Debtors will have more leeway with their creditors under two new laws signed by Illinois Gov. Pat Quinn Wednesday.
"We're coming out of a very grievous recession, and so I think we need to just summon all our energy in Illinois to help the everyday consumer," Quinn said.
Senate Bill 1692 sets limits on fees and penalties for high-risk home loans. It also caps annual interest rates for tax refund anticipation loans at 36 percent.
Such loans "really pick the pocket of many of our consumers with high interest rates," Quinn said.
Some of those interest rates reached as high as 150 percent annually.
The law also requires lenders offering such loans to display a notice telling borrowers they are able to get their refunds in eight to 15 days without fees or a loan.
High-risk home loan fees and penalties are also limited under the new legislation.
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House Bill 5434 makes it more difficult to use courts and jails to collect debts. It bans "pay or appear" orders that were entered against some debtors. Those orders required debtors to make their payment or appear in court each month to explain why they could not pay.
Debtors missing payments or hearings were sometimes arrested under the previous legislation.
