Payday loans trap the borrower in an endless cycle of debt
Predatory payday loans have been a scourge for many families in our community, yet at the state and national level, payday loan stores are more plentiful than McDonald’s. A quick trip through some of Shreveport’s poorest neighborhoods will give you a striking picture of how the most vulnerable among us are preyed upon. While a short-term, high-interest loan can sometimes be enough for the borrower to recover, the reality of payday loans is that the high cost of loans and strict repayment rules not only encourage, but that demand acceptance. multiple loans, thus trapping the borrower in an endless cycle of debt.
Northern and Central Louisiana Interfaith is a nonpartisan organization comprised of congregations, civic groups, and other institutions working together to create real change in our community and across the state, through our statewide network, Together Louisiana. We worked in the legislative session last year, not to weed out payday lenders like the state of Arkansas has done, but to impose some very reasonable regulations on them, either to cap interest rates to a still whopping 36 percent. cent, or to limit the number of loans a person can get per year to a still plentiful 10. Although we were close, and we appreciate the support of local legislators, especially Senator Robert Adley (R-Benton), who co-sponsored the legislation bipartisan together with the senator. Ben Nevers (D.-Bogalusa), the payday industry sent 50 paid lobbyists to Capitol Hill who finally managed to defeat our efforts.
We do not resign. We are currently working to support the new payday loan regulations proposed by the Consumer Financial Protection Bureau, which regulates the banking and credit industry. On June 21 and June 28, our congregations will host Payday Loan Reform Sundays, during which parishioners will be able to learn more about the proposed regulations and sign letters of support to the Office.
Additionally, we want to raise awareness of alternatives to payday loans, available at various financial institutions in our area through a City of Shreveport association called Bank On Shreveport, and also, through Highland Center Financial Services, a part of Highland Center Ministries, who are working in partnership with Pelican State Credit Union to provide low-cost “Delivery Loans” and other banking services to the unbanked and underbanked in our community. HCFS will host an open house from 5-6 pm Tuesday, June 9 at the Highland Center, 520 Olive St., in Shreveport, and we encourage you to come and learn more. Call 318-673-8440 for more information or to RSVP.
Susan Kelly Caldwell
Director of Religious Education at All Souls Unitarian Universalist Church in Shreveport