Reprinted from Nov. 16 Chicago Sun-Times letters to the Editor
Friday was Veterans Day, when we honor and recognize veterans for their sacrifice of blood sweat and tears in service to our country. In Illinois, though, one way veterans can expect to be recognized is by paying 240% interest or more for a pawn loan. As a retired veteran, banker and board chair of the Woodstock Institute, I believe our state can do better by its veterans —and everyone else, for that matter.
Last week, Illinois pawnbrokers made 240%-plus loans to an active-duty service member, in violation of a federal law capping the interest rates for loans to active-duty service members and their families at 36%. The Illinois Pawnbrokers Association said it was “an isolated incident,” according to the Woodstock Institute. But the same day, another Illinois pawnbroker issued another 243.3% annual percentage rate loan to an active-duty service member.
The solution is simple: Cap pawn loan rates at 36% APR, just like other personal loan providers in the state since the passage last year of the Predatory Loan Prevention Act. The law, passed with the leadership of the Illinois Legislative Black Caucus, capped payday and auto title loans at 36% APR. But an injunction by a Sangamon County court last year enabled pawnbrokers to ignore the cap. We need a new law to close that loophole.
The Legislature is back in session for a few more weeks this year. Members should pass a bill to ensure pawnbrokers, too, abide by the 36% APR cap on personal loans. The way to honor and respect those who have served is to support, not extort, them when they have an urgent need for cash.
Tommy Fitzgibbon, retired, United States Navy, and board chair, Woodstock Institute