A group of Illinois state legislators want to lower check cashing rates at currency exchanges — while the industry is pushing to raise those rates.
Last summer, the industry told Illinois’ financial regulator it hadn’t been allowed to increase service fees since 2007, and the time had come for a raise.
But Democratic state Senator Linda Holmes of Aurora says that doesn’t make sense — especially when it comes to cashing government assistance checks.
“We’re taking the money out of the pockets of the families that need it most, and that is costing the taxpayers who are paying for these," she said. She’s sponsoring legislation that would lower currency exchange rates for those kinds of checks, from 2.5 percent to just half a percent.
State Senator Jacqui Collins (D-Chicago) explained currency exchanges, rather than banks, are often the only place people on public assistance can get money.
“Many of the low-income individuals cannot access those services because their employment might be sporadic, they’re under-employed, and so they can’t put the minimum in to open an account," she said.
The proposal would also keep fees on payroll checks from going up.
Meanwhile, a legislative panel that reviews rule changes postponed a vote on whether to accept or reject the proposed rate increase.