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Payday Loans and the Bible

Old Bible
Depending on translation, the word “money” usually appears in the Bible more than 120 times. If the words wealth, gold, silver, poverty, usury, stealing, and debt are included in the count, that number grows significantly.

In fact, the Bible contains more passages about money and possessions than heaven, hell, or the return of the Messiah. There are 500 Bible verses on prayer and less than 500 on faith, but more than 2,350 on money and possessions, according to Crown.org, a Christian organization that offers advice on money-related issues.

With such emphasis on money, possessions, and debt, anybody familiar with the Christian Bible would undoubtedly agree that the religion considers these themes to be very important to the faith.

Couple that importance with the themes of love, acceptance, and forgiveness that the religion’s figurehead, Jesus Christ, preached, and most would likely come to the conclusion that lending and Christianity can only co-exist under controlled and careful circumstances.

But if that’s the case, how can some Christians associate themselves with, what some call, a predatory industry? How has a recent study found that payday loans are more prevalent in areas of dense Christian conservatism?

What are Payday Loans?

If you lend money to any of my people who are in need, do not charge interest as a money lender would. –Exodus 22:25 NLT

Payday loans are the most prevalent form of short-term financing available. They’re a type of financing that borrowers can get almost instantaneously, regardless of their credit score. Due to this disregard of financial history, borrowers from all walks of life can secure payday loans with little more than a postdated check and a bank account.

But the problem with payday loans is that they come with very steep fees. Borrowers can usually expect to pay around $15 per $100 borrowed. However, this repayment is due on a short-term—usually on a borrower’s next payday, hence the name of the loan.

If borrowers find they’ll be short on cash come their next payday, then lenders usually offer what’s called a “rollover.” Rollovers occur when a borrower takes out a second payday loan to repay the first.

However, when a borrower begins rolling over their payday loans, they often find themselves tumbling down a rabbit hole of debt. With each rollover, the bill due on their paycheck grows, and they find their demand for a rollover even higher.

As they sink further and further into this debt trap, the borrower watches his or her paychecks dwindle with each successive rollover.

This mechanism that’s inherently built into the way payday loans work is what has consumer advocates up in arms. Due to the fact that those who are financially stable have access to other types of financing, and that typically the only people interested in these loans are those who are in poor financial situations, consumer advocates believe that payday lenders are naturally predatory.

Predatory lending and evoking usurious fees are arguably one of the furthest things from Christ’s teachings about loving and helping those in financial need.

An Ironic Finding

Better to have little, with godliness, than to be rich and dishonest –Proverbs 16:8 NLT

Professors Christopher Peterson and Steven Graves, from the S.J. Quinney College of Law and California State University, Northridge, respectively, hypothesized that the church would agree that predatory lending practices are against Christ’s teachings. They hypothesized that “given the biblical condemnation of usury, there would be aggressive regulation and less demand for payday loans in [conservative Christian] states,” according to an interview by Newsweek.

But what they found was the direct opposite—at least statistically speaking.

“We [mapped payday lenders] nationwide, and once of the patterns that started to emerge was a lot of density in the Bible Belt and in the Mormon mountain West, and so we started to try and come up with some way to think about that carefully,” explained Peterson in the interview. “We also created an index that measured the political power of conservative Christian Americans…. What’s interesting and surprising to us is that we found a strong correlation between the number of payday lenders within a geographic area and the political power of conservative Christians within a state.”

Feel free to read the professors’ findings in their report, Usury Law and the Christian Right.

 ‘Why is it legal there?’

Hypocrite! First get rid of the log in your own eye… -Matthew 27:5 NLT

The professors suggest that conservative Christian states are more permissive of this industry and have been less restrictive with their regulatory laws—but say that they are not arguing that the reason for the large amounts of payday lenders is because they are in conservative Christian states

“But in a sense, that just begs the question: it’s legal there… why is it legal there?” Peterson said in the interview.

With so many Bible verses on money lending, on treating the poor with respect and love, and on avoiding usury, how could states with conservative Christians in power allow the rampant spread of payday lenders within their borders?

Peterson says the answer to that question is more of political speculation, but he believes it is largely due to the fact that conservative Christians aligned themselves with the conservative Wall Street businesses in the 1980s and 1990s. As a result, Christians have since become more tolerant of big business practices, so long as those practices don’t infringe on the social issues that Christian politicians feel strongly about.

In other words, if big businesses (payday loan lenders) avoid getting involved in social issues, conservative Christian leaders will stay away from opposing legislation that will hinder big businesses.

But by allowing big business to run rampant, conservative Christian leaders have subjected the people they govern to the hostile wasteland of predatory lending. While something should be said for personal responsibility, and the repayment of debts, the intentional preying upon the poor is simply unacceptable—at least from a Christian’s standpoint.

Wandering Stars

I say this because some ungodly people have wormed their way into your churches, saying that God’s marvelous grace allows us to live immoral lives. The condemnation of such people was recorded long ago, for they have denied our only Master and Lord, Jesus Christ. –Jude 1:4 NLT

Then there are those on a whole different plane: those who try to use the Bible to deceive and trick those around them.

Paydayloanprayer.com, a website that claims to offer “Christian payday loans” for those times when borrowers “feel like Jonah,” attempts to bind itself to the Christian faith in a manner nothing short of disgusting.

Consider the atrocious example of when one could use a “Christian” payday loan, as stated by Stan B., the supposed secretary of the company: “Sometimes, when you black out and bring home some girl from the bar whose name you can’t even recall, and she robs you while you’re still passing out drunk, you need some quick cash to get you back on your feet.”

The website hosts a plethora of articles that continue with the religious rhetoric, calling opponents of their industry the Devil, saying that their services are miracles, and alleging that the accessibility of payday loans proves God exists.

…They are the shameless shepherds who care only for themselves. They are like clouds blowing over the land without giving any rain. They are like trees in autumn that are doubly dead, for they bear no fruit and have been pulled up by the roots. They are like wild waves of the sea, churning up the foam of their shameful deeds. They are like wandering stars, doomed forever to blackest darkness. –Jude1:12-13 NLT

Religious or Not, Why do Payday Loans Exist?

Christian, Jewish, Muslim, Mormon, Scientologist, Agnostic, or Atheist, most everybody borrows money at some point in their life. Regardless of religious affiliation or lack thereof, many encounter financial difficulty as well. Payday loans exist because there’s an extremely large demand for short-term financing that will disregard credit score history.

Without such a service, borrowers would be forced to either circumvent the law or approach illegal loan sharks—which often prove to be far less forgiving than even the steepest of payday lenders.

Despite their demand, however, payday loans need a fix.

Until an alternative is devised, there needs to be tighter legislation on usurious fees, rollovers, and predatory advertising tactics. It’s surprising—and admittedly disappointing—that those who read and base their life on the teachings of one of the most popular religious texts don’t see this and don’t stand up for their brothers and sisters who are in financial trouble.