(The Center Square) – A bill headed to the Illinois House that aims to provide financial lending protections for businesses is being criticized as being bad for business.
Senate Bill 2234 from state Sen. Christopher Belt, D-Swansea, would provide protections for small businesses when taking out a loan by requiring financial terms such as the amount financed, fees and the annual percentage rate be clearly disclosed at the time an online or non-bank provider makes an offer for a loan.
“There are small businesses around the state, especially in my community, that have faced challenges in accessing fair and transparent financing options that have allowed them to fall victim to predatory lending,” said Belt. “These businesses are the backbone of our communities and they should be uplifted, not burdened with financial hardship and business failure.”
During floor debate, state Sen. Jason Plummer, R-Edwardsville, said it is bad legislation.
“This bill was designed to go after certain companies and protect the big guys,” said Plummer. “It was marketed that this was going to somehow protect businesses, but ironically, who are all the opposition? It’s all the small business groups and it’s all the medium-sized business groups.”
The measure passed the Senate by a 36-19 vote.
The Woodstock Institute issued a statement following passage of the bill.
“By ensuring transparent pricing and terms, this legislation will empower small business owners to make informed financial decisions and help protect them from exploitation,” said Jane Doyle, Senior Regulatory Policy Associate. “We urge Illinois State Representatives to swiftly pass SB 2234 to give small businesses basic protections when borrowing money."
Only two other states, California and New York, have enacted similar transparency laws.