Dozens of faith leaders and consumer advocates are pressing Congress to create a national interest rate cap for payday lenders instead of the exorbitant three-digit rates currently charged to people in several states.
Eighty activists from 22 states came to Washington in hopes of shaping new regulations that are expected from the Consumer Financial Protection Bureau. Many of their congregations are surrounded by payday loan businesses that they say prey on poor residents by charging high interest rates and creating a cycle of debt.
“Together, you guys are really bringing a strong message and a light and a moral perspective about predatory lending that’s valuable,” said Rachel Anderson, director of faith-based outreach for the Center for Responsible Lending, which spearheaded a three-day visit and training session for religious leaders on Capitol Hill. “We hope that your message is heard strongly.”
The leaders asked members of Congress on Nov. 19 to pass legislation capping interest rates, citing a 36 percent interest cap required by the Military Lending Act.
“If it’s fair for the military, we felt it should be fair for all people,” said the Rev. Susan McCann of Grace Episcopal Church in Liberty, Mo.
Archbishop of Canterbury Justin Welby said he was embarrassed and irritated following revelations that the Church of England has invested millions of pounds in a company that financially backs England’s leading payday lending company, Wonga.
Welby told the BBC: “We must find out why this happened and then make sure that it never happens again.”
The Financial Times broke the news that the Church of England invested several million pounds in Accel Partners, the U.S. venture capital company that led to the launch of Wonga, which dominates the 2 billion pound payday lending market in England. Wonga charges annual percentage rates of more than 5,000 percent.
The people of Ohio won a big victory over the predatory payday lending industry this June when a new state law banned the sky-high interest rates that had trapped many poor Ohioans, as Tom Allio describes in the August issue of Sojourners. Below, Allio, who is chair of the coalition of faith-based consumer, labor, and human services groups that won the [...]