FOR IMMEDIATE RELEASE
Contact: Lance Gideon, Press Secretary
Lance.Gideon@iga.in.gov
317-234-9221
STATEHOUSE (Jan. 17, 2024) — A bill authored by State Sen. Spencer Deery (R-West Lafayette) that would give low-income Hoosiers more alternatives to expensive payday loans unanimously passed the Senate Committee on Insurance and Financial Institutions Wednesday.
Senate Bill 200 would introduce more competition into the emergency loan market by requiring some government employers to provide access to nonprofit community loans or loans with similar terms as an employee benefit.
"Payday loans can offer Hoosiers in financial distress a lifeline, but interest rates are high, and the loan doesn't help the borrower build credit," Deery said. "My bill would make a better option available to more Hoosiers at no cost to taxpayers."
Under current state law, Community Loan Centers (CLC), which are licensed and regulated, offer emergency loans at a lower interest rate compared to traditional payday loans. They also work to help borrowers get on a more stable financial footing through financial training and credit building. SB 200 would gradually require more public employers to allow their employees to use payroll deduction to pay off a nonprofit loan like a CLC loan, or a loan from a bank or credit union that is offered under the same favorable terms.
"The biggest obstacle to a robust alternative market to payday loans is getting employers to understand what a nonprofit loan is and to understand how simple it is to offer this as a benefit," Deery said. "By gradually requiring more government employers to participate, this will also lead more private employers to partner with nonprofit lenders as well."
The committee heard testimony in support of SB200 from representatives from the Indiana Catholic Conference, Indiana Bankers Association, Indiana Credit Union League and several anti-poverty associations.
The bill now moves to the full Senate for further consideration.
To learn more, click here.
Deery encourages constituents to contact him with any questions or concerns on this and other topics at Senator.Deery@iga.in.gov or 317-232-9400.
State Sen. Spencer Deery (R-West Lafayette) presents Senate Bill 200 during a meeting of the Senate Committee on Insurance and Financial Institutions at the Statehouse Wednesday, Jan. 17.
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State Sen. Spencer Deery (R-West Lafayette) represents Senate District 23,
which includes Fountain, Parke, Vermillion and Warren counties,
and portions of Montgomery and Tippecanoe counties.
Click here to download a high-resolution photo.
