The legislation proposed letting Indiana payday lenders offer more loans at even higher interest rates.
(Indianapolis, Ind.) - Hoosier lawmakers are rejecting a measure that aimed to expand high interest loans.
Senate Bill 613 died in the Indiana House this week when its House sponsor, State Rep. Matt Lehman (R-Berne), declined to call it for a vote. He said there were not enough votes to pass the bill, which had narrowly passed the Senate on a 26-23 vote earlier in the lawmaking session.
The legislation would have allowed payday lenders to offer more loans, and at higher interest rates up to 167 percent APR. Subprime loan interest rates would have been increased from 25 percent up to 36 percent. A new product called "loan flipping" would have allowed repeated refinancing of loans at 72 percent.
Payday lenders had lobbied to keep the legislation alive.
SB 613 ran into a lot of opposition from advocates and community groups. Former Indiana Department of Financial Institutions regulator Mark Tarpey issued a written statement calling it “the single most negative piece of consumer credit legislation that I have seen in over 40 years as a former regulator of consumer credit in Indiana.”
According to the Indiana Institute of Working Families, there are nearly 300 payday loan storefronts across Indiana. Each year, those lenders collect $60 million in fees for short-term loans that average less than $350.
“It's hard to believe that a bill this terrible could even get this far," Erin Macey, senior policy analyst at Indiana Institute for Working Families, told the Indianapolis Star.
State Rep. Chris Chyung (D-Dyer) was among the opposition to SB 613, saying it was dangerous for consumers. He is now sharing the donor records of some of these payday lenders on his Twitter page to show how they've contributed to the state's politicians.
Just going to leave these campaign donor records here. They are the first couple pages of two prolific high interest lenders and the amounts they have donated to Hoosier politicians over the last several years. https://t.co/Zs8ddsY3Ti pic.twitter.com/E85WqjK9t3— Chris Chyung (@chrischyung) April 15, 2019