More than 47,000 Hoosier households have used a payday loan in the past 12 months, according to the Indiana Institute for Working Families. A new coalition aims to defend and educate Hoosiers about the dangers of payday loans.
Hoosiers for responsible lending is a coalition veterans’ organizations, faith groups, consumer groups and social service providers.
It brings together groups that have spoken out against payday loans at the Statehouse for years.
Prosperity Indiana coalition founder Natalie James said the alliance will push for legislation this coming session to prevent predatory lending from taking advantage of Hoosiers’ financial distress.
“We seek to end lending practices that target and trap vulnerable Hoosiers by extracting wealth from them and their communities,” said James.
Currently, payday lenders can charge up to an interest rate of 391% per annum on loans. The network of organizations pleads for it to be reduced to 36%.
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Andy Nielsen is Senior Policy Analyst at the Indiana Institute for Working Families. He said state law allows payday lenders to have annual interest rates of up to 391%, which hurts not only borrowers, but the state and local economies as well.
“For comparison, at a 36% APR over current Indiana law, borrowers could have saved nearly $ 300 million in Indiana over the five-year period ending in 2018 Nielsen said. “It invests more money in local economies and communities which are generally under-resourced but allow payday lenders to thrive.”
The group plans to advocate in the next legislative session to cap payday loan interest rates. It also aims to increase the possibilities of other non-predatory lending options for Hoosiers.
The alliance will offer a virtual briefing Tuesday, September 14 at 2 p.m. EST.