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91_SR0042enr
91SR0042 Enrolled
1 STATE OF ILLINOIS
2 NINETY-FIRST GENERAL ASSEMBLY
3 SENATE
4 Senate Resolution No. 42
5 Offered by Senators O'Malley, Hawkinson and Lightford
6 WHEREAS, The granting of credit is a matter that is of
7 economic importance to the citizens of this State and of
8 concern to the Senate; and
9 WHEREAS, It has come to the attention of the Members of
10 this Body that certain lenders are charging fees and interest
11 on short-term loans that result in annual percentage rates in
12 excess of 300%; and
13 WHEREAS, The imposition of exceedingly high interest
14 rates creates financial burdens on persons who must borrow
15 on a short-term basis; and
16 WHEREAS, Borrowers who take out short-term loans may
17 constitute a captive market for lenders who charge high rates
18 of interest; and
19 WHEREAS, Some of these short-term loans, commonly called
20 "payday loans", typically require the borrower to give the
21 lender, at the time of the loan, a postdated check in an
22 amount sufficient to pay the loan; and
23 WHEREAS, Other short-term loans, commonly called "title
24 loans", typically require the borrower to give the lender an
25 authorization to transfer the title to or a lien upon the
26 title to a motor vehicle owned by the borrower at the time
27 the loan is made; and
28 WHEREAS, Additional information about the practices of
29 lenders who make payday loans or title loans is necessary to
30 enable the Senate to determine if additional regulation of
31 this business is necessary; therefore, be it
91SR0042 Enrolled -2-
1 RESOLVED, BY THE SENATE OF THE NINETY-FIRST GENERAL
2 ASSEMBLY OF THE STATE OF ILLINOIS, that the Department of
3 Financial Institutions is directed to conduct a study of the
4 business of making payday loans and title loans; and be it
5 further
6 RESOLVED, That the study include a determination of the
7 number and locations of entities engaged in the payday loan
8 or title loan business, information on the annual percentage
9 rate of interest and other charges imposed upon borrowers who
10 receive payday loans and title loans, and a profile of the
11 borrowers who take out payday loans and title loans; and be
12 it further
13 RESOLVED, That the study determine whether persons who
14 take out payday loans and title loans constitute a captive
15 market for lenders, whether the rates and fees charged are
16 excessive, and whether the lenders engage in "sharp" loan
17 practices; and be it further
18 RESOLVED, That the study include a discussion of problems
19 payday loan and title loan practices cause for borrowers and
20 consumers in general; and be it further
21 RESOLVED, That the Department of Financial Institutions
22 report its findings and recommendations to the Senate by
23 September 15, 1999; and be it further
24 RESOLVED, That a copy of this resolution be delivered to
25 the Director of Financial Institutions.
26 Adopted by the Senate, March 23, 1999.
27 _______________________ _______________________
28 Secretary of the Senate President of the Senate
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