The Indiana Institute for Working Families, a program of Indiana Community Action Association, has released its report, Financial Drain: Payday Lenders Extract Millions from Hoosier Communities. The report, prepared with the Indiana Assets & Opportunity Network, documents the scope and impact of payday lenders on Indiana's families and communities.
In 2002, the Indiana General Assembly granted payday lenders an exemption to Indiana's interest rate cap of 36 percent and criminal loansharking limit of 72% APR. Less than two decades later, 262 payday loan storefronts make small loans with rates up to 391% APR in Indiana. The Executive Summary in the report presents these key findings:
- Eighty-six percent of payday storefronts are operated by out-of-state parent companies.
- Storefront payday borrowers have a median annual income of $19,752 and borrow an average of eight to 10 loans per year.
- Over the past five years, payday lenders have drained an estimated $322,049,432 in finance charges from these Hoosier borrowers.
- Payday storefronts in Indiana are disproportionately located in lower-income neighborhoods and communities of color.
- If this debt had been financed at 36% APR, these Hoosier borrowers and their communities could have benefitted from an additional $291,307,803 over the past five years to spend in their local economies.
Report: Payday loans cost Hoosiers millions, The Statehouse File, Franklin College Pulliam School of Journalism
Our Opinion: The steep cost of payday loans in Indiana, South Bend Tribune
Payday lenders drain from Indiana’s economy, Times Herald, Washington, IN
New Report: Payday Lenders Drain Over $300 Million from Indiana’s Economy in 5 Years, Brightpoint (CAA in Fort Wayne, IN)
Payday Lending Has Drained Hundreds Of Millions From Indiana, WBAA, West Lafayette, IN
See IIWF's web page on Payday Lending to access information and material
- Quick Facts About Payday Lending
- Polling Shows Hoosiers Support Reform
- Ready to Help Stop the Debt Trap
- Other Resources Related to Payday and Subprime Lending
