Finding A Pay Day Loan In Illinois
A landmark Illinois Pay Day Loan Reform Act was signed by Governor Rod R. Blagojevich on June 9, 2005. The act went into effect in December 2005. The act protects the consumers against the abusive exploitation methods used by pay day loan companies, especially against military persons and families who are among the working class. Governor Blagojevich declared that pay day loans were not supposed to empty peoples bank accounts but to help them get through unforeseen costs and emergency situations. When customers can’t repay their pay day loan in Illinois, as with anywhere else, they then renew the loan. This causes the cycle to repeat without any foreseeable ending. There are no alternative repayment plans. At the present time, nine hundred and ninety-five pay day or other short-term lenders are present in Illinois. In the past there was no protection for consumers against the predatory tactics 0f lenders, which translated into high interest rates and endless debt. The Illinois Pay Day Loan Reform Act also protects military members from abusive lenders. The lender can not collect from a person in the armed services while they are in a combat zone. They can not garnish the military member’s check anymore.
According to Lt. Governor Pat Quinn, “For too long, pay day loan operators took advantage of the most vulnerable consumers, including members of the military. This legislature curbs the spiral of debt which so many Illinois residents have experienced due to predatory lenders”
The Illinois Pay Day Loan Reform Act prohibits the abusive practices of pay day lenders in several ways: 1) It sets a cap on the total loan amount for a consumer at $1000 or 25% of the borrower’s monthly income – which ever is the lowest amount. 2) Borrowers who are having trouble repaying their loans are allowed a fifty-six day period to repay the lender without any additional interest charges. 3) It states that Illinois pay day loan borrowers can not have a loan for longer than forty-five days. Once they have met the forty-five day period, they must remain loan-free for at least seven days. No more than two loans at one time are allowed. 4) Borrowers can not be criminally prosecuted for unpaid loans. Attorney General Lisa Madigan warned consumers to beware of the media advertisements speaking of low-cost pay day loans and enticing customers with T-shirts, free turkeys, and other items for signing up. A pay day loan in Illinois is one of the states quickest growing kinds of consumer credit. Therefore pay day lenders have to be licensed by the Illinois Department of Financial and Professional Regulation and abide by the rules of the Pay Day Loan Reform Act. Some community banks, competing for business will help consumers by enabling them not to have to pay for high interest rates and fees.
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