IABG 2008 Policy Roster
IABG’s policy work aims to:
- Build personal and financial assets;
- Increase opportunities for savings and investment;
- Protect existing personal and financial assets, and:
- Promote financial education.
IABG has identified the following bills in the Illinois General Assembly aligned with one or more of our core policy aims:
Close the loophole in the Payday Loan Reform Act - SB1993 (Senate Sponsor: Sen. Kimberly Lightford, D-Chicago; House Sponsor: Rep. Julie Hamos, D-Evanston)
Issue:
Protect existing personal and financial assets - Recent efforts to curb the high interest rates and predatory practices have been abated by a loophole in Illinois Payday Loan Reform Act. The Act currently applies to loans under 120 days that have an interest rate higher than 36% APR. As a result, payday lenders have created predatory loans with terms of 121 days and beyond - sometimes as high as 700% APR. These practices allow the continuation of predatory lending practices that can lead individuals and families to financial ruin. This initiative is led by the Monsignor John Egan Campaign for Payday Loan Reform.
Bill Provisions:
SB1993 would redefine payday loans by deleting the provision that payday loans are those which have a term of under 120 days. The bill also eliminates pre-payment penalties for payday loans and provides that a lender rebate the unearned finance charges to the consumer as of the date of repayment.
Status:
SB1993 passed the Senate 54-0 and is in the House Rules Committee.
Supporting Documents:
SB1993 Fact Sheet
Expand the state Earned Income Tax Credit - SB12 (Senate Sponsor: Sen. Jacqueline Collins, D-Chicago; House Sponsor: Rep. Barbara Flynn Currie, D-Chicago)
Issue:
Increase opportunities for savings and investment - Current tax policies favor asset ownership for some, but fail to help those with low incomes build assets. The state Earned Income Tax Credit (EITC) is the only tax subsidy aimed at low-income workers. Illinois’ EITC is among the smallest of all state EITCs. Increasing Illinois’ EITC will put more money in the pockets of the nearly 777,000 low-income workers eligible for this benefit, improving the likelihood that they will be able to meet basic needs and save money for the future. This initiative is led by the Make Work Pay Coalition of Voice for Illinois Children.
Bill Provisions:
SB12 aims to increase the Illinois EITC to 7.5% of the federal credit in the 2007 tax year with another increase to 10% of the federal credit in the 2008 tax year.
Status:
SB12 passed the Senate and is in the House Rules Committee.
Supporting Documents:
SB12 Fact Sheet,
Letter to the Tribune from Sid Mohn, President of Heartland Alliance,
Letter to the Tribune from Illinois House Majority Leader Barbara Flynn Currie and Jerome Stermer, President of Voices for Illinois Children
Increase Access to Health Care for Low-income Persons - SB1925 (Senate Sponsor: Sen. Jeffry Schoenberg, D-Chicago; House Sponsor: Rep. Elizabeth Coulson, R-Glenview)
Issue:
Protect existing personal and financial assets - Temporary financial set-back due to medical emergencies can put individuals and families at risk of losing assets and falling prey to predatory lenders. It has been estimated that nearly 77 million Americans over 18 year old - nearly 37% of adults - have difficulty paying medical bills or have accrued medical debt. In Illinois, this is an estimated 518,000 of the 1.4 million uninsured residents. Over half of all bankruptcy filings are due to unpaid medical bills. By increasing the access to public health care programs like Medicaid, low-income workers are protected from facing problems with medical debt that could inhibit their attainment and acquisition of assets.
Bill Provisions:
SB1925 provides Illinois Medicaid eligibility for all persons under 100% of the Federal Poverty Level.
Status:
SB1925 passed the Senate and is in the House Rules Committee.
Amendments:
Amended to require that recipient of services be a U.S. citizens, lawfully present in the U.S., or permanently residing in the U.S. under color of law. Also requires recipient to choose a medical home and primary care provider through the Illinois Health Connect Primary Care Case Management Program or any subsequent Illinois Department of Healthcare and Family Services primary care case management program.
Create Incentives for College Savings - SB1981 (Senate Sponsor: Sen. James Claybourne, Jr., D-East St. Louis; House Sponsor: Rep. Frank Mautino, D-Spring Valley)
Issue:
Increase opportunities for savings and investment - Families struggling to save for college need support through incentives like matched savings. Employers support for the savings practices and financial well-being of their employees’ increases productivity, improving the bottom line. Giving the employers’ an incentive to match the college savings of their employee alleviates financial stress, increases access to education for children and families, and supports the long-term economic competitiveness of the state.
Bill Provisions:
SB1981 creates a tax credit for employers who match their employees’ savings to College Illinois, Bright Start College Savings Program, or Bright Directions College Savings Program. Employers contributions may not exceed $500 per employee per year to be eligible for the tax credit. If the company’s tax credit exceeds the total tax, it will be applied to the following year’s tax liability.
SB1981 - Amendment 1 makes a minor change, deleting the provision that requires contributions go to the Illinois Student Assistance Commission.
Status:
SB1981 was approved by the full Senate and is in the House Rules Committee. HB4579 (Rep. David Miller, D-Dolton) is the companion bill, but has not moved from the House.
Prohibit the Steering of Home Buyers into High-interest Mortgages - SB1879 (Senate Sponsor: Sen. Jacqueline Collins, D-Chicago; House Sponsor: Rep. Deborah Graham, D-Oak Park)
Issue:
Build personal and financial assets - Because of incentives to originate loans, mortgage lenders have been found to steer home buyers toward high-interest or risky adjustable rate mortgages, greatly increasing a home owner’s likelihood for foreclosure or financial hardship. Lenders have also been found to steer clients toward certain types of loans based on their race, gender, age, disability, and national origin. These actions take advantage of the trust held in mortgage lenders and push home buyers toward risky and sometimes usurious home loans.
Bill Provisions:
SB1879 creates the Mortgage Steering Act, prohibiting the steering of home buyers to home loans that are not based on their credit history, current capacity to repay the loan, or property on which the loan is secured. In addition, the Act prohibits the steering based on race, gender, age, disability, or national origin. The Attorney General is granted the authority to enforce the Act. Individuals suffering an actual damage due to violation under the Act can file legal action against the lender and receive economic damages.
Status:
SB1879 passed both Houses.
Amendments:
Senate amendments - increase penalties for violating real estate provisions of the Human Rights Act and to add additional provisions to the Illinois Fairness in Lending Act.
House amendments - provides that the plaintiff must attach a Homeowner Notice to summons for residential foreclosure actions.
Increase the Availability of Foreclosure Counselors - SB2566 (Senate Sponsor: Sen. Jacqueline Collins, D-Chicago; House Sponsor: Rep. Kevin Joyce, D-Worth)
Issue:
Protect existing personal and financial assets - The recent surge in foreclosures has increased the demand for counselors to help individuals and families stay in their homes. This demand needs to be offset by creating new funding to support the hiring, training, and availability of counselors to home owners trying to renegotiate their home loans and avoid foreclosure.
Bill Provisions:
SB2566 mandates the Illinois Housing Development Authority to create and administer a foreclosure prevention counseling program through the Foreclosure Prevention Counseling Fund. The Foreclosure Prevention Counseling Fund would make grants to HUD-certified counseling agencies for home-ownership education and foreclosure prevention counseling. Money will be raised for the Foreclosure Prevention Counseling Fund by increasing the cost of the mortgage lending licensing fee 18%.
Status:
SB2566 passed both Houses. An amendment was filed in the Senate that needs House concurrence. Sen. Collins, the original sponsor, has filed a motion of non-concurrence.
HB5788 (Rep. Esther Golar, D-Chicago) is the companion bill, but has not moved from the House.
Amendments:
Senate: Amended to reduce the increase to the mortgage lending license fee to $500.
House: Creates changes to the bill, including the amount of money that would be available for foreclosure prevention counseling. House amendment provides 75% of the funds for prevention counseling and 25% for the City of Chicago to provide pre- and post-purchase foreclosure prevention counseling.
Provide Support for Home Owners at Risk of Foreclosure - HB4191 (House Sponsor: Rep. Michael Madigan, D-Chicago; Senate Sponsor: Sen. Jacqueline Collins, D-Chicago)
Issue:
Protect existing personal and financial assets - Foreclosure prevention efforts need to be available to home owners before they miss their mortgage payments and face foreclosure. The support for home owners in overcoming temporary financial hardships alleviates further problems with foreclosure and long-term financial ruin.
Bill Provisions:
HB4191 expands the current Our Own Home Program to allow mortgage holders at risk of missing mortgage payments to be eligible for state funds from investments used to secure up to 10% of their mortgage. The current eligibility only allows for those who miss a mortgage payment.
Status:
HB4191 passed the House and is on 3rd reading in the Senate.