When they can’t pay back the loans, which average just over $1,000, they lose their cars, along with their ability to get to jobs and medical appointments or take the kids to school. Or maybe they pay the loans instead of rent and wind up on the streets.

This is a classic case of a business exploiting poor and desperate people. It is legal loan-sharking. It should not be tolerated.

Ideally, Congress would impose a reasonable cap on all such consumer loans nationwide, but no one expects Congress to do that. That would require standing up to the loan industry lobbyists who fund their campaigns. As a second best, the Illinois Legislature should rein in these loans in this state, beginning with a cap on the interest rate.

Illinois Attorney General Lisa Madigan and consumer groups are calling for a cap of 36 percent. Something in that ballpark sounds about right to us. Interest rates as high as 300 percent are unconscionable.

According to a new study by the Woodstock Institute and the Illinois Asset Building Group, people in Illinois pay average fees of more than $3,000 for auto-title loans — roughly three times the amount of the loan — and need a year and a half to pay them off. That’s a huge burden for people who are struggling financially.


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