As reported yesterday in The Lead there’s a new study out that finds payday lending is prevalent in the Bible Belt.
Robert Parham, executive director of the Baptist Center for Ethics, has an editorial in today’s Ethics Daily. He writes specifically of Baptist efforts at reform of state law in Virginia:
Given the clarity of the biblical witness and the crippling reality of payday lenders, some Baptists are addressing the issue.
Religious Herald editor Jim White encouraged Virginia Baptists last fall to urge state legislators to place a cap on the interest rate payday lenders can charge. White called payday lending a “great injustice” and called a cap on interest charged “the least we can do.”
White returned to payday lending in a January editorial, beseeching readers to contact their representatives supporting specific pieces of legislation that would cap payday lending. He wrote that these bills “will not eliminate the suffering of the poor. But, it will end one way the oppressed are being further impoverished.”
The Baptist General Association of Virginia spoke out against payday lending in a November 2007 resolution, denouncing “the payday lending industry and its practice of further impoverishing the poor.”
BGAV’s Christian Life Committee members have contacted their own legislators, supporting reforms in payday lending. The committee is now preparing a report to present to Virginia Baptists that will identify the negative impacts on families of predatory lending and offer steps for advocacy.
The committee is also interfacing with the Virginia Interfaith Center for Public Policy, which has a campaign to combat payday lenders, including a pledge for action designed to lobby state legislators.
BGAV is clearly the moral exception among Baptist state conventions. Most appear so morally malnourished that payday lenders flourish and impoverish the poor.
Ouch.
A visit to the Virginia Interfaith Center for Public Policy is recommended.
The Episcopal Diocese of Virginia passed its own resolution at its January 2008 council:
R-6 Payday Lending
Adopted.
Whereas, God calls us to compassion; to alleviate the suffering of the poor; to speak up for those who have no voice; and to protect those who live closest to the edge; and
Whereas, our faith compels us to connect our values with the moral issues of the day, leading us to abhor usury, to turn away from greed, and to reject profiting from another’s vulnerability; and
Whereas, we believe that reducing or eliminating poverty is a faithful mandate, that creating opportunity for all people is an achievable goal, and that predatory payday lending undermines our values and our mission; and
Whereas, the 2002 Payday Loan Act provides a special exemption for this one industry from Virginia’s usury cap law; be it therefore
Resolved, that the 213th Annual Council of The Diocese of Virginia expresses its deep dismay at the usurious practices of the payday lending industry and the exemption granted this industry by Virginia’s General Assembly, and be it further
Resolved, that this 213th Annual Council calls upon the people of this Diocese to contact their senators and representatives in the Virginia General Assembly and urge them to cap these small loans at thirty-six (36) percent.
Here’s some background on how payday lending works and how it compares to alternatives — like a late fee on a credit card or a bounced check.
Here are some questions. If payday lending is removed as an alternative, would those “closest to the edge” be better off? How so — in a paternalistic way that it forces them to better live within their means or borrow from lenders who ask more invasive questions?