SB 1792 “must be repealed quickly” if widespread hardship is to be avoided
Hundreds of Illinois citizens have spoken of their fears for the future, as a new state lending law eliminates access to credit for more than one in four Illinoisans.
In a series of videos, citizens all over Illinois have called for the immediate repeal of SB 1792, which was signed into law by Governor Pritzker last month. The new law has effectively shut down the traditional installment lending industry in the state, leaving borrowers with no legal, licensed, in-state credit resources to draw upon. Coming hard-on-the-heels of the COVID-19 pandemic, this is likely to cause considerable hardship for the estimated 25 percent of Illinoisans who have limited access to banking services.
“[This law] is going to hurt a lot,” said Ms. J from Effingham, “How are people going to get the money they need, say, if a water heater goes out?”
Mr. L, an army veteran from Peoria goes further:
“I just want to send a message to you folks that have decided you are going to shut down these small consumer loan companies…. You don’t realize what you are doing to the small consumer. What if a guy needs … 400 bucks to fix his truck or a mom needs to buy school clothes, or someone gets an unexpected medical bill? Why don’t you reconsider this law you passed? Amend it, or do away with it, because you are going to help people like me and others out there, just trying to live their lives….”
Traditional installment loans have been available in Illinois for generations and are seen as a safe and affordable alternative to payday or title loans. They are often the only safe form of credit available to those with limited credit histories or damaged credit, who banks and credit unions will not serve. They also allow borrowers to establish a positive credit rating and become more financially mobile.
Industry spokesperson and former Illinois 9th District House Member, Arthur J. Turner, Jr., commented on the law, saying,
“As these videos show, this well-meaning law goes way too far and will be disastrous for the very people it is intended to help. Artificially limiting the supply of safe forms of credit in this way, has no effect on demand. Families will be forced to go without essentials, or seek out unregulated forms of credit. This law must be repealed quickly if our state is to avoid a situation in which large numbers of our citizens face considerable hardship.”
A selection of the videos is available at nilaonline.org/testimonials, with the remainder, nearly two hundred and counting – published to Vimeo. They can be viewed at https://vimeo.com/borrowervoices/albums.
A video explaining challenges associated with using Annual Percentage Rate (APR) caps as a means of regulating small-dollar loans is available HERE.
SOURCE: NILA
