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Faith Leaders and Payday Borrowers Urge CFPB Director Not to Look Away from the Harm Caused by Predatory Lenders

Thursday, June 20, 2019

WASHINGTON, DC – Over two dozen faith leaders from around the country and two former borrowers met with the director of the Consumer Financial Protection Bureau (CFPB), Kathy Kraninger, today at CFPB headquarters in Washington. The group asked Director Kraninger to give great consideration to the people harmed by payday lending, as a CFPB proposal threatens to gut landmark reform of the triple-digit interest rate loans that payday lenders make, which was scheduled to take effect this summer.

The meeting comes less than two weeks after the CFPB announced it will delay for fifteen months implementation of the rule that had been finalized in October 2017 while it considers repealing the heart of that rule. The new proposal would remove a commonsense requirement that payday and car title lenders assess a potential borrowers’ ability to repay the loan before making it.

Faith leaders have been on the front lines in the battle for reform of payday lending practices for many years in local communities and state legislatures. In 2016, national religious denominations, traditions, and ministries representing 118 million people of faith stood together to call for a strong rule from the CFPB.

At today’s meeting, a broad and diverse group of leaders (see list below) including those from evangelical, Catholic, Baptist, and Jewish communities called passionately for moral and just lending policies to protect consumers against abuse for the sake of a healthy and robust free market system and for the well-being of all families.

Former borrower Loletha Smith said: “The payday lenders have continued to increase in my state and perpetrate the fraud that they are a good business vendor. They are targeting specific areas to prey on people and providing these individuals false hope. They leave people greatly in debt and further digging a hole while dirt continues to fill it up.”

Former borrower Gordon Martinez said: “Ethical loan products should have both successful lenders and successful borrowers. My story and the borrowers I have helped organize would have been successful borrowers if the 2017 Finalized Payday Rule had been in place. As a directly impacted borrower, the 2017 finalized rules represent a commonsense approach that aligns with both my faith traditions and sound economic principles.”

“The Faith & Credit Roundtable strongly opposes the proposal to remove the commonsense ability-to-repay requirement from the 2017 payday rule – a rule which faith communities helped shepherd from its infancy so that it would protect those members of our congregations who we witnessed first-hand fall into the grip of the predatory lending debt trap,” said Rev. Dr. Willie Gable, National Baptist Convention USA Inc. and Faith & Credit Roundtable Co-Chair. “As people of faith, we will continue to fight, knowing that we are responsible to our God and to one another to see justice done for the economically vulnerable communities and families currently under the yoke of the debt trap.”

“This meeting with Director Kraninger marks five years for me personally joining other faith leaders from CRL and from Faith for Just Lending. We have been lifting our voices, sharing our data and carrying the sacred stories of people across America who continue to drown in the deadly, demoralizing web created by predatory lenders,” said Rev. Dr. Cassandra Gould of Faith in Action in Missouri. “The CFPB’s reopening of the payday rule has added insult to injury. I pray that the Bureau doesn’t center the greed of wealth extractors over the need for unsuspecting families to be protected by financial predators.”

“The purpose of the Consumer Financial Protection Bureau is right there in its name, as plain as day,” said Rabbi David Rosenn, Executive Director of the Hebrew Free Loan Society. “That’s why it’s so baffling that after a painstaking process of research and discovery that led to some very basic rules – like it’s important to determine that a borrower has the capacity to repay a loan before you approve the loan – the CFPB now wants to claim those rules are no longer necessary. The rules are necessary.”

“In its own words, the Consumer Financial Protection Bureau ‘protect(s) consumers from unfair, deceptive and abusive practices’,” said Rev. Ebony Grisom, founder of Mustard Seed Ministries in Providence, Rhode Island. “However, the Bureau is not fulfilling its own mandate by rescinding underwriting provisions as well as delaying rule compliance until 2020. Families will continue to languish in the debt trap while payday lenders profit by preying on their financial fragility. Their practices abuse and deceive hardworking, yet economically vulnerable individuals and families. Our advocacy remains with them. We expect the Bureau to honor its word and protect consumers. We will ‘defend the rights of the poor and needy,’ just as Proverbs 31:9 commands.” 

“Payday loans are a financial collision at the intersection of legitimate need and perverse greed,” said Rev. Dallas Lenear, Director of Project GREEN in Grand Rapids. “Consumers don’t need payday loans; they need financial stability. And, payday loans keep them unstable. Scripture says, ‘Do not exploit the poor because they are poor...’ (Prov. 22:22) But, that is precisely what payday loans do.”

“American consumers are now in the death grip of a government that is not only deaf to the cries of the poor for fundamental economic justice, but this government is also blind to their merciless exploitation by payday lending traffickers,” said Rev. James T. Golden of Florida. “We are strong, and we are clear – the 2017 finalized payday rule must go into effect with the ability-to-repay standard in order to stop this predation.”

“As people of faith, we are called to speak out against practices that harm the most vulnerable among us. We are working hard every day to prevent the harms of payday lending in our communities, and it would be enormously disappointing for the Consumer Bureau to pull back the reforms we have worked so hard for,” said Rev. Brenda Kneece, South Carolina Christian Action Council Executive Minister. “We will not back down on the need for and the moral imperative of reform of predatory lending.”

“Jewish teachings and tradition implore us to protect the vulnerable and guide our support for ethical business practices and workers’ rights. Too many Americans are struggling to make ends meet, and this struggle is further exacerbated by unethical lending practices that prey on the vulnerable,” said Allison Grossman, Legislative Director for Religious Action Center for Reform Judaism. “In Exodus, we learn, ‘If you lend money to My people, to the poor among you, do not act toward them as a creditor; exact no interest from them.’ This teaching inspires the Reform Jewish Movement’s strong support for CFPB’s 2017 rule, including the “ability-to-repay” standards that will help protect customers from predatory loans. We urge the CFBP to fulfill its role protecting consumers and ensure access to fair loans that lift people up instead of exploiting the most vulnerable in our communities.”

“The rule is a critical step in stopping the harms of unaffordable loans and must not be repealed, but instead should be strengthened to ensure it stops the debt trap once and for all,” said Rev. Jimmie Hawkins of the Presbyterian Church (USA). “The fact that people of little means are charged triple-digit interest is a perverse reversal of moral logic. Predatory lenders take advantage of the financial distress of economically disadvantaged people, and it is the job of the CFPB to look out for these families, not for the predatory lenders themselves.”

In addition to those quoted above, participants at the meeting also included the following:

  • Rev. Dr. Rodney Hunter, VA United Methodist Jubilee Fund
  • Christian Brooks, Presbyterian Church (USA)
  • Rev. Sekinah Hamlin, Faith & Credit Roundtable
  • Rev. Dr. Donnie Anderson, Rhode Island State Council of Churches of Christ
  • Rev. Dr. Allen Harris, Ecumenical Poverty Initiative
  • Keith Corbett, National Baptist Convention USA Inc.
  • And members of the Faith for Just Lending Coalition www.lendjustly.com.

For more information, or to arrange an interview with a CRL spokesperson on this issue, please contact Carol Hammerstein at carol.hammerstein@responsiblelending.org.