by Angela Weaver, Klinker-Alting Family Advocacy intern
It is a sad day for all of us at Campaign for Hoosier Families. Senate Bill 104, which capped interest rates on payday loans, was defeated in the third reading with a vote of 22 yeas and 27 nays and will not continue any further this session. Consequently, the bill which we all had high hopes for is now dead. Originally authored by Senator Greg Walker and Senator John Ruckelshaus, this bill seemed to have the support needed at the State Capitol in order to pass both houses and become law. At the time of third reading, SB-104 had eight co-authors.Senate Bill 84 and House Bill 1098 which also addressed small loan finance charges did not make it passed the first reading.
The fight to cap the interest rates charged by payday loans is all the talk around the Indiana State Capitol. The Indiana Coalition for Human Services of which LUM is a member has been has been fighting vigorously for this cap. The cap has gained a lot of traction and attention by advocates such as yourselves spreading the hashtag “#36IsTheFix.” Many of the payday lenders that market themselves to low income families charge anywhere from 390% – 790%. Given the severe economic harm to the most vulnerable in our state, it is vital that interest rates be capped at 36%. Since the last newsletter, Senator Breaux, Senator Stoops, and Senator Ruckelshaus have been added as co authors on Senate Bill 104. Senate Bill 84 has been referred to the Insurance and Financial Institutions committee. House Bill 1098 has been referred to the Financial Institutions committee, as well. On behalf of the Campaign for Hoosier Families, we would like to thank Representative Carey Hamilton, Senator Eddie Melton, Senator Greg Walker, and Senator Mark Messmer for authoring these bills. We would encourage them to send them a note thanking them as well. Their names and email addresses are listed below:
If you have ever been personally affected by payday loans, please share your story below to help the Indiana Institute for Working Families increase awareness on this predatory lending. If you would like to show your support for these bills, please contact your legislators today.
Payday loans are hurting low income families each and every day. But, what are payday loans? Payday loans are short term loans, but come with extreme interest rates. According to Credit.com, payday loans are specifically targeted to people with certain characteristics: renters, no four-year college degree, earn less than $40,000 a year, African-American, and separated or divorced. Payday loans may seem like a useful thing, which they can be. However, many borrowers get into trouble when they are unable to repay their debt quickly. These loans are more expensive than other types of loans because the interest rates are astronomical. According to PayDay Loan Consumer Information, “For two-week loans, these finance charges result in interest rates from 390 to 790% APR”. That is why Hoosiers all around are fighting for a cap on interest rates for payday lenders, specifically to 36% APR. If you have ever been personally affected by payday loans, please share your story below to help the Indiana Institute for Working Families increase awareness on this predatory lending. There are currently three bills this Session regarding payday loans that we will be following: SB 104, SB 84, and HB 1098. If you would like to show your support for these bills, please contact your legislators today. On behalf of the Campaign for Hoosier Families, we would like to thank Representative Carey Hamilton, Senator Eddie Melton, Senator Greg Walker, and Senator Mark Messmer for authoring these bills.
by Angela Weaver, Campaign for Hoosier Families intern