Conservative Viewpoints

"Government is not the solution…it is the problem" -Ronald Reagan

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Help stop predatory lending schemes

Posted by Stephen on September 4, 2007

Writer calls for an end to predatory pay day lending 

By Kathryn Welch

I am a “values voter” and, as such, I’m writing about the relevance of the admonition: “What you do to the least of these, my brethren, you’ve done unto me.” Like most people, I am struck by the simultaneous increase in bankruptcies and payday lending storefronts in my area. I believe the ramifications of payday lending transcend politics and beg for involvement of people of good will from every persuasion.

Enabled by a permissive 2002 law, and charging usurious rates, payday lending companies entice borrowers to take out one, then another, and another payday loan. The typical borrower takes out more than 12 such loans a year. As TV’s “60 Minutes” documented, accumulated interest can reach 400 percent. This is greater than rates charged by organized crime, yet too few of our representatives support reform. A modest reform died in the General Assembly this year.

On these pages and elsewhere we’ve heard from industry representatives and elected officials defending predatory lending practices as a service. Such industry claims whitewash the fact that these storefronts ensnare the poor in a vicious cycle of more and more interest and escalating financial crises. A service would be a loan at a fair price, not whatever amount can be legally extracted from the poor and the sick. A service might be something along the lines of the micro-loans that won the 2006 Nobel Peace Prize. But such award-winning micro-loans are not what predatory lenders have in mind.

Is it not a moral imperative to act on behalf of those needing help? I am heartened that the Virginia Interfaith Center for Public Policy, of which I am a member, seeks to limit legislatively the interest rate allowed by payday lenders to 36 percent, the legal limit for other lenders.

Readers can get more information at www.virginiainterfa ithcenter. org. When the next legislative session begins, readers can check progress of legislation concerning this or any other issue at www.richmondsunligh, a wonderful legislative sentry project of the interfaith public policy center.

On Sept. 8 from 1 to 3:30 p.m., the Virginia Interfaith Center will sponsor a screening of the award-winning film “Maxed Out” at the Lyric Theater in downtown Blacksburg. The film explores how credit card and payday lending firms set up their customers for escalating debt and financial ruin. A discussion will follow the film.

I also urge readers to contact their Virginia state delegate and senator, as well as congressional representatives, to stop such cruel treatment of our fellow citizens. Together, we can join hands across faiths to make a difference.

Welch is a writer from Blacksburg.

Views expressed by OpEd writers do not necessarily reflect those of management of Conservative Viewpoints.


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