Christian Leaders Condemn Payday Lenders Who Con the Poor, Call For New Controls
WASHINGTON — Christian leaders from virtually all denominations gathered in the nation's capital this week to bring attention to rampant financial damage among the poor as a result of predatory lenders.
The coalition met Wednesday morning at the Lutheran Church of the Reformation, mere blocks from Capitol Hill, before heading out to lobby Congress to add new usury restrictions and control lenders' ability to confuse potential borrowers through slick marketing.
Galen Carey, vice president of Government Relations at the National Association of Evangelicals, told The Christian Post he and his organization have "become very concerned" about how predatory lending is wreaking havoc among the poor and disadvantaged.
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"We see that people are getting trapped in debt basically through misinformation and through slick marketing that leads them into these agreements that really can't be repaid in the way that one would want them to be repaid," said Carey.
"We think it is an injustice so we're asking churches to step up their help to people in need and also asking the government to regulate the lending so that these unfair practices are not allowed."
After some remarks from Carey and others, as well as a prayer, those gathered at the Church of the Reformation went to Capitol Hill to visit their elected officials in Congress.
Faith leaders and likeminded activists had with them packets of information compiled by the Center for Responsible Lending, a non-partisan nonprofit with offices in North Carolina, California, and Washington, D.C.
Included in the packet were statements by a representative of the U.S. Conference of Catholic Bishops and a resolution passed by the Southern Baptist Convention calling for efforts against predatory payday lending.
"There are people here from all around the country who have gathered in Washington because of their concern over predatory lending," said Carey.
"We want people to realize that lending and credit is not bad but it needs to be done in a just and transparent way and needs to be realistic so that there's a way for people to repay loans that they take out and not be trapped in a continual cycle of debt."
Religious groups who were part of the coalition included the National Baptist Convention USA, the SBC Ethics & Religious Liberty Commission, and the Cooperative Baptist Fellowship.
Stephen K. Reeves, associate coordinator of Partnerships and Advocacy with the Cooperative Baptist Fellowship, told CP that they are seeking "strong regulations on payday lending throughout this country."
"That is something that's really impacting our churches and communities. And first and foremost the Consumer Financial Protection Bureau has an opportunity to pass regulations," said Reeves.
"We're also asking members of Congress to support those regulations as well as a bill that would cap the interest rate at 36 percent."
Reeves noted that efforts had been made at the state level, especially in Texas and Missouri, to tackle the problems of predatory lending.
"Payday lending and the debt trap that it creates is causing more harm than good in our communities and for many years people of faith have worked on this issue at the state level," said Reeves.
"But as yet, [they have not come] to Capitol Hill and this is an opportunity to do that and make sure they're heard so to make sure that our elected officials know the faith community's interest and that they support regulations by CFPB and the bill to limit the rate at 36 percent."
When asked by CP about whether or not payday lending regulations will become a bigger issue with time, Reeves responded that he thought it would.
"We're at obviously a very unique time coming out of this financial crisis and what I think is so interesting is that now we have historically low interest rates for most borrowing, including mortgage rates," said Reeves.
"Most of us are fortunate to get low interest rates while at the same time incredibly high interest rates 400, 500, 700 percent at being given to those who are struggling to make ends meet and we think that's just wrong."
