Illinois caps consumer rates at 36%, adopts state-level CRA


Illinois Governor JB Pritzker signed an invoice Tuesday capping interest rates on consumer loans at 36% and another bill that sets community reinvestment standards for state chartered financial institutions.

The anti-predatory lending law, which takes effect immediately, applies to all categories of consumer credit. Auto title loans in Illinois currently have an average annual percentage rate of 179%, and payday loans have an average APR of 297%, according to the governor’s office.

The other new law sets standards for state regulators to assess loans from state chartered banks, credit unions and non-bank mortgage lenders in economically disadvantaged communities.

Pritzker, a Democrat, said the two measures were part of a package of new laws that address racial equity loopholes in Illinois. Other bills he signed on Tuesday address employer discrimination against people with criminal records, seek to give minority-owned businesses access to state contracts, and seek to improve ‘access to social housing.

“While there is more work to be done, we are in a better state of what is in this legislation today,” Pritzker said in a written statement.

“While there is more work to be done, we are in a better shape as far as this legislation is concerned today,” said Illinois Governor JB Pritzker after signing bills capping consumer loan rates and establishing community reinvestment standards at the state level.


The rate cap makes Illinois the 18th state plus the District of Columbia to limit interest rates on consumer loans to 36% or less, according to the Center for Responsible Lending. Nebraska and South Dakota have adopted similar caps in recent years.

Illinois’ rate cap law will apply to all consumers, but it relies on definitions set out by the Military Lending Act, a 15-year-old federal law that applies to loans made to military and military personnel. to their families. The annual military percentage rate includes more fees than a standard APR.

“Today is the culmination of over 20 years of advocacy,” said Brent Adams, senior vice president of policy and communications at the Woodstock Institute, in a press release. “Thanks to the leadership of the Legislative Black Caucus, Illinois will move from being a hotbed of some of the industry’s worst abuses to a new bar in consumer financial protection.”

Illinois’ Community Reinvestment Act is designed to incentivize additional secured loans in low- and moderate-income communities, according to the governor’s office.

Unlike the federal Community Reinvestment Act, it applies to credit unions and non-bank mortgage lenders. Illinois joins a small number of states, including New York, Connecticut, and Massachusetts, that have their own community reinvestment laws.

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