SB 1792 would cap the interest rate on loans at 36% APR

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A coalition of more than 110 lenders, elected officials, faith leaders and consumer advocates applaud the Illinois Legislature’s passage January 13 of the Predatory Loan Prevention Act as part of the economic equity omnibus bill proposed by the Illinois Legislative Black Caucus. On Monday dozens of them wrote Governor Pritzker respectfully urging him to sign the bill to help advance racial and economic justice in Illinois.   

The Predatory Loan Prevention Act, SB 1792, would cap interest rates on harmful, deceptive payday and auto-title loans at 36% Annual Percentage Rate, APR. Right now, the average APR on a payday loan in Illinois is 297%.

A case in point, Chicago borrower Kesha Warren received a title loan in January 2020 for $1,200 to help support her small business. Her APR is 197.64% APR, and she has paid $3,000 on the initial loan–so far.

“Predatory lending is a racial justice issue,” the coalition writes Pritzker.“Payday lenders have always targeted communities of color, and this effect has been exacerbated during the pandemic. Our nation’s reckoning with racial justice should include Illinois reckoning with the wedge that high-cost, small dollar lending drives straight through the racial wealth gap, widening it further. With this structural inequity in mind, we hope you will sign SB 1792.”

The most current SB 1792 fact sheet with additional details advocating for the bill’s passage includes support from Mayor Lightfoot, Congressman Garcia, Attorney General Raoul, State’s Attorney Foxx, Cook County Board President Preckwinkle, and over 100 others.

The Predatory Loan Prevention Act passed with a bipartisan vote in both chambers–unanimously in the state House. Representative Sonya Harper and Senator Christopher Belt, members of the Illinois Legislative Black Caucus, sponsored the bill. Senator Jacqueline Collins, chair of the Senate Financial Institutions Committee, spearheaded the broad coalition that supported the measure.  

Lack of access to banking products results in predatory lending practices proliferating communities of color. For example, advocates cite recent research showing that a Chicagoan who lives in the predominantly Black neighborhood of Austin (zip code 60644) is 13 times more likely to take out a payday loan than a Chicagoan who lives in the predominantly white neighborhood of Lincoln Park (zip code 60614).  

When this bill becomes law, it will stop the cycle of debt that families suffer as a result of payday and auto-title lenders charging 300%+ APRs on small dollar loans. It will also make Illinois the 18th state to take this step in capping APRs at 36% or lower. A 36% cap already protects active duty military members nationwide thanks to the Military Lending Act.

Contrary to the industry’s arguments, the passage of this bill will leave families with many affordable, safe options.  Nonprofit lenders like Capital Good Fund and Self-Help Federal Credit Union already make loans at rates below 36%, right here in Illinois. 

“On this issue, Illinois is behind the times,” said Brent Adams, Senior Vice President of Policy and Communication at Woodstock Institute, pointing to a ranking of states that lists Illinois toward the bottom. Woodstock along with The Chicago Urban League, AARP Illinois, The Illinois Asset Building Group, a project of Heartland Alliance, and Illinois PIRG are coordinating support for SB 1792. 

A growing number of organizations have signed on to the effort including (list as of 2-23-21) :

Industry 

  • Affirm
  • Avant
  • Best Egg
  • Capital Good Fund
  • Great Lakes Credit Union
  • Lending Club
  • Marketplace Lending Association
  • Marlette Funding
  • Prosper
  • Seaway, a division of Self-Help FCU
  • Second Federal, a division of Self-Help FCU
  • SoFi
  • Upstart

Government 

  • City of Chicago Mayor Lori E. Lightfoot 
  • Congressman Jesús G. “Chuy” Garcia
  • Cook County Board President Toni Preckwinkle 
  • Cook County State’s Attorney Kim Foxx
  • Attorney General Kwame Raoul
  • Secretary of State Jesse White
  • State Treasurer Michael Frerichs
  • Illinois Comptroller Susana Mendoza
  • Evanston Mayor-Elect Daniel Biss
  • Ald. Raymond A. Lopez, 15th Ward, Chicago
  • Ald. Pat Dowell, 3rd Ward, Chicago
  • Ald. Andre Vasquez, 40th Ward, Chicago
  • Ald. James Cappleman, 46th Ward, Chicago
  • Ald. Maria Hadden, 49th Ward, Chicago
  • Mayor Tari Renner, City of Bloomington
  • Ald. Jennifer Jazmin Carrillo Gomez, 6th Ward, Bloomington
  • Ald. Jeff Craybill, 8th Ward, Bloomington
  • Dr. Peter Schwartzman, Ald. 5th Ward, Galesburg

National Advocates 

  • Americans for Financial Reform
  • Black Veterans Project
  • Center for Responsible Lending
  • Consumer Federation of America
  • High Ground Veterans Advocacy
  • Minority Veterans of America
  • National Community Reinvestment Coalition
  • National Consumer Law Center 
  • National Housing Law Project
  • Prosperity Now
  • Veterans for Common Sense 

Illinois Clergy 

  • Rev. Robert Freeman, Urbana
  • Rev. Kelly J. Youngblood, Bourbonnais
  • Rev. Robert Bushey, Kankakee
  • Rev. Dr. Eugene Barnes, Champaign
  • Rev. Janet Eggleston, Galena
  • Rev. Violet Johnicker, Brooke Road United Methodist Church, Rockford
  • Rev. Tony Pierce, Pastor, Heaven’s View Christian Church, Peoria
  • Rabbi Rebecca L. Dubowe, Bloomington
  • Rev. Violet Johnicker, Brooke Road United Methodist Church, Rockford
  • Rabbi Rebecca L. Dubowe, Bloomington
  • Cliff Parks, Heaven’s View Christian Fellowship, Peoria
  • Pastor Kent King-Nobles, Normal
  • Rev. Frank Langholf, Emmanuel Lutheran Church, Rockford
  • Msgr. Doug Hennessy, Bloomington
  • Rev. Alphonso Lyons, Jr., Mt. Zion Baptist Church, Peoria
  • Presiding Elder, Rev. Tyson J. Parks, Danville
  • Sister Joan Schullian OSF, Decatur
  • Rev. Violet Johnicker, Brooke Road United Methodist Church, Rockford
  • Rabbi Rebecca L. Dubowe, Bloomington
  • Cliff Parks, Heaven’s View Christian Fellowship, Peoria
  • Pastor Kent King-Nobles, Normal
  • Rev. Frank Langholf, Emmanuel Lutheran Church, Rockford
  • Msgr. Doug Hennessy, Bloomington
  • Rev. Alphonso Lyons, Jr., Mt. Zion Baptist Church, Peoria
  • Presiding Elder, Rev. Tyson J. Parks, Danville
  • Sister Joan Schullian OSF, Decatur

Illinois Advocates 

  • AARP Illinois
  • Age Options
  • Asian Americans Advancing Justice
  • Breakthrough
  • Brighton Park Neighborhood Council
  • Catholic Conference of Illinois
  • Center on Tax and Budget Accountability
  • Chicago Area Fair Housing Alliance
  • Chicago Coalition for the Homeless
  • Chicago Community Loan Fund
  • Chicago Food Policy Action Council
  • Chicago Jobs Council
  • Chicago Urban League
  • Chinese American Service League
  • Citizen Action / Illinois
  • COFI
  • Col. Paul Kantwill, USA (Ret); Prof., Loyola Univ. School of Law
  • Collaborative for Health Equity Cook County
  • Community Renewal Society
  • Credit Builders Alliance
  • Economic Security for Illinois
  • Elevate Energy
  • Englewood Community Connection Outreach Corp
  • EverThrive Illinois
  • Equity and Transformation
  • Faith Coalition for the Common Good
  • Family Independence Initiative Chicago
  • Gamaliel of Illinois
  • Garfield Park Community Council
  • Grassroots Collaborative
  • Heartland Alliance
  • High Ground Institute
  • Housing Action Illinois
  • Housing Choice Partners
  • HomeStart
  • Illinois Action for Children
  • Illinois Asset Building Group
  • Illinois Association of Area Agencies on Aging (I4A)
  • Illinois Partners for Human Service
  • Illinois People’s Action
  • Illinois Public Interest Research Group (IL PIRG)
  • Illinois Chapter of the National Association of Consumer Advocates
  • Illinois Conference of Churches
  • Jane Addams Resource Corporation
  • Jewish Council on Urban Affairs
  • Junior Achievement of Chicago
  • Latinx Voice
  • Lawyers Committee for Better Housing
  • Legal Action Chicago
  • LIFT, Inc.
  • LISC Chicago
  • Live Free Illinois
  • Logan Square Neighborhood Association
  • Metropolitan Family Services
  • Metropolitan Planning Council
  • Mujeres Latinas En Acción
  • NAACP Peoria Chapter
  • New America Chicago
  • North Lawndale Employment Network
  • Northwest Side Housing Center
  • OAI
  • Phalanx Family Services
  • POWER-PAC IL
  • Preservation of Affordable Housing Communities
  • Revolution Workshop
  • Rockford Area Habitat for Humanity
  • SEIU Healthcare IL IN
  • Shriver Center on Poverty Law
  • Southwest Organizing Project
  • The Low Income Utility Advocacy Project
  • The People’s Lobby
  • The Resurrection Project
  • Unitarian Universalist Advocacy Network of Illinois (UUANI)
  • United Congregations of Metro East
  • United Way of Illinois
  • Voices for Illinois Children
  • Women Employed
  • Woodstock Institute
  • Working Credit NFP
  • Youth Job Center
  • YWCA Metropolitan Chicago

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