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The Illinois House of Representatives passed the Predatory Loan Prevention Act today, which if passed by the Senate, would implement a 36 percent interest rate cap on consumer loans, including payday and car title loans. The legislation passed with a bipartisan vote, without a single member voting no. It is part of an omnibus economic equity bill, one of the Illinois Legislative Black Caucus’ four pillars, sponsored by Rep. Sonya Harper.
In Illinois, the average annual percentage rate (APR) on a payday loan is 297 percent, and the average APR on an auto title loan is 179 percent. Federal law already protects active-duty military with a 36 percent APR cap. This bill would extend the same protection to Illinois veterans and all other consumers. Seventeen states plus the District of Columbia have 36 percent caps or lower.
A coalition of more than 50 consumer, faith, labor, community and civil rights organizations, along with financial institutions and the Office of the Illinois Treasurer, support the legislation (full list at bottom).
In response, advocates from Woodstock Institute, Heartland Alliance, Illinois PIRG, and Capital Good Fund made the following statements:
“I commend the Illinois General Assembly for advancing the Predatory Loan Prevention Act. Predatory lending has stripped billions of dollars from communities of color, and in capping APRs at 36%, the Illinois general assembly has taken a significant step towards racial justice.” -- Brent Adams, Senior Vice President of Policy & Communications, Woodstock Institute.
“Today, the Illinois General Assembly took steps to protect consumers and address the racial wealth gap by moving forward with the Predatory Loan Prevention Act. This is one giant step in the right direction toward financial security for every Illinoisan.” - Amy Eisenstein, Coalition Manager, Illinois Asset Building Group, a project of Heartland Alliance
“This legislation will ensure more Illinoisans land on their feet, not their backs, after taking out a small loan in a time of need. We applaud Representative Harper for championing consumer protection and call on the Senate to pass the Predatory Loan Prevention Act.” -- Abe Scarr, Director, Illinois PIRG
“As a nonprofit providing loans that serve as an alternative to high-double and triple-digit interest products, every day we see the tremendous harm done to families by predatory lenders. We are delighted that the General Assembly is taking action to protect lower-income Illinoisians and level the playing field for equitable lenders like us.” -- Andy Posner, Founder and CEO, Capital Good Fund
The Predatory Loan Prevention Act is endorsed by: AARP Illinois, Americans for Financial Reform, Asian Americans Advancing Justice - Chicago, Capital Good Fund, Catholic Conference of Illinois, Center on Tax and Budget Accountability, Chicago Coalition for the Homeless, Chicago Jobs Council, Chicago Urban League, Chinese American Service League, Citizen Action Illinois, COFI, Col. Paul Kantwill, USA (Ret);Distinguished Prof., Loyola Univ. Chicago School of Law, Community Renewal Society, Congressman Chuy Garcia, Consumer Federation of America, Credit Builders Alliance, Economic Security for Illinois, Elevate Energy, Faith Coalition for the Common Good, Gamaliel of Illinois, Heartland Alliance, Housing Action Illinois, Illinois Chapter of the National Association of Consumer Advocates, Illinois People’s Action, Illinois PIRG, Junior Achievement of Chicago, Lawyers Committee for Better Housing, Lending Club, LIFT, Inc., Marketplace Lending Association, Metropolitan Family Services, New America Chicago, North Lawndale Employment Network, Northwest Side Housing Center, Office of the Illinois State Treasurer, POWER-PAC IL, Revolution Workshop, Seaway, a division of Self-Help FCU, Second Federal, a division of Self-Help FCU, SEIU Healthcare IL IN, Illinois Secretary of State Jesse White, Shriver Center on Poverty Law, The Low Income Utility Advocacy Project, The Resurrection Project, United Congregations of Metro East, Veterans for Common Sense, Voices for Illinois Children, Woodstock Institute, Working Credit NFP, YWCA Metropolitan Chicago.
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