Illinois lawmakers target payday lenders

SPRINGFIELD, Ill., May 29 (UPI) -- Illinois lawmakers are considering legislation that would bar payday lenders from charging astronomical interest rates, officials say.

Proponents of the legislation say reforms the Legislature passed in 2005 did not go far enough to protect consumers from high interest rates the industry squeezes from borrowers, the St. Louis Post-Dispatch reported Thursday.

In 2005, lawmakers capped the fees on short-term loans at $15.50 for every $100 loaned and limited borrowers to two payday loans at a time.

Now some legislators want to enact further reaching laws aimed at preventing consumers from being buried in debt.

"We're just trying to enact some reasonable regulations so borrowers are not getting gouged," said state Rep. Julie Hamos, D-Evanston "I'm not trying to drive them out of business."

For their part, the payday loan industry says they are unfairly targeted. They say their industry provides a valuable service to customers who need short-term cash.