The Tribune reported Saturday that the payday loan industry is flooding Springfield with campaign contributions:
Contributions to state politicians nationwide have mushroomed from just over $1 million in 2000 to $4.1 million in 2006, and Illinois has led all states, with $2.2 million given to politicians since 2000, according to figures from the National Institute on Money in State Politics.
Illinois is the only state in the country with a cap on short-term payday loans (with repayment schedules under 120 days) but none on longer-term predatory loans, meaning lenders can still charge exorbitant interest rates that send cash-strapped residents into a destructive cycle of debt.
At the same time, Illinois is one of only five states with no cap on campaign contributions, meaning the payday loan industry can spend as much as they want to fight efforts to close this loophole.
The spike in contributions is no big surprise. As other states -- most recently Ohio -- tighten controls on payday lending, the industry is clearly becoming more desperate to oppose reform in Illinois. As we previously reported, a bill to cap longer term payday loans passed the state senate earlier this year. It is scheduled for a hearing in the House Executive Committee tomorrow. We'll keep you updated on its progress.
(Image used under a Creative Commons license from Flickr user Geigenot.)
Comments
Nick S (not verified) on Mon, 02/02/2009 - 15:48
I sympathize with people that are having trouble making ends meet, but we also have to show some level of personal responsibility. People complain about the interest rates on this loan, but they payoff and come back in. We operate a payday loan software and see the numbers first hand. It's amazing how many loans are being done each day.
As far as regulation goes, they need to set up an office at the government level that can work with people in a cycle of debt. Education is the best method. People are ashamed to get help, so we need to make it easier for them to speak up.
If people saw how much they were paying over time, they would think twice about borrowing the money. It's just like anything in life. It's a choice.
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