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.)
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