Religious and Faith-Based Community Development Leaders: financial reform must protect families from lending abuse
Center for Responsible Lending
May 11, 2010
Over the past year, the Center for Responsible Lending (CRL) has hosted numerous conversations with faith communities as part of its "Faith and Credit" program. In a letter delivered to Senators today, sixteen Christian leaders with decades of experience providing housing services and financial counseling urged legislators to enact reforms that protect against abusive lending practices targeting low-income households.
"From the lens of our faith traditions, we recognize abusive lending as a breach of prohibitions against lending that exploits the poor," the letter states, citing practices such as higher cost mortgage loans routinely sold to African-American and Latino borrowers, payday loans with 300-400% Annual Percentage Rates (APR), and targeting of low-income car buyers for high-priced loans and insurance. Read the full text of the letter with signatories.
"The red-lining (cutting off credit) of struggling communities is illegal, but easy credit at usurious rates has a similar effect and there is precious little legislation to correct it," said Dr. Robert Lupton, a signatory of the letter and founder and director of FCS Urban Ministries in Atlanta, a coalition of faith-based housing, youth and neighborhood development services, in Atlanta, Georgia. "Lending is vital for all communities but it needs to have a conscience. And that is the legitimate responsibility of government."
While faith leaders—who see firsthand the effects of predatory lending practices—press for fairness, transparency and accountability in financial services for low-income communities, dozens of payday lending company executives spent last week on Capitol Hill pressuring lawmakers to exclude their products from oversight. Automobile dealers are asking for similar exemptions, even though car loans are one of the most prevalent forms of credit for American families.
"The lobbying by financial institutions against reform make the faith community's efforts to support it all the more urgent," said Rachel Anderson, Director of Faith-Based Outreach at CRL. "Somebody has to speak for families rather than big-money special interests."
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About the Center for Responsible Lending
The Center for Responsible Lending is a nonprofit, nonpartisan research and policy organization dedicated to protecting homeownership and family wealth by working to eliminate abusive financial practices. CRL is affiliated with Self-Help, one of the nation's largest community development financial institutions.