In Florida, the Debate Over Payday loans spills into the pulpit

Inside Subprime: June 11, 2018

By Jacob Rogers

According to The Washington Post, a gulf in the in the world of payday lending has emerged in an unexpected location: African-American churches in Florida.

The state’s largest small-dollar lender, Amscot, has been recruiting pastors to lobby in favor of a bill in the state house that would loosen regulations on payday lenders in Florida. As the Trump administration reviews Obama era rules that threaten the industry, lenders have been battling at the state level.

Proponents like Rev. Frederick Newbill, of First Timothy Baptist in Jacksonville, say that short term financial help can be easier to get via a payday lender, since banks do not usually dole out small loans.

“They don’t understand,” Newbill, 68, said of the industry’s critics. “If you are pastoring, like I do, you know that sometimes people come up short and need a little help.”

But there are many longtime opponents of payday lending who have been shocked by their religious brethren’s support of the industry, though it is certainly still a small minority. Rev. James T. Golden, who pastors Ward Temple AME Church, expressed his disappointment to the Post, saying, “The fact that you have chosen to voice your support of an immoral, unethical, abusive process, that is between you and your conscience.”

Such efforts have expanded to other states as well. In Ohio, the Cleveland Clergy Coalition argued in favor of payday lending to legislators considering a bill which would have increased regulation of the industry. They even appeared at hearings wearing T-shirts that read, “Protect Access To Credit.”

Similarly to Florida, leaders of the group, like Aaron Phillips, claimed banks were leaving their communities in a lurch.

“The banks left us years ago. The credit unions left us years ago. Payday lenders are the only ones stepping up to fill the need,” said Phillips, an Ohio pastor and the CCC’s executive director.

This illustrates the difficult situation in which low-income earners find themselves. They need money, but it seems the only way to get it is by paying high interest rates. More often than not, better options have fled these communities, leaving only predatory lenders and mountains of debt behind. While churches would love to fill that gap, according to Newbill, sometimes his congregation simply can’t come up with the money.

“I know that people are desperate for just 150 dollars,” he said. “I have seen that too many times.”

But Rev. Sekinah Hamlin, from the Center for Responsible Lending, says that is “smoke and mirrors.”

“Despite what they say, we have faith traditions, and payday loans don’t align with those traditions,” he said.

To learn more about payday lending in Florida, check out these related pages and articles from OppLoans:

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