July 7, 2020
By Aaron Weaver
DECATUR, Ga. — Cooperative Baptist Fellowship leaders spoke out against the decision announced today of the Consumer Financial Protection Bureau to remove borrower safeguards intended to ensure that vulnerable consumers have the ability to repay short-term, high-interest “payday” loans.
“For nearly a decade, the Cooperative Baptist Fellowship has sought justice for those who have been victimized by the immoral and sinful practice of predatory lending,” said CBF Executive Coordinator Paul Baxley. “We have been persistent in this pursuit because many of our congregations have heard a calling to love and serve the poorest among us, and in so doing have met those whose lives have been torn apart by predatory lending. Our CBF field personnel and Together for Hope leaders have come face to face with the devastating consequences of payday loans. We cannot keep silent as sisters and brothers in Christ are destroyed, and we cannot ignore the systemic racial injustice inherent in this industry.
“This kind of injustice is what stirred the prophet Amos to cry out against the leaders of Israel who sold ‘the righteous for silver and the needy for a pair of sandals, who trample the head of the poor into the dust of the earth and push the afflicted out of the way’ (Amos 2:6). He went on to say: ‘Hear this, you that trample on the needy and bring to ruin the poor of the land….The Lord has sown by the pride of Jacob, surely I will not forget any of their deeds’ (Amos 8:4, 7). As followers of Jesus called to bring good news to the poor, we add our voices to those of other Baptists and other Christians who ask only that we be a society marked by justice and kindness rather than unchecked greed.”
Stephen K. Reeves, CBF’s associate coordinator of partnerships and advocacy, called the announcement “unsurprising” but “no less disheartening.”
“Today’s announcement, while unsurprising, is no less disheartening. I’m afraid the agency built with consumer protection at heart, has instead caved to predatory lenders,” Reeves said. “To do so during a pandemic when thousands, if not millions of Americans have found themselves financially vulnerable, is truly tragic. If there ever were a time to crack down on debt-trap lending, it is now. It is more than ironic that the CFPB has announced next week as ‘Consumer Financial Protection Week.’ The decision today makes this week ‘Shark Week.’
“To repeal the ability to repay standard in this rule strikes at the heart of what is so predatory about these products. Lenders do not want to determine if a borrower can repay a loan within the initial term and considering their known expenses, because the lender makes more money when they cannot. Lenders are thrilled when borrowers are stuck paying endless interest and fees, or taking out multiple loans in succession, in fact it is their business model. With these products comes a perverse incentive for borrower failure. A business model which exploits the desperate and profits from their failure is immoral.
“By repealing this rule, the CFPB is putting lenders’ ability to make loans, no matter how toxic, above protecting consumers. They are siding with those offering 400% APR loans to struggling families over the faith communities and nonprofits who so often bail out neighbors drowning in debt.
“Hundreds of CBF pastors, church members and supporters were among the tens of thousands of individuals and organizations who submitted comments in support of the rule and in opposition to its repeal. CBF Advocacy will continue to call for systemic change at both the state and federal level. CBF churches and field personnel will continue offering direct help to neighbors in need. This announcement is a setback, but the struggle for reform will continue. We will continue to pray and act for a return to moral lending laws that prevent the exploitation of the vulnerable and desperate.”
Reeves led a delegation in January 2019 of national faith leaders to meet with the newly confirmed Director of the CFPB, Kathy Kraninger, and several senior officials. The diverse delegation, which included representatives of the Southern Baptist Convention’s Ethics & Religious Liberty Commission, U.S. Conference on Catholic Bishops and the Religious Action Center of Reformed Judaism, emphasized to Director Kraninger the importance of the ability-to-repay provision of the Bureau’s rule.
In September 2018, CBF requested to join litigation to defend the Bureau’s regulation intended to restrict industry practices that create debt traps for consumers. Continuing its five-year effort alongside pastors, churches and Global Missions field personnel to reform predatory lending practices, CBF sought “intervenor” status in a case filed by two industry associations challenging the Bureau’s rule, which was set to be implemented by August 19, 2019. Learn more about this effort and read a FAQ at www.cbf.net/paydaylitigation.
Learn more about the efforts of CBF Advocacy to combat predatory lending and find resources here.
The Cooperative Baptist Fellowship is a Christian network that helps people put their faith to practice through ministry efforts, global missions and a broad community of support. CBF’s mission is to serve Christians and churches as they discover and fulfill their God-given mission.