New Rules For Payday Loans In Illinois - posted July 04

Regulations aimed at controlling the fast-growing but controversial business of payday loans  have proven unsuccessful as Payday lenders find ways to avoid these rules. A preliminary report by Illinois Department of Financial Institutions (DFI) shows that the state's more than 800 licensed payday loan locations are avoiding state-imposed limits on how much they can loan to an individual and how many times they can refinance a loan. These regulations, issued in 2001 by DFI over industry objections, were hailed at the time as the first substantial oversight of Illinois' payday loan lenders. They barred lenders from refinancing a loan more than twice and required that at least 20% of the outstanding principal balance be repaid when a loan is refinanced. However, lack of a cap on payday loan interest rates contributes to the high cost of loans in Illinois.