There is no financial freedom or justice with payday loans – Arizona Capitol Times

People speak and discuss publicly on a wide variety of topics. From sports to fashion, entertainment or even politics, joking banter engages people from all walks of life. But when it comes to personal financial challenges, most people tend to keep those worries in their household – with one notable exception: their pastor.

As a minister, I have heard the pleas of those trapped in insurmountable debt. It is sad but true that often no more than a few hundred dollars became a hub of debt that got deeper with each payday loan extension and its soaring triple-digit rates and fees.

Warren Stewart Jr.

Arizona voters were careful about the damage payday loan wages when they were elected in November 2008. Together, the voters of Arizona spoke decisively in a referendum. As a result, voters achieved what state lawmakers either could or would not do: limit payday loan interest rates to 36 percent. More than 60 percent of voters approved.

I am proud that Arizona business leaders stood with voters to end usury lending. The state Chamber of Commerce, along with others in Phoenix and Tucson, agreed that payday loans tarnish the well-deserved reputation of companies that have earned loyal patrons for their inexpensive goods and services.

Since our referendum in 2008, no state in the nation has legally sanctioned expensive payday loans. Arizona joined 13 other states and the District of Columbia to cap interest rates on payday loans.

In a democracy, no industry or organization can violate the will of the people.

I am, therefore, dismayed that Rev. Jarrett Maupin, a clergyman and president of a nonprofit, is publicly defending predatory lenders and referring to the late Dr. Martin Luther King calls. Dr. King believed in the pursuit of freedom, justice and equality and gave his life for it.

There is no financial freedom or equity with payday loans. Instead, these bottom-end financial feeders hunt down those with the least financial resources.

Since loans are renewed or “rolled over” every two weeks, unsuspecting borrowers deepen their debts. According to research by the Center for Responsible Lending, payday loans cost $ 3.5 billion in fees each year alone. Fortunately, voters in Arizona put an end to those payday loans, but our communities are still plagued by auto loans that hit interest rates as high as 200%.

The Consumer Financial Protection Bureau is working to curb abuse of payday and auto title rental companies nationwide. And while they can’t set interest rate caps like Arizona citizens did, they can require lenders to actually determine whether a borrower has the means to repay a loan, taking into account their existing income and expenses – a fundamental principle of lending called the “Repayment ability” is referred to. ‘ Testing a borrower’s ability to repay is not an extreme suggestion. It’s just good business.

Instead of working to undermine the CFPB and aid predatory lenders stealing property from our neighbors and communities, the leaders of conscience should instead work to ensure that the CFPB establishes and ensures a rule that financial robbers cannot play off that the will of the people of Arizona is respected.

Before beginning the rulemaking process, the CFPB sought public opinions on payday lending and auto titles from consumers and businesses alike. In public settings in Alabama and Tennessee, both perspectives were given opportunities to speak. Since then, the CFPB has accepted additional comments and worked with business leaders before submitting a draft rule. Over and over again, the message from current and former borrowers was the same – they thought the payday loan was a life raft. Instead, it was an anchor.

It is noteworthy that a few years ago the Pentagon and Congress agreed to protect our military from predatory loans such as payday and auto title loans and capped interest rates at 36 percent. Arizonans deserve the same protection that men and women in uniform already have.

Both clergy and lay people often encourage believers to light a candle against the dark. When it comes to predatory loans, such as usurious petty loans, I pray the light will shine.

Warren Stewart Jr. is the pastor of Remnant South Phoenix Church

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