CCI celebrates Predatory Loan Prevention Act law that is becoming

CCI celebrates Predatory Loan Prevention Act law that is becoming

Tuesday, Mar 23, 2021

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The Catholic Conference of Illinois is proud to announce that Gov. J.B. Pritzker today signed into legislation Senate Bill 1792, creating the Predatory Loan Prevention Act, which caps the annual percentage rate (APR) on predatory loans, such as for instance payday and auto name loans, at 36%. Illinois becomes the eighteenth state to cap APRs at 36%, combined with the District of Columbia.

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

Browse 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 cap 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 an important milestone for financial equity in Illinois and potentially sets the phase for any other states to follow. Years into the generating, advocates—including a varied coalition of 150 nonprofits, civil rights teams, loan providers, faith leaders, and elected officials—applaud the job and eyesight set because of the Illinois Black Legislative Caucus that helped result in the bill that is standard-bearing in a crucial 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 car name loans, making more income in families’ pouches to invest in the regional economy and produce local jobs. Illinois customers save money than $400 million each year in payday and automobile name loan charges, and also the normal APR on a payday loan had been 297%. Both industry and customer advocates agree totally that the PLPA may have nationwide implications, increasing the club on state usury defenses.

“Today could be the culmination of over twenty years of advocacy,” said Brent Adams, Senior Vice President of Policy & correspondence at Woodstock Institute. “Thanks towards the leadership of this Legislative Ebony Caucus, Illinois is certainly going from being home for some of this worst abuses on the market to establishing an innovative new club in customer financial protection.”

Decreasing the racial wide range gap is really 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 residing in bulk White communities, the cost savings through the 36% price limit will dramatically gain Ebony and Brown communities. The recently released Woodstock Institute report on jobs also reveals that more jobs will likely to be added as result of this PLPA.

SB1792 had been championed within the legislature by Senator Jacqueline Collins (Assistant Majority Leader), Representative Sonya Harper (seat associated with Illinois Legislative Ebony Caucus), and Senator Christopher Belt. The PLPA had broad bipartisan help, including the majority of House Republicans and many Republicans when you look at the Senate, including Minority Leader Dan McConchie.

“For over 35 years, legalized loan sharking in Illinois has sapped huge amounts of dollars from low income and Ebony and Brown communities,” said Assistant Majority Leader Jacqueline Collins, a main sponsor for the PLPA and a long-time advocate for customer economic security. “The PLPA’s 36% price cap 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.”

“This is yet another, essential action toward conquering a few of the racial inequities which have overburdened communities of color inside our state for many years,” said Illinois Rep. Sonya Harper, (D-Chicago). “The disproportionate effect of those excessive charges happens to be one of the numerous facets which have added to Illinois’ racial wealth gap. We have been delighted that this legislation happens to be finalized into legislation.”

The signing associated with the PLPA now starts up space for alternate loan providers such as for example Capital Good Fund. Like us,” says Capital Good Fund founder and CEO Andy Posner“ I am delighted that Governor Pritzker has taken action to protect lower-income Illinois residents and level the playing field for equitable lenders. “As a nonprofit delivering loans that act as a substitute for high-double and triple-digit interest services and products, each day we come across the tremendous damage done to families by predatory lenders.”

It offers an unique chance of business, faith, and community leaders to generally share extra information on short-term loans. The PLPA advocacy team additionally developed a reference guide that will aid borrowers in taking a look at their choices in the years ahead. For the time being, opposition teams and predatory loan providers are generally pressing aggressive “trailer bills” and loopholes. Woodstock Institute together with PLPA coalition users continue steadily to break the rules on such efforts, including supplying this known 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.