By Jennifer Colosimo
It’s not the most commonly known advocacy issue that people are talking about. In fact, you might not even know what payday loans are. But the scary truth is that many average, middle class Americans are just one big financial emergency away from knowing all too well what many already do—that predatory lending is an issue important to know about (and to fight).
A payday loan is an extremely high-interest loan with repayment taken directly from the borrower’s paycheck, which are also designed to be almost impossible to pay back, resulting in the need for consecutive loans on top of that initial one. That definition, and the fact that it’s an extremely big deal to many Americans, is something that people like Rachel Gunter Shapard already know; it is a battle she has been helping to fight since early 2016, when she was asked to advocate on behalf of Floridians suffering from these bad deals.
“I got involved in this work by invitation from CBF’s Advocacy and Partnerships Department in our national office,” said Gunter Shapard, a Duvall County resident who serves as a co-chair for the Florida Clergy Convening and Consumer Law Reform, and as a faith consultant for Floridians for Responsible Lending. “Stephen Reeves, associate coordinator of partnerships and advocacy, shared that predatory lending was at a critical point in our area and asked if we’d be able to lend our time to providing education related to this issue and participate in advocacy work at the state and federal level, including getting the word out and inviting those affiliated with CBF to participate in that as well.”
Initially, when Gunter Shapard came on, it was at the time that the Consumer Financial Protection Bureau was creating a rule on payday lending, high cost installment loans and car title loans. There was a comment period involved where the public was asked to provide feedback and opinion, including examples of how it worked in their communities.
“Part of our role was to become more educated and enter into the conversation about this issue by making our voices heard at the state and federal level,” said Gunter Shapard. “For the most part, in our state, people knew that these loans were bad deals, but they didn’t know just how bad. The education portion of it really helped people get a sense of the severity of this form of exploitation, as well as something which propelled people into action.”
Gunter Shapard is part of a group that combines both the biblical principles behind why it isn’t right and the practical reasons why it is hurting people in the community economically. She visits churches and offers educational sessions on what these deals are. She shares general information and news updates on the topics via newsletters, online articles, documentaries and updates on advocacy opportunities. She maintains an email list to share new information and updates about new advocacy opportunities as well as sharing articles and information on social media.
“We share about what scripture has to say about usury. We also help people better understand the purpose of CBF advocacy,” said Shapard. “This is non-partisan work based around our commitment to missions. As we’re in the community, we’re ministering to people where they are, and we’re learning stories about what it’s like to live in poverty. Connecting people and their stories to the issue—that’s what makes us to want to try and change the system.”
The Center for Responsible Lending published a report entitled, “Perfect Storm: Payday Lenders Harm Florida Consumers Despite State Law” which revealed that interest rates for these loans in Shapard’s area averaged at nearly 300 percent. Eighty-three percent of payday loans made in Florida were made to people who had had seven or more loans in the same year. Three hundred eleven million dollars was collected from the fees in one year—$2.5 billion since 2015. The kicker—it’s all from vulnerable Floridians who don’t have access to traditional lending products due to poor credit.
“We talked about the fact that in wealthy neighborhoods, you don’t see payday lending institutions. It’s the most vulnerable citizens who can’t afford that kind of interest and who get trapped in these loans,” said Gunter Shapard. “These lenders are concentrated in low income areas where they can prey upon those that are underemployed. For Christians who seek to follow in the way of Jesus, when we become aware of a predatory practice that is geared to trap people indefinitely, we feel a sense of responsibility to stand up and amplify the voices of the ones experiencing that kind of trauma.”
So, what’s next? According to Gunter Shapard, people are more educated now than ever before. The Florida Council of Churches adopted this as one of the issues to focus on. While some churches already had a loan system in place, there are now several CBF churches beginning to implement programs like it. Gunter Shapard will continue attending advocacy events with church leaders and consumer advocates, helping them bring educated and informed questions, solutions and more to the desks of legislators. This fall, the Florida Council of Churches will meet again and continue discussing this issue, bringing in different experts to speak to questions and to help people be better informed.
“One of our primary concerns is wanting to see regulations in our state and at the federal level that will protect the most vulnerable citizens,” said Gunter Shapard. “We hope to eradicate the predatory practices that are happening. We are asking for fair and just lending. That’s what we want. Many of us are about one financial emergency away from a crisis ourselves; the difference is that when you have good credit, you have options. That’s where we see our role as people of faith—to stand up and say predatory lending is neither right, nor fair, nor just. We need to change this for those people who have no other option. Perhaps, even beyond the positive results of this specific advocacy work is our hope to see a shift in society and the way our culture responds to things like this.
“We’ve gotten used to ‘doing’ life within our own silos,” Shapard said. “Yet we cannot not transform our communities, our states, or our nation by advocating from within our separate camps. We have to come together. That’s what it’s about. Together we have strength, numbers, and the power to see our world transformed.”
To learn more about CBF Advocacy efforts against predatory lending, visit www.cbf.net/advocacy.