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Economic equity bill draws scrutiny

[January 11, 2021] By PETER HANCOCK
Capitol News Illinois
phancock@capitolnewsillinois.com

SPRINGFIELD – As the General Assembly’s lame duck session moved into its third day, lawmakers in both chambers turned their attention to a sweeping bill aimed at narrowing economic disparities faced by Black and brown communities in Illinois.

That is one of the four pillars that make up the Illinois Legislative Black Caucus’ agenda, which has been the focus of the lame duck session thus far.

The proposed Economic Equity Act, House Bill 5871, was introduced Thursday by Rep. Sonya Harper, D-Chicago, and like many of the other bills being pushed by the ILBC, it drew general praise for its intent, but criticism over a number of specific parts.

The 334-page bill contains sections dealing with predatory lending, the use of criminal background checks in employment decisions and housing, diversity requirements in state contracting and purchasing, and the removal of lead water pipes in public water systems, something that advocates say disproportionately affects communities of color.

It also would create a new African Descent-Citizens Reparations Commission that, among other things, would be charged with developing future legislation to require corporations and other institutions to disclose any past ties to the slave trade and to negotiate financial reparations.

“This pillar is part of the Black Caucus’ agenda to end systemic racism,” Harper said of the bill. “In this pillar, we are addressing several different areas such as banking and investment, economic mobility, small business and entrepreneurship, procurement and the Business Enterprise Program, industry-specific equity, housing, land-use gentrification, and pay equity and workers’ rights.”

Criminal backgrounds
One part of the bill, called the Employee Background Fairness Act, calls for strictly limiting the ability of employers to use a person’s criminal history to deny someone a job or take any other adverse action unless there is a “direct relationship” between the conviction and the job, or if there is a specific federal, state or local law prohibiting the employment of such a person.

It also contains similar language regarding housing in buildings under the jurisdiction of public housing authorities.

“It's just important to note that 55 percent of Illinois adults have a criminal record, and an applicant with a record is 50 percent less likely to get a callback for a job offer or an interview than an individual who does not,” said Matt Smith of Cabrini Green Legal Aid. “So what we see is that just routinely, people who've been caught up in the criminal legal system, sometimes decades prior, continue to face huge and insurmountable challenges in getting stable employment as they move forward.”

But Jay Shattuck of the Illinois Chamber said that while the business community generally supports the concept of that provision, they would prefer language that protects an employer’s right to provide a safe workplace and which is aligned with the U.S. Equal Employment Opportunity Commission’s guidelines on the same subject.

Predatory lending
The bill also contains provisions to put more restrictions on companies that offer small-dollar loans such as payday loans and vehicle title loans. Provisions include capping the interest rate they can charge at 36 percent, the same cap that applies under federal regulations for loans to members of the military.

Steve Brubaker, of the Illinois Small Loan Association, which represents companies that offer short-term, small-dollar loans, said that under current law, payday lenders are allowed to charge a fee of $15.50 per $100 borrowed for a two-week period. Capping interest rates at 36 percent, he said, would translate to to just $1.38 per $100 borrowed, which would effectively force payday lenders out of business.

“We can't operate at $1.38,” he said. “We can't pay somebody to do the paperwork on the loan at $1.38.”

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Rep. Sonya Harper, D-Chicago, the chief architect of a bill aimed at narrowing racial economic inequities, speaks during a House committee meeting Sunday at the Bank of Springfield Center. (Credit: Blueroomstream.com)

Brubaker also defended the industry, arguing that the loans they make circulate through the community because people use them to pay for emergency expenses such as plumbing repairs or funerals.

But Brent Adams of the Chicago-based Woodstock Institute, a group that advocates for fair housing and lending policies, argued that payday loans actually do the opposite because the lenders take the money back at what amounts to a 297-percent annual interest rate.

“For decades, predatory consumer loans have stripped billions, predominantly from families of color, trapping them in cycles of debt, making it impossible for them to build wealth and causing them to forego other expenses like health care and prescription drugs,” Adams said.

Lead water pipes
Another portion of the bill would require all owners and operators of public water supply systems to conduct an inventory of lead pipes in the system and to develop a plan for replacing them.

Lead, which is toxic to the human nervous system, was once the predominant material used for water pipes. The Illinois Environmental Protection Agency estimates there are more than 677,000 lead service lines throughout the state, plus nearly 380,000 copper lines that contain lead solder.

“Let me state clearly, there is no safe level of lead exposure,” said Colleen Smith, of the Illinois Environmental Council. “While not everyone has a lead service line, the existence of lead service lines impacts everyone in the state of Illinois.”

Josh Ellis of the Metropolitan Planning Council, a group that advocates for sustainable neighborhoods in Chicago, noted that 67 percent of Black and Hispanic residents in Illinois live in communities that have 95 percent of all the lead pipes. Even outside of Chicago, he said, Black and Hispanic residents are twice as likely as white residents to live in communities with lead pipes.

But Brad Cole, executive director of the Illinois Municipal League, argued that local governments that operate water utilities cannot afford to undertake such a project without financial help.

He said the language of that portion of the bill has changed several times and that even more revisions have been circulating among lawmakers, some of which would levy a fee on all water users, whether they are connected to lead service lines or not, and others that would put municipal water utilities under rate regulation by the Illinois Commerce Commission.

“We have consistently maintained that any legislatively mandated inventory or replacement of lead service lines must include an accompanying and continuous infusion of revenue to cover the costs of municipal operations and administrative costs associated with this,” Cole said.

Lawmakers heard testimony Sunday in both the House and Senate Executive Committees, no action was taken in either chamber. The lame duck session will continue through Tuesday and possibly into Wednesday before new and reelected lawmakers are sworn into office and a new legislative session begins.

Capitol News Illinois is a nonprofit, nonpartisan news service covering state government and distributed to more than 400 newspapers statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation.

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