March 10, 2019
CHICAGO — Comptroller Susana A. Mendoza is releasing a digital video today encouraging passage of her bill to give more Illinoisans access to banking services.
More than a fifth of Illinois households conduct their financial business outside of the traditional banking system, according to a 2015 report from the Federal Deposit Insurance Corporation (FDIC). Unbanked individuals often use predatory lenders such as auto title lenders, check cashers, payday lenders and pawnshops, which charge exorbitant fees for basic services, like check cashing, and high interest rates on lending.
The Brookings Institute found that, on average, a full-time worker who doesn’t use traditional retail banking products is charged roughly $40,000 in lifetime fees. Low-income and immigrant consumers are more vulnerable to being targeted with long-term fees.
Senate Bill 1332 would expand access to banking in Illinois by using “Bank On,” a proven, national model which aims to connect these consumers with reliable, affordable and equitable financial products -- liberating them from predatory lenders.
Bank On programs certify products that provide fair financial service options such as no maintenance fees, low minimum deposits, low or no overdraft fees and alternative IDs. They also provide secured personal loans — low-risk lending that allows consumers with low credit scores to begin rebuilding their credit.
SB 1332 would create a Bank On program in the Office of the Comptroller. Under this program, the Comptroller would partner with governmental entities, representatives of the community and financial institutions to certify financial products for low-income customers and promote the program throughout Illinois.
The bill is sponsored in the Senate by Senator Cristina Castro, D-Elgin. Representative Jehan Gordon-Booth, D-Peoria, will sponsor the bill in the House of Representatives.
View full video here.
You can download a PDF of this release here.