SB2433 100TH GENERAL ASSEMBLY

LRB100 16238 SMS 31361 b

100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
SB2433

Introduced 1/30/2018, by Sen. Jacqueline Y. Collins

SYNOPSIS AS INTRODUCED:

205 ILCS 405/1	from Ch. 17, par. 4802
205 ILCS 405/19.3	from Ch. 17, par. 4838

Amends the Currency Exchange Act. Defines "government assistance check", "government check", "payroll check", "printed", and "protected class". Provides additional considerations by the Secretary of Financial and Professional Regulation for determining the maximum rate schedules that can be charged for check cashing and writing of money orders by community currency exchanges and ambulatory currency exchanges. Provides that the Department of Financial and Professional Regulation's authority to establish rate schedules for check cashing is subject to specified rate caps. Makes other changes. Effective June 1, 2019.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning regulation.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Currency Exchange Act is amended by changing Sections 1 and 19.3 as follows:

(205 ILCS 405/1) (from Ch. 17, par. 4802)

Sec. 1. Definitions; application of Act.

(a) For the purposes of this Act:

"Ambulatory currency exchange" means any person, firm, association, partnership, limited liability company, or corporation, except banks organized under the laws of this State and national banks organized pursuant to the laws of the United States, engaged in one or both of the foregoing businesses, or engaged in performing any one or more of the foregoing services, solely on the premises of the employer whose employees are being served.

"Community currency exchange" means any person, firm, association, partnership, limited liability company, or corporation, except an ambulatory currency exchange as hereinafter defined, banks incorporated under the laws of this State and national banks National Banks organized pursuant to the laws of the United States, engaged in the business or service of, and providing facilities for, cashing checks, drafts, money orders or any other evidences of money acceptable to such community currency exchange, for a fee or service charge or other consideration, or engaged in the business of selling or issuing money orders under his or their or its name, or any other money orders (other than United States Post Office money orders, Postal Telegraph Company money orders, or Western Union Telegraph Company money orders), or engaged in both such businesses, or engaged in performing any one or more of the foregoing services.

"Controlling person" means an officer, director, or person owning or holding power to vote 10% or more of the outstanding voting securities of a licensee or the power to vote the securities of another controlling person of the licensee. For the purposes of determining the percentage of a licensee controlled by a controlling person, the person's interest shall be combined with the interest of any other person controlled, directly or indirectly, by that person or by a spouse, parent, or child of that person.

"Department" means the Department of Financial and Professional Regulation.

"Director" means the Director of the Division of Financial Institutions of the Department of Financial and Professional Regulation.

"Division of Financial Institutions" means the Division of Financial Institutions of the Department of Financial and Professional Regulation.

"Government assistance check" means a check issued by the federal government or State government on a continuing, periodic basis by a government agency for the payment to the recipient payee of federal or State assistance, Social Security benefits, workers' compensation, unemployment compensation, railroad retirement benefits, veterans benefits, or housing assistance.

"Government check" means a check issued by the federal government, State government, or local government other than a government assistance check.

"Ambulatory Currency Exchange" means any person, firm, association, partnership, limited liability company, or corporation, except banks organized under the laws of this State and National Banks organized pursuant to the laws of the United States, engaged in one or both of the foregoing businesses, or engaged in performing any one or more of the foregoing services, solely on the premises of the employer whose employees are being served.

"Licensee" means any person, firm, association, partnership, limited liability company, or corporation issued one or more licenses by the Secretary under this Act.

"Licensed location" means the premises at which a licensee is authorized to operate a community currency exchange to offer to the public services, products, or activities under this Act.

"Licensee" means any person, firm, association, partnership, limited liability company, or corporation issued one or more licenses by the Secretary under this Act.

"Location" when used with reference to an ambulatory currency exchange means the premises of the employer whose employees are or are to be served by an ambulatory currency exchange.

"Payroll check" means a check issued by an employer to an employee other than a payroll check issued by the federal government, State government, or local government.

"Principal office" means the physical business address, which shall not be a post office box, of a licensee at which the (i) Department may contact the licensee and (ii) records required under this Act are maintained.

"Printed" means typewritten, electronically generated, or computer generated.

"Protected class" means a class of people protected from discrimination under the Illinois Human Rights Act.

"Secretary" means the Secretary of Financial and Professional Regulation or a person authorized by the Secretary or this Act to act in the Secretary's stead. All references in this Act to the Secretary shall be deemed to include the Director, as a person authorized by the Secretary or this Act to assume responsibility for the oversight of the functions of the Department relative to the regulatory supervision of community currency exchanges and ambulatory currency exchanges under this Act.

(b) Nothing in this Act shall be held to apply to any person, firm, association, partnership, limited liability company, or corporation who is engaged primarily in the business of transporting for hire, bullion, currency, securities, negotiable or non-negotiable documents, jewels or other property of great monetary value and who in the course of such business and only as an incident thereto, cashes checks, drafts, money orders or other evidences of money directly for, or for the employees of and with the funds of and at a cost only to, the person, firm, association, partnership, limited liability company, or corporation for whom he or it is then actually transporting such bullion, currency, securities, negotiable or non-negotiable documents, jewels, or other property of great monetary value, pursuant to a written contract for such transportation and all incidents thereof, nor shall it apply to any person, firm, association, partnership, limited liability company, or corporation engaged in the business of selling tangible personal property at retail who, in the course of such business and only as an incident thereto, cashes checks, drafts, money orders or other evidences of money.

(Source: P.A. 99-445, eff. 1-1-16.)

(205 ILCS 405/19.3) (from Ch. 17, par. 4838)

Sec. 19.3. (A) The General Assembly hereby finds and declares: community currency exchanges and ambulatory currency exchanges provide important and vital services to Illinois citizens. In so doing, they transact extensive business involving check cashing and the writing of money orders in communities in which banking services are generally unavailable. Customers of currency exchanges who receive these services must be protected from being charged unreasonable and unconscionable rates for cashing checks and purchasing money orders. The Illinois Department of Financial and Professional Regulation has the responsibility for regulating the operations of currency exchanges and has the expertise to determine reasonable maximum rates to be charged for check cashing and money order purchases. Therefore, it is in the public interest, convenience, welfare and good to have the Department establish reasonable maximum rate schedules for check cashing and the issuance of money orders and to require community and ambulatory currency exchanges to prominently display to the public the fees charged for all services. The Secretary shall review, each year, the cost of operation of the Currency Exchange Section and the revenue generated from currency exchange examinations and report to the General Assembly if the need exists for an increase in the fees mandated by this Act to maintain the Currency Exchange Section at a fiscally self-sufficient level. The Secretary shall include in such report the total amount of funds remitted to the State and delivered to the State Treasurer by currency exchanges pursuant to the Revised Uniform Unclaimed Property Act.

(B) The Secretary shall, by rules adopted in accordance with the Illinois Administrative Procedure Act, expeditiously formulate and issue schedules of reasonable maximum rates which can be charged for check cashing and writing of money orders by community currency exchanges and ambulatory currency exchanges.

(1) In determining the maximum rate schedules for the purposes of this Section the Secretary shall take into account:

(a) Rates charged in the past for the cashing of checks and the issuance of money orders by community and ambulatory currency exchanges.

(b) Rates charged by banks or other business entities for rendering the same or similar services and the factors upon which those rates are based.

(c) The income, cost and expense of the operation of currency exchanges.

(d) Rates charged by currency exchanges or other similar entities located in other states for the same or similar services and the factors upon which those rates are based.

(e) Rates charged by the United States Postal Service for the issuing of money orders and the factors upon which those rates are based.

(f) A reasonable profit for a currency exchange operation.

(g) The impact on consumers.

(h) Whether the rate schedule will disproportionately impact one or more protected classes, including, but not limited to, racial and ethnic minorities.

(2)(a) The schedule of reasonable maximum rates established pursuant to this Section may be modified by the Secretary from time to time pursuant to rules adopted in accordance with the Illinois Administrative Procedure Act.

(b) Upon the filing of a verified petition setting forth allegations demonstrating reasonable cause to believe that the schedule of maximum rates previously issued and promulgated should be adjusted, the Secretary shall expeditiously:

(i) reject the petition if it fails to demonstrate reasonable cause to believe that an adjustment is necessary; or

(ii) conduct such hearings, in accordance with this Section, as may be necessary to determine whether the petition should be granted in whole or in part.

(c) No petition may be filed pursuant to subparagraph (a) of paragraph (2) of subsection (B) unless:

(i) at least nine months have expired since the last promulgation of schedules of maximum rates; and

(ii) at least one-fourth of all community currency exchange licensees join in a petition or, in the case of ambulatory currency exchanges, a licensee or licensees authorized to serve at least 100 locations join in a petition.

(3) Any currency exchange may charge lower fees than those of the applicable maximum fee schedule after filing with the Secretary a schedule of fees it proposes to use.

(C) The Department's authority to establish rate schedules for check cashing pursuant to this Section is subject to the following rate caps applicable to the types of checks indicated as follows:

(1) for a printed payroll check of $100 or less, a rate not exceeding 1.4% of the face amount of the check plus a service charge of $1;

(2) for a printed payroll check of $100.01 or greater, a rate not exceeding 2.25% of the face amount of the check;

(3) for a government check, a rate not exceeding 1.5% of the face amount of the check; and

(4) for a government assistance check, a rate not exceeding 0.5% of the face amount of the check.

(Source: P.A. 100-22, eff. 1-1-18.)

Section 999. Effective date. This Act takes effect June 1, 2019.