KBF Goes to Washington for Payday-Lending Reform

by Chris Sanders, KBF Interim Coordinator

Payday lending is a scourge in working people’s communities. People with too much month left as the end of the money approaches step in, sign away, and fall in the debt trap. Interest rates are typically 391% per annum in Kentucky. The high rate, high fees, and multiple loans in a year keep them tethered. The lender gets their money right from their bank accounts, ahead of other needed payments, like rent, gas, and food. Something has to be done.

KBF is working in Frankfort to lower the interest rate. The national Cooperative Baptist Fellowship working at the federal level. The Consumer Financial Protection Bureau is poised to issue a new rule intended to curb the worst practices. One approach being considered is requiring lenders to assess the borrower’s ability to repay within the term of the loan, as with mortgages, car loans, and other loans.

The CBF’s Stephen Reeves is a co-chair in a new coalition, Faith for Just Lending. The National Baptist Conventions, the Southern Baptist Convention, the National Association of Evangelicals, the National Council of Churches’ poverty-advocacy arm, the United States Conference of Catholic Bishops, and many others have joined together in this rare, encouraging movement moment.

Chris Sanders and others with the CBF traveled to Washington to speak up and speak out. Read about their work here. We met with the Consumer Financial Protection Bureau and key members of Congress, and held a press conference announcing our principles on the issue. We concluded our meeting with a visit to the White House.

The top Administration officer for faith matters is Melissa Rogers, formerly of the Baptist Joint Committee for Religious Liberty and Wake Forest University. It is gratifying that the Administration has turned to one of her caliber and sensitivity to separation of church and state to provide key guidance there. She confirmed that payday-lending reform is a top priority there.

Improving payday lending is a long and winding road. We should continue to be active on both state and federal levels to do all we can. As the Apostle said, “Let us not grow weary in well-doing…” (Galatians 6:9).