Illinois tries to curb payday lending and wage theft
Illinois has passed recent legislation that will further restrict payday lending, in the midst of a broad package of state legislation aimed at shoring up the state’s looming budget shortfall. A provision was also passed that aims to make it easier for workers who had their wages stolen by dishonest employers to reclaim what they’re owed. Many states are in the mood to pass payday loan regulations, as Wisconsin recently just did the same.
Illinois payday lenders reined in further
The Illinois legislature passed a new law, HB 537, through both houses unanimously, placing further restrictions on payday lending, according to ProgressiveStatesNetwork. Illinois already has payday loan legislation, but it was felt that too many holes existed. Payday lenders will not be able to charge more than 99 percent total interest (even though the interest on a loan until payday is calculated deceivingly), pegs loan amounts to income level and makes equal monthly installment loan payments mandatory. As far as reforms go, those aren’t outlandish.
Wage theft on the rise in Illinois
One of the other pieces of legislation just passed by the Illinois state legislature is intended to curb the amount of wage theft. The bill, SB 3568, would make it easier for workers reporting a wage theft (such as non-paid breaks or outright non-payment) of $3,000 or less. There were more than 10,000 cases of wage theft in the state last year, and it’s estimated that employees across the state are owed more than $7 million. That’s the sort of thing that sends someone running for a payday loan. The law would also make it a felony to owe an employee more than $500 in back wages, according to ProgressIllinois.
Where does the line get drawn for private businesses?
Obviously, there are good reasons for the government to not interfere too heavily into business affairs. There are good reasons for them to do so at times, too. Employees provide businesses with their success through their labor, and for them to be cheated and left desperate or destitute as their reward is one of the most atrocious transgressions that can be committed.