## Facts

- Illinois enacted § 19.3 of the Currency Exchange Act, effective October 1, 1977, directing the Director of Financial Institutions to issue, by rule, schedules of maximum rates for check-cashing and money-order services.
- Section 19.3 permitted rates to “vary according to such circumstances and conditions as the Director determines to be appropriate,” allowed later modifications by the Director, and allowed exchanges to charge lower fees after filing a schedule with the Director.
- Before § 19.3, currency-exchange fees were not set or capped by the Director or any statute and were determined through competition with other currency exchanges, banks, and retail establishments offering similar services.
- Two licensed community currency exchange owner-operators challenged § 19.3 as unconstitutional, focusing on the statute’s lack of standards guiding the Director’s discretion (not disputing the legislature’s ability to regulate rates or to delegate rate-setting in general).
- The circuit court upheld § 19.3; the plaintiffs took a direct appeal to the Illinois Supreme Court.

## Issues

1. Whether § 19.3 unconstitutionally delegates legislative power by authorizing the Director of Financial Institutions to set maximum rates without intelligible standards or guidelines to direct and limit that discretion.

## Decision

- The Illinois Supreme Court reversed the circuit court.
- Section 19.3 was held unconstitutional as an unlawful delegation of legislative power.
- The court concluded the statute provided no meaningful policy direction, identified harm, or concrete criteria for the Director’s rate-setting, leaving discretion effectively unchecked.

## Legal Principles

- The legislature may delegate rulemaking to an administrative agency only if it supplies sufficient standards to guide the agency and to prevent arbitrary or uncontrolled action.
- Delegations involving rate-setting must include articulated legislative objectives and limiting principles; the legislature must make the fundamental policy choices and leave only subordinate implementation to the agency.
- A bare requirement that agency-imposed rates be “reasonable,” without additional statutory criteria or guidance, is inadequate to satisfy the constitutional requirement for intelligible standards.

## Conclusion

Section 19.3’s authorization for the Director to set and vary maximum currency-exchange rates without defined legislative purposes or governing criteria amounted to an unconstitutional delegation of legislative power, so the judgment upholding the provision was reversed.


Thygesen v. Callahan, 385 N.E.2d 699 (Ill. 1979)