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91_HR0164enr
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1 HOUSE RESOLUTION 164
2 WHEREAS, The granting of credit is a matter that is of
3 economic importance to the citizens of this State and of
4 concern to the House of Representatives; and
5 WHEREAS, It has come to the attention of the members of
6 this Body that certain lenders are charging fees and interest
7 on short-term loans that result in annual percentage rates in
8 excess of 1,800%; and
9 WHEREAS, The imposition of exceedingly high interest
10 rates creates financial burdens on persons who must borrow
11 on a short-term basis; and
12 WHEREAS, Borrowers who take out short-term loans may
13 constitute a captive market for lenders who charge high rates
14 of interest; and
15 WHEREAS, Without appropriate regulation by the State,
16 consumers who do not have other means to cover what are often
17 basic necessities in times of crisis may be at the mercy of
18 these lenders; and
19 WHEREAS, These short-term loans, commonly called "payday
20 loans", typically require the borrower to give the lender, at
21 the time of the loan, a postdated check in an amount
22 sufficient to pay the loan; and
23 WHEREAS, The "payday loan" industry has proliferated in
24 communities statewide, including locations at the James R.
25 Thompson Center State of Illinois Building in Chicago and on
26 the campus of the University of Illinois at Champaign; and
27 WHEREAS, Additional information about the practices of
28 lenders who make payday loans is necessary to enable the
29 House of Representatives to prepare legislation that protects
30 consumers from predatory lending practices and deceptive
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1 business practices; therefore, be it
2 RESOLVED, BY THE HOUSE OF REPRESENTATIVES OF THE
3 NINETY-FIRST GENERAL ASSEMBLY OF THE STATE OF ILLINOIS, that
4 there is created the Payday Loan Review Commission consisting
5 of 3 members appointed by the Speaker of the House and 3
6 members appointed by the Minority Leader of the House, all of
7 whom shall serve without compensation but shall be reimbursed
8 for their reasonable and necessary expenses from funds
9 available for that purpose; and be it further
10 RESOLVED, That the Commission is directed to conduct a
11 study of the business of making payday loans; and be it
12 further
13 RESOLVED, That the study include a definition of payday
14 lenders and payday loans and practices pertaining to payday
15 lenders and payday loans as well as a determination of the
16 number and location of entities engaged in the payday loan
17 industry, information on the annual percentage rate of
18 interest and other charges imposed upon borrowers who receive
19 payday loans, and a profile of the borrowers who take out
20 payday loans; and be it further
21 RESOLVED, That the study include a discussion of the
22 costs, profitability, and lending practices of payday
23 lenders, including excessive rates, rollovers, consecutive
24 loans, and concurrent lending, for the purpose of
25 establishing in future legislation a fair rate structure and
26 lending guidelines that protect consumers against
27 unacceptable practices; and be it further
28 RESOLVED, That the study include a discussion of problems
29 payday loan practices cause for borrowers and consumers in
30 general; and be it further
31 RESOLVED, That the Commission report its findings and
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1 recommendations to the House of Representatives by September
2 15, 1999; and be it further
3 RESOLVED, That a copy of this resolution be delivered to
4 the Speaker and Minority Leader of the House of
5 Representatives.
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