WFHB Bloomington Community Radio
Podcast: Play in new window | Download (Duration: 2:43 — 2.6MB)
State lawmakers are changing the rules for lending practices.
Senate Bill 613 passed through the state senate last night, the last day for bills to be brought up in the State Senate or the State House of Representatives.
Current Indiana law limits lenders to a 36 percent annual interest rate on loans under $2,000, with loans over that amount having lower interest rates. Under current Indiana Code, charging twice that percentage can be prosecuted as ‘criminal loansharking.’ SB 613 would change Indiana’s definition of criminal loansharking, by including a non-refundable prepaid finance charge on top of the 72 percent cap.
The 69-page bill narrowly passed its third reading on the Senate floor in a 26-23 vote, yesterday. Thirteen Republicans broke ranks and sided with Democrats, in opposition to the lending bill. Indiana Republicans hold a super-majority in the statehouse.
Senate Bill 613 would also create “small dollar loans.” Sen. (R- Wabash) Andy Zay, said ‘small dollar loans’ are necessary to fill gaps between traditional loans and the payday loan industry. Indiana consumer advocacy groups are worried; An analysis of the bill by the Indiana Institute for Working Families, found small dollar loans could include fees and charges, with up to 99 percent interest rates.
Senate Bill 613 passed on the Senate floor yesterday, it now awaits action in the House of Representatives. It has been sponsored in the House by Republican Representative Matt Lehman, and co-sponsored by Majority Whip, Bob Heaton of Indianapolis, and Whiteland Republican Representative Woody Burton.
