By Dominc Fortini
December 29, 2008 
A group of consumer advocates is warning against borrowing holiday cash from payday loan stores.

Citizen Action Illinois is urging Illinois residents to avoid the
high fee loans and is calling for a reform of the practice. A report by
the Woodstock Institute shows on average, borrowers paid a $1,769
finance charge to borrow $1,224 for 319 days.

Co-director of Citizen Action Illinois, Lynda DeLaforge, says
stricter regulation of short term loans is needed to protect customers
from fees that, if they were expressed as interest rates, would amount
to 700 percent a year.

"We want payday loan reform measures to be passed in the 2009
Illinois State Legislature," DeLaforge said. "This coalition is going
to be working hard down in Springfield, and across the state of
Illinois with our partners, to make sure that this happens."

DeLaforgue says the Payday Reform Act of 2005 allows installment
loans over 120 days in length to be free of the consumer protections
applicable to loans 120 days or shorter. The 2005 Act created fee caps,
caps on borrowing to prevent over-borrowing and other reforms.
DeLaforgue says Citizen Action Illinois and other groups are pushing
for further regulation.
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