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91_HR0164enr HR0164 Enrolled LRB9106402LDmb 1 HOUSE RESOLUTION 164 2 WHEREAS, The granting of credit is a matter that is of 3 economic importance to the citizens of this State and of 4 concern to the House of Representatives; and 5 WHEREAS, It has come to the attention of the members of 6 this Body that certain lenders are charging fees and interest 7 on short-term loans that result in annual percentage rates in 8 excess of 1,800%; and 9 WHEREAS, The imposition of exceedingly high interest 10 rates creates financial burdens on persons who must borrow 11 on a short-term basis; and 12 WHEREAS, Borrowers who take out short-term loans may 13 constitute a captive market for lenders who charge high rates 14 of interest; and 15 WHEREAS, Without appropriate regulation by the State, 16 consumers who do not have other means to cover what are often 17 basic necessities in times of crisis may be at the mercy of 18 these lenders; and 19 WHEREAS, These short-term loans, commonly called "payday 20 loans", typically require the borrower to give the lender, at 21 the time of the loan, a postdated check in an amount 22 sufficient to pay the loan; and 23 WHEREAS, The "payday loan" industry has proliferated in 24 communities statewide, including locations at the James R. 25 Thompson Center State of Illinois Building in Chicago and on 26 the campus of the University of Illinois at Champaign; and 27 WHEREAS, Additional information about the practices of 28 lenders who make payday loans is necessary to enable the 29 House of Representatives to prepare legislation that protects 30 consumers from predatory lending practices and deceptive HR0164 Enrolled -2- LRB9106402LDmb 1 business practices; therefore, be it 2 RESOLVED, BY THE HOUSE OF REPRESENTATIVES OF THE 3 NINETY-FIRST GENERAL ASSEMBLY OF THE STATE OF ILLINOIS, that 4 there is created the Payday Loan Review Commission consisting 5 of 3 members appointed by the Speaker of the House and 3 6 members appointed by the Minority Leader of the House, all of 7 whom shall serve without compensation but shall be reimbursed 8 for their reasonable and necessary expenses from funds 9 available for that purpose; and be it further 10 RESOLVED, That the Commission is directed to conduct a 11 study of the business of making payday loans; and be it 12 further 13 RESOLVED, That the study include a definition of payday 14 lenders and payday loans and practices pertaining to payday 15 lenders and payday loans as well as a determination of the 16 number and location of entities engaged in the payday loan 17 industry, information on the annual percentage rate of 18 interest and other charges imposed upon borrowers who receive 19 payday loans, and a profile of the borrowers who take out 20 payday loans; and be it further 21 RESOLVED, That the study include a discussion of the 22 costs, profitability, and lending practices of payday 23 lenders, including excessive rates, rollovers, consecutive 24 loans, and concurrent lending, for the purpose of 25 establishing in future legislation a fair rate structure and 26 lending guidelines that protect consumers against 27 unacceptable practices; and be it further 28 RESOLVED, That the study include a discussion of problems 29 payday loan practices cause for borrowers and consumers in 30 general; and be it further 31 RESOLVED, That the Commission report its findings and HR0164 Enrolled -3- LRB9106402LDmb 1 recommendations to the House of Representatives by September 2 15, 1999; and be it further 3 RESOLVED, That a copy of this resolution be delivered to 4 the Speaker and Minority Leader of the House of 5 Representatives.