Anti-predatory lending measure approved by Senate committee
SPRINGFIELD, IL – Illinois State Senator Jacqueline Y. Collins (D-Chicago 16th) is working with City of Chicago Treasurer Kurt Summers to protect small businesses with legislation recently approved by the Senate Financial Institutions Committee. The measure will apply to the sparsely regulated alternative commercial lending industry the same kinds of transparency standards that currently govern residential mortgage lenders, banks and credit unions.
“Small businesses are the engines of our economy and employ half of Illinois’ private sector workers, but their access to credit through traditional lenders has dwindled since the recession, and alternative lenders – some of which are operating in a misleading or predatory manner – have stepped into the void,” Collins said. “Our goal is to craft a law that maintains access to capital for small business owners who need it, yet protects them from deceptive practices, excessive fees and loans they ultimately cannot repay.”
“Too often we’re seeing instances where hard-working entrepreneurs are being preyed upon by a growing number of unscrupulous lenders,” Summers said.
Senate Bill 2865 requires alternative lenders to disclose their interest rates on commercial loans, limits certain types of fees and creates standards that protect small business owners from economic distress by requiring lenders to assess borrowers’ ability to repay.