- Illinois Staff
Buckner Advances New Legislation to Protect Consumers from Entering Unwanted Loan Agreements
May 12, 2021 | Buckner
CHICAGO – To protect residents from entering unwanted loan agreements, state Rep. Kam Buckner, D-Chicago, advanced legislation that will prohibit the distribution of unsolicited loan checks to consumers.
“As we’ve seen over the last year, people are in the need of financial help to recover from the effects of the pandemic,” said Buckner. “Banks, utility companies and other institutions have taken advantage of Illinois residents by providing unsolicited checks that intend to trap consumers into high interest loans that must be paid back unbeknownst to the person cashing the check.”
Buckner’s legislation, House Bill 272, will make it illegal for institutions to send residents these unrequested checks that forces the consumer to repay the amount of the check plus interest and fees. Unsolicited checks, also called “live checks”, look similar to personal checks but come with terms and agreements in fine print. Once a consumer cashes the check, the consumer enters into an agreement with the lending institution to repay the loan, plus interest and fees based on the terms of the loan in fine print. According to the National Association of Social Workers Illinois Chapter (NASW), it is typically the elderly who cash unsolicited checks; however, anyone could unknowingly cash an unsolicited check not realizing it is a loan.
“The practices displayed by financial institutions are predatory and do not provide solutions for individuals who may be in need of financial relief,” said Buckner. “Putting an end to these practices will protect Illinoisans from unwanted debt and predatory practices.” Buckner’s legislation passed out of the House of Representatives unanimously and is awaiting consideration in the Senate.