A wide spot in my imagination.

Thursday, September 30, 2010

At the Intersection of Death and Debt

Sometimes the ironies of life are almost too much. Read on...

There is a growing coalition of people in Texas saying that the "payday lending" industry is out of control.

You may have seen payday lenders opening up shops in strip malls near you. In Texas, those lenders are charging low interest rates and huge fees. The result is that the borrowers may end up paying back $600, $700 or $800 on $300 loans. The practice is hugely unjust and unethical and is trapping many people in cycle of debt.

So, a couple of groups in our church have studied this issue, looking at what our scriptures say about lending and borrowing, looking at current payday practices, and thinking about alternative lending practices. Some members of our church are actively involved in the coalition to change state laws.

Then, last week, our church was asked by a local hospice chaplain to host a memorial service for families whose recently deceased loved ones were cared for by a hospice group -- we'll call it "Statewide Care Services" (not it's real name). That sounds simple enough, right?

Well, it turns out that "Statewide Care Services" is owned by "Nationwide Care Company." Nationwide Care Company, in turn, is by "XYZ Multinational." And XYZ Multinational also owns "Zippy Cash," a payday lending company that operates in 19 states. One source says "Zippy Cash" is charging 456% on payday loans in Oklahoma.

So, last night, I tossed this out to our a Discussion Group that has been studying payday lending. What do we do, I asked? Do we host this memorial service? Do we refuse on principle? The discussion were very thoughtful. Suggestions ranged from charging them our church rental normal fee plus 456% to putting a line in the bulletin at the service telling them we’re concerned with their business practices to not hosting the service at all. The conversation was good, and there were more suggestions.

The end result is that our congregation is going to send a letter to "XYZ Multinational" telling them that (as a matter of compassion) we will host the memorial service and (as a matter of justice) we would like for their payday lender subsidiary to lower fees and interest on payday loans to 25% or less.

The intersection of theory (opposing payday lending) and practice (hosting a hospice memorial service)... the problem of knowledge (if only we hadn't known so much)... questions about investments (is my retirement fund invested in a payday lender?)... and much, much more...

So, what do you think? Please post your comments, ideas, suggestions, questions...


  1. I can't believe we didn't talk about this today. I'm working with a local credit union to brainstorm alternatives to the predatory lending system in low-income neighborhoods. One of the most interesting programs I've come across is called "Grace Period," a group of folks in Pittsburgh that are helping people find a healthier way to obtain emergency loans. I would love to discuss this with you the next time we meet. Oh, and thanks for loaning me the book.

  2. Dean:

    We'll get together again and go over payday lending. I'll look up Grace Period.