A controversial bill regulating payday loans and subprime mortgages died this legislative session.
On the last day for the bills to come out of Indiana House, the godfather of Senate Bill 613-Representative. Matt Lehman, R-Bern, declined to call him for a vote.
“After a long discussion, there was some determination that more extra work was needed, and we’re just running out of time,” Lehman said.
the latest version of the invoice would have increased the allowable interest rates on traditional loans to 36 percent, plus a prepaid financing fee of $ 150, and created two other loan products that would have been exempt from the 72 percent usurious loan rate cap of the state.
The installment loans that would have been created by the legislation would have been for six to 12 months and ranged from $ 605 to $ 1,500 with interest rates of up to 192%.
The small loans that were also described in the bill would have been for a term of at least six months to a maximum of $ 3,000 with interest rates of up to 72%.
Lenders would not have been allowed to collect a borrower’s property, such as a car title, as a way to help pay off the debt.
Supporters of the bill argued that these new options were necessary to help consumers with low credit ratings and unable to obtain traditional loans.
But consumer advocates have strongly opposed the legislation, saying high interest rates create a cycle of debt that becomes extremely difficult to repay.
It is possible that the wording regarding payday loans and subprime loans could be changed in other bills still in force, but Lehman played down this possibility and instead suggested that it could be something studied in the future. during the summer.
“I doubt you will see parts of it appearing elsewhere,” Lehman said.