Did you know that Illinois law permits payday loan stores to charge borrowers up to 400% interest rates?
This means a single mother taking out a $500 loan to make ends meet will end up paying back $800 on that same loan.
THAT AIN'T RIGHT!
150 IPA members protest payday lender, Peoria IL
We can’t fix our economy until we figure out how to stop this curse of payday lenders. You’ve seen the TV ads and received their junk mailings for easy cash loans. What they don’t tell you is they trap the desperate into a cycle of financial debt.
Big Banks, like Bank of America, finance payday loan stores. The Big Banks essentially use our taxpayer money to do it. Bank of America received billions in taxpayer bail-out funds and turned around and lent millions to Advance America (nation’s largest payday lender). Advance America loans this money back out to hard working Americans at 400% interest. Read “Predators Creditors” report here
Payday lenders would lead us to believe they are an indispensable part of society, but they are a relatively new and bad development in Illinois history. lllinois used to have “usury” laws, which limited the amount of interest rate that could be charged. With deregulation of the financial industry in the 1980′s this interest rate cap was removed. People needing short term loans borrowed from family members or made payment arrangements.
Payday loan stores are not banks. They are “non-bank financial entities”. This means they aren’t regulated by banking agencies and their “customers” don’t have the same protections as bank customers have.
There is Power in People to make change. You can join the campaign to stop payday lenders’ abusive interest rates.
The facts on payday loan companies Letter to the Editor, Herald - Review, Decatur, IL "...payday loans hurt, do not help people to address both their issues of need and place people in a cycle of debt. In Illinois the average rate of interest for payday loans is 330 percent with the overwhelming majority of such loans going to persons who make an annual income of less than $30,000. The targeting of low income persons with dire needs is not the exception, this is the rule!"(read more)
High rates key to payday loan business Pantagraph, Bloomington, IL “...Such institutions and their parent companies have donated generously to state legislators with the regulatory power to impose tougher restrictions even as other states have banned the practice outright...” (read more)
Cities should cap rates on payday loans Letter to the Editor, Pantagraph, Bloomington, IL “After retiring from my Kansas medical practice, I became a consultant and volunteer with the employee assistance program at a Wichita hospital. Staff members with all kinds of problems presented themselves for help. But the cases which were the most difficult to manage involved individuals near the bottom of the pay scale trying to make ends meet…” (read more)
Cap interest rates on payday loans Letter to the Editor, Pantagraph, Bloomington, IL “Not in our towns!” That’s my reaction to learning that in Bloomington-Normal, payday lenders are charging exorbitant interest for loans to some of our most vulnerable citizens…” (read more)
Ban payday loans with high interest Letter to the Editor, Pantagraph, Bloomington, IL “There are people suffering in Bloomington-Normal and we can help. Poor residents in our community, especially single mothers, are finding that they are unable to buy food or medications because they have taken out a payday loan at 400 percent interest to pay for rent or other necessities.…” (read more)
Easy money promises often lead to problems Letter to the Editor, Pantagraph, Bloomington, IL “Let’s face it: We aren’t always aware of what flows through the sewers. One particular outrage plaguing us is the payday loan business…” (read more)
Car Title Lending
Consumers need protection from 300% interest rates on Car Title “lending” in Illinois.
There are currently only 16 states that allow title lending at triple-digit interest rates in the U.S. Illinois is one of those states. And, unfortunately, in Illinois car title lending is on the increase. Illinois auto title lenders nearly doubled the amount of revenue they made in total cash advances from October 2009 to June 2011. During that same timeframe, repossessions increased 271%.
The average car title borrower in Illinois borrows about $950 in principal but pays more than twice that amount ($2346) in interest and fees.
The average Illinois car title borrower makes less than $25,000 per year
When people lose their car, they lose:
Their mobility- this may impact their ability to get to and from work
Their good credit score- this limits the borrower’s ability to get loans or credit cards for up to seven years.
Their money- Car repossession doesn’t excuse the borrower from having to pay off the loan. So not only does the borrower no longer have his/her car, they still owe the balance on the loan.
It’s time to turn this trend around. Illinois People’s Action is organizing to protect consumers from predatory car title lending and advocating for the passage of legislation that will insure safe and sound car title lending practices. What are car title loans? In Illinois, car title loans are short-term, high-interest loans secured by the title of a vehicle. Typically, all that is needed to get a car title loan is a car title, driver’s license, spare key, pay stub, bank statement and a checkbook. Loans are often made quickly, without the borrower realizing what they are getting into. While car title lenders market their product as a way for families to overcome a financial emergency, more often than not those families are driven deeper into an endless cycle of debt.