Last year, I did an interview with a local community activist who has an Internet-based television show. We taped at a studio at 38th and High School Road. If you’ve ever been there, and odds are if you’re reading this you haven’t, the studio was located in a strip mall that was full of places that most of us would likely never go. I stopped by there recently, and not much had changed, the inside was half finished, there were still bars protecting shops. I would never shop there, but as I was reminded of a lot of those folks, that “mall” was and still is their livelihood. I would not buy clothes there, get a haircut, or anything else from there. It has not, nor will it be my world, but it is there’s, and they are entitled to be as happy in their world as we are in ours.
That is why I think lawmakers this week should give HB 1319 a fair hearing. HB 1319 would allow for small installment loans for these folks of limited means who don’t use banks and credit unions the way we do. Now save your “payday loan” outrage, because I’m not a fan of them either, but I do think there needs to be a way for these folks to get access to credit because I doubt if you’re going to see them at the drive-thru window of the credit union.
HB 1319 would allow low-income Hoosiers to borrow between $605 and $1500. It limits fees and interest charged, 20% on the first $605 and 7.5% on the amount greater than $605 and an interest charge of 45% applied to the declining balance of the loan. There are no balloon payments or prepayment penalties. Payments are amortized. And it helps those Hoosiers build credit by supporting financial literacy programs offered through the Secretary of State’s Office. This isn’t the old “payday loan” scam where you’re basically mortgaging everything but your first and second born, but they can be used as collateral.
As I have said in the past, It’s easy to see the “outrage” from folks like us who live in a world where we have easy access to banks, credit unions, and other financial institutions. Or to go further, most of us keep a few grand the bank or a few bucks around the house in case of emergency, but that’s the world we live in. We don’t live in the world where people genuinely are living paycheck to paycheck and need access to capital when real life throws them an inside curveball. They deserve a chance, just like the rest of us.