Bishop Weisenburger requests your help

Harming people in poverty While Bishop of Salina, I fought against payday lending businesses. These businesses prey on the poor and those who are unable to borrow from regular lending agencies or who have a poor understanding of the unconscionable methods payday lenders use to convince our poorest residents to agree to extremely high interest rate (504% over 30 days) and other conditions that ultimately make paying the “loan” off impossible.

204% Interest?
Instead, people end up in an ever-worsening situation of continuing debt. Imposing high interest rates on loans of any kind is called usury. We have got to guard against usury. As I have said before, protecting the poor from outrageous loans was illegal in the U.S. until only a few years ago when unscrupulous business persons realized there was billions of dollars to be made off the backs of the desperate poor. Seems that our laws alternate between protecting against usury and then back again .

Consumer protections are under attack
This week we again find ourselves working against this issue. Just this week Senate Bill SJR-56 was introduced by the national Consumer Financial Protection Bureau to rescind its October 2017 payday lending rules. According to information from Sen. Jeff Flake’s office: “On October 5, 2017, the CFPB finalized a payday lending rule aimed at stopping payday debt traps by requiring lenders to determine upfront whether people can afford to repay their loans. However, on January 16, 2018, the CFPB announced that it intends to engage in a rulemaking process to reconsider its October payday lending rule decision.

The payday industry claims it protects access to credit
Those in favor of repealing the CFPB’s October decision argue that the rule places undue burdens on low-to-middle income consumers by leaving them without access to credit. They also contend that payday loan users overwhelmingly approve of the product, and that the rule is built on a flawed theory of consumer harm.” The information from Flake’s office went on to report, “Despite the CFPB’s announcement that it intends to engage in a rulemaking process to reevaluate the final rule, the agency will be unable to do so without following the time-consuming notice and comment procedures of the Administrative Procedure Act.”

Payday lenders just take advantage of desperation
I cannot understand the need for this rule change. As I wrote in Salina, urging people to advocate against pay day lending, “Payday lenders take advantage of a state of desperation experienced by those in dire financial circumstances. It is this sense of crisis that causes those (often with little financial understanding, and few other options) to initiate an unseen cycle of debt from which it quickly becomes virtually impossible to escape . . .

The elderly and single moms are at risk
Who is most at risk? No one is more vulnerable to the catastrophic consequences of “ballooning” fees than those who live on fixed incomes or who have been designated by social services agencies as highly at risk and unable to secure additional income due to advanced age, disability, or some other critical circumstance.” The rule change has just been introduced. We can still tell our senators not to approve changes that will support this sinister form of lending.

What can you do?
Ask our congressional delegation to vote “no” on SJ. Res. 56. Please use the information below. Your message should include the following:

1. A statement saying you are a resident of Arizona. Also mention your town/city

2. A statement saying you are calling to urge the Senator to vote NO on SJR 56.

• Senator Jeff Flake - (R - AZ) Phone Contact: (202) 224-4521 Email
  Contact: www.flake.senate.gov/public//contact-jeff 413 Russell Senate Office Building, Washington DC 20510

• Senator John McCain - (R - AZ) Phone Contact: (202) 224-2235 Email
  Contact:www.mccain.senate.gov/public//contact-form 218 Russell Senate Office Building, Washington DC 20510

I have attached the message asking for people to call or email from St. Vincent de Paul, VOP Western Region. There is additional information you may find interesting.

SJ. Res. 56: Additonal background:

• In Arizona there are 630 predatory auto title lending stores. It is not surprising that most of these stores are in low income neighbors.

• Predatory Auto Title Lenders extract $254,000,000 annually from the pockets of Arizona’s poor and most vulnerable residents.

• These lenders charge 204% APR interest on a $500 auto title loan. The loan is for 30 days. At the end of 30 days over 80% of the borrowers are not able to pay the loan off. 

• The borrower has little choice except to pay the old loan with a new 30-day loan that now includes the original $500 plus $85 interest and a $25 new loan fee (Total $610).

• The average borrower repeats this process 8 times before paying of the loan or losing his/her vehicle to repossession. After 8 roll overs the repayment of the $500 loan has grown to $2,511.32.

• The Consumer Financial Protection Rules would, among other things, would require that predatory lenders loan only to people that have a reasonable chance of repaying according to terms. Loaning to people that lack the ability to repay is like throwing an anchor to a drowning person. A small loan turns from life preserver to a heavy anchor.