Rev. Don Anderson, president of the Rhode Island Council of Churches, says there are religious reasons for supporting payday loan reform.
“In every religious tradition, the concept of usury is addressed,” Anderson said, at an State House event last week to call attention to payday loan reform.
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Anderson, who is also an important advocate for tax equity legislation, added, “Concern for the poor transcends all faiths.”
The Bible has many references prohibiting usury – or unethically high interest rates. But one not need to read scripture to understand why payday loan shops like Advance America are preying on the poor.
Annual interest rates can be as high as 260 percent, and customers are sometimes cajoled into thinking it will be easier to pay back than is realistic. Rhode Island is the only state in New England to allow predatory payday loans.
A recent Pew report concluded that payday loans “fail to work as advertised” and most people who use them have other options that they often use to get themselves out of the payday loan debt spiral.