Monday, February 06, 2006

Gettin' Paid

In the 'You Could Have Seen This One Coming From a Mile Away Dept.', I was informed on Friday that the State has been sued by at least one payday lender. Followers of Illinois politics will recall the cat and mouse game that has been payday regulation in this state. A couple years ago, a rule was passed regulating the 30 day loans that were proliferating around the state. In response, the industry, deciding that profits beat good faith, went to 31 day loans.

Last year, after years of industry stonewalling that would have been impressive if it wasn't so offensive, we passed a very good, and fair, comprehensive regulatory bill covering the industry.

I don't have the time to get into the myriad components of the new law, but one provision calls for certain loans to be put into a database. According to Crain's:
State regulators last week fined Illinois Title Loans, with 55 locations throughout Illinois, for failing to comply with the state's new payday lending reform law. The company must pay $27,500 a day until it registers its loans with a state database, as required beginning Feb. 1. A company spokeswoman declines comment. (Emphasis added)
What the Crain's article did not mention, they may not have known at the time, is that the fine has resulted in a lawsuit being brought against the State seeking to enjoin enforcement of the Act. My understanding of the jist of the suit is a claim that the Department is attempting to act outside the scope of the Act by requiring certain loans to be recorded into the database. This could just mean that the industry found a new way to structure their products so as to skirt the regulation of the Department. I haven't yet seen the suit, but I will say that it is a safe bet that this will not sit well with the countless groups and legislators and constitutional officers who toiled to get this law passed.

Lobbyists, start your engines.

1 Comments:

At February 5, 2006 at 10:48 PM, Blogger Larry Horse said...

How do you have time to find all of the great graphics for your posts? They really have made your blog fun to check. Kudos, Rep. Fritchey!

 

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