small business lending
...Brent Adams, a lobbyist for the Woodstock Institute in Chicago that does research on fair lending practices, said that he’s not surprised by opposition to the bill.
“We have observed that some of these alternative lenders offer loans on terms that we would consider predatory,” Adams said. “Whenever you take a financial system and seek to implement major reforms, you’re going to get some objections."
The bill on which we have spent the most time this session is SB 2804, and we have worked closely with our ally, the Illinois Asset Building Group. The bill, which is sponsored by Senator Daniel Biss, would amend the Illinois Wage Assignment Act. A wage assignment is a debt collection method used by non-traditional lenders -- like payday lenders -- to access a borrower’s wages when the borrower defaults on a loan. Federal regulations provide that wage assignments are unlawful unless they are revocable by the borrower. By contrast, under the Illinois
Presented by Dory Rand at the 2016 National Community Reinvestment Coalition conference in Washington, DC.
Woodstock was pleased to lead a large and diverse delegation of NCRC members and nonprofit leaders from Illinois on Capitol Hill visits with our Illinois elected officials as part of NCRC’s largest and most successful 25th anniversary conference. We met with legislative aides from the offices of Senators Durbin and Kirk as well as Representative Jan Schakowsky and staff from the offices of Representatives Quigley, Hultgren, Dold, Bustos, Kelly, and Gutierrez.
We are further excited to announce that the evening’s program will be honoring Accion Chicago, highlighting the organization’s hard-won successes in community lending. As a community development financial institution, Accion Chicago’s work has long expanded access to safe capital for small businesses, and they’ve protected small business owners from the growing threat of predatory online business loans that trap borrowers in debt with high fees and unreasonable terms.
Last year, Woodstock worked closely with the Responsible Business Lending Coalition to develop a Small Business Borrower Bill of Rights (BBOR). The BBOR was intended to establish best practices for the industry, including, for example, the responsibility to disclose an APR. The BBOR is, however, completely voluntary. There is no mechanism to enforce the BBOR against lenders who sign on to it, and some major lenders have simply refused to sign on to the BBOR.
Testimony of Spencer Cowan before the Senate Financial Institutions Committee. In this testimony Cowan discussed the lack of access to capital for many small businesses in Illinois and the prevalence of online-predatory lenders.