. SB2433 passed the House and the Senate, and is on its way to the Governor.

HB4095 – Free Credit Freezes: Makes credit freezes free for Illinois residents. The bill passed with strong bipartisan support and is currently on the Governor’s desk.

SB2439 – Student Debt & Professional Licensing Bill: Prohibits professional license revocation due to student debt. The bill passed out of both chambers and is headed to the Governor.

HB3142 â€“ Ban the Box in Higher Education: Prohibits Illinois higher education institutions from asking about an applicant’s criminal record in the admissions process. The legislation passed through the House and Senate committee, but still needs to pass the full Senate. We will work to advance the bill in the coming months.

SB2411– License to Work Act: Prohibits driver’s license suspension for non-moving violations, those that have nothing to do with driving. The bill passed out of the Senate with bipartisan support and is now in the House. We will continue to work with the coalition to build support for and advance SB2411.

HB4594 – Reforms Court Fines & Fees: Makes court fines and fees more transparent and consistent, and provides relief from burdensome fines and fees for low-income Illinoisans. The bill passed both houses and will head to the Governor’s desk.

We also provided support for a number of other initiatives, including efforts to reform debt collection, lower the cost of Peoples Gas, and rein in predatory alternative energy suppliers that deceptively increase the cost of utilities that families need to survive. These bills faced significant opposition and did not make it to the finish line this year. We will continue to support these and other efforts to fight predatory practices that strip wealth from Illinois families.

Heartland Alliance Priorities

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

SB3115 – Increasing TANF Cash Grant: Increases the Temporary Assistance for Needy Families (TANF) cash grant amount. SB3115 passed out of the Senate and garnered significant support in the House. Ultimately, we were able to gain bipartisan support for including a grant increase into the budget implementation bill (BIMP) – HB3342. The BIMP increases grant amounts from the current level (on average 22.25% of the Federal Poverty Level or FPL) to 30% of FPL.

HB5341 – Expanding Sealing Eligibility: Makes clear that judges may not deny a petition to seal criminal records because an individual has outstanding fines and fees owed to the court. The bill passed both chambers and is on its way to the Governor’s desk.

State Budget Progress

For the first time in several years, the General Assembly has passed a full-year state budget that was signed into law by the Governor this week. While it will take Illinois years to recover from the budget impasse and we still have a multi-billion dollar backlog of unpaid bills, this budget agreement is the first step towards economic stability for the state. We hope that lawmakers will continue on this path of stability, and that they will embrace a Fair Tax in future years to generate the revenue we need in an equitable way.

More to Come

There is much more work to come on many of our policy priorities. In particular, we will continue to advocate for a 36% interest rate cap on title loans, and push for a universal Children’s Savings Account program in Illinois. Sign on in support of our title loan campaign today, and sign up for our emails to receive updates and action alerts on our work.

We would also like to thank our dedicated partners and legislative champions for their support this session, and we look forward to working with them so that we can continue to support equity and opportunity in our state.

 

 

Earlier this year, we kicked off a campaign for the Fair Lending Act (SB2843), which caps interest rates on car title loans at 36%.

Car title loans prey on Illinoisans with crippling interest rates as high as 360%. These loans trap consumers in debt they can’t repay, and as a result, thousands of people lose their car every year, a critical source of transportation to school and work. In Illinois, about 10% of individuals who take out a title loan end up losing their car.

Our 2015 report on title lending documented the abuses of these loans. One borrower featured in the report owed more than $15,000 dollars for just $2,500 in title loans.

Twenty eight states, including nearby Indiana and Michigan, either cap interest rates at 36% or less, or ban title loans altogether. It is beyond time that Illinois follow suit.

The Fair Lending Act (SB2843) was introduced in February, spearheaded by Sen. Kimberly Lightford and Rep. Christian Mitchell. It has gained significant support in its first year, with 24 Senate cosponsors and nearly 30 community organizations, veterans groups, and national organizations in support. Download the fact sheet to learn more and see the list of supporters.

The campaign also received attention in the media, including pieces by WBEZ, NBC, NPR Illinois, WCIA, and others.

 

Join Us As We Move Forward

Despite all of the momentum we gained, the bill did not have enough support to move forward this year. The title lending industry does not want this bill to pass. 300% interest rates generate hundreds or even thousands of dollars in profit for the industry on every single loan.

We will keep fighting for a 36% interest rate cap, so that interest rates for Illinois title loans are fair. We will be working with our coalition partners to advance the campaign in the coming months.

We need more organizations pushing for fair interest rates! Sign on in support of the campaign as we continue to move forward.

Do you have a story to share about an experience you’ve had with a title loan? If you have lost your car, face financial hardship due to an auto title loan, or have had any other type of negative experience with auto title lending, email Jody if you have a story you want to tell. We want to hear from you!

 

The Fair Lending Act steering committee includes Illinois People’s Action, Illinois PIRG, the Chicago Urban League, the Shriver Center, AARP Illinois, Reimagine Illinois, and the Woodstock Institute. We are grateful for their ongoing commitment to this campaign.