CHICAGO - On the third anniversary of the death of Monsignor John Egan, the legendary social-justice priest who took on the giant payday loan industry, Lieutenant Governor Pat Quinn joins with Chicago Aldermen and community and religious leaders to unveil a model “Pro-Consumer Payday Loan,” which is aimed at curbing payday loan abuses.
The Pro-Consumer Payday Loan offers borrowers a low-interest source of funds for emergency short-term needs, unlike traditional payday loans that ensnare borrowers in a never-ending cycle of debt and unfairly target lower-income families and military personnel.
“Illinois now has more payday loan stores than McDonalds,” said Quinn. “It is time for major money-center banks like Bank One to offer a competitive alternative to the current payday loans, which carry unfair terms and exorbitant interest rates.”
Current payday loan operators make short-term loans at very high-interest rates to working people. Under the industry’s current system, an occasional user can quickly and easily fall victim to exorbitant interest rates – as high as 1,300% in Illinois – forcing users to repeatedly renew the loan and incur new charges.
The Pro-Consumer Payday Loan will limit interest to no more than 36 percent, provide up to six months for a line of credit, offer various payment options and safeguard consumers from accumulating great debt.
“The leaders of major banks in Illinois like Bank One have a duty to offer the Pro-Consumer Payday Loan to their customers,” said Quinn. “Illinois cannot have a two-tier financial system where there is Rolls Royce banking for the well-to-do and thousands of working families are consigned to the high-interest rates of the payday loan lenders.”
Monsignor John Egan started a campaign to end the use of abusive payday loan practices in 1999. Egan died on May 19, 2001.