Every week at All Saints Church, we put our faith into action. This week, we are writing to our members of Congress across the United States urging them to support the Veterans and Consumers Fair Credit Act to protect consumers from predatory lenders.
The scriptures condemn usury and teach us to respect the God-given dignity of each person and to love our neighbors rather than exploit their financial vulnerability. The mere act of lending is a matter of biblical morality and religious concern. In 2012, the General Convention affirmed its commitment to the reform of interest rates and usury laws to prohibit abusive and predatory lending practices.
Payday loans are high cost, low amount loans, some of which have annual percentage rates of 300% or more. Taking out these loans often leads to a cycle of long-term debt. When borrowers renew these loans again and again, because they often do, they end up accumulating and paying far more in fees than the amount they originally borrowed.
Predatory loans benefit individuals and families who often need loans to pay bills, keep food on the table, save for the next emergency, or support their children. Additionally, payday lenders have target borrowers of color by concentrating their locations in communities of color, further exacerbating existing disparities.
After a Ministry of Defense report showed the devastation caused by payday loans in the military, Congress passed a bill to set a 36% interest rate to protect active duty service members and their families, which was has had great success. However, once a person leaves the military, these protections disappear, leaving veterans – who take out payday loans at high rates – even more vulnerable (See Texas and Nevada).
Members of Congress introduced a bill, the Fair Credit Act for Veterans and Consumers, which would apply the 36% military interest rate cap to all consumers, including veterans, to mitigate and prevent harm from predatory lending practices. 20 states and the District of Columbia have with success have capped their rates at 36% or less to protect individuals and families.
However, there must be consumer protection against predatory lending nationwide. The Fair Credit for Veterans and Consumers Act (S.2508/HR5974) would apply the 36% military interest rate cap to all consumers, including veterans, to mitigate and to prevent the damage caused by predatory lending practices.
Options to act:
- Sign an action letter at the action table outside the church on Sunday morning.
- Download a pdf copy of the action letter, sign it and send it to your members of Congress.
Here is a pdf copy of the action letter for those living outside of California.
- Click on this link to take action on the Episcopal Public Policy Network (EPPN) website.