Fellowship Southwest is committed to combating predatory lending in the form of payday lenders and auto/title loans.
The Bible has a lot to say about usury.
Stephen K. Reeves, who leads the advocacy efforts for the Cooperative Baptist Fellowship has put together a comprehensive library full of documents/resources on payday lending.
The states in the southwest have some of the highest APRs in the country. When people with very limited income and no other resources available have a crisis: a flat tire, a sick child, a broken AC unit, they have very few choices. Payday lenders are often the only way they can make ends meet in an emergency.
One loan leads to the need for another. In fact, 90% of payday loans issued are to recurring customers. The loans are designed to entangle consumers in a debt trap.
Predatory lending directly impacts our communities. When a family’s finances are tied up in outrageous debts, they can’t provide basic necessities for their families like food, diapers and school supplies. Many churches and organizations pick up the slack to help. As Jesus said, “The poor are always with you.” But our resources are often already strained and stretched, and it benefits all of us to empower people away from payday loans so that they aren’t reliant on emergency and relief services from churches.
Fellowship Southwest believes in a twofold approach to predatory lending: Mission and Advocacy. As with many of our projects, the most effective way to help is this twofold approach: provide services and resources to people in need, and advocate for lasting change through public policy.
As a missions approach, creating alternative loan programs is a great way to serve people that might otherwise get trapped in a payday loan debt cycle. This is also a way to help rescue people from their debt cycle by offering a fair loan to pay off their payday loan debt. If you are interested in setting up an alternative loan program partnering a local congregation or group with a local credit union, contact us.