Proponents are again pushing lawmakers to pass laws that would cap annual small loan percentages. Hoosiers for Responsible Lending calls for interest caps to be introduced to protect thousands across the state from predatory loans.
The coalition consists of veterans organizations, faith communities, consumer groups and social service providers. The group supports laws by Senator Ron Alting, R-Lafayette, and Rep. Carey Hamilton, D-Indianapolis, that would cap payday loans at an interest rate of 36 percent.
“I’ve listened for four years as the predatory credit industry tries to defend itself and make arguments about why they should exist in our state. And I wasn’t convinced, to be honest, I find their arguments defenseless, ”said Hamilton, author of House bill 1159. “We have an obligation to protect vulnerable users in this industry. It’s an industry that harms every single user it comes across. And it only benefits the mostly foreign owners of these institutions who grant loans in our communities. “
Indiana is one of 25 states with no strong interest caps on payday loans. This means that lenders can have annual percentages of up to 391 percent.
Angela Espada, executive director of the Indiana Catholic Conference, said the U.S. Bishops’ Conference has been trying for years to get state and federal lawmakers to cap interest rates and protect vulnerable populations.
“You may hear people associated with payday loans saying, ‘Well, that’s because they’re high-risk people,'” Espada said. “Well, in some states, if you can take money straight off your paycheck, it’s not a really high risk. That’s about as safe as possible. “
Marie Morse is the managing director of HomesteadCS, based in Lafayette. The nonprofit works with families and individuals by providing credit alternative to predatory loans. Morse said her organization wants all Hoosier families to have access to affordable interest rates.
“Since we started our program in 2016, we’ve borrowed over $ 2 million and saved our families over $ 3 million in interest,” said Morse. “And that is money that you urgently need to save for your apartment.”
A survey conducted in 2018 for the Indiana Institute for Working Families and Prosperity Indiana found that 88 percent of Hoosiers agree to a 36 percent interest rate cap on payday loans.
Both HB 1159 and Senate Act 253, written by Alting, have been assigned to committees but not yet heard. Similar bills tabled in previous meetings were not passed.