Angela Espada, executive director of the Indiana Catholic Conference, shares her group's reasons for supporting legislation that would cap payday loan interest rates.  - Samantha Horton/IPB News

Angela Espada, executive director of the Indiana Catholic Conference, shares her group’s reasons for supporting legislation that would cap payday loan interest rates.

Samantha Horton/IPB News

Proponents are again pushing lawmakers to pass legislation that would cap annual percentage rates on small loans. Hoosiers for Responsible Lending wants rate caps put in place to help protect thousands of people in the state from predatory lending.

The coalition is made up of veterans’ organizations, faith communities, consumer groups and social service providers. The group supports legislation by Sen. Ron Alting (R-Lafayette) and Rep. Carey Hamilton (D-Indianapolis) that would cap payday loans at an interest rate of 36%.

“For four years I have listened to the predatory lending industry try to defend itself and explain why it should exist in our state. And I was not convinced, frankly, I find their arguments undefended,” said Hamilton, author of House Bill 1159. “We have an obligation to protect vulnerable users in this industry. It’s an industry that hurts every user it encounters. And that only benefits the mostly out-of-state owners of these lending facilities in our communities.

Indiana is one of 25 states without high rate caps on payday loans. This means that lenders can have annual percentage rates as high as 391%.

Angela Espada, executive director of the Indiana Catholic Conference, said the United States Conference of Catholic Bishops has been trying for years to get state and federal lawmakers to limit interest rates and protect vulnerable populations.

“You can hear people say who are associated with payday loans, ‘Well, it’s because they’re high-risk individuals,'” Espada said. “Well, when you can withdraw money in some states directly from a paycheck, it’s not really high risk. It’s about as safe as it gets.

Marie Morse is the Executive Director of HomesteadCS located in Lafayette. The non-profit organization works with families and individuals by providing alternative loans to predatory lending. Morse said his organization would like to see all Hoosier families have access to affordable interest rates.

“Since our program began in 2016, we’ve loaned over $2 million and saved our families over $3 million in interest,” Morse said. “And that’s money they desperately need to save for housing.”

A survey conducted in 2018 for the Indiana Institute for Working Families and Prosperity Indiana found that 88% of Hoosiers approve of a 36% rate cap on payday loans.

HB 1159 and Senate Bill 253, written by Alting, have been assigned to commissions, but have not yet been scheduled to be heard. Similar bills introduced in previous sessions failed to pass.

Contact journalist Samantha at [email protected] or follow her on Twitter at @SamHorton5.