A payday loan location in Henrico County, Va. Photo by Taber Andrew Bain/Creative Commons

Churches Use Political Pressure, Small-Dollar Loans to Fight Predatory Payday Lending

By: Mark A. Kellner

(RNS) — Anyra Cano Valencia was having dinner with her husband, Carlos, and their family when an urgent knock came at their door.

The Valencias, pastors at Iglesia Bautista Victoria en Cristo in Fort Worth, Texas, opened the door to a desperate, overwhelmed congregant.

The woman and her family had borrowed $300 from a “money store” specializing in short-term, high-interest loans. Unable to repay quickly, they had rolled over the balance while the lender added fees and interest. The woman also took out a loan on the title to the family car and borrowed from other short-term lenders. By the time she came to the Valencias for help, the debt had ballooned to more than $10,000. The car was scheduled to be repossessed, and the woman and her family were in danger of losing their home.

Now, a number of churches are lobbying local, state and federal officials to limit the reach of such lending operations. In some instances, churches are offering small-dollar loans to members and the community as an alternative.

The opposition is not universal, however: Earlier this year a group of pastors in Florida lobbied state lawmakers to allow one payday loan firm, Amscot, to expand operations.

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