On June 2 the Illinois Financial Services Association and the American Financial Services Association (AFSA) jointly filed a lawsuit against the State of Illinois and the Illinois Department of Financial and Professional Regulation (DFPR) in the Circuit Court of Cook County over SB 1792 / Public Act 101-0658, the “Predatory Loan Prevention Act,” which took effect on March 23. The lawsuit seeks to prohibit the state or DFPR from implementing the database reporting requirements in the act.
Although the act’s stated purpose is to protect consumers, its provisions are leaving Illinois consumers worse off by limiting the availability of safe and affordable forms of credit. It imposes a 36% rate cap using the military annual percentage rate (MAPR) on all credit extended – including traditional installment loans – greatly reducing consumers’ access to safe and affordable forms of credit.
AFSA estimates that the new MAPR excludes approximately one-third of Illinois consumers from small dollar credit. AFSA previously sent a letter to the governor requesting that he veto the bill.