HB5622: A Bill Regulating Payroll Cards for Workers in Illinois

This legislation, championed by the Attorney General’s office, regulates the use and features of payroll cards for workers in Illinois. After lengthy negotiations with businesses and financial institutions, we were able to pass this bill with near unanimous support from both chambers. Currently, the Illinois Wage and Collections Act does not provide any guidelines for the use of payroll cards, yet many employers, including Walmart and McDonalds, are beginning to use these products with their employees. Current cards can be quite costly, with fees to access wages, make purchases, or check card balances. This legislation provides basic protections so workers are guaranteed full access to their hard-earned wages, including:

• Maintaining an employee’s right to receive wages by paper check or direct deposit;
• Requiring employers to disclose the terms and costs of the payroll card program up front;
• Prohibiting an employer from enrolling an employee in a payroll card program without their voluntary consent;
• Ensuring employees have access to their full net wages without incurring a fee;
• Banning point of sale transaction fees and overdraft or credit products;
• Guaranteeing unlimited and free telephone access for employees to check their card balance;
• Allowing for two free declined transactions before a nominal fee can be charged.

The legislation was sponsored by Representative Art Turner in the House and Senator Kwame Raoul in the Senate. It passed both chambers and will be sent to the Governor’s desk.

SB2758: The Illinois Secure Choice Savings Program

Woodstock, along with our partners at the Illinois Asset Building Group, Heartland Alliance, and the Shriver Center, worked tirelessly during session to advance legislation creating a program that will allow private sector workers without existing access to an employment-based retirement plan to save their own money for retirement. Eligible workers will be automatically enrolled (with the option to opt out at anytime) into an Individual Retirement Account (IRA) where they can easily build savings through regular payroll deductions. Woodstock’s report found that there are over 2.5 million private sector workers in Illinois who lack access to an employment-based plan. For most people, this is the easiest and most convenient way to save for retirement. Unfortunately, far too many workers retire without adequate savings leaving them overly dependent on Social Security or causing them to fall into poverty. The Secure Choice Savings Program will begin to address the growing retirement problem in an easy, safe, and affordable way for employers, workers, and the state of Illinois.

The legislation passed out of the Senate in April and the House Committee on Personnel and Pensions in late May. We will continue our work over the summer and hope to have the bill called for a vote during the fall veto session in late November or early December. If your organization is interested in supporting this work, please contact us!

HB3784: Expands the Currency Exchange Act

Finally, we were also able to prevent the passage of legislation that would have allowed currency exchanges to sell payday loans and/or rent their space to licensed payday lenders. In partnership with Citizen Action Illinois, we worked with the bill’s sponsor, representatives for currency exchanges, and some of our legislative champions in the Senate to ensure that currency exchanges could not expand their list of services and products to include payday loans. The bill was amended and passed out of the Senate Executive Committee. It was not voted on by the full Senate before the end of session.

We will continue to keep you updated on our state and local policy efforts and thank you to all the organizations and advocates who supported this work over the last few months! Please feel free to contact policy director Courtney Eccles if you have question on these bills or other legislative initiatives.