In a resolution approved last week, the Board of Directors of the National Association of Evangelicals (NAE) pointed out the dangers of predatory lending and called on churches, lenders and the Consumer Financial Protection Bureau to do their part in addressing debt traps that imprison poor and vulnerable consumers.
“The Bible speaks strongly against unjust lending and taking advantage of the poor,” said Leith Anderson, NAE President. “We were stunned to learn that short-term, high interest loans with annual interest and fees may exceed 300 percent in some states.”
Banks, credit unions and other financial institutions play a vital role in the efficient functioning of a modern economy, and can serve as a catalyst for the flourishing of individuals, families and communities. However, some states do not have regulations on interest rates. Vulnerable people with immediate financial needs are lured into short-term, high interest loan agreements. These loans cannot realistically be repaid and are rolled over from paycheck to paycheck, creating a cycle of indebtedness.
The NAE resolution, titled “Predatory Lending,” encourages churches, charities and employers to help with gifts or loans in times of personal crisis, offer financial literacy classes and model the virtues of disciplined saving, delayed gratification and investment for future needs.
Galen Carey, NAE Vice President of Government Relations, said, “Christians and churches should also advocate for just and responsible practices among lenders and reasonable state and federal regulations that protect the poor in our communities.”
The resolution states, “The NAE calls on lenders to design loan products that do not exploit poor and vulnerable borrowers. We call on the Consumer Financial Protection Bureau to investigate predatory lending abuses and to establish just regulations that protect consumers, particularly the most poor and vulnerable among us, from exploitation.”