February 24, 2008
"The one who oppresses the poor shows contempt for their Maker,but whoever
is kind to the needy honors God." Proverbs 14:31
Social justice is something of which Methodism has a long history.
Methodists have long been known for their forthright positions on
controversial issues involving Christian principles. Under the section on
Our Doctrinal Heritage, the U.M. Discipline states: Love of God is always
linked with love of neighbor, a passion for justice and renewal in the life
of the word.
This week the S.C. Senate voted to curb payday lending, and the bill now
goes to the House.
Currently a company can lend $600 at a time to a borrower and charge $90 in
fees for the two-week loan, or a 390% annual interest rate. Borrowers can
take out multiple $600 loans with no waiting periods.
With the proposed bill one could not borrow more than 25% of their gross
income for the two-week loan. A person would have to wait seven days to get
another loan after the other one was paid off. The State Bd. of Financial
Institutions would be required to keep a database of payday loans.
Predatory loans are targeted at poor and minority consumers. Georgia and
North Carolina have prohibited these predatory loan practices through
legislation, and Ohio and Virginia have imposed strict limits on this
industry.
At last year’s Annual Conference a resolution concerning Predatory lending
was passed and members of the annual conference were asked to contact their
representatives and let their voices be heard.
Unfortunately, this proposed bill does not do away with predatory lending,
and this bill would allow payday lenders to earn their same high fees – at
least it reduces the amount and number of loans to a borrower. You can also
count on the Payday lobbyists to start working now on legislators in the
House to try and weaken this bill.
While it would be nice to have a full ban on the predatory lending industry,
the close vote 23-18 this week may remind the folks in this business to
realize that they are not as powerful in South Carolina as they thought.
"Do not rob the poor because he/she is poor, nor oppress the afflicted at
the gate; for the Lord will plead their cause, and plunder the soul of those
who plunder them." Proverbs 22: 22-23
