Under current law, there are no limits on how much loan companies charge in interest. The new legislation would cap those rates at 99 percent for loans up to $4,000 and prohibit what officials call abusive pre-payment penalties.
"Even with these new protections these loans will still be costly and they should only be used in emergencies in a last resort," said Lisa Madigan, Illinois Attorney General.
The new legislation will also allow regulators to capture payday loan information in a database so they can take actions against lenders who do not follow the law.
