Pastors urge Congress to support payday loan reform

(Photo: Seth Anderson / CreativeCommons / swanksalot / flickr)

image_pdfimage_print

WASHINGTON—Pastors from several Texas Baptist churches delivered a simple but forceful message to members of Congress during a recent trip to Washington, D.C.: “Stop the payday loan debt trap.”

The Cooperative Baptist Fellowship sponsored the advocacy event to urge key elected officials to support forthcoming regulations on payday loans by the Consumer Financial Protection Bureau and to pass legislation in the next Congress to cap interest rates on these short-term, small-dollar loans at 36 percent.

stephen reeves130Stephen ReevesStephen Reeves, associate coordinator of partnerships and advocacy with CBF, and advocacy specialist Graham Younger led a small group from Texas Dec. 1-2 to discuss payday loan reform with members of the Texas congressional delegation. The group also met with Consumer Financial Protection Bureau staff and consumer advocate leaders, strategizing how to advocate for state and national reform of the payday loan industry.

In the coming months, the bureau is expected to issue new regulations for small-dollar loans. Many faith leaders, including Reeves and the Texas pastors, wish to see the bureau establish strong restrictions on debt-trap lending.

“Over the past few decades, a systematic and deliberate dismantling of traditional usury laws has taken place across the country,” Reeves said. “The result is a multi-billion-dollar industry built not on expensive loans given to risky borrowers, but on the creation of previously illegal loan products designed to act as debt traps for working Americans desperately trying to make ends meet.”

Reeves stressed the need for a fair marketplace that recognizes a lender’s responsibility to offer products where the borrower has a “fair shot to get out debt without the need to re-borrow.”

Government action ‘essential’

While many churches are assisting people caught in the payday debt trap, he noted, government action remains essential.

“What churches cannot do on their own is ensure a fair marketplace; only government can do that. And while churches will continue their efforts to offer direct aid to individuals, we must also seize the opportunity to raise our voice as advocates and call for change from those who represent us,” he said.


Sign up for our weekly edition and get all our headlines in your inbox on Thursdays


Reeves and other Baptist leaders are asking the bureau to adopt a “strong rule” that mandates lenders assess a borrower’s ability to repay, prohibits the lender from direct access to a borrower’s bank account as a condition for the loan and limits how long a borrower can stay in debt in any 12-month period.

Steve Wells, pastor of South Main Baptist Church in Houston, condemned the usurious practices of payday lenders and emphasized the need for a comprehensive solution to this national problem.

“Payday lenders are evil, well-financed and unprincipled. That combination has allowed them to proliferate by changing their legal charters as cities and states have tried to regulate them,” said Wells, a key voice in persuading the Houston City Council to adopt an ordinance in December 2013 to regulate the payday loan industry.

‘Best hope’ to curb payday lending

“What we need is a single, national comprehensive set of regulations,” Wells said. “The good news is the Consumer Financial Protection Bureau has the authority to regulate their practice, though not interest rates themselves. The best hope we have today to curb predatory payday lending is regulation from the CFPB.”

George Mason, senior pastor of Wilshire Baptist Church in Dallas, another outspoken opponent of predatory lending in Texas, emphasized the church’s responsibility to protect the vulnerable.

“The usurious practices of payday lenders are a scourge upon the land,” Mason said. “Exploiting the poor while pretending to serve them is a greedy and sinful business. If the church cannot speak clearly about this moral matter, it has lost its voice altogether. We are calling on lawmakers to remember that when virtue fails, laws are made to restrain evil and protect the vulnerable. Even those who believe strongly in limited government know the value of promoting fairness and honesty in the marketplace. All Christians have a duty to seek the well-being of ‘the least of these,’ as Jesus clearly said.”

‘Unprecedented opportunity’

Reeves emphasized the unprecedented opportunity to address the problem of payday lending.

“Pastors and churches across the country have witnessed first-hand the exploitative practices of predatory lending, trapping borrowers in a cycle of debt. CBF now has the opportunity to be a leading voice for reform nationwide,” he said. “I believe this is exactly the kind of witness for which we should be known, and so far, the response has been tremendous.”


We seek to connect God’s story and God’s people around the world. To learn more about God’s story, click here.

Send comments and feedback to Eric Black, our editor. For comments to be published, please specify “letter to the editor.” Maximum length for publication is 300 words.

More from Baptist Standard