It happens. Your car died a long overdue death. It’ll be expensive to replace, but you need a car. But soon, through Indiana Senate Bill (SB) 352, there may be a new, easy-to-get lending option just for you. But this easy option could be a deal with the Devil. The bill would not only make it legal for installment loans to exceed the 72 percent rate allowable under the criminal loansharking statute, in some cases rates could reach over 300 percent.
(Just for comparison sake, Indiana law states that 25 percent is the maximum rate that can be charged, but consumers can agree to higher rates in order to get the credit they need.)
There’s that pesky word, “need.” Without alternatives lots of working people, military families, and folks on Social Security fall victim to this kind of loan, where high interest rates and fees add up to exorbitant repayment amounts that shackle them for years—often into bankruptcy. But they really really need the money and the loans are easy to get, providing the lenders with lots of customers. SB 352 will provide those customers with a ramped up, even more destructive version of Pay Day Loans, and the bill has already passed the Indiana Senate.
There have been efforts for years to change the laws controlling the astonishingly high interest rates in the Pay Day Loan industry, but this is a new scheme. Because these are installment loans, more money can be borrowed and much more money can be made by lenders. Bryce Gustafson of the Citizens Action Coalition wrote, “Despite SB 352 being touted as that [needed] change to payday lending laws, it’s just a fig leaf to create more profit for the industry.” He added, it is incredible that our Indiana Legislature continues to allow this predatory industry’s business model to exist as is, on the backs of working and fixed-income Hoosiers.
Our neighbors in the most need are methodically targeted by these predatory loan practices. Where’s the humanity? In a growing number of states a 36 percent total interest rate isn’t just the norm—it is the law. Please contact your Indiana Representatives here. Just enter your address and tell him or her that they must reject SB 352 and support a 36 percent rate cap for Pay Day loans.
For evil to exist, good people have only to do nothing,
Nancy
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