I’m a member of a covenant accountability discipleship group. That’s a fancy way of saying that I have brothers in Christ who ask me, very intentionally, if I am doing what I said I would do and being who I said I would be.
Our covenant is simple: We’ve agreed to pray daily. We’ve agreed to fast weekly. We’ve agreed to participate in the Lord’s Supper twice monthly.
Our covenant also includes some intentional action to live the Lord’s Prayer. “Thy Kingdom come, thy will be done on Earth as it is in Heaven.”
So one of our covenant articles is to address injustice when we see injustice. Yesterday, I saw injustice in the form of Usury and predatory lending practices.
Financial Injustice
I abhor payday lending. It is predatory. The cycle of poverty is reinforced and entrenched by the ridiculous amounts of interest charged to those who can least afford it. But the shops and offices appear on many street corners in the major cities of America, and on quite a few rural towns and hamlets.
But what got my attention yesterday is the fact that major banking corporations are in the practice of lending at payday loan rates and methods. In a Huffington Post article yesterday, I learned that
[P]redatory loans that can carry an annual percentage rate (APR) in excess of 365 percent, based on the typical loan term of 10 days, can, according to the letter, “trap borrowers in a cycle of expensive long-term debt, causing serious financial harm to borrowers, including increased likelihood of bankruptcy, paying credit card debts and other bills late, delayed medical care, and loss of basic banking privileges because of repeated overdrafts.”
Rev. Seamus P. Finn, OMI writes that banks like Wells Fargo, US Bank, Fifth Third, Regions, and Guaranty Bank are making loans at rates that are unjust with repayment requirements that feed the poverty cycle in a predatory fashion.
You may well be a patron of such a bank. Rather than simply leaving a bank you’ve been with for years, I’m asking you to put your longevity to work for good.
Call your bank and ask them about these practices. Share your feelings on the matter and call their attention to the article and the letters that are being sent to the Federal Reserve, the FDIC, the Office of the Comptroller of the Currency, and other agencies of banking in our Federal Government.
Then, I encourage you to join the efforts that started with a letter signed by more than 250 organizations. Though that letter has been sent and received, you can add your voice by sending notice to the same agencies. Here’s how:
Write a letter:
Consumer Financial Protection Bureau
P.O. Box 4503
Iowa City, Iowa 52244
Then, send a copy here:
Federal Deposit Insurance Corporation
Consumer Response Center
1100 Walnut St, Box #11
Kansas City, MO 64106
Post a complaint: For answers to banking questions and how to file a complaint regarding national bank activities, visit the Office of the Comptroller of the Currency’s consumer-focused Web site, www.HelpWithMyBank.gov.
Then, contact the Federal Reserve:
http://www.federalreserveconsumerhelp.gov/about/ConsumerHelponline.pdf
Your letter might include the following:
“Wells Fargo, US Bank, Fifth Third, Regions, and Guaranty Bank’s deposit ‘advance’ loans are structured just like loans from payday loan stores — carrying a high-cost combined with a short-term balloon repayment.”
These predatory loans that can carry an annual percentage rate (APR) in excess of 365 percent, based on the typical loan term of 10 days, can “trap borrowers in a cycle of expensive long-term debt, causing serious financial harm to borrowers, including increased likelihood of bankruptcy, paying credit card debts and other bills late, delayed medical care, and loss of basic banking privileges because of repeated overdrafts.”
THIS IS WRONG. Please take action to prevent further harm to unsuspecting consumers.
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