Payday Loans Among Top Remaining Issues in Indianapolis
House Republicans unveiled House Bill 1001 on Feb. 19 with a vision of spending additional funds for schools, the Indiana Department of Child Services (DCS) and Medicaid. More than half of the $34.6 billion two-year budget will contribute to K-12 education, which includes appropriate school budgets and a $1 billion payment to the teacher retirement funds but how all this is going to happened is still unrevealed. However, the leaders in the General Assembly said they hope to finish early of schedule. House Speaker Brian Bosma, R-Indianapolis, told reporters Thursday theHouse could complete its work by April 24, two days ahead of legislators’ self-imposed deadline.
Online Payday Loans Get Another Hearing
When Senate Bill 613 advanced in a contentious 26-23 vote in the Senate with provisions that would reduce caps on payday loan lenders, allowing new types of loans with high annual percentage rates (APRs), Indiana’s religious leaders and activists protested strongly as they considered as injustice.
Retired U.S. Army Brigadier Gen. James Bauerle of the Indiana Military Veterans Coalition, for example, said his organization opposed SB 613 “and its new range of loans that trap borrowers in a debt crisis.”
The bill was discussed in the House Financial Institutions in late March , during which Chair Woody Burton, R-Greenwood, said the committee is expecting a compromise that promotes loan products with government oversight without “giving away the store.” Burton introduced the state’s first payday lending law in 2004 and will oversee the bill’s next hearing, scheduled for 10:30 a.m. Tuesday in committee room 156-C.
According to Indianapolis Payday Loan Legislation, this financial service is considered legal so far with following obligations.
- A consumer is allowed to borrow one payday loan at a time.
- The maximum amount one can borrow is $500 that can be given for no shorter than for 14 days. Moreover, the loan amount cannot exceed 15% of the monthly gross income, including fees.
- 15% on the first $250; 13% on amounts greater than $250 up to and including $400; 10% on amounts greater than $400 up to and including $500.
- Rollovers are strictly prohibited.
Below is the brief:
Legal Status: Legal
Loan Terms:
Maximum Loan Amount: $550 (not to exceed 20% of borrower’s monthly gross income)
Loan Term: Min: 14 days
Maximum Finance Rate and Fees: 15%: $0-$250; 13%: $251-$400; 10%: $401-$500
Finance Charge for 14-day $100 loan: $15
APR for 14-day $100 loan: 390%
Debt Limits:
Maximum Number of Outstanding Loans at One Time: One per lender; Two total Rollovers Permitted: None (cannot renew, repay, refinance or consolidate) Cooling-off Period: 7 days after 6 consecutive loans Repayment Plan: After 3 consecutive loans, lender must offer an extended payment plan of at least four equal installments at no additional cost.
Collection Limits:
Collection Fees: One $20 NSF fee; additional charges may apply when check or authorization to debit was used to defraud another Criminal Action: Prohibited Regulator: Indiana Department of Financial Institutions.
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