WASHINGTON — 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 (CFPB). Many of their congregations are surrounded by payday loan businesses they say prey on poor residents by charging high interest rates and creating a cycle of debt. 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.
The Community Financial Services Association of America, which represents payday lenders, rejects charges of preying on poor and minority communities, saying payday lenders “provide services to a broad cross section of Americans because there is widespread demand.” They say “payday advance customers are typical hardworking adults who may not have savings or disposable income to use as a safety net when unexpected expenses occur.”
In October the National Association of Evangelicals issued a statement calling on payday lenders to offer products that “do not exploit poor and vulnerable borrowers” and urged the CFPB to investigate abuses.
Alabama Baptists passed a resolution at the Nov. 10–11 state convention annual meeting urging Alabama lawmakers to regulate the business in Alabama. To read the resolution, visit abscannualmeeting.org/resolutions/2014-resolutions/.
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