SPRINGFIELD, IL – Frustrated by businesses preying on low-income families, State Senator Emil Jones, III (D-Chicago) proposed legislation last week that will place a cap on excessive fees charged by businesses that cash checks and sell pre-paid debit cards.

Consumers who purchase pre-paid debit cards will benefit from Senator Jones’ plan to reduce itemized fees and penalties which vary by card, but are often expensive. Some cards charge up to $9.95 for activation fees, in addition to significant cash withdrawal fees, reloading fees, balance inquiry fees, and customer service fees. Jones’ plan will limit activation fees to $1 or 1% of the value of the prepaid card. Under his plan it will be illegal to charge reloading fees, balance check fees, overdraft protection fees, dormancy fees, inactivity charge fees or service on these cards. Companies must also fully disclose a schedule of fees and charges on the face of the card or its packaging.

“This legislation is all about protecting the consumer in Illinois,” Senator Jones said. “These fees are obviously predatory and aimed at low income individuals who use these products because a traditional checking account is not a feasible option.”

In 2001, check cashers processed approximately 55 billion dollars in consumer’s checks each year with average fees worth 2.34 percent of the value of the checks. This is clearly illegal under current law as fees charged are not to exceed the greater of $.50 or 1% of the face value of the check cashed to a customer when the customer cashes a check at a retail merchant. The new legislation will require such merchants to register with the state regulator, making the merchant subject to fines up to $10,000 per violation.

 

“Limitations have to be placed on businesses who seek to nickel and dime our most vulnerable citizens. That’s why this legislation is so important” Jones added.

 

Category: News Releases
Submit your legislative proposal

eNewsletter

eNewsletter Signup
  1. First Name(*)
    Invalid Input
  2. Last Name(*)
    Invalid Input
  3. Your Email(*)
    Please let us know your email address.

Contact Info

District Office
507 West 111th Street
Chicago, IL 60628
P. 773.995.7748
F. 773.995.9061

Springfield Office
121D Capitol Building
Springfield, IL 62706
P. 217.782.9573
F. 217.782.5340