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Letter to Governor Pritzker: Predatory Loan Prevention Act
A coalition of more than 110 lenders, elected officials, faith leaders and consumer advocates applaud the Illinois Legislature’s passage of the Predatory Loan Prevention Act as part of the 2021 economic equity omnibus bill proposed by the Illinois Legislative Black Caucus. The Predatory Loan Prevention Act passed with a bipartisan vote in both chambersâ€“unanimously in the state House. We joined dozens of coalition partners in a letter to Governor Pritzker respectfully urging him to sign the bill to help advance racial and economic justice in Illinois.
The Predatory Loan Prevention Act, SB1792, would cap interest rates on harmful, deceptive payday and auto-title loans at 36% Annual Percentage Rate (APR). Right now, the average APR on a payday loan in Illinois is 297%. A case in point, Chicago borrower Kesha Warren received a title loan in January 2020 for $1,200 to help support her small business. Her APR is 197.64% APR, and she has paid $3,000 on the initial loanâ€“so far.
Predatory lending is a racial justice issue. Research shows that a Chicagoan who lives in the predominantly Black neighborhood of Austin (zip code 60644) is 13 times more likely to take out a payday loan than a Chicagoan who lives in the predominantly white neighborhood of Lincoln Park (zip code 60614).
When this bill becomes law, it will stop the cycle of debt that families suffer as a result of payday and auto-title lenders charging 300% APRs on small dollar loans. It will also make Illinois the 18th state to take this step in capping APRs at 36% or lower. Furthermore, the passage of this bill will leave families with many affordable, safe options. Nonprofit lenders like Capital Good Fund and Self-Help Federal Credit Union already make loans at rates below 36%, right here in Illinois.
Download the letter to the Governor and check out the SB1792 fact sheet to learn more.
IABG, along with the Woodstock Institute, The Chicago Urban League, AARP Illinois, and Illinois PIRG are coordinating support for SB1792.