CIOP Demands Advance America End 550% Interest Loans:
Payday Lender Refuses to Even Hear Demand
Bloomington, IL
April 2007
CIOP, along with recently formed affiliate University-College Action Network (U-CAN), descended on Payday Lender Advance America demanding an end to unregulated 550% interest loans. For example a $500 loan costs $1350 after the 5-month term. Advance America’s response was a refusal to engage even a small leadership delegation. The group then lined up along Towanda Avenue displaying signs and receiving support from passing vehicles.
Illinois State University student and U-CAN leader Milon Stovall was disappointed with Advance America’s unresponsiveness: “Advance America’s refusal to engage in any type of communication with us is a clear sign that they know their practices are unjustifiable, which is why CIOP will continue to shine a light on their dark practices until they agree to meet with us and begin negotiations to change their practices.”
CIOP engaged in a similar action in Springfield on April 18th temporarily shutting down the facility. In both cases, Advance America, the largest Payday Lender in the country, refused to negotiate with the community or stop offering 550% interest loans. CIOP will continue to pressure these lenders to stop offering predatory products.
Erin Strauts, a U-CAN leader from Illinois Wesleyan University attended both the Bloomington and Springfield actions, had this to say about Advance America’s loan product: “Advance America exists only to bring in hard working members of our community and give them loans that will keep them in perpetual debt. These people are going through a temporary financial crisis and an honest loan would get them through it, however, Advance America gives them unreasonable loans that they pay back at 550% interest. Financial institutions have an ethical responsibility to not destroy a community in pursuit of profit but that is exactly what Advance America and other Payday Lenders are doing. Whatever happens to a few of us affects all of us. It is just plain wrong to let your friends and neighbors be taken advantage of when they can be protected.”
In December 2005, the Illinois legislature adopted the Payday Loan Reform Act (PLRA), a compromise bill between the industry and consumer advocates forcing modest regulations on short-term lending. By October 2006, Advance America had completely stopped offering any loans that fell under the PLRA instead using a loophole to offer 550% interest installment loans.
“I was disappointed Advance America wouldn’t talk with us so we could achieve our objective of creating a better community. I think we were successful in getting our point across to the community and helping increase support to fight against 550% interest loans.” said Jenni Bubke, a student from Illinois Wesleyan University and U-CAN leader.
The Illinois legislature is currently considering closing this loophole. Legislations has already passed out of committee in both houses and passed on April 19th in the Senate 44-7.