"Do not rob the poor because they are poor;” participants quote verse as predatory lenders enjoy golf under the Miami sky
MIAMI, Fla. – Faith leaders from Texas, Louisiana, Georgia, Missouri, Colorado, Virginia and North Carolina joined Florida clergy and Miami faithful today at the gates of President Trump’s golf course resort, the Trump National Doral Miami, to bring attention to the harms predatory lending causes financially vulnerable families. Inside the gates, payday lenders were registering for their first day of the annual conference of their national trade association, the CFSA. The conference is occurring even as the industry has major business before the Trump Administration; they are pushing for an appointee of President Trump to roll back a payday lending consumer protection rule.
Faith groups representing 118 million Americans campaigned for a strong payday and car-title lending rule from the Consumer Financial Protection Bureau (CFPB), the only federal financial regulatory agency with consumer protection as its core mission. After five years of research and public discussion, the CFPB released a rule that would require payday lenders to assess the ability of potential customers to afford to pay back these high-cost, triple-digit interest loans without reborrowing. The rule would protect millions of Americans from being caught in the notorious debt trap set by payday lenders, but the new leadership of the CFPB, appointed by President Trump, has proposed eliminating the ability-to-repay requirement, which is the heart of the rule.
Today, the comment period ends for a preliminary proposal to delay implementation of the rule, which was scheduled to take effect August of this year. Comments for the proposal to gut the rule are open until May 15.
The average annual interest rate on payday loans is around 400%, and under their terms, the lender can extract payment directly from the borrower’s bank account. This leaves most borrowers unable to cover their immediate and urgent expenses without taking another high-interest loan, and often leads to insurmountable financial difficulties, such as loss of bank accounts and bankruptcy. The CFPB itself found that the average borrower has ten loans per year. Though the lenders call them emergency loans, only 2% are able to pay off the loan after one time and walk away. The practice extracts an estimated $8 billion in fees per year (PDF) from states that do not have strong interest rate caps on payday and car title loans.
“On behalf of the millions of people that have actually been involved in this type of predatory lending, you start off as a customer, but you eventually become a victim,” said Elder Wayne Wright of Mt. Olive Primitive Baptist Church in Jacksonville. “I quickly found one $425 payday loan put me in a spiral to where when the next payday came the money that I had to pay to the loan would make me short somewhere else…It is just a treacherous trap and a juggling game. You are not borrowing from Peter to pay Paul, you’re borrowing from the devil to pay the devil.”
Faith leaders called on the CFPB to implement the rule, as written, without delay. They also voiced support for a 36% cap on annual interest at the federal level and in states that are unprotected. (Sixteen states, DC, and active-duty military are protected by usury caps of around 36%.)
Comments from National Faith Leaders
"We know that payday lenders have a history of setting up shop in communities of color. We have seen this firsthand in the community surrounding our church. We began hearing from the members of our church as well as members of the greater community we serve who got caught in the trap of faithfully making payments only to get deeper in debt. When you’re in a financial hole, a payday lender will throw a shovel instead of a rope. Seeing this exploitative industry show up at the lavish resort of the current occupant of the White House and spending money they have collected from the millions struggling to break free from their traps is an obscenity. The CFPB rule on payday lending should stand,” said Rev. Dr. Frederick D. Haynes, III, Senior Pastor, Friendship-West Baptist Church, Dallas, TX.
“Payday and car title loans are an abomination in plain sight. These lenders weave themselves into the fabric of our neighborhoods and purport to lend a helping hand. But they are wolves in sheep’s clothing. They claim to be for a once-in-a-blue moon emergency, but three-fourths of their loan volume comes from borrowers with more than 10 loans a year. Payday loans and lenders are an extraction industry - siphoning away resources from hardworking families and leaving financial devastation to local economies in its wake,” said Rev. Dr. Willie Gable, Housing and Economic Development Chair, National Baptist Convention USA, Inc., New Orleans, LA.
“Jeremiah 22:3 says, ‘Do justice and righteousness, and deliver the one who has been robbed from the power of his oppressor.’ And that is why we are here today. Our faith traditions consistently call for justice, fairness and love for our neighbors. In Colorado, we were proud and relieved that 77% of Coloradans heard the calls for an end to triple-digit interest predatory payday lending and voted to cap interest rates. We did the right thing, and now the CFPB should do its duty to protect all Americans from this malicious practice, which drives people into worse financial shape than when they took out that first loan,” said Rev. Dr. Anne Rice-Jones, Religious Affairs Chair, Co-Leader Metro Denver Faith Leader’s Caucus, member of Together Colorado, the Greater Metro Denver Ministerial Alliance, and the NAACP, Denver, CO.
“Cooperative Baptist Fellowship members have worked long and hard to bring attention to the serious financial harms that predatory lending practices have caused for people who are just trying to live lives of dignity. It’s astounding that this industry is welcomed back here again this year while the Administration is working to dismantle the rule that would have put a basic level of accountability on them,” said Stephen Reeves, Associate Coordinator of Partnerships & Advocacy, Cooperative Baptist Fellowship (CBF), Atlanta, GA.
“Payday lending is reverse Robin Hood economics. Instead of taking from the rich and giving to the poor, payday lenders take from the poor to become richer. The economic practice of taking from the least, the lost, and the left out is evil and unjust. To stand for goodness is to stand against payday lending. To stand for justice is to organize, demonstrate and write laws against payday lending,” said Bishop Frank M. Reid III, Presiding Prelate of the Third Episcopal District, Chair of the Social Action Commission and Ecumenical Officer, African Methodist Episcopal (AME) Church, Columbus, OH.
“When families are trying to put food on the table, a loan shouldn’t put the food and the family in jeopardy. It is a poisonous trap. Yes, our communities need access to resources but safe and responsible ones that will lead them to financial security. What they do not need is a product designed to make them pay $500 back over and over again until they have no hope of getting back on their feet. It’s exponential usury, it’s predatory and sinful. People of faith have long been against it and we won't stop,” said Rev. Dr. Cassandra Gould, Executive Director, Missouri Faith Voices, Jefferson City, MO.
“The lending practices of the payday business are part of the system of economic practices that both take advantage of the poor and limit them at the same time, to maintain a state of oppression. Instead of providing credit that allows a family to build wealth, these parasitic lending practices further enervate the resources of hardworking Americans and their communities,” said Rev. Karl Brower, Economic Development Chair, Prince William County NAACP (VA), Manassas, VA.
“The problem of poverty is beyond both the poor and rich alike. Our fight is not just against rich unjust individuals holding on to power and privilege, but against complex global and urban processes which incline them to do so. This is why the letter to the Ephesians says, 'our fight is not against flesh and blood but against the powers and principalities of this dark age' (Ephesians 6:12)," said Rev. William Flippin, Jr., Third Vice President, Georgia NAACP, Atlanta, GA.
“We all have rights but when we intentionally mistreat the least of these we must remember we also have responsibility. Micah 6:8... ‘Do Justly, Love Mercy, and Walk Humbly,’” said Rev. Tony Henderson, Presiding Elder, Denver District of the African Methodist Episcopal Zion (AMEZ) Church (CO), Denver, CO.
“For the Christians among us, this Lenten season is a time to repent, fast and pray. We pray today for an end to the systems, powers and policies that keep God’s people down, trapped in machines intentionally designed to strip away their hard-earned dollars. It seems our many conversations and calls for desperately needed accountability for a predatory industry have gone unheard, so as a faith community we come together as one and lift our voices in prayer,” said Rev. Sèkinah Hamlin, Director of Faith Affairs, Center for Responsible Lending, Durham, NC.
Comments from Florida Faith Leaders
“Intentionally targeting and trapping our nation’s most vulnerable citizens in an insurmountable cycle of debt is a morally reprehensible act. The fact that people are struggling to get by does not make it right to charge them triple-digit interest rates. This is usury. This is immoral. This is what exploitation looks like,” said Rev. Rachel Gunter Shapard, Associate Coordinator, CBF Florida, Lakeland, FL.
“I consider it an economic justice issue, it is a consumer protection issue for the poor and often the not-so-poor, who need a quick loan to cover some unexpected expense, but they’re invited to their own financial funeral and interment,” said Bishop Adam J. Richardson, Presiding Prelate of the Eleventh Episcopal District, AME Church, Florida.
“The pernicious evil of those who prey upon the poor can only be defeated by those who pray for the poor,” said Rev. James T. Golden, Social Action Chairperson, 11th Episcopal District AME Church.
“When payday lenders get together, children go hungry. The industry rakes in profits from the dinner tables of working families, who have to choose between food, rent and sudden expenses. Lenders use their carve-out banking rules to put people deeper into debt traps and bully any regulator or politician who protects consumers. Because their greed knows no shame, we must insist regulation is compassionate,” said Rev. Dr. Russell Meyer, Executive Director, Florida Council of Churches, Tampa, FL.
“I serve in a community in one of the toughest hit areas of Jacksonville… I represent 236 churches throughout Florida where we have looked in our communities and found that payday lending is set up in communities least able to afford opposition to those lenders,” said Pastor Lee Harris, Mt. Olive Primitive Baptist Church, Jacksonville, FL.
“This practice takes advantage of poor people and I can't believe the government allows it. The 400% interest rates are shocking and lenders should have to make sure borrowers can afford the loans, just like the mortgage lenders I work with as a realtor,” said Maricarmen Roca, member Christ Journey Church and Representative Assembly of Cooperative Baptist Fellowship FL, District 5, Miami, FL.
For more information or interviews with participants, please contact Carol Hammerstein at carol.hammerstein@responsiblelending.org or 919-437-5055.