April 13, 2005

Payday loan reform bill passes Illinois House

A bill long championed by Rep. David Miller, D-Calumet City has passed the Illinois House.
"Payday-loan companies need to be regulated in a way that is consumer friendly and not further victimize people in a time of need," Rep. Miller said.

But opponents of this bill say rather than helping people, it will encourage them to seek alternate ways of finding short-term financing.

"If you restrict access to payday loans, you don't restrict the need for a loan," said Steve Brubaker, the executive director of the Illinois Small Loan Association, which represents payday-loan firms in Springfield.
Well duh! Sure they'll seek alternative ways to find short-term financing. From someone who doesn't charge over 1000% interest!

This measure would prohibit short-term lenders from lending more than $1,000 or 25 percent of a person's monthly gross income, whichever is lowest.

In addition, the bill would place a limit on fees charged by short-term lenders, capping the fees at $16 per $100 loaned. Rep. Miller said some payday-loan companies charge $44 or more per $100 loaned.

The average payday loan charges an annual interest rate of 520 percent, Mr. Brubaker said. But consumer groups have found instances of loans with interest rates greater than 1,300 percent.

If passed, Mr. Brubaker said, this measure would drive the payday-loan industry out of business in Illinois.

"It won't put anybody out of business, but it will hopefully make it a little easier for people to get out of debt," Rep. Mike Boland, D-East Moline said.

This measure is long overdue, Rep. Pat Verschoore, D-Milan, said. In most cases the people who get payday loans are "the people who can't afford to be in those positions," he added.


This is a good step in the right direction. The Dope hopes this legislation is successful in the Senate.

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8 Comments:

At 4/13/2005 10:16 AM, Blogger maybesomeday said...

I for one feel that these Predatory Lenders need to be put out of business.

C'mon folks - who are we kidding? They are making money in a sleazy way off of the working poor......

Wake up Springfield - just because they pay chamber dues does not mean they are respectful businesspeople.

Examine what they do - visit the locations and make a few calls. Do your homework and grow some strong scruples and maybe try and pass some laws that really mean something with some real teeth for some enforcement?

Of course, if our Reps are getting campaign checks from these same guys - maybe that's the problem....

 
At 4/13/2005 11:10 AM, Blogger Iowa Libertarian said...

If you make this kind of short-term loan activity illegal, you will simply drive it underground where you will no longer have any prayer of being able to even regulate it.

So yeah, it's pretty sleazy, but I'd rather regulate the worst practices than totally lose control.

 
At 4/13/2005 3:05 PM, Blogger maybesomeday said...

So you think it's ok for people to capitalize on folks own ignorance?

Maybe the answer is to more fully fund our educational system so people are not so easily fooled and can actually make a living at a real job.

 
At 4/14/2005 4:21 PM, Blogger corn husker said...

people been borrowing since th ebeginning of time.

 
At 4/15/2005 2:58 AM, Blogger Truthbait said...

Make the interest from these loans 100 % tax deductible, then the government will do something.

This is modern loan sharking and is an epitome to the decilning values that are perpetuating our society. These preditory lending practices have pockets rooted in the rebublican party - (can you say Savings and Loans), these operations are a direct result in the compromises that Ronald Reagan and Bush-1 negotiated to keep their buddies in the finacial industry back rooms out of jail and continued ability to deciferg dollars from the poor communities.

Ironically this is also a decendant cause-fateaccompli that was a prelude to the fall of the Roman Empire. Pay attention - we are trading a very dangerous time under the Bush era.

 
At 4/16/2005 1:42 PM, Blogger maybesomeday said...

I like the idea of the tax shelter for the interest - that would get attention.

However, the current administration wants to get rid of income tax altogether - so getting that into law could be tough.....

 
At 11/07/2008 11:04 AM, Anonymous payday loans said...

I am so sick and tired of the government trying to regulate everything Americans do!!! What is next? Are they going to tell me how many pairs of shoes I can own, or how many credit cards I can have. They are already trying to put the payday loans business out of business. At least my local payday lender has cash on hand, which is more than can be said about banks these days.

 
At 11/08/2008 4:13 AM, Blogger The Inside Dope said...

Thanks for that extremely goofy and phoney sounding comment.

No one but the predatory lenders themselves could possibly be in favor of these destructive con-job businesses which prey on the poor.

 

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