* Catching up on some stuff today. Here’s a Wednesday press release…
The Illinois General Assembly passed the Predatory Loan Prevention Act today, which will implement a 36 percent interest rate cap on consumer loans, including payday and car title loans. The legislation, SB1792, which passed with a bipartisan vote in both chambers, was filed as part of the Illinois Legislative Black Caucus’ economic equity omnibus bill, and was sponsored by Rep. Sonya Harper and Sen. Chris Belt. Senator Jacqueline Collins, chair of the Senate Financial Institutions, spearheaded the broad coalition that supported the measure.
In Illinois, the average annual percentage rate (APR) on a payday loan is 297 percent, and the average APR on an auto title loan is 179 percent. Federal law already protects active-duty military with a 36 percent APR cap. This bill would extend the same protection to Illinois veterans and all other consumers. Seventeen states plus the District of Columbia have 36 percent caps or lower.
A coalition of more than 50 consumer, faith, labor, community and civil rights organizations, along with financial institutions, Secretary of State Jesse White, Treasurer Michael Frerichs, Cook County Board President Toni Preckwinkle, an and the Offices of the Illinois Treasurer and Secretary of State, support the legislation (full list at bottom).
* Hyde Park Herald…
Another economic equity bill, SB 1480, caps interest rates on payday and car title loans and to limit the use of criminal history records as a basis for employment and housing decisions. Peters, Tarver and Buckner voted for it.
Peters said the bill limits payday lenders ability to charge interest rates to 36%, down from more than 300%.
“We would love it to be a lot smaller,” he said. “But the payday loan industry tried to send down an army of people to start (Sen.) Jackie Collins (D-16th) from getting that done, and what we knew was if you put that bill on the board, most people aren’t voting against it. You know you’d get more than 30 in the Senate, because you don’t want it to say for you politically that you stood in the way of payday loan reform.”
A measure that caps the annual percentage rate lenders can place on the unpaid balance of a payday loan at 36% and calls for disparity studies for certain industries received broad, bipartisan support in the House.
“These payday loan lenders need to be under strict, strict regulation,” said Rep. Andrew Chesney, a Republican from Freeport. “They prey on our communities, I would argue they’re a detriment to our communities.”
One provision of the Black Caucus’ extensive agenda limits the interest payday loan providers can charge to 36%.
“How many of you want to get a credit card from Macy’s or Neiman Marcus at 80%, 99% — this is preying on certain communities. It’s really targeting. … It’s a remake, rebirth of redlining, housing covenants and all the other ills and hells that decimated my community,” said Sen. Jacqueline Collins (D-Chicago). “And what we’re trying to do is ensure that they have an opportunity to build economic stability.”
That measure passed despite critics saying it’ll leave low-income individuals without any access to capital.
“There are many citizens – not just in Illinois but all across the country who don’t necessarily have the credit rating that would necessarily allow them to go to the company, lending institutions and borrow money, but nevertheless have a cash need or capital need, maybe short term or to put a new roof on their house or repair a car,” Sen. Dale Righter (R-Mattoon) said.
* Center Square…
The legislation also included an interest cap on payday loans, diversity requirements in state contracting and purchasing
and the removal of lead water pipes in public water systems.
“This pillar is part of the Black Caucus’ agenda to end systemic racism,” Harper said. “In this pillar, we are addressing several different areas such as banking and investment, economic mobility, small business and entrepreneurship, procurement and the Business Enterprise Program, industry-specific equity, housing, land-use gentrification, and pay equity and worker’s rights.”
Republican state Rep. Deanne Mazzochi said there were too many details left out of the legislation which could lead to future legal issues.
“I am an attorney. I deal with this kind of stuff all the time in terms of loose language and legislative statutes, and I will tell you they can lead to very unjust results,” Mazzochi said.