Illinois state regulators have released answers to frequently asked questions about payday-type loans after new restrictions took effect this spring.
The information from the Department of Financial and Professional Regulation is aimed at helping consumers understand the Predatory Loan Prevention Act.
That legislation signed into law by Gov. J.B. Pritzker on March 23 prohibits loans with an annual percentage rate of more than 36%. Loans covered by the law but taken before March 23 are void and lenders may not attempt to collect any part of it.
The law covers a variety of financial instruments, including payday loans, pawn loans, “buy-here-pay-here” agreements, car and title loans.
The law does not cover loans made by banks, credit unions, insurance companies or similar financial institutions. State regulators suggest working with lenders who are licensed by the state or are federally regulated.