KBF & CBF Champion Cap on Payday Loan Interest Rates

Chris Sanders, KBF Interim Coordinator & KY Sen. Alice Forgy Kerr speaking for payday loan reform in Frankfort  

Chris Sanders, KBF Interim Coordinator & KY Sen. Alice Forgy Kerr speaking for payday loan reform in Frankfort

 

by Aaron Weaver, CBF Communications Manager

Stephen Reeves, CBF’s associate coordinator of partnerships and advocacy, spoke in favor of payday loan reform at a press conference Feb. 24 at the Kentucky State Capitol in Frankfort, Ky.

Reeves’ remarks came as part of a two-day conference, Feb. 23-24, on the payday loan debt trap sponsored by the Kentucky Baptist Fellowship in conjunction with Georgetown College’s Center for Christian Discernment and Academic Leadership.

Conference participants heard from state and national leaders about what you and your congregation can do to help the most vulnerable and at risk families get out of the payday lending debt trap, and on the second day met with elected officials and urge the Kentucky legislature to adopt Senate Bill 32, which would cap the annual interest rate on payday loans at 36 percent. Annual payday loan rates in Kentucky are usurious, currently exceeding more than 300 percent!

Other speakers at the press conference included Chris Sanders, Interim Coordinator of the Kentucky Baptist Fellowship; Sharon Felton, Minister to Students, Faith Baptist Church; KBF Moderator Bob Fox; and CBF Field Personnel Scarlette Jasper. Watch a video clip via Louisville’s WHAS11 on the efforts of these Cooperative Baptists.

Read Reeves’ statement below:

Cooperative Baptists across the country are joining with other people of faith calling for change. Pastors and church leaders are seeing the abuses of this industry first hand — in their congregations and in their communities. We are not anti-business or anti-profit. But, if your business depends on usury, depends on a trap, if it depends on exploiting your neighbors right when they are at their most desperate and vulnerable — then its time for you to find a new business model.

Across the country faith leaders and others are bridging theological, ideological, racial and political divides to work together for reform and the same has happened here in Kentucky. But I know the outcome can be different here.

Unfortunately, a sad story has played out in states like Texas, Louisiana, Alabama and others. Again and again people of goodwill join together and call for change. A courageous lawmaker, like Sen. Kerr, listens and puts forward real, meaningful reform. Reform that would put an end to usury. There is momentum and vocal, bipartisan support and then at the last minute some industry lobbyist puts just the right pressure on just the right politician at just the right time and it all grinds to a halt. It doesn’t have to be that way here today. Money doesn’t have to trump morality.

The time is now for Kentucky to have real reform of its own. We understand there are people in DC working on reform, but I know folks here in Frankfort don’t want to wait around for Washington to do the right thing. A return to a traditional usury limit of 36 percent APR is the best solution. So give SB 32 a hearing and a committee vote. In the light of day lawmakers know what is right and we’re confident they will vote accordingly.

Thank you.

Read the column below to learn more about Senate Bill 32, authored by Kentucky Senator Alice Forgy Kerr (R), who is an active member and Sunday school teacher at Calvary Baptist Church in Lexington, Ky., a CBF partner congregation.

Payday loans have become a scourge on our state with interest rates that average more than 300 percent.

Most payday borrowers end up trapped in debt because they cannot pay off their high-interest loans and also cover their normal living expenses.

The borrower is forced to take out loan after loan, incurring new fees each time. While payday loans are often marketed as a one-time, quick fix for people in trouble, payday lenders’ public reports show they depend on getting people into debt and keeping them there.

In response, I have introduced Senate Bill 32 which would reduce the annual interest rate on payday loans from more than 300 percent to 36 percent. It will not be easy to pass this legislation, but it is urgently needed to stop payday lenders from taking advantage of our people.

Payday loans are not only a fiscal debt trap by design. These operations are also having a negative impact on our state, and when confronted with the scale of exploitation, I could not remain silent.

My investigation of payday lending affirmed that these loans are modern-day usury and a plague on Kentucky communities.

Continue reading here.

Want to learn more about payday loan reform and how you can get involved? Contact CBF Advocacy Specialist Graham Younger here.

Learn how to better speak out on behalf and others at CBF’s upcoming Advocacy in Action conference in Washington, D.C., March 9-11. For information and to register, click here.

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