The surprising correlation between payday lenders and conservative Christians.

[RamboLiberal]

In the face of what some economists are now calling a recession, many low- and middle-income Americans are turning to payday lenders, creditors who offer short-term, small-sum loans to desperate consumers. The catch? These lenders generally charge exorbitant interest rates that can trap borrowers with loans they often can't repay. A 2006 report from the Center for Responsible Lending (CRL) found that 90 percent of the revenue generated in the payday-lending industry comes from fees charged to borrowers.

Steven Schlein of the Community Financial Services Association of America (CFSA), which represents the industry, insists that payday lenders are only reacting to consumer demand, which "has been huge and growing since the '90s. There are currently about 24,000 stores. In 2000 there were about 10,000." Critics may consider the practice predatory, but Schlein says "our customers are extraordinarily satisfied. The only people who are complaining is a consumer group out of North Carolina that has spread out across the country."

In a paper to be published this spring in the Catholic University Law Review, professors Christopher Peterson and Steven Graves find a surprising correlation between the geographic density of payday lenders and the political clout of conservative Christians. NEWSWEEK's Patrick Enright spoke with Peterson, visiting professor of law at the University of Utah, about their unexpected findings. Excerpts:

NEWSWEEK: What were the top-level results that you found?
Christopher Peterson: We nationwide, and one of the patterns that started to emerge was a lot of density in the Bible Belt and in the Mormon mountain West, and so we started to try and come up with some way to think about that carefully. We also created an index that measures the political power of conservative Christian Americans … What's interesting and surprising to us is that we found a strong correlation between the number of payday lenders within a geographic area and the political power of conservative Christians within a state. It's a surprising result to us because the natural hypothesis would have been to assume that given biblical condemnation of usury, there would be aggressive regulation and less demand for payday loans in those types of states. I think it's ironic that we actually found that the opposite tended to be true.

http://www.newsweek.com/id/114407

[Donnachaidh]

1. christian with a capital "H"

"It's a surprising result to us because the natural hypothesis would have been to assume that given biblical condemnation of usury, there would be aggressive regulation and less demand for payday loans in those types of states. I think it's ironic that we actually found that the opposite tended to be true."

Yup -- that *concern* for their neighbors has the ka-ching of cold hard cash at a rate of 90% interest.

:puke:

[lonestarnot]

13. forgive us our debts as we forgive our debtors. Guess they forgot

that part of the prayer.

[Raven]

2. What's also interesting to me is that the abundance of Payday

lenders in these areas would indicate that, in these bastions of Christian conservatism, people who are so low on the economic ladder that they would have to resort to these loans don't matter. I guess that not only do their leaders not care about usurous rates, but they don't particularly care to work to make these folks' lives better. I guess the thinking must be that they'll get their reward in heaven.

[Common Sense Party]

3. All the payday lenders are owned by megabanks.

THAT'S what is truly interesting.

[hoosier_lefty]

4. How is this still legal ?

They prey on low income people who have very few options.

:grr:

I call shenanigans!

[supernova]

5. N.C. has worked hard to

drive these people out of our state and out of business, but it's like trying to stamp out cockroaches. You run one out of business and five more spring up in its place.

:grr:

http://www.consumeraffairs.com/news04/2006/03/nc_payday.html

[depakid]

8. Just do what Oregon did

Cap their interest. Simple as that.

These parasites used to infest minimalls all over the state, but since the law went into effect, many have closed shop- including one large Georgia company that went scurrying back the the lucrative safety of the bible belt when the courts upheld the law.

[mitchum]

6. "I am the alpha and the omega... the nut and the vig"

[depakid]

7. The hypocrisy is never ending with these folks

Marx was right about one thing at least- religion is the opiate of the masses, and it dulls their senses to both reality and the ability to read and understand the lessons in their own books.

[Bill McBlueState]

9. this is surprising? n/t

[wishlist]

10. Much of Bible belt justified slavery and segregation too n/t

[tom_paine]

11. Because BushChristianity is actually the worship of the values of Satan

n/t

[Ilsa]

12. Interesting. When my coworkers went to Utah to do loan review,

They always get a list of nonaccrual loans, which are loans placed on 0% interest because the borrowers are having financial problems. They noticed how big the list was, and they asked why each borrower was on nonaccrual status. The reply was that they had never been accruing interest, they were given zero per cent because they were poor and couldn't afford to pay interest. But the loans were usually marginally secured, so they didn't worry about making or losing money on them.