Are payday loans immoral? Many people may present the case that payday loan stores employ dubious practices and could be at times unscrupulous. But immoral is often not the word used during political debates and a discourse involving the need of payday loan businesses in society.
A new survey suggests that most Christians view payday loan lending as a “sin.”
LifeWay Research released the results of its survey Wednesday, which sought the opinions and attitudes of Christians regarding the payday loan business. The study discovered that more than three-quarters (77 percent) of Christians residing in states with little to no regulation of payday lending say it’s immoral.
Essentially, Christian respondents think predatory lending, which is defined as money lent as excessively high interest rates, is a “sin” and should be reined in.
In fact, 94 percent of Christians are in agreement that payday loan stores only provide loans at “reasonable interest rates” and the customer’s ability to pay back the principal sum. Moreover, 85 percent of Christians are in support of laws and regulations that stop payday loan stores from offering short-term money with high interest rates.
As public officials discuss what a reasonable interest rate is, the survey found that more than half (55 percent) were in agreement that the “maximum reasonable” annual percentage rate for payday loans should be 18 percent or less. About one-third (37 percent) pegged the number at 12 percent.
Of all the survey respondents, just 17 percent of these Christians have used a payday loan. When looking deeper into the numbers, close to half (49 percent) of black Christians and fewer than one-quarter (24 percent) of Hispanic Christians have taken a payday loan, Barrett Duke, vice president for public policy of the Ethics & Religious Liberty Commission of the Southern Baptist Convention, said in a statement that getting rich off the burden of others is “shameful.”
“The Bible speaks clearly in its opposition to usurious lending practices,” Duke stated. “Those involved in providing financial services to poor and vulnerable people have a moral responsibility to ensure that they are really helping them and not merely profiting from them. To date, there is too much profit and not enough empowerment from those providing payday loans. Regulation of those who will not responsibly regulate themselves is imperative to protect the most vulnerable among us.”
Reportedly, as part of a conference call, Gordon Martinez, a leader with Faith in Texas of the PICO Network, explained how one payday loan placed him into an endless cycle of debt. Just one payday loan, says Martinez, cost him his prized $8,000 tuba, his home and his marriage.
This report comes as 35 churches across the state of Arizona penned an open letter urging the state to kill a Senate bill that would pretty much resuscitate high interest loans that were prohibited in the state back in 2008. They said they would pray for these lawmakers to have the wisdom to ensure such business practices do not return to the streets of Arizona.
All across the United States, jurisdictions everywhere are trying to rein in payday loan stores. But the biggest issue right now is not necessarily physical payday loan establishments, but these stores heading online. It’s more difficult to regulate and monitor payday loan stores that operate on the Internet.
For Christians, in the meantime anyway, governments have to tackle the brick-and-mortar stores that seem to be plastered on every street corner.
The LifeWay survey was conducted with 1,000 respondents between Feb. 5 and 17. It contains a margin of error of +/- 3.2 percentage points.