The law, sponsored by Rep. Greg Harris (D-Chicago) and Sen. William Haine (D-Alton), requires that payday lenders obtain a license from the Illinois Department of Financial and Professional Regulation. Lenders who fail to obtain a license may  face a felony charge. The law also protects borrowers from a cycle of debt by preventing lenders illegally making loans in Illinois from collection on any outstanding debt. Unlicensed payday lenders generally operate online, but not all online payday lenders are unlicensed.


Any borrower who seeks out a payday loan should have the assurance that the lender abides by Illinois consumer protection laws that limit the cycle of debt, promote affordability, and ensure transparency, regardless of whether the transaction occurs at a brick-and-mortar store or via a lender’s website. This new law  discourages unscrupulous lenders from operating in the state and, if they do, gives regulators  stronger tools to hold them accountable.