Jacksonville’s state representative is sponsoring a bill in the Illinois General Assembly to require applicants for payday loans to watch an education video as part of the process.
C.D. Davidsmeyer says he’s not trying to put the payday loan people out of business, but he does think would-be borrowers who don’t know much about finances should be informed.
“I don’t think that I would outlaw it. I think that if people are going to it, there’s some form of need for this type of high-risk loan, but at the same time, I want to make sure that people that are getting into it aren’t doing it lightly; [that] they actually understand it,” says Davidsmeyer.
“So, the goal is education to make sure that people decide to get into this type of loan actually understand what they’re doing.”
Payday loans can carry interest rates of 300 to 400 percent and typically roll over several times.
“I’m not putting a limit on the payday loan places themselves. They’re the ones deciding to take or not take the risk with their loan money,” he says.
Davidsmeyer says the bill comes from a discussion over whether interest rates for a payday loan should be pushed down.
The legislation is H.B. 5284.