SOUTH BEND — A bill that could expand loan products some critics consider predatory narrowly passed the Indiana Senate on Tuesday, despite opposition from advocacy groups and a bipartisan group of state senators.
If approved by the Indiana House, Senate Bill 613 would allow new loan products that would be considered criminal loansharking under current state law.
The 69-page bill was unveiled Thursday after the original 14-page bill was amended, something critics say is evidence full study and discussion was impossible given the circumstances.
The 26-23 vote comes on the heels of the Senate’s rejection of Senate Bill 104 that would have limited interest rates on payday loans in the state and was backed by religious, nonprofit and veteran’s organizations.
“It’s really ugly,” said Jim Bauerle, retired U.S. Army brigadier general and vice-chairman of the Military/Veterans Coalition of Indiana. “It’s a terrible, terrible bill for the citizens of Indiana.”
It's not the first time payday loans have stirred controversy in the statehouse. Last year, the Indiana House approved a bill that would create a new tier of payday loans, though it was ultimately killed in committee.
S.B. 613 would also change the definition of criminal loansharking in the state, which currently punishes loans exceeding 72 percent interest with a felony charge, and would add new longer-term and higher-value “small dollar loans” which supporters say would fill needed gaps between traditional loans and the payday loan industry.