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INDIANAPOLIS, IN – The Hoosiers for Responsible Lending coalition (HRL) is pleased to announce the new report Medical Debt in Indiana co-released by The Indiana Community Action Poverty Institute (Institute), Grassroots Maternal and Child Health Initiative, and Prosperity Indiana. HRL is marking the release by encouraging Hoosiers to submit personal stories of their experience with medical debt burdens.
Medical Debt in Indiana discusses the health and social impacts of medical debt, explains how individuals become indebted, provides data about financially vulnerable Hoosiers and statewide trends, summarizes recent government and private action, and recommends policy solutions to address rising medical debt.
"After seven miscarriages, I finally was able to have a child of my own, but it came at a huge cost because of the time she spent in the NICU. Medical bills created so much stress and anguish. They caused me to go through bankruptcy, and eventually I lost my home.” said Deborah Fisher, Leader with Grassroots Maternal and Child Health Initiative. “I want everyone to be aware of this problem. I believe we can all work toward solutions so that my daughter, grandchildren, and other families won't have to face the same challenges."
In a recent report by the Consumer Financial Protection Bureau (CFPB), Indiana was found to have the eleventh highest share of its population with a medical debt in collections (18.2% with $2.2 billion outstanding) in the United States and the highest among Midwest neighbors. The Census Bureau estimates that approximately one in five households nationwide and one in four households with children under 18 have medical debt, with a median amount owed of $2,000. Numbers like these are staggering, and they only become more severe when examining systemic disparities between those who bear the burden of medical debt among Black and Hispanic households, their White counterparts, and households with lower levels of educational attainment.
“The burden of medical debt is a pervasive challenge for too many Hoosiers,” said Andy Nielsen, Senior Policy Analyst for the Indiana Community Action Poverty Institute. “This is unacceptable. This report highlights structural inequities in who bears this burden and concrete steps policymakers can take to relieve this pressure. Healthcare is a right, and individuals, families, and children should not have to choose between seeking medical care or dealing with crushing debt.”
This report makes a number of policy recommendations in order to address the growing issue of Hoosier medical debt. These range from strengthening consumer protections, to expanding enrollment methods for Medicaid, to requiring all hospitals in Indiana (nonprofit and private) to adopt robust Financial Assistance Policies that help patients who need assistance.
Jessica Love, Prosperity Indiana’s Executive Director, said, “The findings from this report indicate that, among all Midwest states, Indiana has the highest share of its population with a medical debt in collections. This should be sobering news for any policymaker concerned with long-term economic stability. Indiana's decision-makers should act quickly to use these findings and implement recommendations to increase consumer protections for all Hoosiers."
The report was made possible through generous support from the Americans for Financial Reform. "We're excited to see such good work being done on medical debt and how it affects people in Indiana and across the country," said Candace Archer, Consumer and Payday Campaigns Manager for Americans for Financial Reform Education Fund.
Medical Debt in Indiana was informed by the Indiana Community Action Association’s 20220 Community Needs Assessment and personal stories shared by those experiencing the medical debt burden. If you or someone you know in the state of Indiana is willing to speak with the researchers and potentially testify about their own experiences with medical debt, please share or fill out this form so that we may reach out to you.
Read the full report here.
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About Indiana Community Action Poverty Institute
The Indiana Community Action Poverty Institute 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 Grassroots Maternal and Child Health Initiative
The Grassroots Maternal and Child Health (MCH) Initiative builds the capacity of community members and organizations to bring about systems change that improves maternal and child health outcomes in marginalized neighborhoods across Indiana. We train, mentor, and partner with Grassroots MCH Leaders to bring about community-centered approaches that address inequitable social and economic systems underlying poor maternal and child health outcomes. Our current areas of focus include building the capacity of affordable housing communities, early childhood education centers, faith-based organizations, and mothers exiting the justice system. In addition, we support the development of teen grassroots MCH leaders to bring about sustainable, generational change in maternal and child health. We are grateful for funding from: Riley Children's Foundation, Indiana Dept. of Health, and private and corporate philanthropists.
About Prosperity Indiana
The 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’s network has grown to nearly 200 organizations, representing thousands of practitioners statewide from the public, private, and nonprofit sectors.
About Hoosiers for Responsible Lending
Hoosiers for Responsible Lending was created by a network of advocates working to empower Hoosiers who have been affected by any form of predatory lending. HRL raises awareness of predatory practices across Indiana in order to hold lenders accountable and create attainable pathways to wealth building for all Hoosiers. The alliance includes veterans organizations, faith communities, consumer groups, and social service providers who recognize both the benefits of equitable, responsible lending and the damages of predatory lending.
SB 352 failed to be added to the agenda for the House Financial Institutions and Insurance committee for the committee's final meeting, meaning that it will not make the body's committee report deadline of Tuesday, February 22.
"While all Hoosiers deserve financial services, we know that too often Black and minority families do not have access to fair financial products," said Tanya Mckinzie, President and CEO of Indiana Black Expo. "We will continue to fight for positive public policy that supports fair and reasonable lending practices in Indiana."
"The Indiana General Assembly should enact legislation that promotes regional communities to build community lending institutes where limited loans can be had at reasonable rates," said James L. Bauerle BG, USA (Ret.), VP and Legislative Director for The Military/Veterans Coalition of Indiana. "SB352 would have done none of this! Killing this bill saves Indiana! The future is not so bleak for our poor and needy—I foresee fewer Hoosiers in debt traps, fewer Hoosiers going bankrupt, fewer Hoosier Veterans homeless, fewer Hoosier Reserve and Guardsmen suffering hardship and losing their future in the military, and fewer Hoosier Veterans committing suicide! Think about all the help Indiana and our nation has received during this COVID pandemic from our Guard and Reserve—and we almost were going to offer them this 'new product'!"
"Habitat for Humanity is happy to hear that SB 352 will not be moving forward in the House," said Gina Leckron, State Director of Habitat for Humanity of Indiana. "We breathe easier knowing that high cost loans will not be expanded in our state, threatening the housing security of low income Hoosiers. Our homeowners, volunteers and affiliates are proud to stand in solidarity with many nonprofits and churches in opposition to this bill and thank them for speaking up for those who are most vulnerable.“
"We are pleased to see that this legislation is no longer moving forward," said AARP Indiana Legislative Director Ambre Marr. “Too many households of all income levels have insufficient savings not only for retirement, but for any emergency that may arise. This is a serious situation, especially for older Hoosiers, as they have fewer working years to rebuild their savings after a financial shock. We look forward to continuing the discussion on how we curb the cycle of debt for older Hoosiers and their families and establish financial security instead of establishing products that contribute to it.”
“We thank Chair Carbaugh for standing with financially vulnerable Hoosiers and their families and not hearing Senate Bill 352. From introduction, we saw the bill for what it was: a clear expansion of predatory lending,” said Andy Nielsen, Senior Policy Analyst for the Indiana Community Action Poverty Institute. “This is an important win for consumers throughout the state, and our coalition stands ready to work with the Indiana General Assembly before next session on real solutions and alternatives that provide equitable and responsible access to credit.”
“We are extremely disappointed by the Indiana Senate’s passage of SB 352. Simply put, the bill expands predatory lending in Indiana without any consideration for financially vulnerable Hoosiers and the families,” said HRL member Andy Nielsen, Senior Policy Analyst for the Indiana Community Action Poverty Institute. “The bill creates a problematic new loan product, preserves payday lending, and lacks any consumer guardrails—fueling a debt trap during a time of economic recovery. Our legislature should focus on solutions that provide equitable, responsible access to credit. Unfortunately, the Indiana Senate has taken the opposite approach. Our coalition will continue to fight this bill, and ask that each and every Hoosier do the same,” Nielsen said.
INDIANAPOLIS, IN – Hoosiers for Responsible Lending (HRL) is urging the Indiana General Assembly to cap loan rates and vote no on Senate Bill 352, Supervised Consumer Loans, as it is currently written. SB 352, authored by Senator Andy Zay (R-Huntington) and coauthored by Sen. Mike Bohacek (R-Michiana Shores), will drastically change subprime, high-cost installment lending across Indiana by increasing the finance charges and fees, compared to current law. This problematic legislation will allow lenders to aggressively push borrowers to refinance these installment loans as often as possible and ultimately does not provide guardrails to protect consumers.
Hoosiers will experience harmful effects, including constraining credit as borrowers may need to take out multiple loans through multiple lenders to meet larger credit needs, also known as loan stacking. This will substantially raise the cost of credit. Additionally, SB 352 does not require lenders to report loans to credit bureaus, meaning borrowers receive no credit for successfully paying off a loan and demonstrating creditworthiness. By not allowing borrowers to receive favorable reporting on their credit reports if they successfully repay a loan, a self-fulfilling cycle is created where the borrower’s only option is subprime loans.
The Pew Charitable Trusts, a global nongovernmental organization, released a letter stating, “We find that the bill would expose Indiana consumers to financial harms, rather than create an affordable loan market.”
The letter continued. “Most notably, SB 352 does not effectively address problems with Indiana’s current payday loan statute. The bill would enable high-rate and larger installment loans with payments that exceed what research has found most borrowers can afford and that have been shown to replicate the core problems that exist in the payday loan market, where lenders maintain a strong ability to collect payments despite borrowers’ inability to repay. Such large payments make it difficult for consumers to cover other expenses, drive high rates of repeated financing, and do not result in meaningful consumer savings.”
Steve Hoffman, President of the Indiana Community Action Association and HRL member, said in a recently released op-ed, “What I think is clear is that this industry, besides damaging the financial situation of borrowers themselves, comes with a tremendous public cost. The public is in fact subsidizing the fees and interest that these lenders charge. We know that two-thirds of payday borrowers eventually pay off their loans only with outside help (this is self-reported, I would venture to guess the figure is even higher if we really analyzed the assistance these households are receiving). This help comes from social service organizations, township trustees, family, and friends. These resources originate from individual donations, taxpayers, and citizens that want to help their loved ones. The pubic is massively subsidizing the $40 million annually in fees and interest that this industry generates each year.”
The Coalition believes that SB 352 expands predatory lending in Indiana, fuels a debt trap, and will have negative impacts on financially vulnerable Hoosiers and their families. HRL urges the Indiana State Senate to vote no on SB 352, as it is currently written, and oppose this legislation.
View examples of SB 352 dangerously increasing basic costs of borrowing for Hoosiers over current law.
INDIANAPOLIS, IN – Hoosiers for Responsible Lending applauds the introduction of the Veterans and Consumers Fair Credit Act of 2021 in the U.S. House of Representatives. This legislation would extend the 36 percent APR interest rate cap on payday and car title loans in the Military Lending Act (MLA) to cover all citizens.
The bipartisan House bill was introduced on November 17 and would achieve a major policy goal of Hoosiers for Responsible Lending. Among those who introduced the bill, Representative André Carson is an original sponsor for the Veterans and Consumers Fair Credit Act.
“We thank Congressman Carson for supporting this bipartisan legislation that takes an important step toward eliminating predatory lending in Indiana and across the country,” said Andy Nielsen, Senior Policy Analyst with the Indiana Institute for Working Families and HRL member. “High-cost lending in our state traps Hoosiers in a cycle of debt that many struggle to leave, jeopardizing the economic security of individuals and families and the health of our communities. Congress already recognized the need to enact strong interest rate caps that protect our active duty military, and this protection must be extended to all consumers.”
Hoosiers for Responsible Lending was created by a network of advocates working to empower Hoosiers who have been affected by any form of predatory lending. HRL raises awareness of predatory practices across Indiana in order to hold lenders accountable and create attainable pathways to wealth building for all Hoosiers.
General James Bauerle of Hoosiers for Responsible Lending said, “The Reserve and National Guard are not protected today by the Military Lending Act. This adversely affects these units readiness, and capability. Security clearances can be removed or not granted based upon bad credit. Commanders and full time support get calls and have to waste time dealing with lenders, families, and the service member on this issue-- time wasted that should be used for preparedness. This is bad for America because these men and women help in every state when needed and are not federalized. Every state has benefited from our Reserve Components-- food banks, nursing homes, and hospitals to name a few. Some of these service members get trapped into high interest short term loans-- the proposed Veterans and Consumers Fair Credit Act (VCFCA) will protect them and their families. They deserve our thanks and protection.”
In addition to veterans organizations, the HRL alliance includes faith communities, consumer groups, and social service providers who recognize both the benefits of equitable, responsible lending and the damages of predatory lending.
Jessica Love, executive director of Prosperity Indiana and HRL member, said, “Even beyond its implications for veterans, this bill would, once and for all, put all Hoosiers on equal footing when it comes to protections against these predatory products. For most, it’s unclear when they sign on the dotted line that they’re placing a stranglehold on their family’s economic future for weeks, months and years to come. This federal cap puts the right limit back on these types of loans and would have a major impact on families and communities across the state.”
Payday and car-title lenders target veterans, older persons, rural consumers, and communities of color promising quick access to money in a pinch. But these loans often come with triple-digit interest rates that make it nearly impossible to pay back the loan. This leads to about 80 percent of borrowers having to take out another payday loan to repay the original loan.
Every time a person takes out a new loan to pay off the prior one, the overall amount of debt increases as interest and fees pile on, creating a “debt trap” that few borrowers are able to escape. According to the Center for Responsible Lending, the debt trap is draining $70,632,672 per year from Indiana and $8 billion for the entire U.S.
The Indiana Institute for Working Families polling data shows that nearly nine-in-ten (88 percent) of Hoosier voters support capping the maximum interest on payday loans to 36 percent APR as the Veterans and Consumers Fair Credit Act does. 87 percent say payday loans are a "financial burden", and 84 percent think they are "harmful."
INDIANAPOLIS, IN – Hoosiers for Responsible Lending (HRL) applauds the introduction of two bills that would cap the annual percentage rate (APR) at 36 percent on payday loans in Indiana. The bills include SB 253 authored by Senator Ron Alting of District 22 and HB 1159 authored by Representative Carey Hamilton of District 87.
These bills have the potential to remedy the myriad of issues that Hoosiers across the state face with predatory lending. Across the nation, there have been calls for more equity and continuity in lending and access to credit. Recently, the U.S. House of Representatives introduced the bipartisan Veterans and Consumer Fair Credit Act which seeks to level the personal lending playing field for everyone.
“It is long past time for Indiana to join the growing list of states that protect their citizens from the predatory lending industry. Today, this industry targets Hoosiers who are struggling to get by, including low-income working families, veterans, and senior citizens. When desperate Hoosiers fall prey to this industry, they inevitably end up in a deeper financial hole. HB 1159 is my solution to protect vulnerable Hoosiers from these shameless profiteers," stated Representative Hamilton.
Senator Alting said that “Senate Bill 253 aims to help Hoosiers break the cycle of poverty and avoid getting into more debt than they can manage. I'm grateful to Hoosiers for Responsible Lending for its support of this legislation, and I hope to see Senate Bill 253 move smoothly through the legislative process.”
”Support for the Veterans and Consumers Fair Credit Act and similar state legislation will ensure that all military, whether under active or inactive duty (such as state national guard or army reserve troops) who are called upon as needed, will be equally protected. All consumers need this protection, but it can start with those who have served or are serving their country,” said HRL member Mark Tarpey.
Angela Espada, Executive Director of the Indiana Catholic Conference commented, “The bible is very clear, ‘Thou Shalt Not Steal.’ Predatory lending is tantamount to stealing. No citizens should be victimized, especially veterans who, along with their families, have sacrificed for this country. We owe a debt of gratitude to veterans and should do whatever we can to prevent them from having crushing debts that arise from predatory lending.”
Brigadier General James L. Bauerle (USA Retired), veteran and HRL member said, “Once a service member comes off of active duty, however, state interest rate caps are often the only rights they have that protect their financial well-being. States have had the power to enact caps since the time of the thirteen colonies. Currently 18 states and D.C.—representing about a third of the U.S. population—enforce interest rates of 36% or less that keep all high-cost loans out of their state.
Commanders and full-time staff in these Guard and Reserve Units have to get involved in dealing with these financial issues. This distracts from valuable training time and leadership which is already at a premium. Partners, parents, and others get pressured by these predatory lenders and they too impose upon the units for help—this is NOT the job of leaders in our military. That is why military and veterans service organizations have joined HRL.”
“As a non-profit working to keep families and individuals housed, access to fair lending is a very important piece of that. Predatory loans are particularly targeted to our low-income families, our senior citizens, our families of color, and our veterans, all of which deserve better. Many Indiana residents continue to struggle to pay for their housing and when an emergency arises, they often go to predatory lending as a quick fix. This only exacerbates the problem as families then struggle to keep their housing and pay off these expensive loans. There must be better alternatives and the passage of the Veterans’ and Consumers Fair Credit Act and/or State action to control interest rates can do this,” said Marie Morse, Executive Director, HomesteadCS.
Payday lenders target veterans, older persons, rural consumers, and communities of color promising quick access to money in a pinch. But these loans often come with triple-digit rates that make it nearly impossible to pay back the loan. This leads to 60 percent of Hoosier borrowers taking out a new loan the same day as repaying the previous loan. High reborrowing rates at APRs as high as 391% in Indiana squeeze borrowers and drain fees from Hoosier families and communities, creating a “debt trap” that few are able to escape.
Indiana is just one of 25 states without strong rate caps that eliminate predatory lending and end the debt trap despite public polling that shows strong support for such reform. The Indiana Community Action Poverty Institute’s polling data shows that nearly nine-in-ten (88 percent) Hoosier voters support capping the maximum interest on payday loans to 36 percent APR as SB 253 and HB 1159. 87 percent say payday loans are a "financial burden," and 84 percent think they are "harmful." At 36% APR versus current law, borrowers could have saved $291 million over five years ending in 2018. A strong rate cap puts more money into local economies and communities that typically lack resources but allow payday lenders to thrive.
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