If you’re not familiar with senate bill 1993, it’s a that was proposed in the 2008 session. This bill didn’t pass, so the industry has another year of self reflection.
This issue is complex because there are a few different interest groups at work: the consumer groups, the CFSA and the ISLA.I think that Illinois is committed to regulating these small, short-term loans; which is a good thing.
After seeing the hardline approach taken by Arizona and Ohio, I would be willing to hammer out a deal.
Interestingly, my business partner, Kosta, made a pretty good observation. He likened this process to what the NRA has been opposing all these years. Once the NRA became somewhat, more reasonable and stopped stonewalling, things became more about the issues and they got support from many people that had been either against mostly because they perceived them as mean and unreasonable.
The issue becomes the issue again instead of a reactive state or just a political tug-of-war. Anyone that has any experience knows that this industry can’t survive on double digits interest rates. The charge-offs are just way to high.The industry would be well served by releasing data about default rates and charge offs.
If payday lenders put the business model in perspective for the community, they will start to see that this segment of the market is very difficult to serve, if it were not for the high rate of return. If they want to protect the consumer, they should the damages that lenders can collect and allow the market set the prices.
