Illinois Car Title Loan. Illinois' rules on payday and Illinois car title loans contain huge loopholes, according to a survey by Consumer Federation of America, and only Wisconsin and New Mexico are more loosely regulated.

Payday and Car Title Loans: Look Out!
The SBC Yellow Pages book for Belleville lists 31 payday or car title loan lenders in southwestern Illinois and St. Louis.

St. Clair County Circuit Court files bulge with more than 500 lawsuits filed against people who have defaulted on their loans in the past three years.

Illinois' rules on payday and Illinois car title loans contain huge loopholes, according to a survey by Consumer Federation of America, and only Wisconsin and New Mexico are more loosely regulated.

"Here in Illinois, they have a real opportunity to take financial advantage of people," said Lisa Madigan, the Illinois attorney general and an advocate for tighter regulations governing short-term borrowers.

"They essentially trap them with revolving loans, and they can never get out of debt." Nationwide, the short-term loan industry has prospered mightily since the late 1990s, despite excessive interest rates that have led critics to call it "legalized loan sharking."

State Views
Some states, including Florida and Kentucky, have passed laws limiting the interest rates on car title loans, and other states are considering the legislation, according to a report by the Center for Responsible Lending, a consumer advocacy group. In Illinois car title loans may be refinanced only two times and only when the outstanding balance has been reduced by at least 20 percent, the report said. There is no limit on refinancing the loans in Iowa.

Bolkcom plans to reintroduce his legislation in 2006. He hopes increased public awareness about Illinois car title loans will help him gather more support.

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