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The Catholic Conference of Illinois is proud to announce that Gov. J.B. Pritzker today finalized into legislation Senate Bill 1792, creating the Predatory Loan Prevention Act, which caps the percentage that is annual (APR) on predatory loans, such as for instance payday and automobile name loans, at 36%. Illinois becomes the state that is 18th cap APRs at 36per cent, combined with the District of Columbia.
CCI joined other social justice advocacy teams in pressing passage through of the legislation throughout the January lame-duck session, and celebrates the governorвЂ™s action today.
Browse the news release granted by the combined teams below.
Predatory Loan Prevention Act Signed into Law
Advocates, company, community, and faith leaders celebrate 36% rate of interest cap on loans; applaud Illinois Ebony Caucus for leading economic equity pillar
CHICAGO (March 23, 2021)вЂ”The Predatory Loan Prevention Act (SB1792 вЂ“ PLPA), finalized into legislation by Governor Pritzker today, marks a milestone that is significant financial equity in Illinois and possibly sets the phase for any other states to adhere to. Years within the generating, advocatesвЂ”including a diverse coalition of 150 nonprofits, civil legal rights teams, loan providers, faith leaders, and elected officialsвЂ”applaud the task and vision set because of the Illinois Ebony Legislative Caucus that helped result in the standard-bearing bill feasible in a crucial monetary 12 months for a lot of.
The PLPA establishes a 36% APR cap on consumer loans in Illinois, supplying defenses against pay day loans, installment loans, and car name loans, making more cash in familiesвЂ™ pouches to invest into the regional economy and produce local jobs. Illinois IN auto title loans customers save money than $400 million each year in payday and automobile name loan fees, together with normal APR on a cash advance had been 297%. Both industry and customer advocates agree totally that the PLPA may have nationwide implications, increasing the club on state protections that are usury.
вЂњToday may be the culmination of over two decades of advocacy,вЂќ said Brent Adams, Senior Vice President of Policy & correspondence at Woodstock Institute. вЂњThanks into the leadership associated with the Legislative Ebony Caucus, Illinois goes from being house with a regarding the worst abuses on the market to establishing a fresh club in customer monetary protection.вЂќ
Decreasing the racial wide range space is a key concept associated with the PLPA: because individuals residing in communities of color pay over 2.5 times just as much per capita in costs as individuals located in bulk White communities, the cost cost savings through the 36% price limit will somewhat gain Ebony and Brown communities. The recently released Woodstock Institute report on jobs additionally demonstrates that more jobs will soon be added as being a total outcome associated with PLPA.
SB1792 had been championed within the legislature by Senator Jacqueline Collins (Assistant Majority Leader), Representative Sonya Harper (seat associated with the Illinois Legislative Ebony Caucus), and Senator Christopher Belt. The PLPA had broad bipartisan support, including almost all House Republicans and several Republicans into the Senate, including Minority Leader Dan McConchie.
вЂњFor over 35 years, legalized loan sharking in Illinois has sapped huge amounts of bucks from low income and Ebony and Brown communities,вЂќ said Assistant Majority Leader Jacqueline Collins, a main sponsor regarding the PLPA and a long-time advocate for customer monetary security. вЂњThe PLPAвЂ™s 36% price limit hits the balance that is right use of safe and affordable credit in the one hand and security from predatory financing on the other side.вЂќ
вЂњThis is another, essential action toward conquering a few of the racial inequities which have overburdened communities of color within our state for a long time,вЂќ said Illinois Rep. Sonya Harper, (D-Chicago). вЂњThe disproportionate effect of those excessive costs happens to be one of the numerous facets which have added to IllinoisвЂ™ racial wealth space. Our company is delighted that this legislation was signed into legislation.вЂќ
The signing associated with PLPA now starts up space for alternate loan providers such as for instance Capital Good Fund. вЂњI am pleased that Governor Pritzker has had action to guard lower-income Illinois residents and degree the playing industry for equitable loan providers like us,вЂќ claims Capital Good Fund creator and CEO Andy Posner. вЂњAs a nonprofit providing loans that serve as a substitute for high-double and triple-digit interest items, each and every day we come across the tremendous damage done to families by predatory lenders.вЂќ
Moreover it provides an opportunity that is unique company, faith, and community leaders to share with you more info on short-term loans. The PLPA advocacy team additionally developed a resource guide that will aid borrowers in considering their choices in the years ahead. For the time being, opposition teams and predatory lenders are generally pressing aggressive вЂњtrailer billsвЂќ and loopholes. Woodstock Institute and also the PLPA coalition users continue steadily to break the rules on such efforts, including supplying this known fact sheet on a loophole being backed by high-cost installment loan providers.
The Catholic Conference of Illinois, Chicago Urban League, Illinois PeopleвЂ™s Action, Capital Good Fund, the Illinois Asset Building Group, Heartland Alliance, Illinois PIRG, New America, Citizen Action/Illinois, the American Fintech Association, and Woodstock Institute among the lead organizations advocating for passage of the PLPA are AARP.