Illinois
May 11, 2010 | Illinois, industry, regulation | Comments (0)Sorry, I’ve been so wrapped up in federal issues, I haven’t been watching this:
The Illinois General Assembly is on the cusp of capping for the first time the interest rates that consumer finance companies can charge borrowers.
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The Payday Loan Reform Act, meanwhile, would be amended to increase the allowed terms of the loans to six months from four. Remaining the same is the limit of charging no more than $15.50 per $100 loaned out every two weeks.
At the same time, payday lenders won’t be allowed to offer their loans under the Consumer Loan Installment Act, a law that is meant to apply to loans secured by car titles and signed-check loans made by credit-card companies and other consumer finance firms.
“The agreement is historic in Illinois,” says Lynda DeLaforgue, co-director of Citizen Action Illinois. “We will for the first time have set rates on these unsecured loans made to the most vulnerable borrowers.”
A representative of the association representing many of the state’s largest payday lenders called the deal fair, but said it would result in fewer lenders.
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