Historic legislation to prevent predatory loans passes Illinois General Assembly

Media Contacts
Abe Scarr

State Director, Illinois PIRG; Energy and Utilities Program Director, PIRG

The Predatory Loan Prevention Act establishes a 36 percent interest rate cap on consumer loans


The Illinois General Assembly passed the Predatory Loan Prevention Act today, 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. Senator Jacqueline Collins, chair of the Senate Financial Institutions, spearheaded the broad coalition that supported the measure.

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. This 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, an and the Offices of the Illinois Treasurer and Secretary of State, support the legislation (full list at bottom). 

In response, advocates from Woodstock Institute, Heartland Alliance, Illinois PIRG, Capital Good Fund, and AARP Illinois made the following statements:

“Today is the culmination of 20 years of hard work by consumer advocates. Predatory lending has stripped billions of dollars from communities of color. In capping APRs at 36%, the Illinois General Assembly has taken a significant step towards racial justice.” — Brent Adams, Senior Vice President of Policy & Communication, Woodstock Institute 

“Today, the Illinois General Assembly took steps to protect consumers and address the racial wealth gap by moving forward with the Predatory Loan Prevention Act. This is one giant step in the right direction toward financial security for every Illinoisan.” – Amy Eisenstein, Coalition Manager, Illinois Asset Building Group, a project of Heartland Alliance

“This legislation will ensure more Illinoisans land on their feet, not their backs, after taking out a small loan in a time of need. We applaud Representative Harper, Senator Belt, and Senator Collins for championing consumer protection and call on Gov. Pritzker to sign the Predatory Loan Prevention Act.” — Abe Scarr, Director, Illinois PIRG

“As a nonprofit providing loans that serve as an alternative to high-double and triple-digit interest products, every day we see the tremendous harm done to families by predatory lenders. We are delighted that the General Assembly has taken action to protect lower-income Illinoisians and level the playing field for equitable lenders like us.” –– Andy Posner, Founder and CEO, Capital Good Fund.

“For far too long, unfair lending practices have hurt older adults across the state, especially those on low and fixed incomes, by luring them into a cycle of debt. On behalf of our 1.7 million members and all older adults in Illinois, we commend lawmakers for passing this legislation, which will protect older adults from unnecessarily high interest rates so they can focus on using their money for essential items like food, health care and medicine.” — Bob Gallo, AARP Illinois State Director.

The Predatory Loan Prevention Act is endorsed by: AARP Illinois, Americans for Financial Reform, Asian Americans Advancing Justice – Chicago, Brighton Park Neighborhood Council, Capital Good Fund, Catholic Conference of Illinois, Center on Tax and Budget Accountability, Chicago Coalition for the Homeless, Chicago Jobs Council, Chicago Urban League, Chinese American Service League, Citizen Action Illinois, COFI, Col. Paul Kantwill, USA (Ret); Distinguished  Prof., Loyola Univ. Chicago School of Law, Community Renewal Society, Congressman Chuy Garcia, Consumer Federation of America, Cook County Board President Toni Preckwinkle, Credit Builders Alliance, Economic Awareness Council, Economic Security for Illinois, Elevate Energy, Faith Coalition for the Common Good, Gamaliel of Illinois, Heartland Alliance, Housing Action Illinois, Illinois Asset Building Group,  Illinois Chapter of the National Association of Consumer Advocates, Illinois People’s Action, Illinois PIRG, Junior Achievement of Chicago, Lawyers Committee for Better Housing, Lending Club, LIFT, Inc., Marketplace Lending Association, Metropolitan Family Services, New America Chicago, North Lawndale Employment Network, Northwest Side Housing Center, Office of the Illinois State Treasurer, POWER-PAC IL, Revolution Workshop, Seaway, a division of Self-Help FCU, Second Federal, a division of Self-Help FCU, SEIU Healthcare IL IN, Illinois Secretary of State Jesse White, Shriver Center on Poverty Law, The Low Income Utility Advocacy Project, The Resurrection Project, United Congregations of Metro East, Veterans for Common Sense, Voices for Illinois Children, Woodstock Institute, Working Credit NFP, YWCA Metropolitan Chicago.