State sets limits on payday loans.
Jun. 10--High-interest payday loans will be capped and cash-strapped customers won't be able to borrow as much under a new law signed Thursday by Gov. Rod Blagojevich that supporters say will help people avoid drowning in debt.
Critics say the booming cash-store industry, which allows a customer to borrow against their next paycheck, preys on working families struggling to make it through hard financial times. But efforts to toughen state regulations on such borrowing had failed--until this year when the General Assembly approved legislation during its spring session.
The law, which will go into effect in December, restricts the amount of money payday lenders can charge at no more than $15.50 for every $100 borrowed regardless of the loan's length. Payday loan stores currently charge about $22 for every $100 borrowed over two-week periods and $44 for monthlong loans.
Jun. 10--High-interest payday loans will be capped and cash-strapped customers won't be able to borrow as much under a new law signed Thursday by Gov. Rod Blagojevich that supporters say will help people avoid drowning in debt.
Critics say the booming cash-store industry, which allows a customer to borrow against their next paycheck, preys on working families struggling to make it through hard financial times. But efforts to toughen state regulations on such borrowing had failed--until this year when the General Assembly approved legislation during its spring session.
The law, which will go into effect in December, restricts the amount of money payday lenders can charge at no more than $15.50 for every $100 borrowed regardless of the loan's length. Payday loan stores currently charge about $22 for every $100 borrowed over two-week periods and $44 for monthlong loans.
