Lawmakers in Illinois weigh short term loan industry

Aldermen in Bloomington, Illinois, are discussing whether or not to cap interest rates on short term loans, weighing the pros and cons of each potential decision, WJBC reported. "The question has been posed to (the city’s attorney), and apparently the city does have that (legal) authority" to cap rates at 36 percent, Bloomington Mayor Steve Stockton explained to the news source. "The question is do we want to use it, and do we have the expertise to set those types of rates." Before the meeting, Ward 8 Alderman Rob Fazzini and Ward 1 Alderman Bernard Anderson were asked to look into the issue of short term loan rates further. Fazzini found that the commonly held figure of 400 percent interest rates by opponents of short term loans was inaccurate. He also learned that eliminating short term loan sources would simply send borrowers to other sources of money that are less regulated and offer fewer financial protections. Fazzini talked with representatives on both sides during his research. "Before we make a decision, we need to know the good side and the bad side," he told the news source. According to CashNet USA, short term loans, particularly those acquired online, are convenient sources of funding that require very brief applications. As a result, money is deposited to an account quickly, often by the next business day.