Getting Rich Off Cash-Strapped Illinoisans: Payday Loans by Zip Code

Until passage of a new law this year, millions of dollars were stripped each year from low and middle-income communities across Illinois. No where was this more true than in Black and Brown neighborhoods struggling to build family and community wealth after years of underpay and disinvestment from government and the business community. Known as predatory loans, payday lenders, auto title lenders, and other short-term lenders charged interest rates as high as 400 percent since they became legal in the 1980's.

Analysis from Woodstock Institute and New America shows just how concentrated these shady loans were as recently as 2019. Several zip codes in primarily Black and Latinx areas of Chicago borrowed incredibly high amounts of loans from payday lenders. For example, zip codes 60620, 60628, and 60619 which all are 93 percent or more Black each accounted for between $820,000 and $940,000 in payday loans in 2019 alone. Other areas of the state with higher Black and Brown populations including Rock Island, Decatur, Springfield, Belleville, East St. Louis, Rockford, Kankakee, and Elgin also had higher amounts of payday loan debt. With such high interest rates, these predatory loans had an incredibly high cost for communities, taking money that otherwise might have been saved or invested in assets to build wealth in these communities.

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