Bloomington Shelves Payday Lender Rate Cap (Pictures)

Over 120 people jammed into Bloomington City Hall to show their support for an ordinance that would cap interest rates at 36% in the city limits, curbing the power of payday lenders and the banks that lend to them.

Prior to the council meeting, 20 people from Occupy BloNo held a silent vigil in opposition to the banking and payday interests that were suspected of scaring the city council members away from supporting the ordinance. Many participants in the vigil had their mouths covered with dollar bills, symbolizing the stifling of the people’s voice and will by the power of money.

In the council meeting, Todd Greenburg, attorney for the City of Bloomington, said that he could not guarantee that an ordinance capping interest rates would not be struck down in court given the passage of a recent Illinois Supreme Court decision. Mr. Greenburg said that the case of Stubhub vs. the City of Chicago, which struck down an amusement tax on Stubhub’s online scalping of tickets, challenged homerule rights of Illinois cities.

A number of options were provided to the city by Mr. Greenburg, including 1) the passage of local ordinance capping rates at 36%, 2) the crafting of an ordinance advising the issue be revisited statewide by the Illinois legislature, or 3) no action by the city.

Judy Stearns, who was the only outspoken alderperson opposed to the ordinance, asked how much it would cost the city to litigate challenges to an ordinance. Mr. Greenburg estimated that it would cost the city $50,000 in legal fees.

After a discussion that lasted 15 minutes, Bernie Anderson made a motion to craft a resolution that would advise the Illinois state legislature to revisit the issue of payday lending (Option #2 above). Mr. Anderson claimed that a Bloomington ordinance regulating interest rates had a slim change of surviving a court challenge. The resolution passed with David Gage and Judy Stearns opposing.

Don Carlson, spokesperson for Illinois People’s Action, announced at the conclusion of the vote that those in attendance disappointed by the council inaction on the issue were invited to attend a brief meeting outside to talk about steps to be taken in the future.

Outside the council meeting, Mr. Carlson said that city council members were bullied by lawyers of the payday lenders and that Illinois People’s Action will continue fighting for a 36% cap on interest rates in central Illinois.