Moratorium on Payday Loans Extended in Illinois
By J.J. CameronPayday Loan Writer
As the Illinois legislature debates the issuse of payday loans, an ordinance to extend the moratorim on issuing cash advances was approved last week by City Council members.
There are approximately 10 Calmuet City companies in the area offering these fast cash loans - they'll now have to wait another six months before they can conduct their business. Third Ward Alderman Thaddeus Jones said the moratorium was extended because the city would like to see a wide variety of businesses open in the city and not just certain kinds that may target specific areas.
State Rep. David Miller, D-Calumet City, said Gov. Rod Blagojevich signed a bill in June 2005 regulating payday loan companies. The bill, sponsored by Miller, aims to protect customers from the payday loan industry.
Prior to the reform act, these lenders could charge up to 1,000 percent interest on loans. There is now an established payday advance limit based on income and outstanding debt. Borrowers will be limited to loans of $1,000, or 25 percent of their gross monthly income.
Miller said the bill dealt with regulations within the cash loan industry - but said local municipalities should have the right to determine what kind of businesses are opening in their cities. He said while there is a place for payday loan businesses, smart growth involves having a mixture of businesses in a community.
The legislation also limits time repayment to 45 days and interest to 15 percent per $100 borrowed. Jim Gigliotti, Calumet City community economic development coordinator, said residents should be leery of payday loan businesses.
"They are loan sharks," Gigliotti said, adding that no faxing payday loans hurt the people who are seeking help. "These people are being charged exorbitant amounts of income … by the time they get their paychecks, there is nothing left."
