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Catholic Community Services of Southern Arizona — Payday lenders prey on families’ hopes

By Peg Harmon, CEO of Catholic Community Services of Southern Arizona, in today’s Daily Star:

As we celebrate this season with loved ones we also reflect on important lessons of varied faith traditions that call us to remember the struggles of our families in the current economic crisis.

There are many in our communities who through no fault of their own have lost their jobs.  Many are at-risk of losing their homes to foreclosure , or already have lost them and are facing an uncertain future.

For the working poor — those who take tremendous pride in earning a modest living for their families — the holiday season brings a heightened risk of financial shortfalls. Every family hopes for a joyous holiday season, including gifts for their children.

Unfortunately, there are those in our society who deliberately prey upon these hopes: payday lenders.

Here in Arizona the charges for this type of loan can reach as high as 400 percent annually. The ads for these “holiday loans” flood our TVs and radios and shopping mall parking lots. The message of consumerism and materialism that confuses the meaning of the season seems just a signature away.

With marketing that promotes a convenient and easy solution, these high-cost payday lenders beckon passers-by to think of it as of just a few hundred dollars. Yet the excessive rates rapidly transform short-term credit into long-term debt. The fees are so excessive that borrowers must repeatedly take out new loans to cover their payments on the first loan and become gripped in debt.

Many of our faith communities hear the pleadings of families struggling to make ends meet, wanting that “happy holiday.” We witness the hopelessness that sets in. These struggles are made worse — not eased — by the false promises of payday loans.

This past November, with the help and support of more than 50 pastors, rabbis, religious leaders and faith-based organizations, voters rejected a measure that would have allowed payday lenders to operate under self-prescribed rules and legally guarantee interest rates of 391 percent.

Clergy of all faiths and locations throughout the state understood the critical imperative that our ministry to the needs of people everyday had to include a role in speaking out on this issue. Their moral authority led to more than a dozen major newspaper endorsements and bipartisan support among elected officials to oppose the initiative proposed by the payday lending industry.

As our state faces a new legislative session, I and others in the faith community hope that our leaders will make good on their promise to serve the people who elect them by ensuring that this holiday season will be the last to be tainted by 400 percent interest rates.

E-mail Peg Harmon at peghccs@ccs-soaz.org

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