IABG advocates for policies that close the racial wealth divide, expand savings opportunities, and protect Illinoisans from wealth-stripping financial products and practices.
Illinois’ legislative session wrapped up in early June, and for the first time in many years, Illinois took steps forward in addressing racial wealth inequity in the state. While we still need big, bold solutions to close the racial wealth divide, we are excited to share progress on many of our policy priorities, including Children’s Savings Accounts and debt collection reform. It was a very productive legislative session, so read on for all of the updates!
End Wealth-Stripping & Strengthen Consumer Protections
HB2468 – Fair Lending Act: Caps interest rates on auto title loans at 36%. HB2468 received significant bipartisan support, with 43 cosponsors. It passed out of committee unanimously, but was not called for a vote in the House due to heavy opposition from the title loan industry. We will work with our coalition partners to advance the campaign in the coming months. Learn more about title loans, the legislation, and our progress this session.
Oppose HB2825 – Sandbox Bill: Creates a barebones sandbox initiative, which allows companies to test “innovative” financial products without commonsense consumer protections. We worked with our partners at Woodstock Institute to oppose HB2825, which is not moving forward this year due to our opposition. This is great news for Illinoisans who won’t bear the burden of risky financial products. Learn more about innovation in financial products.
Expand Access to Higher Education
HB2237 – Statewide Children’s Savings Account Program: Automatically provides a $50 seed deposit into a 529 college savings account for every child born or adopted in Illinois beginning in 2021, and gives the State Treasurer’s Office the ability to develop savings matches and incentives. With great work from our partners and the State Treasurer’s office, HB2237 passed out of the House and the Senate, and is headed to the Governor! Check out our fact sheet and press release, and stay tuned for updates as we work with the Governor to sign the bill, and partner with the Treasurer’s Office on implementation.
HB217 – Ban the Box in Higher Education: Prohibits Illinois higher education institutions from asking about an applicant’s criminal record in the admissions process. HB217 did not have enough support to advance this session. We will continue working to move this forward with our partners.
Reform Burdensome Debt Collection Practices, Fines, & Fees
HB88 – Debt Collection Reform: Helps Illinoisans pay off debt more quickly and build financial security. In Illinois, communities of color have twice as many individuals in collections as white communities – so this legislation will make strides in reducing the racial wealth divide. HB88 passed unanimously out of the House and Senate, and is now on the Governor’s desk. Download the fact sheet and read our press release to learn more.
SB1786 – Driver’s License Suspension Reform: Prohibits driver’s license suspension for non-moving violations, including parking tickets. SB1786 passed out of the Senate, but is still awaiting a vote in the House. Check out the License to Work website for updates.
Expand Access to Safe & Affordable Financial Products
SB1332 – Illinois Bank On: Creates a statewide “Bank On” program to promote access to safe and affordable checking accounts, which are the foundation for financial success. SB1332 passed out of the House and Senate, and is now on the Governor’s desk. Stay tuned for more as this program rolls out.
Strengthen Financial Security and Equity for All
SB1 – Minimum Wage Increase: It has been nearly a decade since low-income workers have received a raise. This law puts Illinois on a path to raise the minimum wage to $15/hour over the next 6 years. The first increase to $9.25/hour will happen on January 1, 2020, the second increase will occur July 1, 2020 to $10/hour, and the minimum wage will continue to increase by $1 on July 1 each year until it reaches $15. This will substantially increase the income of workers across the state.
SJRCA1 – Fair Tax: For decades, Illinois’ taxes have been inequitable, with a flat tax in the constitution. This year, SJRCA1 was adopted, which means that voters will get the chance to decide whether we keep our current flat tax system or allow for a graduated income tax. With a graduated income tax – or Fair Tax – people with higher incomes pay higher tax rates and people with lower incomes pay lower tax rates, so that everyone pays their fair share.
SB687 – Income Tax Rates Bill: SB687 outlines the tax rates that will be enacted if the constitutional amendment is supported by voters. If passed, 97% of Illinois filers will pay the same or less in taxes, and we would raise more than $3 billion a year for investments in human services, schools, and other priorities.
First Balanced Budget in Years
- Over $100 million to DCFS for new frontline caseworkers, improved training and supervision, and rate increases for foster families and community based providers
- $1.5 million increase for community based domestic violence shelters
- $1.5 million increase for homeless youth services
- $13 million for Violence Prevention statewide
- $1.3 billion to pay down the backlog of old bills
Despite Progress, Big, Bold Solutions are Needed to End the Racial Wealth Divide
We are thrilled with the progress on issues that impact low-wealth communities in Illinois. A minimum wage increase, a statewide Children’s Savings Account program, and lighter debt burdens will help families build financial security and make steps in addressing the racial wealth divide. Thank you to our dedicated partners and legislative champions for your support this session!
However, the racial wealth divide continues to loom large. In Illinois, white families have more than 29 times the net worth of black families, and 4.7 times the net worth of Hispanic families. Moving forward, we are looking forward to working with our partners to advance bold solutions that will close this chasm.