Keith Ellison, Religious Leaders Speaking Out Against Bad Credit Lenders

If there is one ground zero place in the United States that is taking the fight to the payday loan industry then it’s the state of Minnesota. It seems as if everyone – public officials, religious groups and non-profit organizations – are banning together to rein in payday loan lenders.

Case in point, religious leaders are collaborating with Minnesota Democratic Congressman Keith Ellison to rally against websites that offer short-term, personal loans for people with bad credit. The two are looking to help those impoverished Minnesotans who have been seriously affected by payday loans.

Speaking at a forum at Greater Friendship Missionary Baptist Church in Minneapolis, faith leaders and the congressional representative presented the case that payday loan storefronts offer higher rates in black communities. At the same time, according to the speakers, bad credit loan establishments provide predatory products that put people into debt.

“Payday lending is not fair. It is not credit. It is robbery,” said Pastor Paul Slack of New Creation Church.

Ellison added that the group’s primary initiative is to ensure that consumers do not get caught into the trap or cycle of debt.

“The fees are so high that they got to get a loan to pay back the loan, and then that goes on and on,” Ellison said. “That is a core principle. You got to break it.”

Just what do they want? Well, more regulations on the entire payday loan industry. This includes a cap on the maximum interest rate.

According to the Minnesota Department of Commerce, payday lenders issued just under 400,000 payday loans in 2014 that were valued at around $150 million.

Minnesota Officials Already Working on Legislation

It is expected that next year Minnesota lawmakers will introduce a bill to limit the vast growth of payday lending ( This would be the second time legislators have tried to regulate the payday loan niche – lobbyists quashed any regulatory reform by spending more than $300,000 to kill the bill.

As part of the previous legislation, officials wanted to limited the number of payday loans a customer can take out to four and capping interest rates. It’s believed the same elements of that bill would be part of the newest edition of the legislation.

Rep. Joe Atkins, DFL-South St. Paul, has said that any new bill wouldn’t “be a disaster” because he wants to take a balanced approach to protecting consumers and ensuring payday loan lenders keep their doors open.

“But on the same token, I don’t want to put them out of business,” said Atkins. “I just want to put reasonable interest rates in place.”

Nick Bourke, director of Pew Charitable Trusts’ research on small dollar loans, notes that states across the country have implemented three primary types of reforms: cap on interest rates, a longer time to repay the principal and a limit on the number of payday loans a customer can take out.

Of the three options, Bourke believes the third one is still the most dangerous one.

“It allows a harmful product to stay on the market,” Bourke said. “Because the payday loan looks artificially good to people, it looks like a short-term loan for a fixed fee.”

Leaders with the Minnesota State Baptist Convention confirmed their support for any type of regulatory reform on the industry. Rev. Billy Russell, president of the organization, said in a statement that his group will fight for the congregants who have been harmed by bad credit loans.

Russell purported that the industry maximizes profits while preying on the most vulnerable.

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