‘Payday lender’ rate cap hurts borrowers with bad credit

As for Rep. Will Guzzardi’s letter to the editor on payday lenders, it’s one thing to report success, it’s another to have data to back it up.

Guzzardi is right to say that it is expensive to be poor in America. In Illinois, it’s even harder, as tens of thousands of consumers with or without subprime credit no longer have access to any form of regulated, reliable lending.

Guzzardi says 46 new businesses are now giving installment loans at rates at or below 36%, and some lenders are offering interest rates as low as 6%, depending on the borrower’s credit.

What he doesn’t acknowledge is that the new law prevented 28% to 36% of Illinois — more than a third of the adult population — from qualifying for that 6%. In fact, they cannot claim any small dollar loan to any interest rate.

While it is impressive to see an almost 70% increase in consumer loan applications with a non-profit creditor, this data is incomplete without seeing how many of these new loan applications were declined because consumers did not don’t have the creditworthiness to qualify.

The American Financial Services Association includes traditional installment lenders that are regulated by both Illinois and federal agencies, and offer safe, ethical, and transparent loans with fixed terms and no lump sum payments, hidden fees, or penalties for prepayment. Unlike payday lenders, our member companies offer subprime or non-credit customers the opportunity to improve their credit rating, as our member companies report to credit reporting agencies.

The AFSA said there is no room in the consumer credit industry for predatory lending practices. We also believe that every American consumer deserves access to some form of credit, especially when needed. Unfortunately, Illinois’ Rate Cap Act, by driving responsible lenders out of the state, has cut off access to credit and deepened economic inequality for people who are not privileged enough to have more money. credit options.

Danielle Fagre Arlowe, Senior Vice President, AFSA

ShotSpotter always a bad idea

One Sunday afternoon, we were called three times to a hospital trauma room to tend to another gunshot victim. The rampant gun violence epidemic has led cities to seek different solutions, such as ShotSpotter, a sound detection system that alerts local law enforcement to the location of a suspected gunshot. However, this is not an effective solution.

Following the 2021 murder of 13-year-old Adam Toledo, who was shot by a deployed police officer via a ShotSpotter notification, ShotSpotter released adeclarationclaiming that its technology “is a vital tool for law enforcement.” In reality, ShotSpotter wastespolice resources. theMacArthur Justice Centerfound that “89% of ShotSpotter deployments in Chicago revealed no gun crime”. Yet Chicago haswideneda multi-million dollar contract with ShotSpotter until 2023.

ShotSpotter also encourages excessive surveillance in communities of color. Areportof the Chicago Inspector General’s Office found that ShotSpotter “rarely produced[s] documented evidence of a gun-related crime” and led officers to perform more “stops and frisks” in black and brown communities. The report said the implementation of ShotSpotter changed the how police interact with citizens near ShotSpotter alerts, and these effects may influence ShotSpotter’s algorithm because the algorithm relies on information from police reports.

Any ER doctor or trauma surgeon on the South Side can attest that Chicago is experiencing a crisis of gun violence. But ShotSpotter technology is inherently reactionary, only alerting after a gun has supposedly been fired. The solution does not simply lie in short-sighted and racialized policing.

Public health policy should guide the city’s response to gun violence.

Meredith Hollender, first-year medical student
V. Ram Krishnamoorthi, MD