Hang tough, Illinois, and cap interest rates on payday loans at 36%

Chicago Sun-Times, March 7, 2021 | View the original here.

By the Chicago Sun-Times Editorial Board

Six years ago, a woman in Downstate Springfield, Billie Aschmeller, took out a $596 short-term loan that carried a crazy high 304% annual interest rate. Even if she paid back the loan in the two years required by her lender, her total bill would exceed $3,000.

Before long, though, Aschmeller fell behind on other basic expenses, desperately trying to keep up with the loan so as not to lose the title to her car. Eventually, she ended up living in that car.

Aschmeller regrets she ever went the payday and car title loan route, with its usury-high levels of interest, though her intentions — to buy a winter coat, crib and car seat for her pregnant daughter — were understandable. She is now an outspoken advocate in Illinois for cracking down on a short-term small loan industry that, by any measure, has left millions of Americans like her only poorer and more desperate.

For years, as she has told the Legislature, she felt “like a hamster on one of those wheels.”

A bill awaiting Gov. J.B. Pritzker’s signature, the Illinois Predatory Loan Prevention Act, would go a long way toward ending this sort of exploitation by the financial services industry, and there’s little doubt the governor will, in fact, sign it. The bill, which would cap interest rates at 36%, has strong bipartisan support. It was approved unanimously in the House and 35 to 9 in the Senate.

But two hostile trailer bills — HB 3192 and SB 2306 — have been introduced in the Legislature that would greatly water down the Predatory Loan Prevention Act, defeating much of its purpose. Our hope is that those two bills go nowhere. They would create a loophole in how the annual percentage rate is calculated, allowing lenders to charge hidden add-on fees.

Between 2012 and 2019, as reported recently by the Chicago Reader, more than 1.3 million consumers took out more than 8.6 million payday, car title and installment loans, for an average of more than six loans per consumer. Those loans typically ranged from a few hundred dollars to a few thousand, and they carried average annual interest rates — or APRs — of 179% for car title loans and 297% for payday loans.

Some 40% of borrowers in Illinois — a disturbingly high percentage that underlines the unreasonableness of the burden — ultimately default on repaying such loans. More often than not, they find themselves caught in a cycle of debt, with old loans rolling over into new ones. Nationally, the Consumer Financial Protection Bureau has found, nearly 1 in 4 payday loans are reborrowed nine times or more.

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CHICAGO – In light of reports showing familiar disparities in ongoing COVID-19 vaccination efforts between Chicago’s well-to-do communities and majority-minority communities, State Senator Jacqueline Collins called on Gov. Pritzker Monday to focus resources on the same neighborhoods that are suffering from the highest rates of infection and death but are to date seeing the slowest rollout of the vaccines.

“When the pandemic began, we saw disparities in infections and deaths,” Collins said. “As it continued, we saw disparities in testing and care. Now, we are seeing disparities in reaching the light at the end of the tunnel. These disparities are literally killing us. I am calling on Gov. Pritzker to interrogate the reasons that the most affluent North Side ZIP codes are seeing such success in vaccination while impoverished communities like mine are struggling, even as we’re seeing the worst rates of spread. And I am calling on him to do something about it.”

A recent report from the Chicago Tribune showed vaccination rates in areas of the city such as the Magnificent Mile and Wicker Park have been relatively high, while rates in areas like Englewood have been much lower. Early data indicates white Chicagoans are twice as likely to receive the vaccine as other groups, the Tribune reported. The Associated Press also reports that the disparity is hardly unique to Chicago.

Another report out today shows the same neighborhoods that have dealt with long-term issues such as pollution are also struggling to get a place in line for vaccinations.

“The governor moved to rectify testing disparities in the Auburn Gresham area when we pointed them out, and now it is home to the city’s state-run, free testing site,” Collins said. “I am again calling on him to recognize that a more targeted effort is needed to immunize the communities where this virus has struck the hardest.”

Collins: "We need to hear their voices."

CHICAGO – State Senator Jacqueline Collins (D-Chicago) urged young women aged 14 to 18 to step up and apply to join the Illinois Council on Women and Girls to help shape the policies that will ensure a more equal future for female citizens in Illinois.

“I pushed for the creation of the Illinois Council on Women and Girls because despite some progress, women still have far to go to reach true equality in America,” Collins said. “And these policies are of even greater importance to our young women: Access to health, education, an equal wage, and so many other issues are apparent when we look to the lived experiences of our young women. We need to hear their voices.”

Collins sponsored legislation creating the council with the goal of studying the systemic barriers faced by women and girls in Illinois and developing clear policy goals to address them. Led by Lt. Gov. Juliana Stratton, the council issued its first report in March of last year, available here.

The Girls Committee will focus in particular on the concerns of young women in Illinois. Collins said young women must have a say in the policies that disproportionately affect their lives.

“The thoughts, behaviors, and even the bodies of young women are policed and politicized, and those of young women of color more so than almost any other group of people,” Collins said. “We must open our ears and our hearts to their struggles and find the means of providing them the opportunity to use their God-given talents to become tomorrow’s leaders.”

Young women in Illinois aged 14 to 18 can apply for the Girls Committee here: http://ilsendems.co/GirlsCommittee

CHICAGO – State Senator Jacqueline Collins (D-Chicago) will step into the role of Assistant Majority Leader in the Senate.

Collins, who served as Deputy Majority Caucus Chair during the previous General Assembly, pledged to continue using her position in Democratic leadership to further her ongoing efforts to increase access to finance, housing and education, and fight for racial and social justice for residents of the 16th Senate District and all Illinoisans.

“I am honored and humbled to be chosen to help lead the Senate Democratic Caucus in its work, and I am blessed to be given the opportunity to stay in the fight for equality and justice,” Collins said. “The past year has proven that we still face great barriers in fairness and justice in Illinois for the Black community in particular, but also for many Illinoisans in general. I am ready to help lead us in the monumental work we have ahead of us.”

Collins will serve as vice-chairperson of the Senate Financial Institutions Committee and also serve on the Senate Criminal Law and Senate Transportation Committees.