Open letter to Oklahoma Legislators from Oklahoma Clergy on Predatory Lending Practices

We are deeply worried about predatory lending practices in the state of Oklahoma. We represent a variety of traditions and beliefs, but we stand together against predatory payday lending as we advocate for the most vulnerable in our communities who are at risk of falling into the debt trap of these high-cost loans.

The payday lending industry remains relentless in its pursuit to expand predatory lending practices in Oklahoma because it already experiences shockingly high profitability here. In 2015, the industry made $52 million in fees on payday loans in our state. Oklahomans take out more payday loans per capita than any other state. Oklahomans who use payday loans take out an average of 9 loans per year. It is clear that the industry is highly interested in expanding its already outrageous profit margin on the backs of financially at-risk Oklahomans.

In 2016, the industry attempted to pass legislation that introduced a new high-cost loan product, but it was withdrawn after intense public opposition. This year, the industry shopped for a new legislator to peddle its’ wares and found Rep. Chris Kannady, who recently introduced HB 1913. This “new” bill is essentially a copy-and-paste insert of the previous high-cost loan product that Oklahomans protested the year before. The so-called “Oklahoma Small Loan Act” creates a high-cost loan for up to $1,500 for a term of up to 12 months and allows interest to be charged of 17% per month (204 % Annual Percentage Rate). This means that over the course of the loan, a borrower will have paid cumulative interest of $2,108. There is no requirement for the lender to run an income check to determine the borrower’s ability to pay off the loan.

Payday lenders target the most vulnerable among us, including the elderly, low-income, families, young adults, and immigrants. These populations are targeted because the industry is counting on the borrower taking out loan after loan after loan because they cannot possibly pay off both the original loan and the exorbitant interest charged in such a short amount of time. These high-cost loan products are designed to take advantage of our at-risk neighbors.

As members of the clergy, we find these predatory lending practices an affront to our moral center and in violation of the most basic tenets of our faith. Scripture condemns usury lending time and again. The prophet Nehemiah denounced those who exacted crippling interest rates on the poor, saying, “But now you are selling your own kin!” and ordered lenders to mend their ways. In the Gospel of Matthew, Jesus reminds us that, “Truly I tell you, just as you did not do it to one of the least of these, you did not do it to me,” so if we do not protect the vulnerable, we have failed to protect Jesus. Ultimately, we adopt the self-professed mission of Jesus found in the Gospel of Luke to “bring good news to the poor.” The way we treat the poorest of our citizens reflects our commitment to that which we profess. Will we be found faithful?

In this moment, Oklahoma has an opportunity to distinguish itself in how we respond to predatory lending practices. Regardless of what regulations are recommended by the Consumer Financial Protection Bureau, Oklahoma can set an example for the rest of the country in its approach to responsible lending laws.
As people of faith, we reject the idea that triple-digit interest rates are acceptable. As people of faith, we will not turn a blind eye as the payday lending industry targets our most vulnerable neighbors. As people of faith, we will continue to speak against usury lending practices that drive people into the debt trap. As people of faith, we will continue to advocate for existing alternatives that provide a meaningful safety net and actually lift people out of poverty. Now is the time to do the right thing.

Thus, we urge our legislators to reject HB 1913, as an act of faithfulness and in the best interest of all Oklahomans.

Sincerely,

Rev. Lori Walke, Mayflower Congregational United Church of Christ