100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
HB5510

 

Introduced 2/16/2018, by Rep. La Shawn K. Ford

 

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", and "printed". 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.


LRB100 20766 SMS 36251 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB5510LRB100 20766 SMS 36251 b

1    AN ACT concerning regulation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Currency Exchange Act is amended by changing
5Sections 1 and 19.3 as follows:
 
6    (205 ILCS 405/1)  (from Ch. 17, par. 4802)
7    Sec. 1. Definitions; application of Act.
8    (a) For the purposes of this Act:
9    "Ambulatory currency exchange" means any person, firm,
10association, partnership, limited liability company, or
11corporation, except banks organized under the laws of this
12State and national banks organized pursuant to the laws of the
13United States, engaged in one or both of the foregoing
14businesses, or engaged in performing any one or more of the
15foregoing services, solely on the premises of the employer
16whose employees are being served.
17    "Community currency exchange" means any person, firm,
18association, partnership, limited liability company, or
19corporation, except an ambulatory currency exchange as
20hereinafter defined, banks incorporated under the laws of this
21State and national banks National Banks organized pursuant to
22the laws of the United States, engaged in the business or
23service of, and providing facilities for, cashing checks,

 

 

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1drafts, money orders or any other evidences of money acceptable
2to such community currency exchange, for a fee or service
3charge or other consideration, or engaged in the business of
4selling or issuing money orders under his or their or its name,
5or any other money orders (other than United States Post Office
6money orders, Postal Telegraph Company money orders, or Western
7Union Telegraph Company money orders), or engaged in both such
8businesses, or engaged in performing any one or more of the
9foregoing services.
10    "Controlling person" means an officer, director, or person
11owning or holding power to vote 10% or more of the outstanding
12voting securities of a licensee or the power to vote the
13securities of another controlling person of the licensee. For
14the purposes of determining the percentage of a licensee
15controlled by a controlling person, the person's interest shall
16be combined with the interest of any other person controlled,
17directly or indirectly, by that person or by a spouse, parent,
18or child of that person.
19    "Department" means the Department of Financial and
20Professional Regulation.
21    "Director" means the Director of the Division of Financial
22Institutions of the Department of Financial and Professional
23Regulation.
24    "Division of Financial Institutions" means the Division of
25Financial Institutions of the Department of Financial and
26Professional Regulation.

 

 

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1    "Government assistance check" means a check issued by the
2federal government or State government for the payment to the
3recipient payee of federal or State assistance, Social Security
4benefits, workers' compensation, unemployment compensation,
5railroad retirement benefits, veterans benefits, or housing
6assistance.
7    "Government check" means a check issued by the federal
8government, State government, or local government other than a
9government assistance check.
10    "Ambulatory Currency Exchange" means any person, firm,
11association, partnership, limited liability company, or
12corporation, except banks organized under the laws of this
13State and National Banks organized pursuant to the laws of the
14United States, engaged in one or both of the foregoing
15businesses, or engaged in performing any one or more of the
16foregoing services, solely on the premises of the employer
17whose employees are being served.
18    "Licensee" means any person, firm, association,
19partnership, limited liability company, or corporation issued
20one or more licenses by the Secretary under this Act.
21    "Licensed location" means the premises at which a licensee
22is authorized to operate a community currency exchange to offer
23to the public services, products, or activities under this Act.
24    "Licensee" means any person, firm, association,
25partnership, limited liability company, or corporation issued
26one or more licenses by the Secretary under this Act.

 

 

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1    "Location" when used with reference to an ambulatory
2currency exchange means the premises of the employer whose
3employees are or are to be served by an ambulatory currency
4exchange.
5    "Payroll check" means a check for wages issued by an
6employer to an employee subject to withholding other than a
7payroll check issued by the federal government, State
8government, or local government.
9    "Principal office" means the physical business address,
10which shall not be a post office box, of a licensee at which
11the (i) Department may contact the licensee and (ii) records
12required under this Act are maintained.
13    "Printed" means typewritten, electronically generated, or
14computer generated.
15    "Secretary" means the Secretary of Financial and
16Professional Regulation or a person authorized by the Secretary
17or this Act to act in the Secretary's stead. All references in
18this Act to the Secretary shall be deemed to include the
19Director, as a person authorized by the Secretary or this Act
20to assume responsibility for the oversight of the functions of
21the Department relative to the regulatory supervision of
22community currency exchanges and ambulatory currency exchanges
23under this Act.
24    (b) Nothing in this Act shall be held to apply to any
25person, firm, association, partnership, limited liability
26company, or corporation who is engaged primarily in the

 

 

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1business of transporting for hire, bullion, currency,
2securities, negotiable or non-negotiable documents, jewels or
3other property of great monetary value and who in the course of
4such business and only as an incident thereto, cashes checks,
5drafts, money orders or other evidences of money directly for,
6or for the employees of and with the funds of and at a cost only
7to, the person, firm, association, partnership, limited
8liability company, or corporation for whom he or it is then
9actually transporting such bullion, currency, securities,
10negotiable or non-negotiable documents, jewels, or other
11property of great monetary value, pursuant to a written
12contract for such transportation and all incidents thereof, nor
13shall it apply to any person, firm, association, partnership,
14limited liability company, or corporation engaged in the
15business of selling tangible personal property at retail who,
16in the course of such business and only as an incident thereto,
17cashes checks, drafts, money orders or other evidences of
18money.
19(Source: P.A. 99-445, eff. 1-1-16.)
 
20    (205 ILCS 405/19.3)  (from Ch. 17, par. 4838)
21    Sec. 19.3. (A) The General Assembly hereby finds and
22declares: community currency exchanges and ambulatory currency
23exchanges provide important and vital services to Illinois
24citizens. In so doing, they transact extensive business
25involving check cashing and the writing of money orders in

 

 

HB5510- 6 -LRB100 20766 SMS 36251 b

1communities in which banking services are generally
2unavailable. Customers of currency exchanges who receive these
3services must be protected from being charged unreasonable and
4unconscionable rates for cashing checks and purchasing money
5orders. The Illinois Department of Financial and Professional
6Regulation has the responsibility for regulating the
7operations of currency exchanges and has the expertise to
8determine reasonable maximum rates to be charged for check
9cashing and money order purchases. Therefore, it is in the
10public interest, convenience, welfare and good to have the
11Department establish reasonable maximum rate schedules for
12check cashing and the issuance of money orders and to require
13community and ambulatory currency exchanges to prominently
14display to the public the fees charged for all services. The
15Secretary shall review, each year, the cost of operation of the
16Currency Exchange Section and the revenue generated from
17currency exchange examinations and report to the General
18Assembly if the need exists for an increase in the fees
19mandated by this Act to maintain the Currency Exchange Section
20at a fiscally self-sufficient level. The Secretary shall
21include in such report the total amount of funds remitted to
22the State and delivered to the State Treasurer by currency
23exchanges pursuant to the Revised Uniform Unclaimed Property
24Act.
25    (B) The Secretary shall, by rules adopted in accordance
26with the Illinois Administrative Procedure Act, expeditiously

 

 

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1formulate and issue schedules of reasonable maximum rates which
2can be charged for check cashing and writing of money orders by
3community currency exchanges and ambulatory currency
4exchanges.
5        (1) In determining the maximum rate schedules for the
6    purposes of this Section the Secretary shall take into
7    account:
8            (a) Rates charged in the past for the cashing of
9        checks and the issuance of money orders by community
10        and ambulatory currency exchanges.
11            (b) Rates charged by banks or other business
12        entities for rendering the same or similar services and
13        the factors upon which those rates are based.
14            (c) The income, cost and expense of the operation
15        of currency exchanges.
16            (d) Rates charged by currency exchanges or other
17        similar entities located in other states for the same
18        or similar services and the factors upon which those
19        rates are based.
20            (e) Rates charged by the United States Postal
21        Service for the issuing of money orders and the factors
22        upon which those rates are based.
23            (f) A reasonable profit for a currency exchange
24        operation.
25            (g) The impact on consumers.
26            (h) Whether the rate schedule will

 

 

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1        disproportionately impact an individual on the basis
2        of any protected characteristic or category identified
3        in subsection (Q) of Section 1-103 of the Illinois
4        Human Rights Act.
5        (2)(a) The schedule of reasonable maximum rates
6    established pursuant to this Section may be modified by the
7    Secretary from time to time pursuant to rules adopted in
8    accordance with the Illinois Administrative Procedure Act.
9        (b) Upon the filing of a verified petition setting
10    forth allegations demonstrating reasonable cause to
11    believe that the schedule of maximum rates previously
12    issued and promulgated should be adjusted, the Secretary
13    shall expeditiously:
14            (i) reject the petition if it fails to demonstrate
15        reasonable cause to believe that an adjustment is
16        necessary; or
17            (ii) conduct such hearings, in accordance with
18        this Section, as may be necessary to determine whether
19        the petition should be granted in whole or in part.
20        (c) No petition may be filed pursuant to subparagraph
21    (a) of paragraph (2) of subsection (B) unless:
22            (i) at least nine months have expired since the
23        last promulgation of schedules of maximum rates; and
24            (ii) at least one-fourth of all community currency
25        exchange licensees join in a petition or, in the case
26        of ambulatory currency exchanges, a licensee or

 

 

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1        licensees authorized to serve at least 100 locations
2        join in a petition.
3        (3) Any currency exchange may charge lower fees than
4    those of the applicable maximum fee schedule after filing
5    with the Secretary a schedule of fees it proposes to use.
6    (C) The Department's authority to establish rate schedules
7for check cashing pursuant to this Section is subject to the
8following rate caps applicable to the types of checks indicated
9as follows:
10        (1) for a printed payroll check of $100 or less, a rate
11    not exceeding 1.4% of the face amount of the check plus a
12    service charge of $1;
13        (2) for a printed payroll check of $100.01 or greater,
14    a rate not exceeding 2.25% of the face amount of the check;
15        (3) for a government check, a rate not exceeding 1.5%
16    of the face amount of the check; and
17        (4) for a government assistance check, a rate not
18    exceeding 0.5% of the face amount of the check.
19(Source: P.A. 100-22, eff. 1-1-18.)
 
20    Section 99. Effective date. This Act takes effect June 1,
212019.