A LIFE OR AN ANCHOR
by GAIL RIECKEN, EDITOR OF THE CCO STATEHOUSE NEWS
Discussion over the payday lending bill, Senate Bill 613 is continuing April 9 despite Financial Institutions Committee members hearing a lot of negatives about this consumer credit bill.
Groups that have testified against the bill – the Institute for Working Families, veterans, churches, community groups, and consumers- all favor seeing it die.
So, why is SB 613 still alive?
I imagine one reason would be the Committee Chairman is convinced that he can find the “sweet spot†that would please both sides. Another reason could be that members have heard the same comments I heard when I was a member of this Committee. The comments were: “Gail, you have to understand there are issues people have getting credit, and when they need money, more likely an emergency, there isn’t any in reserve. If you can’t pay the light or water bill if the car breaks down and you can’t get to work or there is no money to pay book rental and you don’t qualify for help or the a/c breaks down in the summertime, what choice do you haveâ€.
This may not be familiar to you and me but to families who are living one paycheck to the next, families who are at risk, it is a common fear.  People living at risk of losing everything should be a serious concern for us all. It isn’t just the right thing to be concerned, it is the smart thing.
No one can feel secure about the future of our economy knowing that over 43% of people in Evansville (39% in Indiana overall) are living near or on the poverty line, people who can’t afford the basics – housing, food, high electric  and water bills, health care, child care and transportation.
We can’t ignore the consequences of such a large number of people at risk.
Maybe it is time that the Governor calls for a commission to develop new strategies to address families at risk, similar to his call from the comprehensive report on the status of children in the Department of Child Services. And while the government is doing more that supports our economy and results in fewer families at risk and fewer payday borrowers, you and I can do something in a small way to help.
The legislature passed the law a few years back to encourage and “trainâ€, if you will, people to save money. Called a Prize-linked savings account, it is a fun way that a family can save for an emergency.
Not just for a family, the account can be for a young person starting out – a newly graduated student saving money to move to her first real job or a young person aging out of foster care saving for the deposit on his first apartment. As examples: Attached below is a news release from FORUM Credit Union in Indianapolis explaining their Prize-linked savings program.
(https://www.forumcu.com/News/2019/FORUM-Credit-Union-Announces-2018-Member-Giveback)
Let’s encourage more credit unions and banks to establish their “Indiana Save to Win” program and encourage more people to sign up.
According to recent figures, the Indiana Save to Win program (prize-linked savings) is definitely a success. Â As of the end of January, there are 20 credit unions in Indiana participating (6 of them in SW Indiana) and there have been more than 2,500 “Save to Win” accounts opened with $9.2 million saved so far. There have been almost 800 prize winners winning more than $85,000 in prize money.
In Indiana, the law allows for debt reduction and financial literacy programs to be a part of any Save to Win product.
Institute Senior Policy Analyst Erin Macy asked the question in her testimony before the Financial Institutions Committee last week. “ Is the best solution we can offer them [Hoosiers struggling with debts they have] is more and even higher-cost debt?  That’s not a lifelineâ€, she added, “It’s an anchor.â€
