February 10, 2017 at 9:51 p.m.
Holdman's bill would hurt the poor
Editorial
State Sen. Travis Holdman has always struck us as a pretty level-headed guy.
That’s not to say we’ve agreed with his positions; we’ve often differed. But he seemed to have his head screwed on straight.
So what in the world is he doing with Senate Bill 245?
The bill, which the senator is sponsoring in the Indiana General Assembly, would allow payday loan firms in the state to charge interest rates far in excess of what Indiana law already considers loan sharking.
In other words, it would legalize behavior that has already been identified as criminal.
A similar bill last session would have allowed annual interest rates of 180 percent on six-month loans. This year’s version is even worse, with interest rates as high as 240 percent.
What does that translate into?
According to calculations by the Indianapolis Star, a two-year loan of $2,500 would require paying back at total of $12,252.87. More than $9,650 of that would be in interest.
Not surprisingly, companies like Check Into Cash have hired four lobbying firms in an effort to win passage this time around. The last time this was tried, the bill died in committee.
Apparently Holdman’s support for the bill comes from a desire to help low-income families who are strapped for cash. These are folks who can’t qualify for a traditional bank loan. But loans with killer interest rates don’t do anything to help low-income families. Instead, they just sink them deeper into the hole.
And who benefits? Companies that are just a nudge and a wink away from loan sharks.
Lobbyists for the bill say that the customers of payday loan companies are clamoring for it. Maybe. Then again, drug addicts often clamor for another fix.
In the end, it’s the dealer who benefits.
“These loans trap people in ongoing debt, sometimes bankrupting them,” said one local official familiar with the problem.
So why is it even being given serious consideration?
That’s a question for the Senate Committee on Financial Institutions, which is set to consider the bill on Feb. 16.
An even better question is one for Sen. Holdman: Why have you allowed yourself to be bamboozled by the payday loan lobby in a way that will ultimately hurt Indiana’s poorest families? — J.R.
That’s not to say we’ve agreed with his positions; we’ve often differed. But he seemed to have his head screwed on straight.
So what in the world is he doing with Senate Bill 245?
The bill, which the senator is sponsoring in the Indiana General Assembly, would allow payday loan firms in the state to charge interest rates far in excess of what Indiana law already considers loan sharking.
In other words, it would legalize behavior that has already been identified as criminal.
A similar bill last session would have allowed annual interest rates of 180 percent on six-month loans. This year’s version is even worse, with interest rates as high as 240 percent.
What does that translate into?
According to calculations by the Indianapolis Star, a two-year loan of $2,500 would require paying back at total of $12,252.87. More than $9,650 of that would be in interest.
Not surprisingly, companies like Check Into Cash have hired four lobbying firms in an effort to win passage this time around. The last time this was tried, the bill died in committee.
Apparently Holdman’s support for the bill comes from a desire to help low-income families who are strapped for cash. These are folks who can’t qualify for a traditional bank loan. But loans with killer interest rates don’t do anything to help low-income families. Instead, they just sink them deeper into the hole.
And who benefits? Companies that are just a nudge and a wink away from loan sharks.
Lobbyists for the bill say that the customers of payday loan companies are clamoring for it. Maybe. Then again, drug addicts often clamor for another fix.
In the end, it’s the dealer who benefits.
“These loans trap people in ongoing debt, sometimes bankrupting them,” said one local official familiar with the problem.
So why is it even being given serious consideration?
That’s a question for the Senate Committee on Financial Institutions, which is set to consider the bill on Feb. 16.
An even better question is one for Sen. Holdman: Why have you allowed yourself to be bamboozled by the payday loan lobby in a way that will ultimately hurt Indiana’s poorest families? — J.R.
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