Loans_Payday_loan » Interest still high in payday battle - Chicago Tribune(Loans Payday Loan)

Jun

30

Interest still high in payday battle - Chicago Tribune(Loans Payday Loan)

Filed Under Loans Payday Loan | 

Effort to fill loophole Initially the drive to cap interest rates began in the state Senate with an effort to fill a loophole left by the 2005 payday loan reform act. Payday loan companies, some of which charge up to 1,000 percent annual interest on long-term loans, balked at lowering their rates without any financial incentives. And the companies that offer short-term installment loans, their annual interest rates ranging from 36 to 150 percent, balked at being lumped together under the same law with payday loan companies. They explained that they are long-term businesses, not new arrivals like some of the payday loan firms, and that they perform credit checks and try to work out payment plans based on clients’ budgets—steps not taken, they said, by payday loan companies. As the bill was under consideration in the House, small loan firms were especially worried by talk of setting the annual interest rate caps as low as 36 percent, said Kevin McFadden, a lobbyist for the Illinois Financial Services Association, which represents most of the installment loan firms in the state. read more

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