“Don’t charge interest when you lend money to any of my people who are in need.”
–Exodus 22:25 – Contemporary English Version
Payday lending is a debt trap for the poor. The average payday borrower takes out 10 loans and pays 391% in interest and fees. Payday lending leads to enslavement to a lender and is contrary to all Biblical teaching— caring for the poor is lending to the Lord (Prov 19:17), when you lend money…you are not allowed to charge interest (Deut 23:19), they lend their money without charging interest (Ps 15:5), and the ultimate command of Jesus to love your neighbor as yourself.
Recently there was an article in the NY Times entitled “Full Faith and Credit: Christian Groups Unite Against Predatory Lending.” Here it was noted that the Southern Baptist Convention proclaims that payday lending “conflicts with God’s plan for human relationships” and “is direct violation of the Love Commandment.” The National Association of Evangelicals is “working specifically to counter the payday loan industry.”
Currently, payday lending in NC is illegal and as people of faith we rejoice in this. However, payday lending is not illegal in every state and the Consumer Financial Protection Bureau (CFPB) has developed rules to govern payday lending nationally. While we are glad to see national rules, we are concerned that these rules are less strict than our NC laws and we want to protect our strong rules and keep payday lenders out of NC.
Susan Lupton at Center for Responsible Lending notes, “North Carolina has a strong rate cap with protections against loopholes and subterfuge. Since CFPB is prohibited by statute to set an interest rate cap, by far the best way to regulate high-cost lending, it is extremely important that states maintain their rate cap protections.”