“A casino economy” this phrase has been used widely to denote the flagrant risk, greed and exploitation characterizing the recent economic meltdown. “Casino economy” practices go deeper into the American mainstream, however, than a one-time crisis. Greed and exploitation can find their way into almost any American venture replacing Biblical values of thrift, stewardship and shared prosperity. Just this week the following examples of deception and predatory practice emerge on Wall Street, Main Street and Online. Sadly, they are lost news because they can be replicated in almost any week.
Just business ? Sanctioned fraud masquerading as investment: The Securities and Exchange Commission filed a civil lawsuit against Goldman Sachs for securities fraud on Friday, charging the bank with creating and selling mortgage-backed securities that were intended to fail. According to the complaint (pdf), Goldman let John Paulson, a prominent hedge fund manager, select mortgage bonds that he wanted to bet against because they were most likely to lose value and packaged those bonds into the “Abacus” investments, which were sold to investors like foreign banks and pension funds. As those securities plunged in value, the Paulson hedge fund made money on the negative bets, while the Goldman clients who bought the investments lost billions of dollars.
Just business ? Cheap, but you are supporting the criminally convicted: FLDS (the extreme Mormon sect in San Angelo) owns and operates a cement plant and building services business and will contract to build more cheaply than other local contractors offering San Angelo area residents low price contracts. The leader of this group, Levi Jeffs, plead no contest to sexual assault and bigamy charges of the 16 year old girl in question. He received two eight year prison sentences earlier this week. Jeffs is the fifth man to be found guilty in Texas on charges… based on evidence seized by authorities during an investigation at the ranch in April 2008. The other four FLDS defendants — among them the father of Jeffs’ victim — received sentences ranging in length from seven years to 75 years.”
Just business ? Financial service turned financial exploitation: As one example of hundreds of payday loan outlets (www.Nationalpayday.com) advertises their quick cash advances to help you in any situation. “If you need a quick cash advance or payday loan, let us help. We are the best quick solution for any cash flow problem. Our online payday loans and cash advances give you the emergency cash you need until your next payday. No matter what you need money for, our quick and easy check cashing service provides the assistance you’ve been looking for”… at 500% interest and above, is this help or an invitation into a cycle of debt?
Also from National Payday website: “The following table provides examples of the cost to obtain a payday loan or online cash advance. The APRs are based on example loan terms of one payment (“Check Amount”) due in 16, 14, and 7 days. (These figures do not include additional fees of up to $60 charged to each loan at many lenders)
Greed is classically regarded as one of the seven deadly sins because greed is so pervasive and harmful. Unlike ancient Rome, Americans have something to say about the laws which are supposed to enact justice in society. We vote for candidates who are charged with passing just laws. .. We are a people who overwhelmingly say that we are influenced by the biblical tradition which requires justice. We can’t very well plead innocence if the laws of society are unjust because we are the people who in a democratic society preside over the passage of these laws. Our laws are a reflection of who we really are as a society–not who we say we are–but who we really are.
And who are we?
Are we people who are willing to lament and raise our voices? The prophetic witness of scripture including Moses, Jeremiah, Isaiah and Christ began with sincere lament over the suffering and injustice. A central calling for our Christian community is simple WITNESS. Speaking our values of thrift, stewardship and shared prosperity is an act of faithfulness. Will you consider voicing your concern over the expressions of greed and exploitation you see in your own workplace or community? Will you join others in your city and state to control the growth of payday lenders and auto title loan sharks?
:: Resolution on Financial Stewardship (pdf)
Are we a people willing to act with consideration of the interest of others? There is no need to forgo our own interests to support the interests of others. Our country has passed through ages of unbridled greed before – and there has been a correction through law, advocacy, incentives and market forces. We need a correction to “casino economics” so that there is a balance of fiduciary responsibility to millions of investors and employees, as well as to shareholders. The impact of ethical practice is to build an ethical IDENTITY, not just a whenever- it’s-in-my-own-interest incidental ethical action.
Businesses go to great lengths and great expense to construct a public relations face to conceal predatory or exploitive practices. One particular troubling trend today is for businesses to create charitable foundations that give away relatively small amounts of money with great fanfare and flourish. Not that the charitable work they do is undesirable, but if the charitable foundation is a public face masking predatory and exploitive business models that harm consumers, employees and investors, then the charity is merely a contrived device to perpetuate destructive greed.
This type of good face/bad practice trend is evident in many communities that embrace casinos in exchange for support for local nonprofit organizations. It is evident in the TV and radio ads claiming the Texas Lottery supports education when the money raised by the Lottery only supplants General State Revenue that is Constitutionally committed to support education. “A Lottery dollar in is a General State Revenue dollar out.” No matter how much the Lottery makes, the education budget remains the same, but the public message directs you to believe that your Lottery ticket will add to Texas education.
As Susan Hamill, a former NY tax lawyer and professor at University of Alabama law school, remarked, “Some people say that Christians should focus on charity, and withdraw our voice from the economic marketplace. The Bible calls us to charity, but charity is not the same as justice. Charity involves voluntary generosity, but biblical justice requires systemic and structural righteousness for all people, and particularly for the most vulnerable people in society. Charity and justice are both pillars of righteousness, but an abundance of charity does not substitute for the absence of justice. An “A” in charity and “F” in justice do not average out to a “C” in righteousness.”
Although the marketplace and other media of commercial interface are changing rapidly, we are not yet a generation away from the values of thrift, stewardship and common prosperity. These little embers of economic ethics need to be fanned into brightness as we approach an eminent turning point in local and global economics. We build the structures, we buy the products, we buy the stock, we invest and we elect the officials. If there is a need to return to the values and thrift institutions envisioned by Ben Franklin, then it is a faithful presence and prophetic witness that can usher in balance.
You can find the latest information and stories from the ride on our website.
Can’t ride but want to be a part of this event? Just because it has already started, doesn’t mean you can’t participate. If you want to ride find out where we’ll be, e-mail Rand (email@example.com) so we know to expect you, then just join up.
It’s also not too late to join financially either. Sponsor a specific rider or simply help the cause.
Cyclists riding to end hunger in Texas!
HPU/Coggin Ave BC, Brownwood
Pastor FBC Ballinger
Pastor FBC Plano
Pastor FBC Gatesville
The Heights BC, Richardson
Baptist Temple, McAllen
Pastor The Heights BC, Richardson
The Heights BC, Richardson
HPU/Coggin Ave BC, Brownwood
BGCT Dallas/FBC Arlington
HPU/Midtown BC, Brownwood
President BUA/San Antonio
Pastor FBC Golinda
HPU/Southside BC, Brownwood
By Amy Wiles
I remember sitting at my desk on the first day of my internship at the Christian Life Commission – nervous, excited, and feeling a bit like a fish out of water.
I had recently ended a five-year teaching career as a public school music teacher to follow a call to ministry and attend Austin Presbyterian Theological Seminary. My seminary education and experience serving and attending churching communities had taught me that pursing justice was a part of the Christian call to discipleship. My problem – I had no idea how to do that. Don’t misunderstand me. I had wonderful opportunities to serve people through mission trips to places like New Orleans, Toronto, Kenya, and my own hometown. Still, I had very little experience working to change the systems that created poverty, inequality, and injustice around me. I had done the important work of treating the symptoms of these systems, but had never reformed the systems themselves. Serving others in church ministries had raised many questions. Why do people live in poverty? What can be done to fix the problem? How can I help to change systems of injustice? But, I didn’t have the answers and didn’t know where to find them. So when I heard about the internship at the CLC from Suzii Paynter, I jumped at the opportunity to learn more about advocacy, public policy, and how I could help.
On my first day, Suzii tasked me with learning more about predatory lending and had given me a report from the Commission on Thrift to read. The report talked about credit cards, gambling, and sub-prime mortgages – topics that I vaguely knew. Then, I began reading about payday lending, and I was shocked by what I found.
Payday loans are small dollar loans with enormously high service fees and interest rates that offer instant cash with no credit check. On average, these fees and interest rates amount to 500% APR. Borrowers secure the loans with a checking account and are expected to pay back the full amount in two weeks. If they cannot pay the full amount, the borrower rolls over the loan paying another high fee. Many borrowers roll over loans multiple times before being able to pay the entire loan. Payday lenders profit from creating this cycle of debt. Even worse, they prey off of the most vulnerable in our society. A recent survey conducted by Texas Appleseed (pdf) found that most borrowers work for $30,000 a year or less and use the loans to secure basic necessities like groceries, rent, mortgages, or medical expenses.
The Texas Finance Code sets restrictions on fees and payment periods. Yet, many lenders operate as Consumer Service Organizations (CSOs) in an effort to avoid regulation. CSOs register with the Secretary of State but are not regulated by or required to obtain a license from the Office of Consumer Credit Commissioner. This business model takes advantage of a loophole in Texas law and sidesteps many state regulations on the books. Consumers have no place to voice complaints, and data concerning industry business practices cannot be collected. Without closing the loophole, the Office of Consumer Credit Commissioner cannot react to the industry’s wrongful business practices.
I was outraged that this multi-billion dollar industry was preying off of the poor and no one was stopping them. Everyday during those first few weeks of my internship, I would rush home to share what I had learned with my husband, my mom, or a classmate. I relished the opportunity to write articles for the Baptist Standard and speak at conferences and with student groups. Like myself, most of the people I talked to had no clue that this industry was running rampant in Texas.
When I talk to Christians about payday lending, they are shocked, appalled, and generally ask, “Why are payday lenders unregulated? How are they getting away with exploiting the poor? How can I help?” They ask the same question that I was asking at the beginning of my internship. But, now I have a few more answers.
As Christians, we are called to be a prophetic voice to a hurting world. We are called to speak up for those who have no voice. We are called to speak for the victims of predatory lending and find ways to pull them out of the cycle of exploitive debt. We can make our voice heard by urging local government officials to pass resolutions calling on the state legislature to close the loop hole in the 2011 Legislative session. More cities can pass ordinances like Irving and Richardson that restrict zoning regulations of payday and auto title lenders. People can sign petitions and share personal stories about how payday lending has negatively affected them. Churches can offer financial education classes like Money Smart to warn people about the predatory practices of payday and auto title lenders.
The AARP and Texas Appleseed along with other partnering groups have initiated the 500% Interest is Wrong campaign to further educate people about the devastating effects of payday lenders and offer avenues for people to speak out against predatory lending. I encourage Christians to educate themselves about the issue of predatory lending, join the campaign, and speak out for those who have fallen victim to payday loans.
The 2010 Christian Life Commission conference was a success by any measurable terms. This year marked the first time the conference was held in the Rio Grande Valley. The hospitality, enthusiasm, support and encouragement from McAllen and the surrounding communities was fabulous. The CLC would like to especially thank Josué Valerio, Director of the Missions Mobilization Team for the invitation and Daniel Rangel, Director BGCT River Ministries, for getting the word out. The staff and members of the beautiful Calvary Baptist Church also deserve our gratitude for serving as gracious hosts.
The conference featured dynamic and thought provoking speakers, a look at timely issues and the opportunity to develop and deepen relationships. Thanks to the hard work of the Texas Baptist communications team, those of you unable to attend can now access video of the entire conference including follow-up interviews with the presenters. The theme of this conference was Neither Need nor Greed: Christian Stewardship of Money and Resources. From a look at the Biblical foundation for stewardship, to a prophetic word about the church in our economic times, to challenging public policies that hurt the poor and encouraging churches to provide personal financial literacy classes, the conference took a look at money and economics from many different angles.
To watch the presentations you should right click on the link and save to your computer to be watched in Quicktime. The interviews can be watched online via YouTube.
Theme Interpretations by Ellis Orozco
1 – http://www.bgct.org/documents/mp4/20100331-Ellis_Orozco_Theme_Interp_1.mp4
2 – http://www.bgct.org/documents/mp4/20100331-Ellis_Orozco_Theme_Interp_2.mp4
3 – http://www.bgct.org/documents/mp4/20100331-Ellis_Orozco_Theme_Interp_3.mp4
YouTube Interview – http://www.youtube.com/watch?v=mEPoEmEm8MQ
David Blankenhorn - “Confronting the Debt Culture: The New American Thrift”
YouTube Interview – http://www.youtube.com/watch?v=SZTaYJThFaA
Eloy Villafranca - “Money Smart–Never Too Late to Prosper”
YouTube Interview – http://www.youtube.com/watch?v=TW4lX1r3AQw
Stephen Reeves and Rob Kohler - “Better than Luck–Why the Lottery and Gambling are for Losers”
YouTube Interview – http://www.youtube.com/watch?v=E8aS0Vcy0dE
YouTube Interview – http://www.youtube.com/watch?v=shSC_eR6QMk
Miguel de la Torre - “The Bible and Christian Economic Responsibility”
YouTube Interview – http://www.youtube.com/watch?v=451MJGDsxUE
Ann Baddour and Tim Morstad - “Predatory Lending and Credit Gone Bad”
YouTube Interview – http://www.youtube.com/watch?v=Jj0bAhIY4Qw
YouTube Interview – http://www.youtube.com/watch?v=vJgWeF-EVdg
Don Baylor – “The Bread of Life: Getting By and Getting Ahead in Texas”
YouTube Interview – http://www.youtube.com/watch?v=vmgdkqUSze4
DALLAS – Ash for an Icelandic volcano eruption has jeopardized an extensive Ukrainian tour of the Singing Men of North Central Texas. Full Story »
GEORGETOWN – God’s call to care for others, to bring people into the kingdom is beckoning Woman’s Missionary Union of Texas to reach out to the downtrodden throughout the state and around the globe. Full Story »
MOSCOW – Officials with Buckner Adoption and Maternity Services say they have not received any official notification about the suspension of adoptions from the Russian Ministry of Education, the arm of the government that oversees international adoptions. Full Story »