Usury, it’s still with us

by Bishop Kirk S. Smith
The Episcopal Diocese of Arizona

In just a few weeks many of you will be receiving your mail-in ballot, due to arrive about a month before the November General elections. This means that if I am going to say anything about the political process, I had better say it now.

As you know, churches cannot endorse political candidates without getting in trouble with the IRS (although a coalition of conservative churches plans to challenge this ruling later this month). However, religious leaders have a right and obligation to speak out about issues of public morality, which includes the referendum process.

Proposition 200 is a case in point. Titled the Payday Loan Reform Act, it is nothing of the kind. In fact, it is rather a cynical attempt to reestablish the practice of usury (lending money at exorbitant rates), something the church has opposed for nearly 1800 years.

Why?  First of all, because lending money at interest is prohibited by the Bible (Exodus 22.25-27, Leviticus 25: 35-37, Deuteronomy 23:19, Psalm 15.5). Over time, in order for a capitalist economy to work, that prohibition was softened a bit to allow some fair return on lending money. Still the intent of those passages remains the same-to warn against economic injustice.

Arizona used to have a law that capped the APR rate on loans at 36%. A few years ago, the Payday lending industry obtained an exemption which allows them to charge up to 410%! Most of their customers are poor, borrowing against their paycheck for small amounts. Still, at such an astronomical rate of interest, even a small loan can trap an individual in destructive debt spiral which is nearly impossible to escape.

The former exemption had one redeeming feature-it expired in 2010, at which time the previous law would again apply.

Now the Payday industry has cynically proposed a “reform” which would lower the cap to 391% (how kind of them!) but, there would be no time limit! To add insult to injury, the Payday industry is based out of state, yet has spent more money in trying to pass this law in Arizona than any other lobbying group in history.

I will be joining with other religious leaders in Arizona in speaking out against this deceptive attempt to exploit the poorest among us, and I would urge you to do the same by voting NO on Prop. 200.

You can find more information at www.200isNoReform.com.