Several Cooperative Baptist Fellowship ministers were among 36 faith leaders sending an open letter March 17 taking the chair of the Democratic National Committee to task for resisting attempts by the Obama administration to rein in abuses in payday lending.
The clergy asked Rep. Debbie Wasserman Schultz (D-Fla.) to support rules being drafted by the Consumer Financial Protection Bureau to crack down on abusive payday lending.
“The Bible expressly forbids excessive interest and warns us not to ‘exploit the poor because they are poor’ (Proverbs 22:22),” the faith leaders said. “With its average 400 percent interest rate, payday lending is the very definition of exploitation.”
The clergy said exploiting the poor is “the very business model” of payday lending, in which money is made by lending amounts that a borrower cannot pay back in time unless they take out another loan, and then another, and so forth.
“Each loan comes with an astronomical interest rate that eats an ever‐bigger hole in the borrower’s budget,” they said. “We call this the debt trap. It is intentional. It is not moral. It should not be legal.”
Wasserman Schultz is a co-sponsor of a bipartisan bill that would delay by two years payday lending regulations being developed by the CBFB, a new government agency created by the Dodd-Frank Wall Street Reform and Consumer Protection Act passed in 2010 in response to the Great Recession in the first decade of the 21st century.
Her so-called Consumer Protection and Choice Act would exempt states with existing restrictions on payday lending such as a law in Florida, which Wasserman Schultz and other lawmakers from the state touted as model legislation in an email circulated on Capitol Hill.
“In reality, Florida law has not reined in triple‐digit interest or stopped the debt trap,” the faith leaders said in their letter. “The data shows the payday debt trap is lethal to the financial lives of thousands of Florida’s most vulnerable consumers.”
According to the Pew Charitable Trusts, the annual percentage rate charged on a payday loan in Florida is 304 percent. Allied Progress, a nonprofit research organization that targets special interests, ran a television ad targeting “Debt Trap Debbie” claiming that Wasserman Schultz received $68,000 in political donations from payday lenders.
The clergy urged Wasserman Schultz, as party chair, and all in the Democratic Party “to publicly renounce abusive payday lending and to support the CFPB’s efforts to craft a strong rule that will protect vulnerable Americans of all faiths and in all states.”
“Nationally, the average payday borrower has nine transactions a year and 75 percent of payday loan fees come from borrowers with 10 or more loans per year, meaning that payday lenders prey upon the same people who are stuck in a cycle of debt,” the letter said.
“The impacts of these duplicitous dealings mean families lose homes, cars and jobs,” the letter continued. “Their credit ratings are destroyed forever and with them, their financial futures. But the damage is not limited to individuals. Payday lenders prey on the most vulnerable communities, setting up shop in low‐income communities and communities of color and drain the wealth out of the neighborhoods that need it most.”
Signers included Moral Monday architect William Barber; Traci Blackmon, executive minister for justice and witness ministries of the United Church of Christ and organizer of Black Lives Matter in Ferguson, Mo.; and Herbert Nelson II, director of the Presbyterian Church (U.S.A.) office of public witness in Washington, D.C.
Baptist signers included Stephen Reeves, associate coordinator of Partnerships and Advocacy for Cooperative Baptist Fellowship in Decatur, Ga.; Frederick Haynes III, senior pastor of Friendship West Baptist Church in Dallas; Amy Butler, senior minister at The Riverside Church in New York City; Steve Wells, pastor of South Main Baptist Church in Houston; and George Mason, senior pastor at Wilshire Baptist Church in Dallas.
Florida Baptists signing the letter included Bob Mulkey, pastor of New Covenant Baptist Church in DeLand; Gary McCall, recording secretary for Cooperative Baptist Fellowship of Florida; Tom Lewis, minister to students at Deermeadows Baptist Church in Jacksonville; Thomas M. Shapard, minister of music and worship at Hendricks Avenue Baptist Church in Jacksonville; Ray Johnson, coordinator of Cooperative Baptist Fellowship of Florida; Susan Rogers, pastor at The Well at Springfield in Jacksonville; and Rubén Ortiz, pastor of La Primera Iglesia Hispana Bautista in Deltona.
Rachel Gunter Shapard, associate coordinator of CBF Florida; Britt Hester, minister of youth and mission at Hendricks Avenue Baptist Church in Jacksonville; Gregory Magruder, pastor of Parkview Baptist Church in Gainesville; John Fairless, pastor of First Baptist Church in Gainesville; Allan Mitchell, pastor of South Venice Baptist Church in Venice; Phil Miller-Evans, pastor of The Church of the Beatitudes in St. Petersburg; Courtney Hester, chaplain at Baptist Health in Jacksonville; Ramona Reynolds-Netto, ACPE supervisor at the Center for Pastoral Education in Orlando; and Kevin Collison, pastor of Island View Baptist Church in Orange Park.
Wasserman Schultz and other Florida lawmakers wrote a letter last April saying the Consumer Financial Protection Bureau’s “one-size-fits-all” approach would close down non-bank lenders that many consumers rely on for short-term and small-dollar loans.
This story was updated with signatures added later, and to correct an error in one title.