WASHINGTON, March 24, 2021 /PRNewswire/ -- Today, Tom Keepers, President & CEO of the Consumer Credit Industry Association, issued a statement concerning the passage of the Predatory Loan Prevention Act, or PLPA, in Illinois. The PLPA is effective the date it was signed into law by Governor Pritzker on March 23, 2021.
"CCIA supports the shared common goal to protect Illinois families from predatory lending practices. However, the PLPA will result in Illinois residents of modest means being unable to protect their loan debts and credit scores with products like credit insurance that help them make loan payments, especially critical during this COVID-19 pandemic."
"Illinois borrowers choose credit insurance because they see the value. As of year-end 2020, over 300,000 Illinois households representing $1.9 billion in protected loan balances held protection from such unforeseen adverse events as unemployment, disability, or death. Academic studies over 40 years consistently show a vast majority (85%) of installment loan borrowers feel products like this are a good idea."
"By wrongly treating voluntary protection products as a cost of credit, the PLPA actually prevents lenders from offering the products to their borrowers. Borrowers are thus left with no options to protect their credit, assets or other essential financial obligations. For over 50 years, borrowers and lenders didn't have this losing predicament before the PLPA."
"Again, we support the goal to prevent or reduce the cycles of debt that are all too common to so many households of low to modest means. However, the PLPA introduced very real consequences: many borrowing households in Illinois – especially those of more modest means -- just lost the chance to purchase a financial safety net to protect their finances. We therefore urge the legislature to revisit the PLPA and fine-tune it to once again provide Illinois households with access to a financial safety they want and need."
About CCIA. CCIA fosters consumer financial security by assuring a healthy market for consumer asset and debt protection products. The products help consumers meet their loan or payment obligations should an unforeseen event arise such as disability, job loss, death, auto mechanical repairs, or failure to secure primary insurance coverage.
Contact: Tom Keepers