Call for passage of legislation to stop pawnshops from charging 240% interest for loans

Interviews available upon request

CHICAGO – Faith leaders held a press conference December 23 to caution consumers about turning to predatory loans over the holidays.

Despite groundbreaking legislation passed into law last year capping consumer loan interest rates at 36%, Illinois pawnbrokers still charge as much as 243.3% APR for loans.

“Extravagant gifts are not necessary to enjoy the spirit of the holidays, and predatory lenders that charge triple-digit interest rates are a direct affront to Christian principles,” said Father Larry Dowling of the Archdiocese of Chicago. “The state needs to finish the work it started to protect consumers and close the pawnbroker loophole.”

The state’s 36% interest rate cap, known as the Predatory Loan Prevention Act (PLPA), was part of the Illinois Legislative Black Caucus’s “Economic Access Pillar” to help narrow the racial and ethnic wealth gap.

There is considerable evidence that predatory lending disproportionately impacts Black, Brown, and underserved communities. See, e.g., High-interest loans in Chicago target Black neighborhoods (Nov. 26, 2021). In 2020, the average income of a payday loan borrower was only $37,582 according to data published by the Illinois Department of Financial and Professional Regulation.

A judge in Sangamon County Circuit Court granted pawnbrokers an injunction in September 2021 allowing them to continue charging predatory interest rates. Legislation is pending in Springfield that would fix the problem and require Illinois pawn brokers to charge no more than 36% APR for their loans.

“We need to protect the integrity of the economic pillar from the ill intentions of pawn brokers who are disregarding this law and preying on the financially vulnerable, undermining the pillar that is intended to protect the very people they’re targeting,” said State Sen. Jacqueline Collins (D-Chicago).

A woman named Jazmine T., who took out two $800 pawn loans to help her with moving expenses, is also urging legislators to close the pawnbroker loophole. With a triple digit interest rate, she ended up paying more than $2,000 in loan fees and property valued at over $6,000.

“Regardless of the time of year, trying to make a profit off of someone else’s hardship goes against central tenets of the Jewish faith,” said Leah Greenblum, founder and executive director of Jewish Free Loan Chicago (JFLC), which makes zero interest loans to families in need.

A recent poll regarding the impacts of the state interest rate cap shows that by a margin of more than 2 to 1, Illinoisans oppose “exceptions for pawnbrokers.” Eighty-six percent of Illinoisans support the PLPA rate cap. Support for the rate cap is overwhelming across political parties.

A wide swath of organizations and individuals support the legislation, including the Catholic Conference of Illinois, the United Way of Illinois, the NAACP, and the Illinois Hispanic Chamber of Commerce. (See fact sheet)


Woodstock Institute advances economic and racial justice within financial systems through research and advocacy across Illinois and the United States. Among our areas of focus are predatory lending, access to banking, debt collection, and municipal fines and fees.