Critics of predatory lending have long advocated for payday lending reform in Indiana.

The findings of a recent study — which estimates the hundreds of millions of dollars drained from Hoosiers by payday lenders — should bring even more calls for lawmakers to finally act.

The study, released last week by the Indiana Institute for Working Families and the Indiana Assets & Opportunity Network, shows that payday lenders charged annual percentage rates as high as 391%. They were allowed to do so thanks to a 2002 exemption that legislators carved out for short-term loans.

In total, payday lenders cost Hoosiers an estimated $322 million in finance charges over the last five years, according to the report.

The report shows that 64 of Indiana’s 92 counties have at least one payday loan storefront — and that these lenders are disproportionately located in low-income communities as well as those with larger minority populations. The study cites data that shows that the median income of borrowers who use payday loans nationwide is $19,752. And 60% of payday loans in Indiana are re-borrowed within 30 days.

You’d hope that this report, available at, would spur legislation to rein in interest rates on payday loans. But so far, such efforts have gained little traction in the General Assembly. Earlier this year, legislation proposing an Annual Percentage Rate cap of 36% on two-week loans of up to $605 was rejected by the Senate; a similar bill died the year before.

Instead, a bill that would have allowed loan products that would be considered criminal loan-sharking under current law was approved by the Republican-led Senate before dying on the Indiana House floor.

The bill was opposed by veterans organizations, religious groups and social service agencies — but was supported, not surprisingly, by the payday loan industry, which has spent hundreds of thousands of dollars on lobbying and campaign contributions in recent years.

That such legislation would even be considered is an abomination.

In the next session, the issue of payday loans is likely to come up again. Lawmakers should support legislation that reins in payday lenders. They should work to fix a situation so devastating for the state’s poor and vulnerable. Most of all, they should remember whose interests they were sent to Indianapolis to represent.

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