FOR IMMEDIATE RELEASE:
November 12, 2019
Hoosier Veteran, Faith, Community Groups Applaud Federal Bill to Protect Consumers from Predatory Lending
INDIANAPOLIS – A coalition of more than 100 Indiana-based veterans groups, faith-based organizations, non-profits, and civil rights organizations applauds the introduction of the Veterans & Consumer Fair Lending Act, a bipartisan bill sponsored by Senators Jeff Merkley (D-OR), Sherrod Brown (D-OH), Jack Reed (D-RI) and Chris Van Hollen (D-MD), as well as Representatives Jesus “Chuy” Garcia (D-IL) and Glen Grothman (R-WI). The coalition urges members of Indiana’s federal delegation to add their names as coauthors of the legislation.
If passed, the lending regulations outlined in the Military Lending Act (MLA), including a 36 percent interest rate cap on small-dollar, short-term loans (commonly known as payday loans), would be applied to all citizens. Right now, the protections only cover active-duty military members, leaving veterans and civilians vulnerable to lenders charging triple-digit interest rates. In Indiana, payday lenders charging up to 391 percent APR have drained over $300 million in finance charges over the past five years. Nearly 90 percent of Hoosiers want to see these loans capped at 36 percent APR.
“Extending the Military Lending Act is a clear message that our military (active and reserve), veterans, and their families are valued for their service to our nation,” said Brigadier General James Bauerle, Vice Chairman of the Military / Veterans Coalition of Indiana. “We cannot take for granted this group of great Americans as they have sacrificed so much and done so much so we can enjoy the freedom granted in our Constitution.”
Advocates from across Indiana have been recommending that state lawmakers enact a 36 percent rate cap for several years. To date, 16 states and Washington, D.C., have adopted similar legislation (a rate cap at 36 percent or lower) with promising results. At the state level, Senator Greg Walker (R-Columbus) Senator John Ruckelshaus (R-Indianapolis), Senator James Tomes (R-Evansville), Senator Vaneta Becker (R-Evansville), Senator Dennis Kruse (R-Auburn), Senator Jean Breaux (D-Indianapolis), Senator Mark Stoops (D-Bloomington), Senator J.D. Ford (D- Indianapolis), Senator Mike Bohacek (R-Michigan City), and Senator Lonnie Randolph (D-East Chicago) coauthored SB 104 in the 2019 session, which would have capped interest rates on small-dollar, short-term loans statewide at 36 percent APR. The bill failed to pass the Senate 22-27.
“Human service agencies across this state regularly see the damage and distress payday lending causes,” said Emily Bryant, President of the Indiana Coalition for Human Services. “Our members enthusiastically applaud the introduction of federal legislation to extend the Military Lending Act protections to all consumers.”
For more information, please see:
Financial Drain: http://www.incap.org/documents/Financial_Drain_Report2019.pdf
Bellwether Polling: http://incap.org/documents/INPaydayLendingMemo1.22.18.pdf
United States Department of Defense report: https://archive.defense.gov/pubs/pdfs/Report_to_Congress_final.pdf