A full-time worker who doesn’t use traditional banking faces about $40,000 in lifetime fees.  

SPRINGFIELD, IL — Illinois Comptroller Susana A. Mendoza’s bill to give more Illinoisans access to banking services was introduced in the Senate today by sponsor Senator Cristina Castro. 

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 take their financial business to predatory lenders such as auto title lenders, cash checkers, 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, in exchange for low-information lending documentation. 

“My office offers workshops all over the state that advise people on how to get their finances in order, but many Illinoisans lack access to the basic tools they need to do that,” Comptroller Mendoza said. “Many of us take for granted being able to cash a check at our bank, open a savings account to plan for our family’s future or secure a loan at a reasonable interest rate. But thousands of Illinoisans don’t have these options, and they pay for it in inordinate fees and sky-high interest rates. This legislation will help them break that cycle and offer a second chance to those with troubled financial histories to get back on the right track.” 

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.  

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.  

“Many in our state cannot meet the requirements to get a bank account, such as startup fees or a large minimum deposit, or they lack the needed identification or credit score. This leaves them vulnerable to predatory lenders and ends up costing them so much more in the long run,” Senator Castro, D-Elgin, said. “Senate Bill 1332 will shield low income families from excessive fees and give them the tools they need to help secure their financial futures.”  

Representative Jehan Gordon-Booth will sponsor the bill in the House. “Members of our communities who lack access to banking fall prey to predatory lenders and end up paying high fees for basic services, like cashing their paychecks. They get caught in a cycle of ridiculously high interest rates and fees that they can’t escape,” said Representative Gordon-Booth, D-Peoria. “Providing access to banking services and low-risk lending options to rebuild credit are the first steps to helping low-income residents plan for their futures and find a path out of poverty.” 

Lack of access to traditional banking is a problem in both rural and urban areas all over the state. Cook County has a combined unbanked and underbanked rate of 29.6%. Alexander County has a rate of 35.6%, Pulaski County’s rate is 32.8% and Macon County’s rate is 34.9%.  

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. 

“This is a true, holistic approach to dealing with predatory lending and the under-banked in Illinois. I appreciate the effort to address these issues not just in cities, but in rural areas as well, and I look forward to helping roll out this program across the state,” Fulton County Treasurer Staci Mayall said.  

Comptroller Mendoza, Senator Castro, and Representative Gordon-Booth are joined in their efforts by banking groups, community advocates and local government officials who support SB 1332.  

“Community Bankers are dedicated to providing outstanding service to our customers by reducing barriers and increasing access to financial products and services.  The Community Bankers Association of Illinois is proud to partner with Comptroller Susana Mendoza to highlight the availability of services to un-banked and underserved Illinois consumers in the hopes of providing greater access to mainstream financial services,” said Jerry Peck, Senior Vice President of Governmental Relations at the Community Bankers Association of Illinois.  

“More than 1.6 million Illinoisans are experiencing poverty, and many more are just one emergency away from financial crisis,” says Jody Blaylock, Project Manager for Financial Empowerment Policy at Heartland Alliance and the Illinois Asset Building Group. “A statewide Bank On program is a promising step forward that will help low-income families and families of color access affordable checking accounts and get started on the path to financial security.”

“United Way of Metro Chicago is proud to partner with the Illinois Comptroller’s office, community banks around the state, and non-profits to increase access to reliable financial services for individuals and families,” said Sean Garrett, President and CEO of United Way of Metro Chicago. “Local access to trusted, low cost, community-based banking and lending services strengthens families by helping to secure their economic future. As we seek to build a stronger region, bringing the Bank On national model to Illinois will play a vital role in our work.”   


You can download a PDF of this release here.