Over the past several years, the issue of payday lending and high-cost lending has been debated in the Pennsylvania Legislature. Payday lenders continue to lobby for a change in state laws.
As Catholic leaders charged with being a voice for the poor, we are adamantly opposed to predatory payday lending and believe that our state's current laws fairly protect borrowers and our economy from harmful financial practices.
Payday lending is modern-day usury. Whether they are called "micro-credit," payday loans or any other name, high cost, predatory loans exploit people facing financial emergencies, enriching the lender while failing to offer a sustainable solution to the person in need. The result is that people with limited resources get caught in a financial downward spiral. Burdened with high interest payments, they rarely are able to pay down the principle and often fall deeper and deeper in debt.
All major religious traditions share a deep opposition to usury. For example, the Christian and Jewish scriptures counsel specific care when lending to those who are poor. "Do not rob the poor because they are poor" (Proverbs 22:22).
Beyond the moral case, the devastating impact that legalizing predatory payday loans will have on the communities and congregants we serve is abundantly clear. In communities with payday loan storefronts, churches and social services report strains on local food pantries and charitable emergency relief services. Rather than offering a bridge to financial security, payday loans make financial problems worse, leading to increased food stamp usage, delinquency on bills and obligations and eventually bankruptcy.
Catholic Charities, The Society of St. Vincent de Paul and numerous other Catholic lay organizations and parish social ministers walk with these vulnerable individuals and families on a daily basis, helping them to journey from a place of need and despair to a place of independence and hope. While challenging, we know from our experience that it can be done.
We need to continue providing pathways out of poverty and dependency for individuals and families, rather than sinking them further into debt. Today, Pennsylvania's laws are considered among the strongest in the country to protect against this type of abusive lending, even if it occurs online. We strongly urge our Pennsylvania legislators to remain steadfast in upholding, not weakening, our lending laws in order to keep our communities free from predatory practices.opinion_commentary
Keith G. Kondrich is executive director of The Society of St. Vincent de Paul, Manchester. This piece also was signed by Helene E. Paharik, associate general secretary and director of the Department for Human Life and Dignity of the Diocese of Pittsburgh, and Susan Rauscher, executive director of Catholic Charities.