Small business borrowers in Illinois need more protection from predatory lending

A common reality for small businesses is thinking you’re paying one price for your loan, and instead realizing, sometimes too late, that your actual Annual Percentage Rate (APR) is in fact in the triple digits.

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Illinois State Capitol building in Springfield.

Illinois State Capitol.

Rich Hein/Sun-Times

Last week, state legislators heard testimony from a number of small business advocates about the importance of enacting protections for small business borrowers in Illinois that are falling prey to predatory lending practices. Legislation is needed because small businesses in Illinois are oftentimes unknowingly agreeing to higher-cost loan terms because it’s legal for lenders to offer opaque terms through deceptive practices.

A common reality for small businesses is thinking you’re paying one price for your loan, and instead realizing, sometimes too late, that your actual Annual Percentage Rate (APR) is in fact in the triple digits. This is because financing companies are offering products with interest rates other than APR that can mislead borrowers. Sometimes borrowers discover there are additional costs associated with their loan that they were not made aware of, and by this point, it’s too late for them to back out.

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The Small Business Truth in Lending Act legislation would address this by requiring price transparency in small business financial products, which would benefit the entire small business ecosystem. What’s more, it’s important to recognize how the lack of transparency in small business lending is disproportionately impacting under-resourced communities. Federal Reserve research indicated that minority-owned firms more frequently applied for “potentially higher-cost and less-transparent credit products.”

We urge state legislators to pass this legislation as soon as possible to protect our state’s small businesses from predatory and deceptive lenders.

Tasha Brown, Midwest director at Small Business Majority

School shootings are no joke

The Sun-Times reported Whitney Young High School was among more than 20 schools across Illinois targeted by fake threats of an active shooter on Wednesday. Officials said a 911 call was made in the morning saying an active shooter was inside the school building, but it was determined the call was a prank.

It is just a matter of time before one of these fake threats of active shooters in schools leads to real violence. As statistics show, legally and illegally, more and more people are carrying guns.

A person not realizing that a false threat has been made may wind up getting shot in chaos created by the fake threat. A teacher or student seeing the police flood the school grounds may think that school occupants are at risk and fire shots at someone they feel is the threat. First responders may mistakenly view a student or teacher as a threat and take lethal action. There are more than enough shots being fired in schools and we do not need pranks leading to more bloodshed.

Terry Takash, Western Springs

Working against needy families

While families in our area are struggling with the rising costs of food and trying to provide healthy meals for their children to eat, extremist Republicans in Washington are proposing massive cuts to the Supplemental Nutrition Assistance Program.

Republicans have introduced legislation that, for the first time ever, would subject parents or grandparents with children seven years or older to a harsh time limit of three months of SNAP if they cannot meet burdensome work requirements. If this legislation were to pass 4 million children would see a massive reduction in their food assistance.

SNAP is one of the strongest tools our nation has to combat hunger. Our elected leaders should be strengthening SNAP benefits and protecting them against attacks, not doing the opposite.

Daniel Manobianco, Marquette Park

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