Pawnbroker loans could be capped at 36%

Springfield, Ill (WAND) – Democrats in the Illinois General Assembly are introducing legislation to put caps on fees charged by pawnbrokers.

Legislation is already being enforced so payday loan lenders can’t charge more than 36%. But last year the pawn industry went to court in Sangamon County and obtained an injunction allowing them to charge higher rates. Lawmakers claim some of those rates are as high as 240%.

“Pawnbrokers, like payday lenders, make a living draining money from people who are struggling,” said Senator Jacqueline Collins, (D) Chicago, at the Illinois State Capitol on Wednesday. Collins is the sponsor of the measure in the Senate, SB 4281.

Decatur pawn shop owner Perry Lewin tells WAND News if the measure is passed it would virtually shut down the pawn industry in Illinois.