- Published: Wednesday, March 10, 2021 10:09 AM
WTTW's Chicago Tonight, March 9, 2021 | View the original story and newscast here.
By Paris Schutz
Kesha Warren needed a short-term cash infusion of $1,250 to make payroll costs for her small janitorial services company.
In 2019, she took out an auto title loan, a short-term loan that uses the borrower’s vehicle as collateral.
She says she was shut off from more traditional bank loans.
“No one wants to lend to someone that has $100,000 in student loans, so it was very hard for me to get a traditional loan,” Warren said.
The loan came with a yearly interest rate of 197%. That ballooned her initial $1,250 loan into a total payment of $3,400 that she paid off early last week. Had she not done that, it could have cost her another $2,000.
It’s a story that plays out constantly in Black and Latino communities.
South Side state Sen. Jacqueline Collins co-sponsored the Illinois Predatory Lending Prevention Act, which would cap annual interest rates on short-term loans at 36%.
“Anything above 36% is predatory and usury,” Collins said. “So we know that high-cost payday loans and auto loans have stripped communities of billions and billions of dollars, primarily the Black and Brown communities in the state of Illinois.”
Read more and see the newscast here.
