The industry reacted by producing a brand new item: a 31-day loan. “That permitted them to have round the rules,” DeLaforgue states.

The industry reacted by producing a brand new item: a 31-day loan. “That permitted them to have round the rules,” DeLaforgue states.

Therefore the coalition started pressing for brand new laws and regulations. In 2005 then-governor Rod Blagojevich finalized the cash advance Reform Act, that has been sustained by both the Community Financial Services Association—a nationwide trade group for payday lenders—and the Egan coalition. It codified a number of the guidelines that were subverted, needing additional time between loans and more underwriting that is thorough.

But there is a loophole. Regulations established a regulatory regime that governed payday lenders whose loans had terms of 120 times or less. Loan providers, DeLaforgue states, merely began loans that are writing longer terms than that.

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