Usury is defined as the practice of charging excessive, unreasonably high and often illegal interest rates on loans.
Originally, when charging interest was still banned by Christian churches, usury simply meant charging interest at any rate.
The book of Exodus says, “If you lend money to one of my people among you who is needy, do not treat it like a business deal; charge no interest” (Exodus 22:25).
The writer of Proverbs says, “Whoever increases wealth by taking interest or profit from the poor amasses it for another, who will be kind to the poor” (Proverbs 28:8).
A coalition of community and faith groups is currently supporting an initiative petition to be placed on Missouri’s November ballot to cap the rate of predatory lending in our state at 36 percent.
Only a few years ago, Missouri usury laws capped these loans at an even lower rate; however, driven by the payday loan and related industries, these laws have been dramatically relaxed.
Now, payday lenders in Missouri are charging an average of 444 percent interest – and can charge as high as 1,950 percent. Some have suggested that this is legalized loan-sharking.
These predatory loans carrying triple-digit interest rates create a long-term cycle of debt, exploiting a family’s budget crisis and driving these families into deeper debt.
Even more remarkably, they thrive by oppressing the most vulnerable in our communities.
Incredibly, we have more payday lenders than Starbucks, McDonald’s and Wal-Mart combined.
They saturate our cities, and they can be found in almost all of our small towns and many rural areas. These payday, car title and other high-cost lenders drain millions of dollars in predatory fees annually from our communities.
Missouri loses $317 million annually in payday loan fees alone taken out of our state. That’s a lot of money that could be spent investing in our neighborhoods and families.
Where does all this money go? Most of it goes to out-of-state predatory lenders. Some of it comes back to Missouri legislators who protect predatory lenders’ ability to charge these high interest rates.
For more than 10 years, Missouri’s legislature has failed to take action on numerous bills and countless appeals from faith and community leaders from across our state.
I believe it is time for people of faith in Missouri to make our voices and values heard. It is time for us to say, “This is wrong. Enough is enough.”
It is wrong to take advantage of the working poor. No one in the middle- or upper-income brackets would stand for these ridiculous interest rates and fees.
Many in payday and related industries will say these loans are needed, and they must be able to charge those rates to cover their risk.
But studies indicate the repayment rate on these loans (even with current rates) is between 90 and 95 percent. The default rate is much lower than the default on credit card debt. These lenders charge these rates because they can.
Missouri has some of the weakest payday loan laws in the nation and some of the highest rates.
I believe this is wrong, and it is contrary to my faith and the teachings of Scripture. For me to fail to speak or to act on behalf of the working poor in our state is to betray my faith and my Savior.
If you would like more information, I encourage you to visit Missourians for Responsible Lending.
This is not a political issue; it is an issue of faith and justice. I hope you will join the effort as we seek to lead Missouri to greater justice and hope for all Missourians.
Jim Hill is executive director of Churchnet – A Baptist Network Serving Churches. This column appeared previously on his blog, Our First Priority.
An ordained Baptist minister, Hill has served 50 years leading local church, denominational and non-profit organizations. He lives in Jefferson City, Missouri.