Law Caps Loan Interest Rates, Closes Loopholes

CHICAGO - June 21, 2010. Governor Pat Quinn today signed a bill into law that will increase protections for Illinois residents obtaining consumer installment loans. The new law caps interest rates charged by consumer finance companies, which can sometimes be as high as 1,000 percent.

"Many consumers who take out short-term loans are doing so as a last resort to pay their bills and provide for their families. It is all too easy for lenders to take advantage of them by raising interest rates and setting very short repayment periods," said Governor Quinn. "It is important that we do everything we can to protect these consumers who are already hurting, by helping to make these loans more affordable."

House Bill 537 sponsored by Rep. Lou Lang (D-Skokie) and Sen. Kimberly Lightford (D-Westchester) protects consumers by setting reasonable interest rates for loans. Current interest rates for consumer installment loans can be exorbitantly high. Under the new law, rates on consumer installment loans will be capped at 99 percent rate for loans $4,000 and less and 36 percent for loans greater than $4,000.

"For too long, Wild West lending practices have dominated the marketplace in Illinois and consumers have suffered as a result - saddled with costly loans that they could never repay," said Attorney General Madigan. "Now that has changed. House Bill 537 reigns in abusive and predatory lending practices and protects consumers. I want to thank Senator Lightford, Representative Lang, the Governor's Office and consumer advocates for their hard work on this important consumer protection legislation."

The new law also includes provisions to help borrowers repay loans more easily. For example, lending is based upon the borrower's ability to repay the loan. Monthly payments on consumer installment loans are limited to 22.5 percent of the borrower's gross monthly income. In order to give borrowers enough time to repay the loan, the new minimum loan term will be set at six months - an increase from the previous four month term.

"We look forward to working with licensed lenders and their customers to make sure this law is strictly enforced," said Secretary of Financial and Professional Regulation Brent Adams. "For too long, Illinois borrowers have been at the mercy of lenders who were free to charge quadruple-digit interest rates."

The law expands the existing statewide database that tracks payday loans to also track consumer installment loans, which will enable the state to ensure that lenders are complying with the new law.  The law also eliminates balloon payments and prevents lenders from penalizing borrowers for paying off loans early.

House Bill 537 was supported by numerous consumer groups and lenders alike, and it passed through the Illinois General Assembly almost unanimously.

Governor Quinn signed the legislation in Chicago. It goes into effect nine months after becoming law.

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WASHINGTON -Monday, June 21, 2010

Senators Chuck Grassley and Kit Bond have sent a letter to the Secretary of the Department of Housing and Urban Development, or HUD, reiterating their concerns about possible waste, fraud and abuse in the Department's distribution of stimulus funds to troubled Public Housing Authorities.

"Our oversight is focused on making sure the federal agencies handling the $787 billion in stimulus dollars passed by Congress and signed by the president last year are operating with the highest level of transparency and accountability.  In this case, taxpayers deserve an answer to why the federal agency gave tens of millions in stimulus dollars to housing authorities it found to be 'high risk.'  Is there so much pressure to shovel stimulus dollars out the door that responsible stewardship has been abandoned?" Grassley said.

"When families across the nation are still struggling to pay bills and put food on the table, the Administration owes Americans answers on why they chose to gamble with taxpayer dollars on risky organizations," Bond said.

Grassley initially sent a letter to HUD on March 15, 2010, in which he cited problems with a number of Public Housing Authorities that had been raised by the HUD Office of Inspector General and not adequately addressed in the HUD response.  Today, Grassley and Bond are seeking answers on the accuracy of troubled housing designations and the abuse of stimulus funds.

As ranking member of the Senate appropriations subcommittee that funds our nation's housing programs, Bond has questioned the Administration on their lack of oversight of stimulus funds awarded to troubled PHAs. Bond continues to stress that Congress - and the taxpayer - deserves answers on the benchmarks the Administration is using to hold PHA's accountable for their use of taxpayer dollars. The Senator also has concerns on whether the Administration is putting scarce resources to the best use - including whether they are investing in projects that will address the huge backlog of public housing capital needs. 

In its response, HUD agreed to Grassley's suggestion of posting Public Housing Assessment System scores on the HUD website.  Grassley and Bond also request that HUD post the following information on its website:  location of the Public Housing Authority; fiscal year in which the Public Housing Authority was designated as troubled; categorization of the Public Housing Authority problems (Troubled, Substandard Financial, Substandard Physical, and Substandard Management); the applicable narrative and corrective plan; total number of units involved; level of concern (high, medium, low); stimulus funding risk level; and amount of stimulus funding awarded to Public Housing Authority.

Click here to read Grassley's initial letter.

Click here to read HUD's response to Grassley.

Click here to read Grassley and Bond's June 16 letter to HUD.

Your Easy Choice 93.9 WYEC continues its expansion and improvement of its product and services with recent changes to its daily line up.

Beginning June 21st 2010 Your Easy Choice 93.9 WYEC will begin airing  "Remembering Music Mornings" a new morning show to be heard weekdays from 5AM- 10:30AM dedicated to the very best hits from the 50's, 60's and 70's.

Added to the program line up is the much anticipated "Mid-Morning in the Cities" weekdays from 10:30 - Noon with guests to include Moline City Administrator Lew Steinbrecher, QC Senior Olympics Lisa Killinger, Rick Baker from the Illinois Quad City Chamber of Commerce, Wells Fargo Financial Advisor Dave Barnhart, members from the Children's Therapy Center of the Quad Cities, and Royal Neighbors of America in its inaugural week. Additional guests in the weeks to come, include Moline Mayor Don Welvaert, and former East Moline Mayor Joe Moreno, current Mayor of East Moline John Thodos, the Social Security Administration, Rock Island County Extension Bureau, and Quad City Animal Welfare Center, and many more.

Your Easy Choice 93.9 WYEC will continued its individually chosen music selection through the day with hits from the 50's, 60's and 70's along with a new addition to the line up featuring the very best special selection of 80's music with  "80's at 8" an weekday show catering to 80's music from 8 - 9PM.