Payday Loans Get Another Enemy: God

Not really the client conversation we would want to have.

Many people complain, gripe, and even protest the ‘short-term loan’ or ’emergency financing’ market. This industry is known as Payday Loans.

Transparently speaking, I’ve been on both sides of this barbed-wire fence. I have represented a global company that manages many pawn shops and payday loan brick-and-mortars. I understand why people assume these businesses are preying on the impoverished; yet, there is a market out there for it. And why?

That’s the other side of the fence I have traipsed — I have needed emergency financing. And you know, while the interest sucked, it covered a large financial gap at one time in my life. Not all industries are sexy, but they all have a place in commerce.

However, the payday loan market possibly gained another enemy it doesn’t want. According to an article in Christianity Today, it’s God.

lifeway researchLifeWay Research surveyed Christians in 30 states to gain their insights about this industry, and according to most of them, “it’s a sin to lend money to someone who can’t afford to pay it back.”

Most Christians find payday loans “impractical and morally questionable,” said Scott McConnell, vice president of LifeWay Research. But many seem unaware that the Bible addresses lending practices.

“Ask people if charging high interest is wrong, and they’ll say yes,” McConnell said. “They forget the Bible calls it ‘usury’ and condemns it as sinful.”

Sidebar: I guarantee many people that have disagreed have needed one. Oh wait, here’s proof:

Overall, 17 percent of Christians have taken payday loans, including 20 percent of Protestants and 12 percent of Catholics. Half of African American Christians (49 percent) and a quarter of Hispanic Christians (24 percent) say they’ve taken out a payday loan.

Other findings in the research included:

  • 86 percent of Christians think “laws or regulations should prohibit lending at excessive interest rates.”
  • 77 percent believe it’a sin to lend money “that harms the borrower financially.”
  • 62 percent believe payday loans are “just too expensive.”
  • 56 percent think the Church should give counseling on payday loans.
  • 55 percent believe the “maximum reasonable” APR should be 18 percent
  • 37 percent believe they are “harmful”
  • 33 percent say they are “predatory”
  • 11 percent say they are “immoral”

Galen Carey, vice president of government relations for the National Association of Evangelicals, said payday loans offer short-term solutions but create longer-term problems. Such loans, he said, have a “devastating effect” on churches and communities.

“A payday loan may look like an answer to prayer—a way out of a financial crisis,” Carey said. “But too often, payday or title loans lead to long-term indebtedness, making a small problem into a large problem.”

You know you have an image issue when God is not on your side, so how do you PR around this?

Edwin Louis Cole once penned: “God never ends anything on a negative; God always ends on a positive.” It’s like a college loan — sure, paying for 20 years is ridiculous but check out that diploma on the wall. My own loan wasn’t for a diploma on the wall, more like the walls in my house.

That was a positive, at least to me and some folk (in the Church) like me.

[PHOTO: Andrew Jansen/News-Leader]