The stage is being set for a showdown. In this corner, Goliath of Gath oozing greed from every pore. In the opposite corner, Little David who has only a sense of right and wrong going for him.
Chances are you have seen them. Storefront loan offices proclaiming “Payday Loans,” or some equivalent, they pepper our urban areas. Most Virginia Baptists have had no reason to become intimate with the proprietors of these establishments. Those who have wish they hadn't.
Although the state legislature has capped the interest rates charged on other loans at 39 percent annually, these payday loan sharks get away with charging an APR of up to 390 percent! This is great for the lenders. But for the borrowers, the consequences are disastrous.
Jim White
A reasonable person might ask “How can this practice possibly be legal?” Can you spell L-O-O-P-H-O-L-E?
Twenty years ago my family and I chose to move to the Old Dominion from another state. I am proud to be a Virginian. In fact, I prefer to think of myself as a native-born Virginian. According to a map I discovered in Colonial Williamsburg, I can lay claim to that distinction, having been born in a settlement on the western bank of the Mississippi called St. Louis in the vast expanse designated simply “Virginia.” But, I am aware that others may dispute my claim and I am therefore content to think of myself as a Virginian by choice.
Much in Virginia's heritage is cause for pride and hope. As a Virginia Baptist, I cannot help but take pride in the Virginia Statue for Religious Freedom. I am happy to note that many of the founding fathers responsible for our freedoms and the clergymen who prodded them into thinking about guaranteeing them with a bill of rights were from Virginia. Historically, in many moral issues, Virginia has been on the cutting edge. With a notable exception or two, it has often led the nation in declaring and securing for its citizens those basic rights due every human being.
Our forefathers (both political and clergy) knew, as do we, that the rule of law must supplant the law of the jungle in which the strong take advantage of the weak for their own benefit. Indeed, they knew, as do we, that one of the basic responsibilities of government is to provide security for all. To protect our citizens (at times even from themselves), we have enacted seat belt laws for their own safety. We demand that motorcyclists wear helmets to protect them. We understand that left to our own devices, we human beings sometimes act contrary to our own best interests — and contrary to the best interests of society as a whole.
Laws also protect us from each other, because we realize that often the stronger will prey on the weaker. Our culture agrees that it is fundamentally wrong for one person to brutalize another. Indeed, some of our citizens have recently begun to realize that it is wrong for human beings to brutalize dogs. But brutality comes in various forms.
Laws must also protect the financially feeble from falling victim to those who are eager to enrich themselves at the expense of their less advantaged fellow citizens. What else can it be called but brutality when a man or woman is enslaved not by the pounding of the lash but by the compounding of interest. And, with it, hopelessness is also compounded.
Men and women, all of them poor and many of them in utter poverty, have been forced by circumstance to secure loans from financial vultures called payday lenders. These lenders, many of them respected (though not respectable) citizens of the community, feast on the carrion of dead dreams and expired hopes demanded of the down and out. They care nothing that these fellow citizens are being forced deeper and deeper into financial ruin. All that matters to them is that they are making a lot of money. That their high interest compounds the misery of their fellows is of no matter to them. But, it matters to God. And, it should matter to Virginia Baptists.
States all around us have come to the conclusion that this practice is wrong. Reprehensible, even. It is too late for Virginia to be on the cutting edge of this moral issue, but we must not lag behind any longer.
Capping the interest rate the strong may charge the weak to a uniform 39 percent is the least we can do. We must demand it of our legislators. To ignore the great injustice perpetrated on those who are living hand to mouth, paycheck to paycheck is almost as immoral as those who are prospering by and adding to their fellow citizens' misfortunes.
I can almost hear the arguments: “But they have brought their hard times upon themselves,” one may reason. Another may add, “They have readily agreed to pay a high premium for the privilege of obtaining ready cash.” To which I reply, “Desperate people do desperate things. It is not in the best interest of our citizens nor of society at large to willingly add to their desperation.” The argument implies that those seeking these loans have a choice. Most of them are out of choices and out of chances. They seek payday loans at extreme interest rates because they have no choice.
Or someone may offer this rationale: “Payday lending is nothing more than supply and demand. We are providing a service and obviously meeting a need or no one would borrow from us. The interest we charge is commensurate with the risk we are taking.” It is true that lending is a service and that reasonable interest rates benefit the lender and do not overburden the borrower. But there is a line beyond which the transaction ceases to be mutually beneficial and becomes tyrannical. The General Assembly has recognized this to be the case in enacting usury laws limiting interest in all other cases to 39 percent. The laws already governing other forms of lending should of necessity be extended to cover payday lending as well.
Goliath has the money. Legislators need money to run campaigns. But David is right. And in the end, David wins.
Most issues facing the legislature are complicated with effective and persuasive arguments offered from all sides of the issue. Seldom is a question so clear-cut as this one. For that reason, I ask all Baptists in Virginia to join with other people of faith to send a unified message to our state legislators: “Cap it.” We may not have the money, but we know right from wrong. And we vote.
For more information, visit www.virginiainterfaithcenter.org.