A state lawmaker says he has a simple solution to illegal loans. The problem is on-line small-loan providers that are not licensed in Illinois and which don’t abide by Illinois laws. State Rep. Greg Harris (D-Chicago) says these lenders impose terms and conditions that are not legal in Illinois, and in some cases they have drained customers’ bank accounts.
The solution is to enact a law absolving the borrower from repayment, Harris says. “If you’re an Illinois resident and you borrow money from an on-line or brick-and-mortar entity who is not licensed to do business in Illinois, that contract is null and void. You do not have to pay that money – the principle or the interest – back,” he said.
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Harris says borrowers who believe they are being mistreated by unlicensed on-line lenders have no recourse because the lenders are overseas. He says if this becomes law, unlicensed lenders will stop lending in Illinois, as they have done in the six other states that have enacted laws like this: Arizona, Indiana, Kansas, Nevada, New Hampshire and Vermont.
Brent Adams, secretary of the Department of Financial and Professional Regulation, says this will benefit the borrowers and the state’s 2,000 licensed lenders. The measure has passed out of an Illinois House committee and will be considered on the House floor.