HB 779 re-codifies 240%+ interest but adopts new consumer protections

For Immediate Release:
March 7, 2024

Andrea Magana
andrea@sgstrategies.com | (714) 654-8143

SPRINGFIELD –Today, the Illinois House of Representatives passed HB779, a rewrite of the Pawnbroker Regulation Act (PRA). Upon passage, a coalition of consumer advocates – including AARP, the Catholic Conference of Illinois, the Chicago Urban League, and Woodstock Institute – and financial technology (fintech) companies (the “Coalition”), sent a letter to Governor Pritzker identifying the pros and cons of the bill. 

Among the pros: the bill prohibits pawnbrokers from making auto title loans, which is a problem in other states. The bill also empowers the Illinois Department of Financial & Professional Regulation (IDFPR), to collect data about every pawn loan made in the state.

Among the cons: the bill permits pawnbrokers to continue charging 240%+ APR on loans less than $500.

“This bill is a ‘mixed bag’ from a policy perspective. Unable to compete with the pawn industry’s considerable resources, we decided to remove our opposition to the bill and take “No Position.”” said Brent Adams, Senior Vice President of Policy & Advocacy at Woodstock Institute. “The interest rates are still too high, but HB 779 lowers the rate on loans of $500 and above. A critical component of HB 779 is data collection, which is intended to enable the stakeholders to revisit the issue of interest rates at a future date. We are grateful for the leadership of State Senator Elgie Sims, who spearheaded negotiations in the Senate and signaled a commitment to addressing rate-related concerns in the years to come.”

Earlier this year, Woodstock released a report, which showed that Illinois consumers have saved over $600 million thanks to the 36% interest rate cap on consumer loans that was established in 2021. Woodstock’s report stated that there is a high probability that some of the money saved by consumers on payday and auto title loans was spent on pawn loans. The report pointed to Ohio where, after enacting a cap of 28% APR on payday loans, there was a 97% increase in pawn shops. 

Caps on pawn loan finance charges vary considerably among the states. Michigan caps pawn loans at 36% APR plus a $3 per month storage fee while Kentucky permits a pawnbroker to charge as much as 264% APR. Iowa has no cap.

In recent years, more states have established rate caps and resisted industry efforts to raise rates. New Mexico established a 36% rate cap on installment loans modeled after the Illinois law. Colorado and Minnesota reduced the allowable APR on certain small short-term loans, and Florida’s governor vetoed a bill last year that would have raised interest rates on installment loans to 36%.


Woodstock Institute is a leading policy and research nonprofit that advocates for consumer financial protection and community economic development. Our work seeks to combat structural inequities and to improve the quality of life in lower-income neighborhoods and communities of color. Among our areas of focus are predatory lending, access to banking, debt collection, and municipal fines and fees.