INDIANAPOLIS – A divisive subprime loan bill died in the Indiana House on Monday, and almost certainly won't become law this year.
Technically, the language could be inserted elsewhere, but Rep. Matt Lehman, R-Berne said “I doubt you'll see parts of it pop up anywhere else,” and added, “we didn't get there.”
Senate Bill 613 would have established several new lending products for Hoosiers who don't have high enough credit scores to obtain traditional loans. The new options would have lower rates than payday loans at 391% but would last longer and allow higher dollar amounts to be borrowed.
It barely passed the Senate earlier this session. The House reduced the proposed interest rates but Lehman said some were still concerned about the parameters – from the rates to the number of additional fees and longevity of the products.
“It was difficult to get enough votes to get it out the way it is,” he said.
Monday was a key deadline for the House before conference committee, so Lehman declined to call it down for a vote – instead letting it die.
A strong lobbying effort against the bill continued over the weekend with social service, faith and veterans groups applying pressure last week.
This included the United Way of Allen County, which encouraged area state representatives to vote no.
“We encourage our state legislators to not expand payday and subprime lending at rates at or above criminal loansharking,” said David Nicole, president and CEO of United Way of Allen County. “We want to see this issue brought to a summer study committee to fully gather all the facts and design a system to provide Hoosiers access to credit without being hurt by lending.”
Lehman said it is possible a study on the topic could be added to another bill – saying the long-term discussion needs to continue.
“By this bill not moving, we pretty much condemn people in Indiana to payday lending or online,” he said. “There's no other options for them.”
The Indiana Institute for Working Families thanked lawmakers, saying that “by declining to call the bill for a vote today, they sided with Hoosier families over out-of-state lenders.”
The institute is a program of Indiana community action agencies, and said “lawmakers made a sound policy decision to reject expansion of payday and subprime lending. We look forward to continuing to bring evidence-based policy recommendations to the Indiana legislature.”