Predatory Lending is NOT Good News
In Luke’s Gospel, Jesus said, “The Spirit of the Lord is upon me, because he has anointed me to bring good news to the poor” (4:18). Predatory lending is not good news for the poor. Predatory lending is an evil practice that should be regulated heavily or abolished altogether. Unfortunately, there are a few Oklahoma legislators that think otherwise.
On February 28, House Bill 1913, sponsored by Rep. Chris Kannady, was passed by the House Judiciary – Civil and Environmental Committee by a vote of 8-3. Known as the Oklahoma Small Loan Act, the bill would allow a new type of loan to be offered in amounts up to $1,500 at a 17% interest rate per month. This amounts to an APR (annual percentage rate) of 204%. Such unjust rates for poorer Oklahomans would force borrowers to make a monthly payment of $301 for an entire year. Those terms mean hard working Oklahomans would pay $2,108 in interest alone over the course of twelve months.
Obviously, this is not good news for working Oklahomans who find themselves in need of a short-term loan. Predatory lending has no place in a just society. Last year, Senator David Holt withdrew his support from a similar bill. Earlier this year, Senator Dan Newberry chose not to advance a nearly identical bill to the one that is now being considered by the House. Both Senators apparently recognized the dangers of supporting legislation that would further cripple Oklahomans and empower an industry with the objective of profiteering on the backs of our poorest citizens.
In the book of Nehemiah, the Jewish people returned from exile to rebuild their city wall. Their story offers an insight on the importance of stifling predatory lending practices. The poor retuned with nothing. Attempting to rebuild their lives, they were forced into crippling debt that was crushing their productivity. Nehemiah, acting as governor, chastised the nobles for charging a crippling interest rate. He condemningly said, “You are selling your own kin.” Modern day predatory lending practices are preying on the poorest of our citizens with many of them crying out from this crushing burden. By allowing this practice to continue, Oklahomans will be selling our kin to the highest bidder.