Prairie State Wire

The Online Lenders Alliance has released the results of a survey showing a decline in performance for short-term lenders after a bill passed capping interest rates on such loans.

"This survey of actual borrowers shows what we have known all along: arbitrarily capping annual interest rates on short-term, small-dollar loans leaves consumers with fewer credit choices which leaves too many consumers worse off," Andrew Duke, executive director of the Online Lenders Alliance, said in a statement.

"Far too often, those pushing these destructive policies either fail or willfully choose not to ask borrowers who actually use these lending products how it will impact them," Duke said. "The feedback from Illinois borrowers is clear: short-term, small-dollar loans help these consumers manage their financial situations and eliminating them from the marketplace does far more harm than good.”

The Online Lenders Alliance is an advocacy group and governance body. The group serves as the overseer of online lending activities. On its website, the group bills itself as the “center for lending, technology and innovation, representing the growing online lending industry.”

The survey finds that those making less than $50,000 per year suffered as a result of the legislation capping interest rates.

It further notes all but 27% of respondents said they have struggled to pay bills since the legislation was passed.

“Since the Illinois rate cap took effect in March 2021, nearly three-quarters of former users of short-term, small-dollar loans have said they have been unable to pay their bills more than once,” the survey reads.  

The bill, SB1792, passed the House on a vote of 110-0-2. It passed the Senate with a vote of 35-9.

The bill passed both chambers on Jan. 12, 2021, and was later signed into law by Gov. J.B. Pritzker. 

It was sponsored by Sens. Christopher Belt, Jacqueline Collins, Mattie Hunter, Robert Peters, Napoleon Harris III, Omar Aquino and Kimberly Lightford.

It was sponsored in the House by Reps. Sonya Harper, Jonathan "Yoni" Pizer, Nicholas Smith, Carol Ammons, Kambium Buckner, Lakesia Collins, William Davis, Marcus Evans Jr., Mary Flowers, La Shawn Ford, Jehan Gordon-Booth, LaToya Greenwood, Thaddeus Jones, Camille Lilly, Rita Mayfield, Debbie Meyers-Martin, Lamont Robinson Jr., Justin Slaughter, Curtis Tarver II, André Thapedi, Emanuel Chris Welch, David Welter and Jawaharial Williams.