Capping interest rates on “payday loans” hurts borrowers with bad credit


Regarding Rep. Will Guzzardi’s letter to the editor about payday lenders, it’s one thing to announce a success, it’s another to have data to back it up.

Guzzardi is right that being poor in America is expensive. It’s even harder in Illinois, where tens of thousands of consumers with subprime credit or no credit no longer have access to regulated, reliable credit.

Guzzardi claims that 46 new companies are now making installment loans at rates of 36% or less, and that some lenders are offering rates as low as 6%, depending on the borrower’s creditworthiness.

What he doesn’t acknowledge is that the new law has left 28% to 36% of Illinois — more than a third of the adult population — unable to qualify for that 6%. In fact, they cannot qualify any small dollar loan at any Interest rate.

While it’s impressive to see a nearly 70% increase in consumer loan applications from a nonprofit lender, such data is incomplete without seeing how many of those new loan applications were rejected because consumers didn’t have sufficient credit to support themselves to qualify.

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The American Financial Services Association comprises traditional Illinois and federally regulated installment lenders that offer safe, ethical and transparent loans with fixed terms and no balloon payments, hidden fees or early repayment penalties. Unlike payday lenders, our member firms offer subprime or no-credit customers the opportunity to improve their credit score as our member firms report to the credit bureaus.

The AFSA has stated that there is no place for predatory lending practices in the consumer finance industry. We also believe that every American consumer deserves access to some form of credit, especially in times of need. Unfortunately, Illinois’ interest rate cap law, by driving responsible lenders out of the state, has cut off access to credit and exacerbated economic inequality for people not privileged enough to have more borrowing options.

Danielle Fagre Arlowe, Senior Vice President, AFSA

ShotSpotter still a bad idea

On a Sunday afternoon, we were called three times to a hospital trauma ward to attend to another gunshot victim. The rampant gun violence epidemic has prompted cities to pursue various solutions, such as: However, it is not an effective solution.

Following the 2021 killing of 13-year-old Adam Toledo, who was shot dead by a police officer deployed via a ShotSpotter notification, ShotSpotter astatementThe technology is “an important tool for law enforcement”. In reality ShotSpotter wastedpolice resources. theMacArthur Justice Centerfound that “89% of ShotSpotter incidents in Chicago resulted in no gun crime.” But Chicago hasexpandeda multi-million dollar contract with ShotSpotter through 2023.

ShotSpotter also encourages over-policing in communities of color. Areportnoted by the Chicago Office of Inspector General that ShotSpotters “rarely produce[s] documented evidence of a gun-related crime” and has led to officers conducting more “stops and sweeps” in black and brown communities. The report explained that the implementation of ShotSpotter has changed how police interact with citizens near ShotSpotter alerts, and these impacts could affect ShotSpotter’s algorithm as the algorithm relies on information from police officers’ reports.

Any paramedic or trauma surgeon on the South Side can confirm that Chicago has a gun violence crisis. But ShotSpotter technology is inherently reactionary, only alerting after a gun is allegedly fired. The solution does not lie simply in short-sighted and racist policing.

Public health policies should advance the city’s response to gun violence.

Meredith Hollender, first year medical student
V. Ram Krishnamoorthi, MD


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