Ill. residents warned to stay away from payday loans

December 13, 2010 3:42:35 PM PST
It's that time of year where people find themselves needing extra cash for the holidays. And consumers are being warned to stay away from payday loans.

State financial agencies, advocacy groups and a Grinch met in front of a loan store in downtown Chicago Monday. They warn that people who borrow a couple hundred dollars from these types of businesses can end up paying out much more in the end. Some of the businesses charge triple digit interest rates and consumers could end up in deeper financial trouble.

"We need to continue to emphasize this and continue to raise awareness and also need to be mindful and analytical about whether additional protections might be necessary down the road," said Brent Adams, Ill. Dept. of Financial Regulation.

Starting next March, new legislation will close a loophole that allowed 700-percent payday installment loans to trap borrowers.


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