Indiana Assets & Opportunity Network
Asset Building For Low- and Moderate-Income Hoosiers

News

Standing In Opposition to Senate Bill 613

Dear Members of the Indiana General Assembly,

The undersigned organizations ask for your support to establish a 36 percent APR cap on small loans in Indiana. These loans are currently offered at rates of up to 391 percent APR. We also ask you to reject any bills establishing new loan products or expanding the allowable fees or interest on existing loan products if they exceed this 36 percent threshold, and apply the 36 percent threshold only to small loans.  

The negative effects of high-cost loan products are well-documented. A large body of research has demonstrated that high-cost loans create a long-term debt trap that drains consumers' bank accounts and causes significant financial harm, including delinquency and default, overdraft and non-sufficient funds fees, increased difficulty paying mortgages, rent, and other bills, loss of checking accounts and bankruptcy. Indiana currently has one of the highest bankruptcy rates in the country. The Indiana General Assembly is well positioned to strengthen consumer protections for Hoosier consumers and improve economic well-being by capping loans at 36 percent.

Thus far, provisions in the state's small loans statute, such as warning notices, renewal bans, and cooling off periods have been insufficient to adequately protect consumers. In Indiana, 60 percent of borrowers take out a new small loans the same day they repay their old loan. Within 30 days, 82 percent have re-borrowed. The average borrower takes out 8-10 loans per year, paying over $400 in interest to repeatedly borrow $300. In 2017, these loans drained Indiana's economy of an estimated $60 million in abusive finance charges — a statewide issue that extends far beyond the negative effects individuals may suffer from these products.  

Approving legislation that caps APR at 36 percent is the most effective protection the state government can offer to all borrowers, especially payday borrowers. When payday lending was, effectively, banned in states that introduced rate cap bills of 36 percent or lower, former borrowers reported that their lives were better than when they had access to payday loans. Notable examples include North Carolina and Arkansas, which in 2006 and 2009 established 36 percent and 17 percent rate caps, respectively. Researchers studying the effects of the rate cap and the effective banning of payday lending in North Carolina concluded that the absence of storefront payday lending had "no significant impact on the availability of credit" among former borrowers. Further, former borrowers were twice as likely to report that they were better off without payday lending. Military families are also protected by a 36 percent APR rate cap.

Nearly 9 in 10 Hoosier voters supports a 36 percent interest rate cap. By and large, they see these products as more harmful than helpful and a financial burden rather than financial relief. Seventy-five percent of voters would not want to see a payday loan store open in their community. Given the strong support for a rate cap, the harms incurred from taking out loans with high interest rates and fees, and costly but, largely, ineffective insurance products and the economic benefits of the absence of such products, the Indiana General Assembly should reject the expansion of high-cost loan products in the state and approve a 36 percent APR rate cap on payday loans. It should also reject any new proposals to establish credit products that exceed 36% APR inclusive of origination fees and insurance products.   

Signed,

Military and Veterans Groups

  • The Military / Veterans Coalition of Indiana

  • American Legion

  • Disabled American Veterans

  • Reserve Officers Association

  • AMVETS

Faith Groups & Churches

  • Indiana Catholic Conference

  • Episcopal Diocese of Indianapolis

  • Grace Church, Indianapolis, Fishers, and Noblesville

  • The Creek Christian Church, Indianapolis

  • Indiana Friends Committee on Legislation

  • House of God Church, Indianapolis

  • Christ Church Cathedral, Indianapolis

  • Drexel Gardens Christian Church, Indianapolis

  • Associated Churches, Fort Wayne

  • Lafayette Urban Ministry, Lafayette

  • All Souls Unitarian Church, Indianapolis

  • Catholic Charities Diocese of Fort Wayne-South Bend, Inc.

  • Indy Metro Church, Indianapolis

  • Shepherd Church of the Nazarene, Indianapolis

Community Groups, Businesses, & Social Service Agencies

  • Indiana United Ways

  • AARP Indiana

  • Habitat for Humanity of Indiana, Inc.

  • Indiana Black Expo, Inc.

  • Indiana State Conference of NAACP

  • Prosperity Indiana

  • National Association of Social Workers – Indiana Chapter (NASW-IN)

  • Indiana Association of Area Agencies on Aging

  • Indiana Alliance of Retired Americans

  • Indiana Connected by 25, Inc.

  • Indiana Coalition Against Domestic Violence

  • Coalition for Homelessness Intervention and Prevention

  • Indiana Community Action Association

  • Indiana Assets & Opportunity Network

  • Indiana Institute for Working Families

  • Feeding Indiana’s Hungry

  • Citizens Action Coalition

  • Hoosier Action

  • Indiana Coalition for Human Services

  • Wayne Township Trustee of Wayne Co., Richmond

  • City of Fort Wayne

  • United Way of Allen County, Fort Wayne

  • Headwaters Counseling, Fort Wayne

  • Big Brothers Big Sisters of NEI, Fort Wayne

  • Blue Jacket, Inc., Fort Wayne

  • Vincent Village Inc., Fort Wayne

  • Habitat for Humanity of Greater Fort Wayne

  • Boys & Girls Clubs of Fort Wayne, Inc.

  • CVC Communications, Fort Wayne

  • Brightpoint, Fort Wayne

  • MLK Montessori School, Fort Wayne

  • Sharon Eisbart Corporate Art , Fort Wayne

  • Do it Best Corp., Fort Wayne, Plainfield, Danville

  • YWCA Northeast Indiana , Fort Wayne

  • UAW 2209, Roanoke

  • United Way of Elkhart County

  • Northwest Indiana Community Action (and Area Agency) Program, Crown Point. Covering Lake, Porter

  • Jasper, Newton, Laporte, Starke and Pulaski counties.

  • Starke Pulaski Habitat for Humanity

  • Northwest Indiana Reinvestment Alliance, Hammond/East Chicago

  • Lafayette Neighborhood Housing Services, Inc dba HomesteadCS

  • LifeStream Services, Inc., Yorktown, Anderson, Richmond

  • Interlocal Community Action Program, New Castle, Covering  Marion, Anderson, Rushville, Greenfield, Rushville, Connersville, Muncie

  • Providence Housing Corporation, Terre Haute

  • Advantage Housing, Inc., Kokomo

  • Melissa S. Brown & Associates, LLC, Carmel

  • Stones3 Resources, LLC, Carmel

  • GCC Foundation, Noblesville

  • Thrive Nonprofit Solutions, Indianapolis

  • Marion County Commission on Youth

  • Southeast Community Services, Indianapolis

  • Indianapolis Worker Justice Center

  • City Real Estate Advisors, LLC, Indianapolis

  • Fair Housing Center of Central Indiana

  • Greater Indy Habitat for Humanity

  • West Indianapolis Development Corp.

  • JB Real Estate Consultants, Indianapolis

  • United Way of Monroe County

  • Habitat for Humanity of Monroe County

  • Mother Hubbard's Cupboard, Bloomington

  • Building a Thriving Compassionate Community, Bloomington

  • Area 10 Agency on Aging, Ellettsville, covering Monroe and Owen counties

  • Thrive Alliance (Area Agency on Aging), Columbus, covering Bartholomew, Brown, Decatur, Jackson & Jennings counties

  • United Way of Bartholomew County

  • Habitat Brown Co.

  • Human Services, Inc., Clifford, covering Bartholomew, Brown, Decatur, Jackson, Johnson, and Shelby Counties

  • Habitat for Humanity Clark & Floyd Indiana, Inc

  • Orange County Habitat for Humanity

  • SWIRCA & More, Evansville

  • Memorial Community Development Corporation, Evansville

  • Lincoln Hills Development Corporation, Tell City, covering Crawford, Harrison, Perry and Spencer Counties

  • TRI-CAP, Jasper, covering Dubois, Pike Warrick, Vanderburgh

Individuals:

  • Ronald Turpin, Fort Wayne

  • Armand R Francois, West Lafayette

  • Joanna W. Rogers, Fort Wayne

  • Herb Anderson, Woodburn

  • Susan Brouillette, Lafayette

  • Stephen R. Smith, Fort Wayne

  • Shana Lewis, Indianapolis

  • Jeff Jenkins, Richmond

  • Steve Morrison, Winamac

  • David Noe, Indianapolis

  • Marilyn J. Clerc, Columbus

  • Maria Rusomaroff, Indianapolis

  • Rev. Soozi Whitten Ford, Greenwood

  • Jay Height, Indianapolis

  • M. Bert Kite, Franklin

  • Rhea Dawn Cain, Speedway

  • Genevieve A. Baird, Richmond

  • Jane Stowe, Richmond

  • Lee Scott Vannoy, Richmond

  • Melissa S. Brown, Carmel

  • Logan Charlesworth, Indianapolis

  • Hannah Lencheck, Bloomington

  • Marcie Luhigo, Indianapolis

  • Susan Isaacs, Richmond

  • Donna Taylor, Columbus

  • Steve Hoffman, Fort Wayne

  • James L. Bauerle, Indianapolis

  • David Nicole, Fort Wayne

  • Sharon Eisbart, Fort Wayne

  • Barbara Bolling-Williams, Gary

  • Greta McKinney, Fort Wayne

  • Stephen Jarrell, Fort Wayne

  • Gloria Whitcraft, Fort Wayne

  • Efrat Feferman, Bloomington

  • Denise Andorfer, Fort Wayne

  • Rhonda Zuber, Evansville

  • Mark Lindenlaub, Columbus

  • William (Bill) Rieth, Elkhart

  • Kate Hess Pace, New Albany

  • Serita Cabell, Evansville

  • Lisa Laflin, Indianapolis

  • Donna Taylor, Columbus

  • Ashley Piland, Beech Grove

  • Allen Southerland, Indianapolis

  • Nancy Holle, Indianapolis

  • B.J. Green, Indianapolis

  • Kimberly Coveney, Carmel

  • Edward Gerardot, Mooresville

  • Caryn Anderson, Zionsville

  • Kate Bathon Shufeldt, Indianapolis

  • Meryl Altman, Greencastle

  • Marilyn Moran-Townsend, Fort Wayne

  • John Peirce, Fort Wayne

  • Scott Senger, Fort Wayne

  • Vanessa Tijerina, Anderson

  • Joyce Fleck, Huntingburg

  • Bryan Robbins, Greensburg

  • Dan Niederman, Bloomington

  • Alyssa Prince, Mitchell

  • Janis Bradley, Indianapolis

  • Megan Miller, Terre Haute

  • Kim Rogers-Hatfield, Anderson

  • Jahanah Strawther, Indianapolis

  • Gina Lewis, Indianapolis

  • Amy Hendrix, Indianapolis

  • Dan Starr, Fort Wayne

  • Ahmed Abdelmageed, Fort Wayne

  • Holli Murphy, Fort Wayne

  • Ruth Stone, Fort Wayne

  • Lisa Smith, Fort Wayne

  • Michelle Carson, Peru

  • Irene Paxia, Fort Wayne

  • John Court, Fort Wayne

  • Kathleen Lara, Westfield

  • Mike Landram, Fort Wayne

  • Josette Rider, Fort Wayne

  • Irene Walters, Fort Wayne

  • Stephanie Crandall, Fort Wayne

  • Mayor Tom Henry, Fort Wayne

  • Tony Hudson, Fort Wayne

  • Jeanne Wickens, Fort Wayne

  • Kelly Gerber, Fort Wayne

  • Shana Lewis, Indianapolis

  • Jerry Leonard, New Albany

  • Colleen Fahling, New Albany

  • Crystal Kaulen, Richmond

  • Wendi Goodlett, Bloomington

  • Scott Mills, Nashville

  • Jenny Hamilton, Yorktown

  • Chris Myers, Ellettsville

  • Amanda Sheridan, Bloomington

  • Louise O’Connell, Paoli

  • Joe Jordan, Fort Wayne

  • Mark Lindenlaub, Columbus

  • Cheri Stone, Columbus

  • Mignon Kennedy, Porter

  • Gina Bush Hayes, Indianapolis

  • Lisa Piercefield, Columbus

  • Cindy Benedict, Carmel

  • Kathryn Thompson, Bloomington

  • Joel Zwier, Goshen

  • Marcus Casteel, Noblesville

  • Anna Schoon, Kouts

Prosperity Indiana