predatory lending

Taking up the cause of the afflicted and poor – Leah Gonzalez, day 4

December 7th, 2012 at 7:00 am

(This is a guest blog post by Leah Gonzalez, a master’s degree student in social work at the University of Texas in Austin and a graduate of Howard Payne University.)

While researching predatory lending and its impact, I found a fairly consistent voice of opposition from religiously affiliated organizations. Truthfully, this took me by surprise.

I grew up going to church, graduated from a private university, and I’m continuously developing my faith. I think it’s reasonable to say I’ve been to my fair share of church services. My research findings caught me off guard because the many sermons I’ve heard instructing us to “defend the rights of the poor and needy”(Proverbs 31:9, ESV) have not often been tied to taking action with public policy.

So why is this issue one of concern for churches? In 2010, Catholic Charities of Texas researched the impact predatory lending was having on the population they serve and found that more than $1 million of charitable assistance was given to individuals indebted to a payday lender (Catholic Spirit Staff, 2011).

There is no denominational bias for predatory lenders. Texas Faith for Fair Lending is a coalition designed to bring “change [to] payday and auto title lending practices in Texas” (Faith for Fair Lending, 2012), and it has garnered support from various church groups throughout the state. Representatives from Baptist, Methodist, and Catholic churches have given testimonies urging policymakers to take legislative action.

A study by (my favorites) Stephen Graves and Christopher Peterson examines what correlations exist between conservative Christian states and the availability of payday lenders. They found “the conservative Christian Americans are a prime demographic target of the payday lending industry” (Graves & Peterson, 2008). In states that have loose regulation of usury laws, predatory lenders are able to flourish. By registering as credit access businesses, predatory lenders are able to evade the 10 percent interest rate limit Texas has set (Pallavi, 2010).

In the same article, Graves and Peterson highlight the teaching the Bible provides regarding lending and exploitation of the poor. They discuss the story of Jesus becoming angry and almost violent when entering the temple and seeing business practices that took advantage of the poor.

Holding businesses accountable to fair practices may be an avenue for Christians to “maintain the cause of the afflicted and justice for the poor” (Psalm 140: 12, NASV) in a practical, meaningful way.

Sources:

Pallavi, G. (2010). Costly cash: in texas, towns try zoning out payday lenders. Retrieved from http://www.dailyfinance.com/2010/03/10/costly-cash-in-texas-towns-try-zoning-out-payday-lenders/ .

Graves, S. & Peterson, C. (2008). Usury Law and the christian right: faith-based political power and the geography of american payday loan regulation. Catholic University Law Review. Retrieved from http://www.heinonline.org.ezproxy.lib.utexas.edu/HOL/Page?page=637&handle=hein.journals%2Fcathu57&collection=journals .

Texas Faith for Fair Lending. (2012). Retrieved from http://www.texasfaithforfairlending.org/ .

Catholic Spirit Staff. (2011). Faith leader seek state regulation of payday loans. Diocese of Austin. Retrieved from http://www.austindiocese.org/newsletter_article_view.php?id=5753 .

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