May 21, 2008
In his monthly American Prospect column, Chicago attorney and author Tom Geoghegan calls for a “national usury act, ” with payday lending as a case in point.
“In a country of no real safety nets, the ersatz American safety net is a payday loan of 700 percent. In 38 states, payday lenders run wild.
“I should say that in Illinois, there is a cap of 400 percent. But this applies only to loans of 120 days or less, so the lenders just make the loans of 121 days or more. The Illinois General Assembly, in the grip of the bank lobbies, just looks the other way.
“If you like, we Americans are ‘at fault.’ We go into debt too easily, we have bad moral character. But who corrupted us? America’s financial and political elites, when they deregulated interest rates and loans.”