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Illinois Law Leaves Loophole.
An Illinois Payday Loan Law loophole allows lenders to run business as usual. In 2005, Illinois law invoke
a series of payday loan regulations on loans under 120 days.
Lenders found a way around the laws by shifting their customers into loans exceeding 120 days.
This effectively skirted the new regulations. In fact, one of the more actively payday loan lenders, Americash,
has increased the interest rates charged to customers. Since 2004, interest rates charged to borrowers has jumped
from 140 percent to 279 percent.
This points to a very important point I have with government trying to legislate consumer protectionism.
It does not work!
Business owners, no matter what the industry will find ways to increase profits. That is what they do. Rather than
trying to out smart businesses, they should be focusing their efforts on education.
Educating the consumer and helping them find ways to improve their financial condition should be their focus.
Believe me, I know. I was there!
I was not able to drag myself out of my own payday loan debt until two things were done. My own personal decision to stop
the insane debt cycle I had created and educating myself on financial matters. Without this decision,
I would still be borrowing using cash advance lenders.
Moral of the story?
Don't legislate - educate!!