Payday Loan Grinch Comes to Town

Just before the Christmas holiday, Illinois advocates joined a rally to warn consumers of the hazards of payday installment loans. Fast cash during the nation’s peak shopping season might sound like a deal, but the truth is that many loans, particularly those taken out over a 120-day period, are highly unregulated. Consumers beware. The Payday Loan Reform Act of 2005, while in itself a victory, leaves many vulnerable to aggressive loan servicers.

The payday loan rally, held on December 5, brought numerous organizations and advocates out to a downtown Chicago Americash location. Lt. Gov. Pat Quinn joined the Monsignor John Egan Campaign for Payday Loan Reform, including Citizen Action–Illinois, Woodstock Institute, Heartland Alliance for Human Needs & Human Rights, the Illinois Asset Building Group, the 8th Day Center for Justice, and the Shriver Center to raise awareness of the critical need to reform payday loans. A Payday Loan Grinch was on-site that morning. 

“Payday loans can be dangerous to your financial health. Consumers should be especially alert if they take out any payday loan that is more than 120 days in length,” said Dory Rand, supervising attorney of the Shriver Center’s Community Investment Unit. “If you do, you will not be protected by the Illinois law that regulates payday loans and protects consumers.”

Payday loans or cash advance loans, like those sold by Americash, can steal the holiday fun from millions of Americans. The Center for Responsible Lending estimates that consumers lose $3.4 billion yearly on payday loan interest and fees.

The Monsignor John Egan Campaign for Payday Loan Reform plans to close the loopholes in the Payday Loan Reform Act and propose consumer protection amendments to the Consumer Installment Loan Act.

The Shriver Center joins the Monsignor Egan Campaign in advocating fair laws and policies that protect consumers’ wealth. The Shriver Center’s Community Investment Unit takes action to end poverty by promoting the expansion of asset-building and protection policies for all Americans. For more information, visit the Community Investment Unit or call Dory Rand at 312.368.2007.