Illinois Gov. Pat Quinn signed into law a bill that caps interest rates on payday loans and provides other consumer protections through increased regulation of lenders. The legislation is the culmination of efforts by a coalition of civic and labor groups, including MacArthur grantee the Woodstock Institute. The law, which goes into effect in March 2011, caps rates at $15.50 per $100 borrowed every two weeks for loans of six months and less. For loans longer than six months, rates are capped at 99 percent for amounts less than $4,000, and at 36 percent for loans more than $4,000. Previously, these loans were unregulated, resulting in a cycle of debt for some consumers and rates as high as 700 percent.
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