Pastors Are Ill-Advised to Support Payday Loan Legislation
"The Rev. Frederick Newbill is not the typical face of the payday lending industry.
Recruited by Florida’s largest small-dollar lender, Amscot, the senior pastor at First Timothy Baptist Church in Jacksonville was among several faith leaders to visit the state’s capital this year to lobby for a bill loosening payday regulations.
The group helped secure a victory for an industry known for its high-cost, short-term loans that had been under assault by federal regulators for years. Their efforts also opened a rift among some of the state’s most influential faith leaders, many of whom had spent years opposing the spread of payday loans.
“They don’t understand,” Newbill, 68, said of the industry’s critics. “If you are pastoring, like I do, you know that sometimes people come up short and need a little help.” That type of help, he said, is easier to secure through a payday lender than a traditional bank, which may be reluctant to lend small amounts and require pristine credit scores.
Amscot paid for some of the pastors to fly to Tallahassee by private plane, though Newbill drove instead and said he received no compensation from the company."
There are quite a bit of issues that trouble me about the above opening paragraphs of this article on pastors lobbying politicians in support of Payday lenders. These pastors argue that Payday lenders are important to their congregation and are lobbying politicians to support Legislation to support Payday Lenders.
First, Payday lenders end up making the lending situation worst on average than solving a problem. It just pushes the problem further out into the future. The key is to correct the problem that got the consumer to that point in the first place. Payday lending enables the problem by creating yet another lender with impossible interest rates that prevent the borrower from ever getting out of the financial hole.
Instead of enabling a congregations suggesting that they go the payday route, they should be educating their congregation on how to get out of the situation in the first place.
Pew Research published the following statistic:
"The average payday loan requires a lump-sum repayment of $430 on the next payday, consuming 36 percent of an average borrower's gross paycheck. However, research shows that most borrowers can afford no more than 5 percent while still covering basic expenses.Jan 14, 2016"
Politicians and preachers in bed together are a toxic mess. First, you have this pastor flying other pastors in a private jet. Who paid for that cost? The church? If I were a lay leader at that church, I would have a real problem with the church flipping the bill. The pastor states that no one received compensation for their support. Yet, one pastor admitted that there was a donation made to his church by a payday lender. Plus some of the other Pastors said that the Payday Lenders gave money to non-profits the preacher supported.
It is not up to me to pass judgment on the loose financial dealings of this situation. It is about their credibility as a spiritual leader and accountability. A Pastor has the responsibility not to put themselves in questionable situations. Paying for a private plane, supporting a seedy industry that preys on people in desperate situations, and receiving donations to their church or other non-profits doesn't shine the right light on their ministry. For instance, a Pastor can state for the record that they did not receive direct compensation. Yet, a contribution to the church is an indirect form of compensation since the church pays for that Pastor's compensation package.
A better solution is to provide educational resources to help their congregation get back on their feet. Enabling the problem does not solve the problem. Some say claim this is a Biblical stance. If you really want to go there, a Payday lender makes the borrower way more of a slave to the lender.
The church could probably make some low cost loans with the money that it costs to operate that private plane and pay the expenses to go down and lobby for the Payday industry. One pastor refused to fly on the plane and drove there instead. Now, there is a Pastor who is trying to stay beyond reproach.