SB 122 requires Indiana state agencies to partner with nonprofit loan centers operating in the state and offer eligible full-time employees voluntary payroll deductions to repay nonprofit loan center loans. The bill phases in the requirement by agency type, with most state agencies required to participate by September 1, 2025, state educational institutions by September 1, 2026, and school corporations by September 1, 2027. Eligible employees may request payroll deductions at any time and may revoke that authorization at any time, including outside open enrollment periods.
The bill defines a nonprofit loan center loan as a small personal, family, or household loan of up to $1,000 with at least a 12-month term, an interest rate capped at 18% annually, limited fees, no collateral, no prepayment penalty, and no credit check beyond basic employment, bank account, and income verification. Loan payments must be reported to a nationwide consumer reporting agency, and proceeds must be deposited directly into the borrower’s checking account. The bill also allows depository institutions to make similar loans under the same terms and to receive payroll-based repayment through wage assignment or electronic transfer.
Impact
The bill amends the state comptroller’s duties and adds a new chapter to the Indiana Code governing payroll payments to nonprofit loan center lenders. It authorizes the comptroller to transfer state funds directly to NLC lenders, and also to depository institutions making comparable loans, when an employee has provided written authorization. It further amends Indiana’s wage-assignment statute to expressly permit payroll deductions for repayment of these loans, expanding the list of lawful wage assignments for state employees and, more broadly, for employees whose employers agree to such deductions.
Sentiment
No committee transcripts or recorded votes were provided, so there is no direct evidence of debate or formal support/opposition in the available record. Based on the bill text, the measure appears designed as an employee-benefit and financial-access initiative, suggesting a generally supportive policy framing around helping workers access small-dollar credit with structured repayment through payroll deductions. The absence of recorded opposition or amendments in the provided materials limits any stronger conclusion about legislative sentiment.
Contention
The main policy issues likely center on whether state agencies should be required to administer payroll deductions for private nonprofit lenders and whether the state should facilitate repayment of consumer loans through payroll systems. Potential concerns include administrative burden on agencies, the role of the state comptroller in processing loan payments, and whether the program could encourage borrowing even with consumer protections. Another possible point of contention is the bill’s extension of the payroll-deduction framework to depository institutions making loans on the same terms, which broadens the program beyond nonprofit lenders and may raise questions about scope and oversight.