Bad Credit Online Magazine - Daily News and Advice on Credit, Debt and Mortgage : Payday loan reform act was signed by Illinois Governor Blagojevich

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August 13, 2005

Payday loan reform act was signed by Illinois Governor Blagojevich

This Legislative Update also contains several identity theft related issues among other things. But the new regulations for payday loans are our primary concern. Here are the significant new consumer protections:

(1.) A prohibition on loans that would result in a consumer being indebted to one or more payday lenders for a period in excess of 45 consecutive days. In addition, the Act establishes a cap on payday loans if the total of the principal proposed loan amount, when combined with all of the consumer’s outstanding payday loans exceed the lessor of either $1000 or 25% of the consumer’s gross monthly income;
(2.) A prohibition on new payday loans involving any consumer who has a balance on 2 exiting payday loans;
(3.) A prohibition against the payday lender taking any interest in the consumer’s personal property to secure the payday loan;
(4.) A prohibition against any charge that exceeds $15.50 per $100 loaned; and
(5.) A prohibition against rollover of payday loans.

Those provisions become effective on December 6, 2005.

Posted in Payday Loans at August 13, 2005 04:00 PM

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