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91_SR0042
LRB9105941JSpc
1 SENATE RESOLUTION
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 Senate; 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 300%; 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, These short-term loans, commonly called "payday
16 loans", typically require the borrower to give the lender, at
17 the time of the loan, a postdated check in an amount
18 sufficient to pay the loan; and
19 WHEREAS, Additional information about the practices of
20 lenders who make payday loans is necessary to enable the
21 Senate to determine if additional regulation of this business
22 is necessary; therefore, be it
23 RESOLVED, BY THE SENATE OF THE NINETY-FIRST GENERAL
24 ASSEMBLY OF THE STATE OF ILLINOIS, that the Department of
25 Financial Institutions is directed to conduct a study of the
26 business of making payday loans; and be further
27 RESOLVED, That the study include a determination of the
28 number and locations of entities engaged in the payday loan
29 business, information on the annual percentage rate of
30 interest and other charges imposed upon borrowers who receive
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1 payday loans, and a profile of the borrowers who take out
2 payday loans; and, be it further
3 RESOLVED, That the study determine whether persons who
4 take out payday loans constitute a captive market for
5 lenders, whether the rates and fees charged are excessive,
6 and whether the lenders engage in "sharp" loan practices;
7 and, be it further
8 RESOLVED, That the study include a discussion of problems
9 payday loan practices cause for borrowers and consumers in
10 general; and, be it further
11 RESOLVED, That the Department of Financial Institutions
12 report its findings and recommendations to the Senate by
13 September 15, 1999; and be it further
14 RESOLVED, That a copy of this resolution be delivered to
15 the Director of Financial Institutions.