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Collins: Check cashing rate compromise will spare some of the state’s poorest

collins 031318 2SPRINGFIELD – A rate hike on check cashing services will be lower than originally proposed, and rates for those on public assistance will become lower, under a compromise reached today.

State Senator Jacqueline Collins joined activists from a number of groups pushing against a higher proposal at a press conference today to thank advocates and explain the impact of new rates.

“Today is a good day for unbanked households, which are disproportionately lower-income, African-American, Hispanic and working-age people with disabilities,” said Collins (D-Chicago). “Working with the Woodstock Institute and other consumer advocates, we were able to protect consumers from an across-the-board double-digit increase on the maximum fees that could be charged for check-cashing by Currency Exchanges. Most importantly, public assistance checks will see a rate decrease. We must continue to reform a system where those with the least pay the most.”

The table below reflects the new rates for different types of checks cashed using services at businesses such as Currency Exchanges.

Type of Check (@$100)

Current Rate

Proposed Rate Hike

Agreed

 Public assistance

1.40% + $1

2.50% + $1

1.50%

Government check (e.g. *EITC)

1.40% + $1

2.50% + $1

2.40% + $1

Printed paycheck

1.40% + $1

2.50% + $1

2.40% + $1

Personal check

1.40% + $1

2.50% + $1

2.45% + $1

All other (e.g., insurance)

1.40% + $1

2.50% + $1

2.40% + $1

 

According to an industry report, the average check amount is $463.83.

Type of Check (@$500)

Current Rate

Proposed Rate Hike

Agreed

Public assistance

2.25%

2.50%

1.50%

Government check (e.g. *EITC)

2.25%

2.50%

2.33%

Printed paycheck

2.25%

2.50%

2.33%

Personal check

2.25%

2.50%

3.00%

All other (e.g., insurance)

2.25%

2.50%

2.40%

 

According to industry data, only 7 percent of checks are greater than $1,250.

Type of Check (@$1250.01)

Current Rate

IDFPR Rate

Agreed

Public assistance

2.25%

3.00%

1.50%

Government check (e.g. *EITC)

2.25%

3.00%

3.00%

Printed paycheck

2.25%

3.00%

3.50%

Personal check

2.25%

3.00%

3.50%

All other (e.g., insurance)

2.25%

3.00%

3.50%

 *EITC = Earned Income Tax Credit

 

Sen. Jacqueline Y. Collins


16th District

Years served:
2003 - Present

Committee assignments: Financial Institutions (Chairperson); Insurance; Transportation; Committee of the Whole; Higher Education; Commerce and Economic Development; Public Health.

Biography: Full-time state legislator. Born December 10th in McComb, Mississippi. Studied journalism at Northwestern University; MA from Harvard's John F. Kennedy School of Government; MA in Human Services Administration from Spertus College; MA in Theological Studies from Harvard Divinity School, June 2003. Former Emmy Award-nominated news editor at CBS-TV in Chicago, and 2001 Legislative Fellow with United States Senator Hillary Rodham Clinton.