SPRINGFIELD, Ill. – One Illinois lawmaker wants the state to further clamp down on the interest rates pawn brokers charge.
Described as a follow-up to a law crafted last year by State Senator Jacqueline Collins of Chicago, the “Pawnbroker Regulation Act” would cap interest rates to 36 percent — same as payday lenders and short term auto title loans.
“Pawn brokers want you to think they’re different from the payday lenders,” said Collins (D-Chicago). But, pawn brokers, like payday lenders, make a living draining money from people who are struggling.”
Those pawn brokers claim this legislation, if approved, would drive them out of business.
A court injunction in Sangamon County excluded pawnbrokers from the law.
“The people who were once vulnerable to payday lenders will become targets of the pawn brokers,” said Collins. “It would open the flood gates for other predatory lenders who would come to the legislature asking for a carve-out.”
Collins wants the legislation passed during next month’s legislative session. It’s currently awaiting a legislative committee assignment.
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