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.
