| February 8, 2005
The Illinois General Assembly
Statehouse
Springfield, IL 62706
Dear Members of the Illinois General Assembly,
Soon, you will be considering
whether to pass the Payday Loan Reform Act. We strongly
support this bill and urge you to do the same.
This bill is the product
of years of hard work by the Monsignor John Egan Campaign
for Payday Loan Reform. The Egan Campaign is a coalition
of religious leaders, consumer advocates, labor unions,
public interest organizations, and social service
organizations that has been fighting since 1999 for
reform of the payday loan industry.
The Payday Loan Reform
Act would go far in protecting consumers from abuses
in the payday loan industry. The bill would:
-
Lower and cap fees on payday loans.
The bill would freeze fees at a maximum $16 per
$100 borrowed and would prohibit charging any
additional fees. Current fees in Illinois are
averaging $44.00 per $100 borrowed on 31-day loans.
-
Protect consumers from an endless
cycle of debt by establishing loan limits that
are tied to a consumer’s income. Under the bill,
a consumer could borrow an industry wide total
of no more than 25% of their gross monthly income.
-
Allows the consumer to shop around
for a better deal, enabling them to take only
up to two loans at any given time, thereby reducing
the possibility of being trapped in multiple loan
products.
-
Give consumers a chance to stabilize
their finances between loans through a debt-free
cooling-off period after 45-days of indebtedness.
-
Forestall collection activity
against members of the military who are deployed
in a combat or combat-support posting and prohibit
payday lenders from locating their stores within
one mile of a military base.
Payday loan reform is long overdue in
this state. Illinois consumers deserve the protections
of the Payday Loan Reform Act.
Very truly yours,
Citizen Action/Illinois
Chicago Federation of Labor
Illinois AFL-CIO
Illinois Public Interest Research Group
Metropolitan Family Services
Woodstock
Sargent Shriver National Center on Poverty
Law
Catholic Conference of Illlinois |
