“What are those men doing in my backyard?” she said, looking out her kitchen window. After watching them a few minutes, she charged out into the yard. There were three big white men out there with a wrecker that didn’t have a name on it. She yelled, “Get out of my backyard! Get out!” She had an envelope stuffed with money in her hand and said, “Here. Here’s the money. Take it and leave me alone!” The men ignored her. They didn’t say a word, and they didn’t take her money. She told them, “I got to that office one minute late yesterday, and I saw people inside. I banged and banged on the door, but nobody would come, or take my money.
She watched helplessly as the wrecker towed her car away. Trembling and crying, she went back into her kitchen and mumbled to herself, “They ain’t got no right to do that. Why did they do that to me? How am I going to go to work? How am I gonna pick up the babies? What am I going to do?”
This woman was just another victim of the predatory lending industry. She was short of money one week and went to a title loan company for one of their short-term, quick, and easy loans. She didn’t know what she was getting into, or what her small loan would eventually cost her. She was just one of many whose lives are ruined by predatory lenders.
The term “predatory” is an appropriate one for payday and title loan companies. They prey on the poor and low-income people. They make bad situations worse, and drive people to desperation. They target poor people who won’t be able to pay off their loans when they are due. When the borrower can’t pay, the lender offers to roll over the amount owed into a new loan. The borrowers become trapped in a vicious circle of borrowing to pay off one loan after another. Borrowers are incapable of paying off the principle and are forced into paying monthly interest payments, which oftentimes are more than the original loan amounts. Interest rates run 456% and 300% for payday and title loans. These two or four-week loans often keep their borrowers mired in debt for almost a year. It is sad, but true: It is impossible to borrow our way out of debt.
In addition to hurting individuals, predatory lenders hurt their communities. Like the so-called “electronic bingo” parlors, they infest areas where poverty and desperation run high. They decrease property values and increase crime. They locate near each other and become eyesores, making it harder to bring in business and jobs. They ruin a communities’ reputation and lower its quality of life. The only people who profit from them are the loan sharks who own them.
Several communities have started working to rid themselves of these predators. The question is should they be eliminated or capped and more tightly regulated. Personally, I would prefer their total elimination. However, we live in a real world governed by laws and regulations made by politicians, some of whom can be influenced by money. The best the people may hope for, at this time, may be greater regulation and a cap on interest rates at 36%. There seems to be a consensus on that.
You can help make this situation better. Call your representatives. Tell them what you think about predatory lenders and what should be done. Let them know you will be tracking how they vote on this issue. Even better, go to the state capitol, attend the subcommittee meeting, and any subsequent meetings that deal with this issue.
The God we serve is deeply concerned that the poor and needy receive justice. The poor are mentioned more than twenty-five times in the book of Psalms, usually in terms of what the wicked are doing to them, or what God is doing for them. Thus, to be on God’s side is to champion the cause of the poor. Jesus said, “. . . whatever you did not do for one of the least of these, you did not do it for me” (Matthew 25:45).
The testimony and financial data shared in this article is based on information shared at a Fair Lending Rally held at the YWCA in Birmingham, Alabama on January 10, 2014.
Dr. Robert Wilkerson is a minister, writer, and founder of People for the Christian Way, an organization whose mission is to encourage all people to practice Christian principles in business, politics, and every area of life. firstname.lastname@example.org, http://www.peopleforthechristianway.com