Governor Quinn signs bill to protect from risky home loans and 'debtor’s prison'

Examiner.com
July 26, 2012
John Presta

Illinois has passed new financial protections for its consumers: legislation to help protect families from high-risk mortgages and refund anticipation loans and a measure that establishes guidelines to follow before a borrower can be imprisoned for non-payment of debt. The law clarifies the state's definition of a high-risk home loan to meet federal guidelines and also restricts fees and penalties that may be charged when a loan is issued. Lenders also are prohibited from collecting pre-payment penalties if a loan is paid off before its term ends. The second measure codifies best practices for post-judgment collection of debts. Debt collectors and lenders must provide evidence of unprotected assets available to repay a debt before sending the debtor to jail. The law should help keep Illinois residents from being incarcerated as a result of a payment order they cannot afford or for missing a hearing for which they did not receive notice. The law was developed after research showed that customers of licensed consumer lenders were being jailed for their debt.

Web Link

External web links may expire.

Return to Headlines