(IL.) Fwd: A mesage from Il. P.I.R.G. on "Payday Loans."

(FYI & slightly O/T)


Dear Illinois PIRG supporter,

In a recent report, the Illinois PIRG Education Fund and the Consumer
Federation of America found that the interest rates that payday lenders
charge in Illinois ranged from 486% to 780%, with an average annual
percentage rate of 560%.

Please take a moment to ask your state legislators to reduce the allowable
fee for payday loans, improve and enforce consumer protections, and
implement greater regulatory oversight on payday lenders. Then, ask your
family and friends to help by forwarding this e-mail to them.

To take action, click on this link or paste it into your web browser:
http://pirg.org/alerts/route.asp?id=493&id4=ES


A payday loan is a small, short term loan made by check cashers at
extremely high interest rates. Typically, the borrower writes a personal
check for $100-$300, plus a fee, payable to a payday lender. The lender
agrees not to deposit the check until the borrower's next payday. In
return, the borrower gets cash immediately.

The problem is that lenders have exploited vulnerable borrowers by grossly
overpricing the loans and have been known to deceptively use threats of
criminal prosecution to collect repayment. An easy solution to a cash
shortfall becomes a cycle of accumulating an insurmountable debt for many
borrowers.

In a recent report, the Illinois PIRG Education Fund and the Consumer
Federation of America found that interest rates in Illinois ranged from
486% to 780%, with the average APR of 560%. The fees charged for a payday
loan should be equal to the charges for small loans made by other licensed
finance lenders in other states. It can be compared to a 36% Annual
Percentage Rate (APR), which is typical for small loans.

Please take a moment to ask your state legislators to reduce the allowable
fee for payday loans, improve and enforce consumer protections, and
implement greater regulatory oversight on payday lenders. Then, ask your
family and friends to help by forwarding this e-mail to them.

To take action, click on this link or paste it into your web browser:
http://pirg.org/alerts/route.asp?id=493&id4=ES

Sincerely,

Diane E. Brown
Illinois PIRG Executive Director

http://www.IllinoisPIRG.org

P.S. Thanks again for your support. Please feel free to share this e-mail
with your family and friends.

--
Denni
s