Taking on Insanely Expensive Pawn Broker Loans

Coalition highlights injustice of 243% interest rate on loans from pawn brokers

A coalition of leaders from various advocacy groups came together today to express support for legislative efforts to cap pawn broker loans at 36% interest rates — instead of the 243% currently charged as a result of a loophole in the Predatory Loan Prevention Act.

“The pawnbrokers are waging an aggressive campaign alleging that consumers need their predatory loans,” State Senator Jacqueline Y. Collins (D-Chicago) said. “Don’t be fooled. The pawnbrokers are trying to protect their millions, not the Illinois consumer.”

According to the Woodstock Institute, Illinois families paid over $44 million in pawn loan fees in 2020, which is more than 8 times as much as payday loan fees in 2020.

“When the Predatory Loan Prevention Act was passed it was meant to protect consumers from all abusive lending practices but pawnbrokers have continued to take advantage of Black, Latino, and Low-income communities,” Teresa Haley, President, NAACP Illinois State Conference said. “Legislators can take action today to help end this abusive practice by passing a law that closes a loophole that should have never existed in the first place.”