For the third year in row, Indiana lawmakers listened to consumer advocates, faith leaders, veterans, and concerned citizens and stopped a proposal to expand high-cost payday lending. HB 1319, which would have allowed payday lenders to offer installment loans at rates up to three times the current criminal loansharking rate, narrowly passed the House but was stopped in the Senate. ICADV supported the efforts of the Indiana Institute for Working Families, who worked tirelessly to analyze multiple bill drafts, produce fact sheets, meet with dozens of lawmakers, and provide public testimony. Executive Director, Laura Berry, added to public testimony, discussing the ways payday lending directly hurts survivors of domestic violence and creates inequitable conditions for Hoosier families. Thanks to the leadership of Senator Messmer further damage has been prevented. However, the current two-week product still exists and will continue to ensnare low-income borrowers in high-cost debt.
Fifteen states and the military have capped all loans at 36% APR or less. Those states have lower consumer bankruptcy rates and save borrowers millions in fees each year. This year, a rate cap bill – SB 325 – was introduced by the ranking majority member of the Senate Insurance and Financial Institutions Committee, Senator Greg Walker, and helped to secure strong bipartisan support from seven coauthors. The Institute collaborated to field a poll showing that the proposal has 88% voter support. Unfortunately, the bill never received a hearing.
Next year, ICADV will continue to support the Institute’s policy agenda aimed at empowering Hoosier families to achieve and maintain economic self-sufficiency.