Caldwell: Payday loans trap borrower in endless cycle of debt

Payday loans trap borrower in endless cycle of debt

Predatory payday loans have been a scourge on many families in our community, and yet, on a statewide and national scale, payday lending shops are more plentiful than McDonald's. A quick drive around some of the poorest neighborhoods in Shreveport will give you a startling visual of just how they prey on the most vulnerable among us. While one high-interest, short-term loan can sometimes be enough to get the borrower back on his or her feet, the reality of payday loans is that the high cost of the loans and stringent rules of repayment not only encourage but necessitate the taking of multiple loans, thus trapping the borrower in an endless cycle of debt.

Northern and Central Louisiana Interfaith is a non-partisan organization comprised of congregations, civic groups and other institutions working together to create real change in our community and throughout the state, via our statewide network, Together Louisiana. We worked in the legislative session last year, not to eliminate payday lenders as the state of Arkansas has done, but to place upon them some very reasonable regulations, either to cap the interest rates at a still-whopping 36 percent, or to limit the number of loans one person can take out per year to a still-plentiful 10. Although we came close, and appreciate the support of local legislators, especially Sen. Robert Adley (R-Benton) who co-sponsored bipartisan legislation along with Sen. Ben Nevers (D.-Bogalusa), the payday industry sent 50 paid lobbyists to the Capitol who were ultimately successful in defeating our efforts.

We are not giving up. Currently, we are working to support new payday lending regulations proposed by the Consumer Financial Protection Bureau, which regulates the banking and lending industry. On June 21 and June 28, our congregations will be hosting Payday Lending Reform Sundays, during which congregants wlll be able to learn more about the proposed regulations and sign letters of support to the Bureau.

Additionally, we want to raise awareness of alternatives to payday loans, available from a number of financial institutions in our area through a City of Shreveport partnership called Bank On Shreveport, and also, through Highland Center Financial Services, a part of Highland Center Ministries, who are working in partnership with Pelican State Credit Union to provide low-cost "Hand Up Loans" and other banking services to the unbanked and underbanked in our community. HCFS will host an Open House from 5 to 6 p.m. Tuesday, June 9 at the Highland Center, 520 Olive St., in Shreveport, and we encourage you to come and learn more. Call 318-673-8440 for more information or to RSVP.

Susan Kelly Caldwell

Director of religious education at All Souls Unitarian Universalist Church in Shreveport