INDIANAPOLIS, IN –

The Indiana Assets & Opportunity Network (A&O Network) is pleased to announce two key policy victories for low and moderate income families following the conclusion of the 2023 session of the Indiana General Assembly. A&O Network members worked closely with Indiana legislators throughout the session to achieve these victories, including the recoupling of the state Earned Income Tax Credit with the federal credit and a graduation requirement for financial education for all Hoosier high schoolers. 

Earned Income Tax Credit Reform

The Earned Income Tax Credit (EITC) is a resource for low and moderate income Hoosiers that encourages work by providing a wage subsidy in the form of a tax credit. Most states, including Indiana, have their own version of an EITC and they calculate it as a percentage of the federal credit. Under current law, Indiana’s state EITC is 10% of the federal credit as calculated before 2009 meaning the state credit is decoupled from the federal credit. The decoupled state EITC has several repercussions including a marriage penalty where a couple currently receives larger individual credits if they are not married than the single credit they receive as a married couple and the barring of foster parents being able to claim foster children on their taxes unless they spent the entire year with them. 

During the 2023 legislative session, the Indiana Assets & Opportunity Network advocated for EITC reform in the form of an increased state percentage of the federal credit and recoupling of the state credit back to the federal credit.House Bill 1290 would have achieved the Network’s broader EITC goals, but officially died on April 18th due to it not obtaining a 3rd reading in the Senate after passing unanimously in the House. Ultimately, the recoupling of the EITC with the federal credit was included in thestate budget bill in the final few days of session, providing additional relief to married couples, foster parents, parents of three or more children, and families with income disparities. 

Representative Chuck Goodrich (District 29), the author ofHouse Bill 1290, said “This tax credit can be a boost for low-income, working families around the state and play a vital role in our fight to end generational poverty. I'm thankful this language was included in the budget to provide additional relief to more Hoosiers, especially our married couples, larger households with three or more children and foster parents.”

Andy Nielsen, Senior Policy Analyst at the Indiana Community Action Poverty Institute and Co-Chair of the A&O Network acknowledged the victory as well as the work yet to be done: “The EITC is a critical resource for Hoosiers to reach financial stability. The change made in the state budget is an important step toward creating a fairer tax code, and will provide millions of dollars to hardworking individuals and families. We appreciate the Indiana General Assembly’s efforts on this issue and look forward to working in the future to expand the tax credit even further.” 

Financial Education Graduation Requirement

At the start of the 2023 legislative session a number of bills appeared on the scene with a clear agenda: boost financial literacy in K-12 education. Indiana Code 20-30-5-19 does require that personal financial responsibility be taught sometime between 6th and 12th grade, but in no particular manner. “What members of the Assets & Opportunity Network have been saying for years is that current law simply isn’t sufficient, and that a standalone financial literacy course would be a huge investment in both Hoosier children and the Indiana economy,” says Hale Crumley, Coalition Coordinator for Prosperity Indiana, Co-Chair of the A&O Network.

One bill, Senate Bill 35, authored by Senator Mike Gaskill (District 25) emerged from the pack and made it to the finish line by passing both the House and Senate on the same day, April 24. It now awaits the signature of Governor Eric Holcomb. The legislation will require that all Hoosiers take a standalone financial literacy course in order to graduate high school, with the bill taking effect in time to apply to current 7th grade students. These students will be able to earn credit for their studies of money management, debt management, savings, tax returns, credit scores, simple contracts, and more. 

Representative Joanna King (District 49) House Sponsor of Senate Bill 35, celebrates this victory with the A&O Network: “This is good not just for this generation but for the state of Indiana as a whole. We become a bright shining light in our nation that says we take responsibility for our finances, and we then have opportunities because of it. So yeah, it’s a win. It’s a huge win for all of us.” 

Representative Dave Hall (District 62), who introduced Senate Bill 35’s companion legislation in the House and helped to shape the final product, reiterated his confidence in this legislation’s necessity: “To ensure students’ long-term financial well-being, it’s crucial that we provide them with a comprehensive understanding of money management. Equipping them with this knowledge is essential in preparing them for life beyond high school.”

Phil Schuman, Executive Director of Financial Wellness & Education at Indiana University Bloomington and A&O Network Steering Committee member also applauds the passage of Senate Bill 35, saying “I am very excited that the State of Indiana has recognized the importance of students learning about personal finance at a young age. With finances being one of the leading causes of stress in American society, the passage of this bill will enable students to begin being more comfortable with finances at a younger age and decrease the likelihood of financial stress later in life. This is a great benefit for students in Indiana.”

The Indiana Assets & Opportunities Network looks forward to working with legislators on the implementation of both pieces of legislation, and on future programs and policies to strengthen financial empowerment, savings for the future, and public benefits and programs for Hoosiers.

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About the Indiana Assets & Opportunity Network

Assets are the building blocks of financial security for Hoosiers of all backgrounds and identities both now and for years to come. Asset building can mean many different things to different people, but to the Indiana Assets & Opportunity Network it means financial empowerment, savings for the future, and public benefits and programs.

The Indiana Assets & Opportunity Network (A&O) connects and provides learning opportunities to practitioners and advocates committed to asset building. It is co-governed by Prosperity Indiana and the Indiana Community Action Poverty Institute and has a Steering Committee of diverse organizations that support an economy that works for all Hoosiers. Members of the A&O Steering Committee are leaders in the Indiana asset building space.

Indianapolis, IN – In a letter signed by 30 organizations and individuals, members of the Indiana Assets & Opportunity Network and other stakeholders are urging the Indiana House Speaker Todd Huston, Senate President Pro Tempore Rod Bray, and Members of the Legislative Council to conduct an interim study to promote financially responsible retirement savings as part of a statewide financial literacy strategy by (1) studying how the State of Indiana may reduce the regulatory and operational burden on small businesses to promote payroll deduction as a retirement savings option for employees; (2) studying the preparedness of Hoosiers to retire in a financially secure manner; and (3) studying the need for a statewide financial literacy strategy as included in H.R. 37, authored by Rep. VanNatter.

Across our state, approximately 1.1 million Hoosiers, representing more than 47.7 percent of the state’s private sector workforce, lack access to a retirement program at work. With that being said, studies show that employees are fifteen times more likely to save for retirement when they have access to workplace savings plans.

Furthermore, according to the Prosperity Now Scorecard, Indiana ranks 36th for the prosperity of its residents when compared to the 50 states. The scorecard finds that nearly 4 in 10 Hoosier households do not have money set aside for unexpected expenses and emergencies. Furthermore, Indiana ranks 49th among 50 states for the percentage of households that reported falling behind on bill payments in the past 12 months, including 14.7 percent of white households and 32.5 percent of households of color who are behind on bills.

These outcomes and metrics are among the reasons why many stakeholders throughout the state, including members of the Indiana Assets & Opportunities Network, have been working to advance this issue for several years now and it is our hope that the conversation will continue in the months ahead via the interim study to promote financially responsible retirement savings as part of a statewide financial literacy strategy.

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About the Indiana Assets & Opportunity Network

The Network creates learning opportunities for community leaders, advocates on policies that affect low-to-moderate income families, and builds capacity for organizations aimed to increase financial stability. It is co-led by Prosperity Indiana which is a member organization skilled at building vibrant communities and resilient families; and the Indiana Community Action Poverty Institute (ICAP) which is a program of the Indiana Community Action Association, skilled in research, policy analysis, and advocacy. The Network is directed by a diverse steering committee to help establish program and policy focus. They meet bi-monthly to help identify funding sources, opportunities, and coalition partners.

VOTE IN THE HOUSE FOLLOWS SIMILAR REBUKE IN THE SENATE

Indianapolis, IN – The Indiana Assets and Opportunity Network applauds two members of Indiana’s Congressional delegation, Congressman André Carson and Congressman Frank Mrvan, for voting on June 25 to repeal a federal rule that allows lenders to evade state consumer protections on predatory lending. The 218-208 bipartisan vote in the House follows the bipartisan decision in the Senate to overturn the rule using the upper house’s fast-track authority.

“Thank you to Congressman Carson and Congressman Mrvan for voting to overturn this problematic and hurried rule that would have allowed lenders to violate state laws and promoted non-transparent lending practices – jeopardizing the financial security of all Hoosiers. Congress should build on this momentum and advance a desperately needed federal interest rate cap to ensure consumers aren’t pulled into a cycle of debt stemming from unaffordable, high-interest loans,” said Andy Nielsen, Senior Policy Analyst at the Indiana Institute for Working Families, a Network co-chair.

In October 2020, the nation’s big-bank regulator, the Office of the Comptroller of the Currency, rewrote rules in favor of predatory lenders. Its regulation allowed lenders to ignore state interest rate caps by partnering with banks, which do not have to follow state usury laws. The OCC called it the “true lender” rule; but the bank’s role in the process is merely providing a pathway to evasion for predatory lenders.

There has always been broad and robust public support for reining in predatory lenders. Polling has consistently shown that large majorities of voters across party lines support capping interest rates at 36 percent. While 18 states and the District of Columbia have laws capping interest rates at or below 36 percent, Indiana’s cap is at 391 percent. In recent years, broad majorities of voters in Arizona, Montana, Nebraska, and South Dakota supported interest rate caps through ballot initiatives, in the face of well-financed industry campaigns against them.

Members of the Indiana Assets and Opportunity Network joined a broad, bipartisan cross-section of experts and officials who called on Congress to repeal the OCC rule. The Conference of State Bank Supervisors, National Association of Consumer Credit Administrators, National Association of Federally Insured Credit Unions and many other groups also urged Congress to overturn the rule. The Network also joined 36 Indiana organizations and more than 400 from all 50 states and the District of Columbia in a letter to Congress in support of overturning the rule.

“We are thrilled that Representative Carson and Representative Mrvan listened to the calls from members of our network, asking for them to dismantle this OCC rule. In the absence of a federal interest rate cap that applies to all citizens, we’re pleased to see that this repeal restores our state’s authority to regulate interest rate caps on consumer loans. Even with Indiana’s unconscionably high rate of 391 percent, having the right to impose that limit is still a win for Hoosiers, for now,” said Jessica Love, Executive Director of Prosperity Indiana, a Network co-chair.

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About the Indiana Assets & Opportunity Network

The Network creates learning opportunities for community leaders, advocates on policies that affect low-to-moderate income families, and builds capacity for organizations aimed to increase financial stability. It is co-led by Prosperity Indiana which is a member organization skilled at building vibrant communities and resilient families; and the Indiana Institute for Working Families (IIWF) which is a program of the Indiana Community Action Association, skilled in research, policy analysis, and advocacy. The Network is directed by a diverse steering committee to help establish program and policy focus. They meet bi-monthly to help identify funding sources, opportunities, and coalition partners.

About the Indiana Institute for Working Families

The Indiana Institute for Working Families promotes public policies to help Hoosier families achieve financial well-being. We value, gather, and translate quantitative and qualitative data to communicate the opportunities and challenges that Hoosiers experience. We advance well-being by promoting evidence-based solutions and building coalitions to engage in direct and strategic conversations with policymakers and the public.

About Prosperity Indiana

Indiana Association for Community Economic Development d/b/a Prosperity Indiana builds a better future for our communities by providing advocacy, leveraging resources and engaging an empowered network of members to create inclusive opportunities that build assets and improve lives. Since its founding in 1986, Prosperity Indiana has grown to nearly 200 members from the public, private and nonprofit sectors.

INDIANAPOLIS – A high-cost predatory loan is only made worse when the loan is larger and longer. But while residents in some states are gaining protections from these larger, longer-term products, Hoosiers are now paying more than before the COVID-19 crisis, according to a new report from the National Consumer Law Center. This report builds on NCLC’s extensive work on predatory lending.

“The Institute and Prosperity Indiana have been working to educate policymakers and the public about how harmful these high-cost loans are to financially vulnerable Hoosiers. This research will help us advance the 36 percent rate cap Hoosiers desperately need,” said Jessica Fraser, Director of the Indiana Institute for Working Families.

Read the press release here.

INDIANAPOLIS, IN – The Indiana Asset and Opportunity Network [Indiana A&O Network] applauds the Senate for voting for the Congressional Review Act resolution to overturn the OCC’s “fake lender” rule, which allows predatory lenders to evade state interest rate laws by putting a bank’s name on the paperwork. In a 52 - 47 bipartisan vote on May 12, the U.S. Senate voted to approve S.J. Res. 15, a resolution under the Congressional Review Act (CRA), which was introduced by Senators Chris Van Hollen (D-MD) and Sherrod Brown (D-OH). Rep. “Chuy” García introduced a parallel resolution, H.J. Res. 35, in the U.S. House of Representatives. Now that the Senate approved the resolution, the House needs to take urgent action to stop the ongoing harm.

The rushed “fake lender” rule took effect in December and was issued by the Office of the Comptroller of the Currency (OCC). The rule protects “rent-a-bank” schemes whereby predatory lenders (the true lender) launder their loans through a few rogue banks (the fake lender), which are exempt from state interest rate caps. The rule overrides 200 years’ worth of case law allowing courts to see through usury law evasions to the truth, and replaces it with a pro-evasion rule that looks only at the fine print on the loan agreement. 

The Indiana A&O Network was part of a broad coalition of more than 375 organizations representing all 50 states and the District of Columbia calling on Congress to overturn the “fake lender” rule, which threatens to “unleash predatory lending in all fifty states.” 

A broad, bipartisan cross-section of experts and officials have called on Congress to repeal the fake lender rule. They include a bipartisan group of 25 state attorneys general, concerned the rule would effectively gut their state usury laws. The Conference of State Bank Supervisors, National Association of Consumer Credit Administrators, National Association of Federally-Insured Credit Unions and many other groups also support Congress overturning the rule.

According to national polling, two-thirds of voters (66%) are concerned about the ability of high-cost lenders to arrange loans through banks at rates higher than the state laws allowed. In a statewide poll, an even higher proportion of registered Hoosier voters (88%) support capping the maximum interest on payday loans to 36%.

“Lenders doing business in Indiana should play by Indiana’s rules. Indiana’s legislature limited loan rates and anything above 72% APR is a felony except payday loans which we are working to fix. The “fake lender” rule would allow lenders to circumvent our laws and charge whatever they like. This rule hurts our National Guard, Reserves, Veterans, Gold Star Families, and many others ,” said Indiana A&O Network member Brigadier General James L. Bauerle USA (Ret.).

 Predatory lenders charging 100% to 200% APR are already starting to push high-cost installment loans in Indiana that exceed the rates permitted under Indiana law. In light of this fact, the Indiana A&O Network urges Indiana’s House delegation to support H.J. Res. 35 to swiftly overturn the predatory lending rule.

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About the Indiana Assets & Opportunity Network

The Network creates learning opportunities for community leaders, advocates on policies that affect low-to-moderate income families, and builds capacity for organizations aimed to increase financial stability. It is co-led by Prosperity Indiana which is a member organization skilled at building vibrant communities and resilient families; and the Indiana Institute for Working Families (IIWF) which is a program of the Indiana Community Action Association, skilled in research, policy analysis, and advocacy. The Network is directed by a diverse steering committee to help establish program and policy focus. They meet bi-monthly to help identify funding sources, opportunities, and coalition partners.

2020 has caused all of us to take a good look at every aspect of our lives from where we work, worship, and live to what we eat and who we spend our time with. Because this year has disrupted all of those things, the A&O Network has selected a path for the 2021 Indiana General Assembly session that we believe will be essential to Hoosiers gaining stability not just in response to COVID-19 but long term. Protecting the financial wellbeing of Hoosiers is critical to the continued growth of Indiana and it will take a contribution from each one of us in order to move towards a more equitable future.

View the 2021 Policy Priorities here.

As a result of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, consumers started to see some financial relief through Economic Impact Payments (EIP) issued by the Internal Revenue Service (IRS). However, millions of individuals who do not normally file income taxes are entitled to EIP. These individuals have until October 15, 2020 to enter their information in the IRS Non-Filers Tool to receive their payment. 

The Consumer Financial Protection Bureau (CFPB) just released the guideHelping Consumers Claim the Economic Impact Payment: A guide for intermediary organizations. The guide contains step-by-step information for direct service and community organizations frontline staff on how to:

• Discuss the EIP with clients;

• Determine if clients need to take action; and

• Support clients with what to expect and how to troubleshoot common issues or address scenarios such as not having a permanent address

The CFPB will offer two webinars on Helping Consumers Claim the Economic Impact Payment: A guide for intermediary organizations.

• Thursday, September 3, 2020, 3:00 PM – 4:30 PM EST.Register here.

• Thursday, September 8, 3:00 PM – 4:30 PM EST.Register here.

Read CFPB’s original blog post to learn more.

INDIANAPOLIS – There’s a lot going on right now. With COVID-19 cases rising even as schools attempt to reopen and Congress negotiates its next COVID-19 package, trying to keep up with the deluge of policy news feels like drinking from a firehose. 

Perhaps it is no coincidence that financial regulators have chosen this moment to pave the way for predatory lenders to operate freely throughout the country. In late July, the Office of the Comptroller of the Currency (OCC) proposed a new rule that would allow predatory lenders to partner with banks to evade state interest rate limits.

How will it work? Thanks to a 1970’s Supreme Court case, banks are able to export the interest rates of their home state. However, both regulators and courts have guarded against allowing this preemption to be “rented out” to predatory lenders seeking to evade state interest rate limits. The OCC’s new proposed rule, which declares the bank the “true lender” so long as it is named as the lender in the loan agreement, would enable predatory lenders to proliferate, charging triple-digit interest for loans that cause harmful debt cycles.

Another rule dismantling protections from predatory lending is the last thing we need right now. This would not help struggling working families or communities of color – often the targets of these schemes – weather financial storms or build wealth. It would sink them, further widening the inequality that has worsened through this financial crisis. Among Hoosiers, charging triple-digit interest rates is incredibly unpopular, with nearly nine in 10 Hoosiers wanting to see our policymakers clamp down on these rates.

In fact, this rule could undo the efforts of a coalition of veterans’ groups, faith leaders, non-profits, and community organizations to preserve the protections Indiana does have. In 2019, these organizations came together to defeat SB613, a legislative proposal that would have allowed the proliferation of high-cost installment loans in addition to payday loans. That bill passed the Senate by one vote and ultimately failed in the House when the bill’s architects could not garner the necessary support to pass.

The coalition’s win – and legislators’ wise decision not to allow these high-cost loans in Indiana – would be completely undermined by the OCC rule, which would give high-cost lenders a way to run right around our existing installment loan caps and charge the interest allowed by their rent-a-bank partner.

In fact, with the waters warming, banks are already wading in. National Consumer Law Center’s rent-a-bank watch list suggests that there are five lenders already using rent-a-bank schemes in Indiana. These same lenders are currently avoiding states with strong enforcement, so we have among the highest number in the nation, with some charging as much as 190% APR. We need to stop this predation.

Those who want to speak out against this harmful rule can comment to the OCC by Sept. 3. And, given the speed with which regulators may be able to undo all state-level protections under the cover of current chaos, it is even more imperative for Congress to set a national usury limit by passing the Veterans and Consumers Fair Credit Act, which extends the 36% APR cap protecting active duty military families to all citizens, so that no institutions can continue predatory activities anywhere in the United States.

Macey, Ph.D, is a senior policy analyst for the Indiana Institute for Working Families and the Indiana Community Action Association.

Column link to original post: https://howeypolitics.com/Content/Columns/Columns/Article/Erin-Macey-While-we-were-distracted-a-door-opens-for-predatory-lending/10/20/24343

Indiana groups urge the Indiana delegation to halt debt collection, cap predatory loan interest rates at 36%, and suspend negative credit reporting

For Immediate Release

July 29, 2020

Contact: Erin Macey, Senior Policy Analyst, Indiana Institute for Working Families, emacey@incap.org, 317.638.4232

Andrew Bradley, Policy Director, Prosperity Indiana, abradley@prosperityindiana.org, 317.222.1221 x403

Indianapolis — This week, the Indiana Assets and Opportunity Network and other Indiana-based organizations will participate in the Stop The Debt Trap Coalition's national Week of Action to urge Congress to step up on behalf of consumers facing hardship during the ongoing coronavirus pandemic. Advocates across the country are calling on elected leaders to pass a much needed COVID-19 relief bill that includes a ban on debt collection, caps interest rates at 36% to stop predatory lending, and halts negative credit reporting.

“On behalf of hundreds of Hoosiers who we serve and represent, I urge Congress to address the negative impact debt can have on our vulnerable fellow citizens with some responsible, compassionate legislation,” said Keith Carlson, Executive Director of the GCC Foundation.

Sarah Williams, Public Policy and Advocacy Director for Marion County Commission on Youth, echoed these concerns.

Williams said, “When people are charged such high interest rates that are designed to keep them trapped in debt forever, it not only affects that individual, but their entire family has to struggle with this financial burden, including their children. In particular, during a pandemic such as the one we are experiencing, parents need to prioritize keeping themselves and their families healthy and well-supported, which is why congress needs to pass another COVID relief bill to halt debt collection, stop predatory, high-interest lending, and prohibit negative credit reporting.”

Kathryn Hadbecker, Impact and Advocacy Manager for Indiana United Ways, has similar concerns. “We know that prior to the pandemic, many Indiana households were already struggling to make ends meet. Since the pandemic and the economic disruption it caused, more Hoosiers have joined them. We strongly urge our Congressional delegation to support policies now that will alleviate the challenges faced in each of our communities from the pandemic and that will fortify consumer protections which ensure Hoosier families are on a path to financial stability.”

While relief provided by the CARES Act temporarily stabilized many households, nearly one-third of Hoosier renters are now not sure how they’ll make rent next month. Worse still, 57.1% of Black Hoosiers have little to no confidence in their ability to pay rent in August. That figure soars to 77% for Hoosiers who have used unemployment to pay bills in the last seven days. Without action from Congress, high-cost lenders and other financial actors could take advantage of struggling Hoosiers, causing long-term damage to these individuals, their families, and the economy.

"With an unprecedented number of Hoosiers filing for unemployment and losing income due to the pandemic, we know that a disturbingly high proportion of Indiana households have been forced to exhaust savings just to pay for basic needs," said Prosperity Indiana Policy Director Andrew Bradley. "Predatory lenders, debt collectors, and credit reporting agencies shouldn’t be allowed to take advantage of people facing terrible economic hardships during this pandemic. Hoosiers need our Congressional delegation to act as our champions and ensure that the final COVID relief bill includes halting debt collection, stopping predatory, high-interest lending, and prohibiting negative credit reporting."

The Indiana organizations participating in Stop the Debt Trap Coalition’s national Week of Action are urging the Hoosier delegation to include consumer protections in the next package and encourage others to take these messages to their Representatives and Senators as well.

“A large and diverse coalition has been fighting for stronger consumer protections for Hoosier families over the past several years,” said Erin Macey, Senior Policy Analyst at Indiana Institute for Working Families. “Our work is even more critical in this crisis.”

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About the Indiana Assets & Opportunity Network

The Network creates learning opportunities for community leaders, advocates on policies that affect low-to-moderate income families, and builds capacity for organizations aimed to increase financial stability. It is co-led by Prosperity Indiana which is a member organization skilled at building vibrant communities and resilient families; and the Indiana Institute for Working Families (IIWF) which is a program of the Indiana Community Action Association, skilled in research, policy analysis, and advocacy. The Network is directed by a diverse steering committee to help establish program and policy focus. They meet bi-monthly to help identify funding sources, opportunities, and coalition partners.

The St. Louis Federal Reserve Bank’s Center for Household Financial Stability studied the relationships between wealth and various demographics characteristics, including race and ethnicity, education level, and age.

Through their study, researchers determined that families who are thriving in America tend to be white, college-education, and advanced in age, while families that are young, Black or Hispanic, and living without a four-year college degree tend to struggle the most.

To read the full report,click here.