If you’re feeling outraged that there’s a proposed pay raise in the works for Illinois’ estimated 400 currency exchanges — which prey on the poor and unbanked — you are not alone.

These payday lenders and check cashers are everywhere, though the majority of them in Illinois are in Chicago. They are mostly in neighborhoods where many financial institutions are unwilling to do business, because the people who live nearby don’t make enough money to make it worthwhile for a legitimate bank to set up shop. The currency exchanges say, “We offer a service that that our customers can’t find anywhere else!” That is true – and it’s a huge problem that needs to be fixed.

Make no mistake, these are predatory financial services.

Call it what you want, but a fee increase for currency exchanges is a hidden tax on the poor. Currency exchanges are most commonly found in low-income African American areas, followed by Latino communities, and frequently serve consumers who don’t have access to mainstream financial services.

Why do people use currency exchanges? Lots of reasons. In some cases, people are to afraid to use banks or credit unions, for fear of the U.S. Immigration and Naturalization Service. Some people have simply been kicked out of the system, while others have never even seen a financial institution in their neighborhood.

These currency exchanges claim that they haven’t had a raise in more 10 years and that many of them may close due to the rising cost of business. If they shut down, they argue, their customers—many of whom are already on the financial fringe — will become financial outcasts, turning to cashing third-party checks or doing business with strangers.

But that’s garbage logic. That’s akin to thinking if your local grocery store stopped selling Pringles, all anyone would have to eat would be pork rinds. What about standing up and saying both are unhealthy options, and selling fruits and vegetables? Or better yet—planting a garden!

Currency exchanges prey on people who can least afford it. The cycle of economic dysfunction perpetrated by high check-cashing fees coupled with high interest rates makes life harder for consumers who are generally starting from a place of economic insecurity.

We can do better.

Credit unions have an opportunity to lead the way. We need to encourage financial institutions to open branches in underserved areas of Illinois and help young people learn financial literacy skills at a young age. We need to help people apply their skills — help them open accounts at banks and credit unions. In the long run it will be good for business, and good for our financial intuitions.

Heidi Albert

Heidi Albert

Heidi Albert is the founder of MoneyLocker.org/Live It To Learn It