American Fintech Council Endorses Illinois Predatory Loan Prevention Act, Urges Governor Pritzker to Sign Bill

“This legislation will provide critical consumer protection for Illinoisans struggling in the COVID economy, especially communities of color who are disproportionately targeted by abusive payday and car title lenders.”‍

WASHINGTON, D.C. - The American Fintech Council (AFC) is endorsing and urging Illinois Governor J.B. Pritzker to sign into law SB 1792, the Illinois Predatory Loan Prevention Act (PLPA), a bill to establish a 36% annual percentage rate (APR) cap on consumer loans in Illinois. The bill was introduced by Rep. Sonya Harper as part of the Economic Equity Pillar of the Illinois Legislative Black Caucus “ILBC” Reform Agenda earlier this year.

Illinois consumers spend more than $500 million per year in payday and auto title loan fees, and the average APR on a payday loan is 297%. Both industry and consumer advocates agree that the PLPA would have national implications, raising the bar on state usury protections.

“Our members show every day it is possible to offer loans at no more than 36% APR, while assessing a borrower’s ability to repay,” said the American Fintech Council Executive Committee. “We are strong proponents of extending the federal Military Lending Act’s 36% rate cap protections to all Americans, and working with lawmakers to eliminate triple digit interest rates that put too many distressed families into debt traps. This legislation will provide critical consumer protection for Illinoisans struggling in the COVID economy, especially communities of color who are disproportionately targeted by abusive payday and car title lenders. We thank the State Legislature and community leaders like Woodstock Institute, the Urban League, and the Heartland Alliance for pushing this bill forward, and we urge Governor Pritzker to sign it into law.”

The bill doesn’t carve out particular products like installment loans or auto purchase loans or fail to consider the cost of “add-on” products like credit insurance.

The PLPA is on Governor JB Pritzker’s desk awaiting his signature, but legislators have already filed bills that would add loopholes to the PLPA.

The American Fintech Council is the leading voice of the financial technology industry and includes some of the largest providers of unsecured consumer loans in the country.