Those looking to take out a payday cash advance loan in Illinois may run into some trouble this year. As part of a host of new legislation aimed to solve budget shortfall issues, the Illinois General Assembly passed a new law in an effort to curb payday lending and fill up some of the perceived holes in previous payday lending legislation. A new bill was also passed to help lessen the troublesome amount of wage theft, which is on the rise in the state. These new regulations over Illinois payday loans appear to be a part of a recent trend, as other states are also passing laws attempting to restrain cash advance loans.
The new payday lending law in Illinois, HB 537, passed through both houses of the legislature unanimously and reins in lenders in several ways. For starters, they will be prevented from charging more than 99 percent interest. This is seen as an improvement, although payday cash advance interest is often calculated rather deceptively. Also, loan amounts will be set at income level, and equal monthly installment loan payments will be required as well. Though these changes are not particularly radical, they will certainly affect both lenders and borrowers in several ways.
SB 3568 Seeks to Curb Rising Wage Theft
Last year, there were over 10,000 reported cases of wage theft, and since this is a major problem that definitely contributes to increased payday lending, the bill is expected to help solve predatory cycles. It is estimated at the moment that employers across the state owe more than $7 million. To prevent this number from skyrocketing even more, the bill will also make it a felony for an employer to owe $500 or more in back wages.
Payday Loan Options in the Wake of Illinois' New Laws
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