"Split the Baby" - Seriously?

In an article in the Springfield News-Leader today, Representative Steve Helms is quoted as saying, "I think we split the baby as best we could." Which is apparently his incredibly bizarre and theologically questionable way to say "compromised," I guess.

In the article, Representative Helms lays out some thoughts about tweaking the regulations around predatory lending practices in the state. Among the ideas are

            - Lowering the number of times a loan can be renewed from six to two,

            - Creating conditional extended payment plans,

            - Lowering the total amount of interest and fees that can be charged from 75% of the loan total to 35% of the loan total.

            - Lowering the licensing fee for a payday loan store from $500 to $300.

Helms is quoted as saying that more regulation that this would put lenders out of business, eliminating a much-needed resource for people who need a short-term cash loan.

Of course, Representative Helms is repeating industry talking points, rather than working for the common good. His bill (HB 2657) may seem on the surface to make meaningful changes, but the reality is that such incremental adjustments will have very little impact. As our legislature continues to be influenced by the predatory lending industry, the working poor in our state continue to suffer.

Notably, North Carolina has enacted very strict regulations on short-term lending, capping the interest rate at 36%, for example. Yes, several companies went out of business as a result, namely companies who were preying on the poor and basing their business models on loan rollovers, exorbitant fees and penalties, and triple digit APRs. I am not mourning their loss. And today it is still possible to get a small, short-term loan in North Carolina. The companies that chose to comply with the regulations are in business.

Representative Helms says he wants to "split the baby" on this issue. He means he wants to both make the corporations happy and also protect people from their predatory practices. He is attempting to cite scripture in making this analogy.

Solomon didn’t split the baby, though. Compassion, love, and justice are crying out to save the baby's life. We must cap the rate; lives are depending on it. May our legislature display the wisdom necessary to do what is right.

HB 2657 (Helms' bill) was read on March 1st, got its second reading on the 5th, and was assigned to committee on the 7th. A well-greased machine.

HB 1541 (which I wrote about yesterday) caps the interest rate at 36%. It was prefiled on December 7, read on January 3rd, got its second reading on January 4th, and HAS YET TO BE ASSIGNED TO COMMITTEE.

What's the hold up, I wonder? I suppose it's that HB 1541 doesn't "split the baby," but rather does everything it can to keep the baby alive, and safe from the deadly cycle of the debt trap on which predatory lenders base their profit margins.

Missouri HB 1541 - MOVE IT!!!

This morning I called the office of Missouri House Speaker Todd Richardson - (573)751-4039 - to ask him to please assign HB 1541 to committee. It really needs to happen THIS WEEK, before the Missouri Legislature adjourns for the season.

My call was a follow-up to the email (todd.richardson@house.mo.gov) I sent last week:

Mr. Speaker,

I am writing today to ask you to please assign HB 1541 to committee as soon as possible. 

As a pastor, I have seen how the exorbitant interest rates of "payday loan" and "title loan" companies can pull families into a cycle of poverty from which it is very difficult to escape. In addition, the companies are by and large out-of-state corporations, and the financial drain to our state is estimated to be in the hundreds of millions of dollars, as Missouri families send their hard-earned money out of state to pay off these unjust loans.

HB 1541 sets a limit on these interest rates at 36%, which would align our state with the seventeen other states that cap "payday loan" interest rates at this level or lower.

This policy is good for people, good for families, and good for our state. Please send this bill to committee before the upcoming break. Thank you for your time.

Sincerely,

Andy Bryan, Pastor

Campbell United Methodist Church

Springfield, Missouri

The injustice of predatory lending is rampant. The oppressive system traps people in poverty. In fact the business models on which such lending companies operates is based on forcing people to renew loans over and over again, or face the legal ramifications of defaulting.

Payday loan companies, title loan companies, used car lots that advertise "automatic credit approval," and on an on and on... Such companies are not just "meeting a need," as their supporters would have you think. It us usury, pure and simple. People of faith used to really, really care about usury. And yet somehow we've drifted away from our focus on that horrific injustice, probably from the fear of being "too political" or some such nonsense.

Missouri House Bill 1541, filed by Republican Representative Lynn Morris, has not yet been assigned to committee, which is the exclusive responsibility of Speaker Richardson. I invite and encourage you to call his office today and ask him to assign this bill to committee so it can proceed. 

HB 1541 makes sense, and brings Missouri in line with seventeen other states with interest rate cap laws on the books. If you have any questions about it, I'd be more than happy to talk with you. 

It's time to move the bill!