The Illinois Senate Insurance Committee held a subject matter hearing on SB 2208 earlier this month, which prohibits the use of consumer’s credit information or credit report to calculate auto insurance rates. State and national consumer groups Citizen Action Illinois, Woodstock Institute, Consumer Federation of America and Consumers Union testified at the hearing urging lawmakers to support the bill and other efforts to make auto insurance affordable and accessible for lower-income people and communities of color.

The bill was introduced by Senator Jacqueline Collins (D-Chicago 16^th) who stated that California, Massachusetts and Hawaii already prohibit credit-based auto insurance pricing. “It’s absurd and unacceptable that in Illinois today, a person with poor credit but a perfect driving record pays, on average, substantially more for car insurance than a person with great credit and a drunken driving conviction,” said Sen. Collins. “That certainly doesn’t make our roads safer or create incentives for responsible driving, and it makes it even harder for people who are in debt to drive to work so they can get out of debt.”  The bill was co-sponsored by Sen. Patricia Van Pelt (D-Chicago 5^th), Sen. Napoleon Harris, III (D-Harvey 15^th), Sen. Mattie Hunter (D-Chicago 3^rd), Sen. Donne E. Trotter (D-Chicago 17^th), Sen. Emil Jones, III (D-Chicago 14^th) and Sen. Laura M. Murphy (D-Park Ridge 28^th).

Citizen Action / Illinois’s Legislative Director Joshua Collins testified at the hearing that auto insurance is not optional for people that rely on automobiles to get to work, manage their children and their daily lives. “Most of all, Citizen Action / Illinois does not feel that the evaluation of one’s credit score is a just marker for determining what an individual will pay on a monthly basis. While representatives from the industry will say that using credit histories is a fair way to determine ‘credit-worthiness’ and ‘that’s how it has always been done’, there is in fact a problem with this method.”

Woodstock Institute’s Vice President of Policy Brent Adams testified that credit scores were originally intended to reflect only the likelihood that a consumer would repay a debt. “Allowing the use of credit-based scoring in other areas, like in the setting of auto insurance rates, can become a trap whereby people with poor credit histories, who are disproportionately persons of color, become permanently saddled with low credit scores and with the array of disadvantages that come with that status.”

Consumer Federation of America’s Director of Financial Services Tom Feltner testified that when auto insurance is fairly priced, lower-income people can safely and affordably purchase, maintain and insure a car to get to the best job for which they are qualified. “We urge states to take immediate action to protect consumers from the unfair use of factors such as credit score, education, occupation and other factors unrelated to a driver’s performance behind the wheel and outside the driver’s control.”

Consumers Union’s programs director Chuck Bell testified at the hearing and stated that “many Illinois drivers pay higher insurance premiums because of their credit history even though they have a spotless driving record.  Credit scores are given so much weight by insurers that good drivers with poor credit can end up paying substantially more than drunk drivers with excellent credit. State lawmakers should restore some fairness to the insurance market by banning this discriminatory practice.”