ERLC Launches Coalition to Help Payday Loan Borrowers
The Southern Baptist Ethics & Religious Liberty Commission (ERLC) has launched a religious coalition to finish the predatory lending practices of the payday lenders in the country. The ERLC collaborated with other religious organizations to come up with ‘Faith for just Lending Coalition’ on this May 14th, 2015.
At a press conference organized at Capitol Hill, various alliance like Baptists, Christians and mainline Protestants were present to witness the launch of this coalition. The leading organizers of the event said that they believe in raising awareness about the predatory lending practices among borrowers. The common practices adopted by payday lenders attracts poor people into the never ending debt trap.
Borrowers also prefer the attractive option to get instant cash without any credit proof. Many religious leaders said that pay day loans are misguiding prospective borrowers by representing misleading information, nonrealistic interest rates and false claims related to easy payday loans. When an interest rate is presented by a payday lender, it is generally not on an annual basis.
For example- an interest rate of 15 % by a lender means the interest is applicable for repayment after two weeks. When the borrower fails to make repayments on time, the lender is in the position to crush them financially by charging an unjustified interest rate. In some cases, the borrowers take time as long as ten to fifteen years to payback their debt.
There are around 20,000 payday and car title loan stores in the United States, said the coalition. Generally payday lenders flourish in the country where states having independent laws exist. Difference in the local lending laws makes it easier for the payday lenders to execute their business.
“The payday lenders grind the faces of poor’s into the grounds” – said Russell Moore, the President of ERLC in a written statement.
He also added that god believes in treating all the people fairly irrespective of their financial status. Barrett Duke, the Vice President of this coalition said that the god is not an economic Darwin that believes in survival of the fittest. For him, all living beings are equal.
A list of principles for just loans was also laid down as part of this coalition, the principles are –
- Individuals should manage their finances with ethical responsibility. Overspending is highly discouraged and money saving schemes are encouraged to maintain a healthy financial future.
- It is the responsibility of churches to teach people about responsible behavior and helping neighbors during critical situations.