‍Illinois Governor Approves Increase in Check Cashing Fees

Adam Rust

Illinois Governor Bruce Rauner has approved a rate hike on check cashing fees. Under the new rule, Illinois’ Department of Financial and Professional Regulation will allow currency exchanges to increase the cost of cashing a check by as much as 46 percent. The amount of escalation depends on a check’s face value. 

a)      For checks of less than $100 go up 46 percent. They will now cost 2.5 percent of the face value, plus $1.00.

b)      For checks of between $100.01 and $1,250, the cost jumps by 11 percent, to 2.5 percent of face value.

c)       For checks with a value of more than $1,250.01, check cashers can now charge 3 percent of face value.

Before the change, fees were 2.25 percent for any check worth more than $100.01 and 1.4 percent plus $1 for those of less than $100.

When the rule takes effect, the cost to consumers to cash a $1,000 check will have increased 74 percent since 1997 and 121.8 percent since 1980.

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Illinois Currency exchanges

In surveying fee schedules set by local banks, the IDFPR found that costs for the same face amount would fall between $2 and $25.

Assuming a 40-hour work week, under the new rates a worker earning the minimum wage would pay $19.80 to cash a bi-weekly paycheck. As Chicago’s minimum wage is currently $11.00 for non-tipped workers, their cost would be $26.40. By 2019, after the last of a series of minimum wage increases goes into effect, non-tipped employees in Chicago will pay $31.20 every two weeks.

Most states have fee schedules that change depending on the writer of the check. Personal checks cost more than payroll or state-issued checks.

A law firm representing the Currency Exchange Association of Illinois and the Community Currency Exchange Licensees petitioned IDFPR to increase the rates, on the grounds that the cost of doing business had escalated since the last time that IDFPR set price ceilings.

But advocates pointed out that if businesses were finding it more difficult to make a profit, it was because of new competition from income tax preparers and reduce demand for their services because more employees were using direct deposit.

The IDFPR released details of the proposed rule in the summer. 

According to a July column in the Chicago Tribune, “the state gave the currency exchange owners everything that they wanted.”

Local advocates had asked legislators to reconsider. Woodstock Institute pointed out that most of the people going to check cashers have lower-than-average incomes, so the net effect of the rule would be to lower the pay of the state’s least-well-off workers.


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