June 21, 2010
Gov. Pat Quinn sign signed a new law Monday that is designed to protect people from predatory payday loans.
Under current law, there are no limits on how much loan companies charge in interest. The new legislation would cap those rates at 99 percent for loans up to $4,000 and prohibit what officials call abusive pre-payment penalties.
“Even with these new protections these loans will still be costly and they should only be used in emergencies in a last resort,” said Lisa Madigan, Illinois Attorney General.
The new legislation will also allow regulators to capture payday loan information in a database so they can take actions against lenders who do not follow the law.