Jessica Love: Getting ‘stuck’ from a payday loan

Have you ever got your car or truck stuck in mud? The more you try to get out, the deeper the tire sinks? I have.

So I know from experience. Unless you have the luxury of waiting for things to dry, you’re going to need help pushing and pulling to get stuck.

And you will probably feel a little embarrassed. So technically, no one else was behind the wheel, even if they weren’t meant to be stuck. Either they didn’t realize the danger was in front of them, or they didn’t think it would be so bad to walk through it.

Even if there’s no good way around it, or you think you’ve calculated the risk and you can get over it, it doesn’t change the fact that it happened. In retrospect, I wish I had done something other than the solution I was looking for. It’s the solution (fellow ‘Little Blue Truck’ fan) that caused the tires to ‘sink deep into the muddy quagmire’.

Now imagine that the vehicle you are thinking of represents the financial health of your family. Also, imagine a “more stuck” process as a result of the options you choose to solve short-term problems on your own instead of asking for help or not thinking about you. had other options – Represents payday loans. The “solution” becomes a bigger problem to solve than the first problem.

Muddy Patch doesn’t have a business model designed to keep you stuck, but payday lenders do. Where interest ends up at 391% in Indiana, the real benefit is getting people more stuck. And you really have to find a solution.

I often refer to the payday industry as one of the most subsidized markets in existence because government and nonprofit resources are often needed to save people from the disaster that payday loans cause. is for this reason.

But what if it didn’t have to be?

One avenue to pursue is policy change. At this point, that burden falls largely on Congress, and your legislative work can help make the Veterans and Consumers Fair Credit Act (which limits all payday loans to 36%) a reality. You can also ask the state legislature to impose a cap of 36%. But until the bill is passed, many Hoosiers need a more responsible way of borrowing.

But what if there was another route?

Of the 88% of voters who said they want Indiana’s wage cap to be 36%, most (who are in a position to offer alternatives) have established a pathway to alternative solutions for their employees, colleague?

To elaborate on my analogy, the impact would be catastrophic for the Hoosier family, who do not have the resources to weather the financial shock.

One specific “bypass” that was previously only available in 23 counties has recently become available statewide. If you’re a business owner, HR representative, or anyone looking to talk to your boss about making financially sustainable options available to people at work, the solution I offer is the Community Loan Center. It’s a program.

This is an affordable employer-based microloan program. So what’s the catch?

Believe it or not, it doesn’t actually exist. His CLC program is provided free of charge as an employee benefit to companies that sign up for the program. Employers literally only need to 1) confirm employment when a loan is applied for and 2) set up payroll deductions according to the employee’s repayment plan. By doing so, you can quickly acquire employees who are less stressed and more focused on their work.

Available through nonprofits, this affordable 12-month loan is designed to get people out of debt or keep them out of debt, rather than driving them into debt. (CLC loans can be used to pay off payday loans.) The reason is simple. The nonprofit that offers this program wants to put resources into improving the financial trajectory of families rather than bailing them out of earthquakes with payday loans.

Think about how you can introduce this alternative into your workplace. In fact, in a way that can help solve a colleague’s short-term financial hardships, you can make it manageable and get people out of trouble without getting bogged down.

Jessica Love is Executive Director of Prosperity Indiana, a statewide membership organization for individuals and organizations that strengthen the Hoosier community. This commentary was previously posted on comment to [email protected]

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