On Monday, Nov. 8 2021, members of the Faith for Just Lending coalition and advocates for military families called on the U.S. Congress to protect working families, including veterans’ families, from predatory payday, car title, and other high-cost installment loans by passing the Veterans and Consumers Fair Credit Act (VCFCA).
The following is a transcript of the press conference, edited for clarity and length.
Katie Thompson, Program Director for Shared Justice, an initiative of the Center for Public Justice
Welcome, everyone, and thank you so much for joining us for today's press conference of faith leaders and military advocates who are calling on Congress to pass the Veterans and Consumers Fair Credit Act. My name is Katie Thompson, and I am a program director at the Center for Public Justice, which is a member of the Faith for Just Lending coalition. Today's press conference features faith leaders from Faith for Just Lending, an ecumenical coalition of faith based institutions working to end predatory payday lending. We are also grateful to be joined by a representative from the Military Officers Association of America (MOAA).
As Congress continues to deliberate on the Build Back Better Act, we must not lose sight of the many families trapped in a cycle of predatory payday loan debt, who are struggling to pay the bills, keep food on the table, and save for the next emergency. As we honor veterans this week, there's no better time to enact legislation that will protect veterans and all Americans from these harmful loan products. By taking advantage of loopholes and a weakening of traditional usury laws, payday lenders typically offer loans at 300% annual percentage rate (APR) and higher to the 12 million consumers who use payday loans each year. The Veterans and Consumers Fair Credit Act introduced in the Senate in July by Senators Jack Reed (D-RI), Sherrod Brown (D-OH), and Jeff Merkley (D-OR) would extend the protections of the Military Lending Act, which caps payday loans, car title loans and installment loans at 36% APR for active duty military service members, their spouses, and certain dependents, to veterans and all Americans. Today, we're going to hear from a panel of speakers from both Faith for Just Lending as well as the Military Officers Association of America (MOAA).
Rev. Dr. Willie Gable, Pastor of Progressive Baptist Church, Chairman of the Housing and Economic Development Commission of the National Baptist Convention, USA, and former Airman First Class in the US Air Force
We want to first of all, thank the Center for Public Justice and our Faith for Just Lending participants for hosting this most important and quite necessary panel discussion on this issue. I'm Willie Gable, and I pastor church, really at the end of the pastoring. I've been doing that for 34 years. So I'm about to go out and pass the baton, but I will never stop doing the social justice work. As a leader in our National Baptist Convention, we've been at the forefront in the faith community fighting predatory lending. And it has been my honor to serve as that chairperson associated with various groups that are providing advocacy towards predatory lending.
I'm also a former military person. And I can quickly remember, I don't know if any of you who are listening know, ever heard of “Household Finance.” And Household Finance was that little agency right outside of the base, and I got a $500 loan from them. And that was the longest loan I ever had. It took a long time to pay it off; I actually was discharged from the military and still owed on that $500 loan. So I've had some experience in this particular area.
“It’s egregious that individuals are having to pay 400%, some of my congregants 400-500%, on a loan.”
And so we're here to, first of all, explain the need for the Veterans and Consumer Fair Credit Act. I'm a believer that what's good for the military is good for everyone. And therefore, it's egregious that individuals are having to pay 400%, some of my congregants 400-500% on a loan. And I have in fact labeled this legalized loan sharking. We call upon Congress to step forward. It's not like they do not know, their lobbyists have been to congressional offices every year. But we have an opportunity now to come together. What we need from you, from the people, is to lift your voices up and support the Veterans and Consumer Fair Credit Act. We need the press to report upon it. And every week, we'll keep it at the forefront as hot news, and we need our politicians to think of all of the people who are being harmed by these egregious loans.
Mr. Cory Titus, Director of Veteran Benefits and Guard/Reserve Affairs at the Military Officers Association of America (MOAA), and United States Army veteran
Thank you to our Faith for Just Lending coalition partners for the opportunity to be here and speak on this important issue. Anytime we get to sing the praises of the Military Lending Act, we absolutely jump at the opportunity.
For those who are not familiar with the Military Officers Association of America (or MOAA), we are the largest military service organization and the fourth largest veteran service organization. We became heavily involved in predatory lending in the early 2000s, given that the payday lending issue was so pervasive in the military. Dr. Gable shared his story about getting caught in the debt cycle, the debt trap. And every year tens of thousands of service members were facing that exact same challenge. And Congress took action in the mid-2000s on a bipartisan basis and passed the Military Lending Act. That bill was an overnight success. It's one of the most successful consumer credit protections that our country has passed. Some of these military aid organizations that frequently helped service members get out of these types of predatory lending loans saw, from when the Military Lending Act was implemented to 2018, a 99% decrease in having to help service members with predatory loans. Giving service members the access to reasonable rates meant that they weren't trapped in the debt cycle. And what this ultimately meant was that they weren't losing their jobs, because every service member needs to maintain a security clearance, and when they can't do that, the military needs to separate them. That was tens of thousands of service members every year, ultimately costing our government millions of dollars to separate them. And the Military Lending Act stopped all that.
“Payday lending is disproportionately affecting veterans, what we see is that veterans take out these loans at six times the rate of their civilian counterparts. ”
While this is a tremendous success, we need to take this good policy, and we need to expand it because it's not protecting all Americans. Within most communities, we are seeing that the reserve components are not covered, our veterans aren't covered, and our survivors still are not protected with these reasonable consumer credit protections. This is unjust, and we believe that this is something that Congress needs to take action on because the harm it is doing to our society is so great. What's important about this is that payday lending is disproportionately affecting veterans, what we see is that veterans take out these loans at six times the rate of their civilian counterparts. And that is something that we urge Congress to take action on and close this loophole. Ultimately, good policy should not just be reserved for the military, but banning these types of predatory products will help service members, veterans and really all Americans.
Ms. Chelsea Sobolik, Director of Public Policy at the Southern Baptist Ethics and Religious Liberty Commission
I am Chelsea Sobolik, and I'm here with the Ethics and Religious Liberty Commission. We arethe public policy and ethics arm of the Southern Baptist Convention and represent about 15 million Southern Baptists and about 46,000 congregations throughout the US. I want to thank the Center for Public Justice for hosting this important event as we highlight our support for the Veterans and Consumers Fair Credit Act. We are grateful for Chairman Sherrod Brown's leadership on this important issue and we're honored to be a part of the Faith for Just Lending coalition.
The ERLC opposes unjust lending practices that exploit the vulnerable and are predicated on consumer loss and trap families in cycles of debt. Payday lending serves as a significant contributing factor to the economic struggles for many Americans. The practice of providing short-term cash loans at unreasonably high interest rates forces families and individuals to make really difficult financial decisions that are often impossible to recover from. Southern Baptists are opposed to predatory lending practices that target financially unstable people. Any lending practice that intentionally uses and exploits vulnerable individuals is unacceptable and should be strictly regulated by government protections.
“A business that leaves most of its customers worse off than before does not contribute to the common good.”
We believe that scripture offers guidelines for us as we think through honorable lending and borrowing practices. We're instructed not to take advantage of the weak, we are instructed not to charge usurious interest. And in Leviticus 25, Scripture instructs that if your brother becomes poor and cannot maintain himself with you, you should support him as though he were a sojourner and he should live with you. Take no interest from him or profit but fear God that your brother may live beside you. We are also instructed to seek the good of others. In Luke, we are told to love our enemies, do good, lend expecting nothing in return, and our reward will be great.
A business that leaves most of its customers worse off than before does not contribute to the common good. The average interest rate on payday loans in the US is 391%. This high cost lending often traps families in cycles of debt that leave already impoverished families with crippling debts, like some of my other panelists have referenced. The payday lending industry exploits individuals in financially desperate situations. Like my colleagues referenced, the Military Lending Act prohibits loans exceeding an interest rate of 36% to active duty military members. The Veterans and Consumers Fair Credit Act would extend those same protections to all Americans, including veterans and military families. This important legislation provides a federal interest rate cap at 36% for all Americans. There are currently 19 states and the District of Columbia, where I live and work, that have already implemented these interest rate protections to prohibit predatory loan lenders from exploiting vulnerable Americans. We swiftly urge Congress to pass this important bill so that all Americans will be protected and will have a chance at a financially stable future that predatory lenders will not be a part of.
Rev. Gabriel Salguero, President and Founder of the National Latino Evangelical Coalition, and pastor of The Gathering Place
Thank each of you for taking time this week, in particular, as we celebrate the service of veterans and their families. We want to first express our heartfelt thanks for all those who have served and their families and those who are still serving. The National Latino Evangelical Coalition has joined the Center for Public Justice and Faith for Just Lending and MOAA, and so many others to call for the passage of the Veterans and Consumers Fair Credit Act. As you heard from some of our fellow panelists, the Military Lending Act, passed with strong bipartisan support in 2006. Now, we're calling for an extension to cover all veterans and other citizens.
And the reason I'm doing it and why it's important to me is that 16% of the military force in America is Hispanic. 18% of US Marines are Latino or Latina. This is particularly true in my congregation in Orlando, Florida, where we have multiple veterans. We have one of the largest VA hospitals, actually across the street from my house, and I see them almost every day when I do home visits. Both my grandfathers are veterans, and multiple uncles and aunts, actually have served in the military. So this is very close to home both as a grandson of veterans and as a pastor of veterans.
“This is a question about the nation’s moral ledger, not just not just the fiscal ledger, but the moral ledger.”
And this is a question about the nation's moral ledger, not just not just the fiscal ledger, but the moral ledger. What protections do we guarantee for those who are willing to pay the highest sacrifice with their lives and their families? And what does it mean that predatory lending is almost at 400%, for some of the most vulnerable people? For us, this is a scriptural issue. Deuteronomy 23 reminds us that we should not charge exuberant usury or interest and that we should not exploit the poor and the vulnerable. And so both as a pastor as a family member of veterans, and as a person who understands the impact on families that predatory lending has, when people are paying a loan, that should not take, as Reverend Dr. Gable has told us, multiple years, and entrap them in their families, particularly children, in a cycle of debt.
It's important for us as faith leaders to say that we as a nation can do better and must do better. And that's why we're urging all our elected officials to pass this. Because I mean, to cap it at 36% APR: Could you imagine how many people we’re helping by monthly groceries? How many people we’re helping not be evicted from their homes? How many people we’re helping make ends meet? So as the nation seeks to invest in infrastructure, as it seeks to invest in early childhood education, we should remember the most vulnerable, our veterans, and our consumers who have for years been exploited by predatory lending. And that's why the National Latino Evangelical Coalition has joined the Center for Public Justice and our colleagues from Faith for Just Lending and MOAA to say, now's the time to act without any delay. Thank you, and God bless you.
Rev. Sekinah Hamlin, Minister for Economic Justice at the United Church of Christ
Thank you so very much to the Center for Public Justice for your commitment to this issue. Thank you also to MOAA, as well as the millions of veterans that have served this country faithfully. I am honored to know that my father is one of those, my uncles and aunts are some of the veterans as well. So we thank you for your service.
The United Church of Christ is committed to helping to create a just world for all. We believe strongly in Jeremiah 29:11, that states that God's vision for us is for us to have a future and a hope. Our military service members truly sacrificed all of themselves for the protection of us. They sacrificed themselves with the promise of a hope of coming back as veterans to a life where they would be honored and respected. However, though they have protections with the Military Lending Act as active duty service members, we neglect to protect them from predatory, bad financial actors as veterans. And this must stop. And beyond that, the future and hope that God calls us to ensure is not only for our veterans, but also for our non-military families. So therefore, as the United Church of Christ, we stand with this coalition, and ask that the protections of the Military Lending Act be extended by passing the Veterans and Consumer Fair Credit Act.
“While we, as communities of faith, do our part ... we do recognize that the government must do its part to make sure that usury is prohibited.”
The United Church of Christ is a part of this robust Faith for Just Lending coalition, a coalition that is extremely theologically diverse. But yet we stand on principle that you should not rob the poor just because they are poor. Another principle as outlined in our Faith for Just Lending coalition Statement, is that we will teach and model responsible stewardship and help our neighbors in times of crisis. We, the United Church of Christ, have done that, as evidenced by our partnership with RIP Medical Debt, where we have today abolished $71.2 million in medical debt and counting. This is important because a study by this very coalition, Faith for Just Lending, as well as several studies by the National Consumer Law Center found that borrowers often have extreme medical debt and look to payday lenders to help them get rid of that debt. However, as they go to payday lenders, they find themselves even more in a vicious cycle that robs them of their hope, their dignity, and their future. In addition to that principle, we join with this great coalition, Faith for Just Lending, in stating even that as we model responsible stewardship, we, as the United Church of Christ and our UCC Pension Board are in the final stages of acting upon a 2017 resolution of our denomination to support and create credit unions as a responsible stewardship model that does not prey upon the poor just because they are poor. We are in the final stages of that, and our team that has entered into this, cite wholeheartedly that the reason or one of the reasons why we have this credit union is because of the bad financial products that are in our financial spaces, and because that families find themselves in a cycle of debt.
Again, we hold to another principle of this great coalition. And that is that while we, as communities of faith, do our part, in making sure our neighbors have the financial resources that they need in times of crisis, we do recognize that the government must do its part to make sure that usury is prohibited, and predatory and deceptive lending practices are eliminated. We're doing our part. We need the government now to do theirs. So therefore, think of it like this. We as communities of faith, denominations, our churches have been lending justly. We have been helping people when they don't have enough cash to fix their car. We've been trying to create systems and situations where they would not need to go to predatory payday lenders. However, it's much like the old adage, you can't keep pouring water into a bucket that has a hole in it. And certainly, the loopholes in this financial system are such that, that which we are doing in good faith, as a community of faith, and communities of faith, keep going right out the bottom of the bucket. Congress, you must fix the bucket, you must fix the hole. You owe it to families to seize upon this moment and relieve the debt burden of predatory payday lending. Pass this bill.
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Faith for Just Lending is a coalition of faith-based institutions working to end predatory payday lending. The Faith for Just Lending steering committee includes Catholic Charities USA, Center for Public Justice, Cooperative Baptist Fellowship, Ecumenical Poverty Initiative, Ethics & Religious Liberty Commission of the Southern Baptist Convention, Faith in Action, National Association of Evangelicals, National Baptist Convention USA, National Latino Evangelical Coalition, The Episcopal Church, United Church of Christ, and United States Conference of Catholic Bishops.
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