“Capping rates for short-term loans was our number one priority,” said Woodstock Institute Vice President Tom Feltner. “These reforms, passed overwhelmingly by the General Assembly with bi-partisan support, succeed in doing this and will ensure that borrowers are not stuck in long-term, 700 percent loans.”
“Under the provisions adopted today, Illinois lenders would be able to offer two types of products: long-term loans with APRs under 99 percent and higher-cost, shorter-term loans with additional protections for the most credit-challenged borrowers,” said Lynda DeLaforgue, co-director at Citizen Action/Illinois. “With the Governor’s signature, 700 percent interest rates will be a thing of the past.”
Consumer advocates, who have long pushed for an industry-wide interest rate cap of 36 percent, embraced the legislation as a much needed reform to eliminate the worst industry abuses. “Five years ago, we thought that a cap on interest rates could never pass in Illinois. Now we are seeing a meaningful rate cap move to the Governor’s desk,” said DeLaforgue.
The legislation was supported by the Monsignor John Egan Campaign for Payday Loan Reform, a coalition of over 30 consumer and community groups, Illinois Attorney General Lisa Madigan, and Illinois Treasurer Alexi Giannoulias. Illinois Senator Kimberly Lightford (D-4) and Representative Lou Lang (D-16) championed the bill.