CCI celebrates Predatory Loan Prevention Act law that is becoming

Tuesday, Mar 23, 2021

First Page News

The Catholic Conference of Illinois is proud to announce that Gov. J Pritzker today finalized into legislation Senate Bill 1792, creating the Predatory Loan Prevention Act, which caps the apr (APR) on predatory loans, such as for example payday and automobile name loans, at 36%. Illinois becomes the eighteenth state to cap APRs at 36per cent, together with the District of Columbia.

CCI joined up with other social justice advocacy teams in pushing passing of the legislation throughout the January lame-duck session, and celebrates the governor’s action today.

See the news release given because of the combined teams below.

Predatory Loan Prevention Act Signed into Law

Advocates, company, community, and faith leaders celebrate 36% rate of interest limit on loans; applaud Illinois Black Caucus for leading equity pillar that is economic

CHICAGO (March 23, 2021)—The Predatory Loan Prevention Act (SB1792 – PLPA), finalized into legislation by Governor Pritzker today, marks a milestone that is significant financial equity in Illinois and potentially sets the phase for any other states to check out. Years when you look at the making, advocates—including a varied coalition of 150 nonprofits, civil legal rights groups, loan providers, faith leaders, and elected officials—applaud the task and eyesight set because of the Illinois Ebony Legislative Caucus that helped result in the standard-bearing bill feasible in a vital monetary year for a lot of.

The PLPA establishes a 36% APR limit on customer loans in Illinois, supplying defenses against pay day loans, installment loans, and automobile name loans, making more income in families’ pockets to blow within the economy that is local create local jobs. Illinois customers save money than $400 million each year in payday and car name loan costs, and also the APR that is average a pay day loan was 297%. Both industry and consumer advocates concur that the PLPA may have national implications, increasing the club on state protections that are usury.

“Today may be the culmination of over two decades of advocacy,” said Brent Adams, Senior Vice President of Policy & correspondence at Woodstock Institute. “Thanks towards the leadership of this Legislative Ebony Caucus, Illinois will go from being house for some associated with worst abuses on the market to establishing a fresh club in consumer economic protection.”

Decreasing the racial wide range space is really a key principle associated with PLPA: because people surviving in communities of color pay over 2.5 times just as much per capita in charges as individuals residing in bulk White communities, the cost savings through the 36% price limit will somewhat benefit Ebony and Brown communities. The recently released Woodstock Institute report on jobs additionally reveals that more jobs may be added being a total outcome of this PLPA.

SB1792 was championed into 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 support that is bipartisan including almost all House Republicans and many Republicans into the Senate, including Minority Leader Dan McConchie.

“For over 35 years, legalized loan sharking in Illinois has sapped vast amounts of bucks from low income and Ebony and Brown communities,” said Assistant Majority Leader Jacqueline Collins, a main sponsor associated with the PLPA and a long-time advocate for customer protection that is financial. “The PLPA’s 36% price cap strikes the balance that is right usage of safe and affordable credit from the one hand and defense against predatory financing on the other side.”

“This is yet another, crucial action toward conquering a number of the racial inequities which have overburdened communities of color within our state for a long time,” said Illinois Rep. Sonya Harper, (D-Chicago). “The disproportionate impact among these exorbitant costs happens to be one of the numerous facets which have contributed to Illinois’ racial wealth space. We have been delighted that this legislation happens to be finalized into legislation.”

The signing of this PLPA now starts up space for alternate loan providers such as for example Capital Good Fund. “I am happy that Governor Pritzker has had action to safeguard lower-income Illinois residents and degree the playing industry for equitable loan providers like us,” claims Capital Good Fund founder and CEO Andy Posner. “As a nonprofit delivering loans that act as a substitute for high-double and triple-digit interest items, each day we come across the tremendous damage done to families by predatory lenders.”

It supplies an opportunity that is unique business, faith, and community leaders to talk about more info on short-term loans. The PLPA advocacy team additionally developed a reference guide that can help borrowers in taking a look at their options moving forward. For the time being, opposition teams and predatory lenders already are pushing“trailer that is hostile” and loopholes. Woodstock Institute and also the PLPA coalition users continue to break the rules on such efforts, including supplying this reality sheet for a loophole being backed by high-cost installment loan providers.

The Catholic Conference of Illinois, Chicago Urban League, Illinois People’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.