It is said that the definition of "poor" is when you have too much month left at the end of your money. You have income. Maybe just Social Security, but you get by. Then the tire blows on your only vehicle, or your child breaks his arm, or the furnace goes out and it's below zero outside.
These issues are a pain to most, but to you, it's a financial catastrophe. So you take out a payday loan. You're in a hurry, you need the money for groceries now, and wading through the legaleze in the loan papers is something you have no time to do. You sign, not knowing you are being charged close to 400 percent APR on that money, all through interest charges and a web of constant fees.
In 2002, our Indiana legislators gave these vultures approval to do this by actually carving a hole in our criminal loansharking laws just for them. In the past five years alone, they have extracted around $300 million in finance charges from our most vulnerable residents.
In the last Indiana legislative session Senate Bill 104 would have limited the APR on these loans to 36 percent, as has been done in other states. It was authored by Sen. Greg Walker and Sen. John Ruckelshaus, but was defeated 27 to 22. Payday loan companies and their slick lobbyists from out of state protect their obscene business practices and again they were victorious.
Meanwhile, sixty percent of of borrowers go on taking out a new loan to pay off an old loan on the day it is due. Eighty-two percent take another loan within 30 days. The borrowers are hounded by these companies through texts and phone calls to take out more and more loans. And like all these companies, the money is extracted directly out of their bank accounts. Boom. Gone. If there's no money in the account, a personal visit is sure to be next.
There is looming evidence that the stress and constant harassment is yielding illness, depression, and even consideration of suicide among borrowers. Payday loan companies prey on the elderly with Social Security income, as well as the low-income poor. We need three right-minded legislators to change sides and remove this stain from our state.
PLEASE, PLEASE, PLEASE, Sign this 2020 letter to the Indiana General Assembly calling for a 36 percent APR cap now. Other states have done it. We can too.
Nancy
