Every year payday loan companies take $70 million out of the Indiana economy in fees and make huge profits off the backs of the poor, mostly affecting those in our urban areas and predominantly people of color.
These loans are sold as “a solution to a short-term financial need”; in truth they are a trap that captures the average borrower in a round of eight to 10 loans, borrowing and borrowing again to escape the ever-growing debt due to astronomical interest rates and fees—now capped at 391%. And, 86% of these payday companies are not even based in Indiana. To protect the $60 million in profits made here, these companies send in high-powered lobbyists whenever their business practices are challenged.
This year, again, State Sen. Greg Walker has introduced a bill (Senate Bill 26), which will cap interest rates and fees to a total of 36%, matching the federal caps for loans to military personnel. At our current 391% rate, it is clear our Legislature has legalized theft from those who can least afford it.
Citizens of Indiana cannot allow our laws to sanction lending that preys on the poor and most vulnerable among us. Please, call Sen. Eric Bassler, chairman of the committee where the bill has been assigned, and ask him to schedule a hearing on this important bill. Then call your state senator and ask him or her to co-sponsor the bill and to vote yes on SB 26.