More than 47,000 Hoosier households were using a payday loan in the last 12 months according to the Indiana Institute for Working Families. A new coalition aims to advocate for and educate Hoosiers about the dangers of payday lending.
Hoosiers for Responsible Lending is a coalition of veterans organizations, faith communities, consumer groups and social service providers.
It brings together groups that have spoken out against payday lending at the Statehouse for years.
Prosperity Indiana coalition builder Natalie James said the alliance will push for legislation this upcoming session to stop predatory loans from taking advantage of Hoosiers’ in financial distress.
“We seek to put an end to lending practices that target and trap vulnerable Hoosiers extracting wealth from them and their communities,” said James.
Currently payday lenders can charge up to a 391 percent interest rate annually on loans. The network of organizations is advocating that it be reduced to 36 percent.
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Andy Nielsen is a senior policy analyst with the Indiana Institute for Working Families. He said state law allows payday lenders to have annual interest rates of up to 391 percent that not only hurts borrowers, but also the state and local economies.
“For comparison, at 36 percent APR versus current Indiana law, borrowers could have saved nearly $300 million in Indiana over the five year period ending 2018,” said Nielsen. “That puts more money into local economies and communities that typically lack resources but allow payday lenders to thrive.”
The group plans to advocate in the upcoming legislative session to cap interest rates for payday loans. It also aims to increase opportunities for other non-predatory loan options for Hoosiers.
The alliance will offer a virtual information session Tuesday, Sept. 14, at 2 p.m. EST.