March Legislative Update

This legislative season there are a number of asset building and asset protection bills before the Illinois General Assembly. Here’s our March Legislative Update:

Automatic IRA (SB3278 / HB4497)

IABG is working to educate legislators about asset poverty and the role of retirement savings in building financial stability over a lifetime. This session, IABG introduced Automatic IRA legislation (SB3278 / HB4497) that would require businesses of a certain size to provide access to a retirement savings plan. As the wealth gap in Illinois grows so does the need for an Auto IRA program. This innovative proposal could bridge the retirement savings gap and help low- to moderate-income workers save for their retirement. While the bill did not move out of committee, IABG plans to continue educating legislators through subject matter hearings later this spring.

Car Title Loan Reform (HB 4603)

IABG also supported the efforts of our partners at Illinois People’s Action to protect borrowers from abusive car title lending. HB 4603, which limits interest on car title loans, failed to make it out of House committee, a disappointing setback that keeps Illinois in the minority of states allowing predatory lending at triple-digit rates. However, there are a number of other consumer protection bills that remain alive, including regulations on refund anticipation loans (SB3523).

Internet & Out-of-State Payday Lenders (HB3935)

On February 22nd, the Illinois House passed HB3935 – a measure that would crack down on non-licensed payday lenders. State Representative Greg Harris, sponsor of the proposal, said, “This legislation will provide protections for Illinois residents against the illegal and abusive lenders who operate outside of the law.” He introduced the bill after hearing about foreign companies that offered individuals loans online and left many borrowers in a destructive cycle of debt. HB3935 amends the Consumer Installment Loan Act. The bill now moves to the Senate.

Debtor’s Prison (HB 5434 & HB4695 / SB3234)

Debtor’s prisons are once again a growing problem in our state. Borrowers taking out consumer installment loans who fail to appear in court after missing payments, can be arrested and imprisoned. There are two measures currently before the general assembly that would address this problem. HB 5434 would eliminate the practice of “pay or appear” for low-income borrowers. HB4695 / SB3234 would prohibit creditors from requesting the arrest of borrowers who cannot pay and require them to develop an internal policy regarding the prevention of debtor incarceration.

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