Payday Loan Reformers Work To Close Illinois Loophole
Contrary to whatever you may hear from Rep. Luis Gutierrez in Washington, the payday loan reforms on the books in Illinois do not adequately protect consumers. Regulations that were established when the General Assembly passed its major reform bill in 2005 defined a payday loan as one with a term of 120 days or less. Following the passage of this measure, lenders circumvented it by stretching their terms one day beyond that limit, which qualified them as purveyors of “consumer installment loans” under a 1963 law. A recent report from the Woodstock Institute found that these small-dollar installment loans — including subprime auto loans, retail installment loans, personal lines of credit, and check solicitation loans — face little oversight and no restrictions on interest rates. (more…)
