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Christians take out payday loans despite excessive interest rates 

More than one-third of Christians in states that don’t regulate payday loans say they have obtained them, despite believing that charging excessive interest is a sin.

In a recent survey, Lifeway Research found that more than three in four see lending harmful to borrowers as sinful even though one in three respondents has taken a payday loan before. And even though a growing share of Christians see these predatory loans as helpful, most support government and church intervention in an industry predicted to grow to $42.6 billion globally by 2028.

“The proliferation of retail payday lending establishments has increased the firsthand knowledge many Christians have of these financial institutions,” said Scott McConnell, executive director of Lifeway Research. “The majority of Christians in states with few regulations on payday lending want more regulations that protect borrowers.”

Missouri and Kansas were included in the survey, along with Alabama, Alaska, California, Florida, Hawaii, Idaho, Indiana, Iowa, Kentucky, Louisiana, Michigan, Minnesota, Mississippi, Nebraska, Nevada, New Mexico, Ohio, Oklahoma, Rhode Island, South Carolina, Tennessee, Texas, Utah, Wisconsin and Wyoming.

READ: Faith leaders stand against predatory payday loans

The Department of Financial Services in New York, where payday loans are illegal, notes that “payday loans are designed to trap borrowers in debt. Due to the short term, most borrowers cannot afford to both repay the loan and pay their other important expenses.”

In Missouri, where it is unregulated, payday loans can charge up to 2,000% interest.

Despite warnings from states such as New York however, when asked to choose which words apply to payday loans, some 37 percent of respondents said payday loans are helpful, more than doubling the share of those who held this sentiment in 2016 when a similar survey was done. Only 16 percent of respondents described payday loans as helpful at that time.

“Short-term financing is a real need for many Americans, so you expect to see a growing number of customers who appreciate the payday lending service,” McConnell said. “Yet many describe payday loans with language that sounds more like warnings than endorsements, Most churches are silent on payday loans at times when Christians desire advice and emergency help.”

–Dwight Widaman | Metro Voice

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