Indianapolis Not So Affordable For Lower Class
By Desmond CarlislePayday Loan Writer
Indianapolis, Ind., prides itself on being among the most affordable large cities in the nation, but that low cost of living does not always extend to the city's working poor.
The Indianapolis Star reports that a number of factors including predatory lending, expensive car insurance and high-cost home loans are draining the pockets of low-income families across the nation. A Brookings Institution study put Indianapolis near the top in a number of categories measured to gauge poverty levels in cities of various sizes.
"I think legislators are aware of the problem but not really aware of how big it is. And the poverty rate in our state is growing," said Lisa Travis, the advocacy and education coordinator of the Indiana Institute for Working Families.
Indianapolis ranked second in the number of low-income residents who took advantage of controversial "refund anticipation" tax loans. The metro area also boasts the fourth-highest concentration of check cashing places and alternative short-term, payday loan providers.
Most of the other cities in the survey had a much higher cost of living than Indianapolis, according to at least one online database.
The biggest reason for the success of such businesses is that they give instantaneous credit approval regardless of status, said Jordan Ash, director of the Financial Justice Center of ACORN, a non-profit group that advocates for low- and moderate-income families.
"This is about an entire industry that is based on preying on people in need. These places advertise fast cash, easy paydays, quick money. As Fannie Mae once put it, these places are selling 'yes.' They're selling the fact that you're going to be able to get the loan," Ash said.
Solving the everlasting cycle of debt and high prices that afflict the working poor is difficult. With payday loans growing in popularity in Indiana and the U.S. as a whole, regulators and governments are feeling increasing pressure to protect consumers from themselves.
