By AILEEN CHUANG,
-- The Republican leader of the Indiana Senate says he is opposed to
legislation to expand payday lending and allow for rates more than triple
what is currently permitted under the state’s criminal loansharking law.
water and the water is pretty deep,” Republican Senate leader David Long of
Fort Wayne said Thursday, referring to a payday lending bill that narrowly
passed the House last month and is now before the Senate. “... I’m not a big
fan of it, personally.”
It’s a felony under
state law to offer loans with an annual percentage rate greater than 72
percent, according to the Indiana Department of Financial Institutions. But
the new payday lending bill would lift that, allowing payday lenders to
charge annual percentage rates as high as 222 percent on short-term loans
between $605 and $1,500, an analysis by Indiana Institute for Working
Many payday loans
are for two weeks, but the bill would create a new class of loan that would
be paid off over the course of three months to a full year.
come amid a chorus of faith-based groups announcing their opposition to the
bill, including leaders of the church attended by House Speaker Brian Bosma,
who voted for the measure. The bill cleared the House in January on a
closer-than-usual vote of 53-41.
cross-denominational group of 13 clergy members -- including Indianapolis
Archbishop Charles C. Thompson -- wrote in a letter this month that it
“opens doors for lending practices that are unjust and which take unfair
advantage of people in desperate circumstances.”
include social service charities and the state’s four largest veterans’
organizations, who say such high-cost loans trap people in debt and prey on
"The optics of it
aren’t very good, to be honest,” Long said.
Mark Messmer of Jasper, who is carrying the bill in the Senate, is working
on amendments that may make the bill more palatable to members of the Senate
Commerce and Technology committee.
Long said changes
that would eliminate some of the fees could help earn support, but he still
wasn’t sure “it will get enough votes to get out of the committee.” Still,
he anticipates that the bill will be brought up for a vote.
argue the proposal would serve people who need quick cash but have nowhere
else to go, filling a void.
“We always think
more options are good for customers,” said Jamie Fulmer, a spokesman for
Advance America, one of the country’s largest payday lenders. He said the
bill would create a regulated environment that is transparent and beneficial
to small-dollar borrowers.
say the proposal lacks consumer protections, especially now that President
Donald Trump’s administration is looking to scrap rules created under former
President Barack Obama aimed at tightening loan practices.
loans have devastating consequences for borrowers,” said Steve Hoffman,
president and CEO of Brightpoint, a Fort Wayne-based non-profit that
provides social services to low-income people.