SPRINGFIELD – The Illinois General Assembly passed the Predatory Loan Prevention Act Friday, which will implement a 36 percent interest rate cap on consumer loans, including payday and car title loans.
The legislation, SB1792, which passed with a bipartisan vote in both chambers, was filed as part of the Illinois Legislative Black Caucus’ economic equity omnibus bill, and was sponsored by Rep. Sonya Harper and Sen. Chris Belt.
In Illinois, the average annual percentage rate (APR) on a payday loan is 297 percent, and the average APR on an auto title loan is 179 percent. Federal law already protects active-duty military with a 36 percent APR cap.
The bill would extend the same protection to Illinois veterans and all other consumers. Seventeen states plus the District of Columbia have 36 percent caps or lower.
A coalition of more than 50 consumer, faith, labor, community and civil rights organizations, along with financial institutions, Secretary of State Jesse White, Treasurer Michael Frerichs, Cook County Board President Toni Preckwinkle, and the Offices of the Illinois Treasurer and Secretary of State, supported the legislation.