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Arizona car title loans must be capped to save the poor

Opinion: As pastors, we care for the vulnerable. That’s why we support Arizona’s Fair Lending Act, which limits interest on title loans to 36%.

In this season, Christians observe Advent – awaiting the arrival of the One we believe has come to redeem the earth. It’s a moment of joy, yes.

But it is also a time of reflection on the evils of the world. We walk in the darkness of injustice, war, poverty and greed.

As pastors, we are disturbed when we see vulnerable congregants being preyed upon, including in their financial dealings.

This is why we support the Arizona Fair Lending Lawa ballot initiative effort that would lower the interest rate on car title loans, so that title lending companies could charge no more than 36% annual interest.

Loans charge borrowers 200% interest

When families are in financial trouble, they are vulnerable to the promise of “quick cash” from car title and other predatory lenders as a financial life raft. Unfortunately, the life raft often turns out to be an anchor, adding to borrowers’ debts.

Too often, this raft weighs us down too. With interest rates of up to 204%, our already strained charitable funds are often stretched even harder trying to help our brothers and sisters pay off these disastrous loans.

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In 2008, Arizona voted to ban payday loans, which defrauded families with exorbitant interest rates, sometimes over 200% per year. At that time, about half of the companies in the payday loan industry in Arizona simply replaced their products with vehicle title loans, so they could continue to charge families those exorbitant interest rates.

Today in Arizona, securities lenders are making mega profits by charging borrowers interest rates of up to 200%. Studies show that 1 in 5 borrowers end up losing their car when they can’t pay. Families on fixed incomes are often trapped in debt. And churches like ours need to step in to help people get back on their feet.

Do not exploit the poor for profit

What do the scriptures tell us about debt and loan?

In Proverbs 14:31 we are advised, “Those who oppress the poor insult their creator, but helping the poor honors him.”

Proverbs 22:22 goes on to instruct us, “Do not steal from the poor because they are poor.

The car title loan does just that. It targets the needy with loans they cannot afford for the benefit of the wealthy.

Securities lending benefits the poor and makes debt repayment almost impossible. God created mankind in his image and bestowed dignity and value on every human being. Predatory lending places individuals in a perpetual state of indebtedness, all for reasons of personal gain.

Making a profit is not unethical; however, making extreme profit at the expense of the weak and vulnerable is condemned by Jesus – and human decency in general.

As Christ is the light and the hope of the world, we must be the light of those who suffer from this darkness. We must end this exploitation of the poor and ensure that all Arizonans can live in dignity.

We pray that God will fill us with wisdom and compassion as Arizonans vote. We humbly ask that you support the Arizona Fair Lending Act.

Reverend Abigail Conley is pastor of Chalice Christian Church Disciples of Christ in Gilbert and Randy Reynolds is founder and executive director of Community Renewal in Tucson, which mobilizes the faith community on social and other issues. Contact them at [email protected] and [email protected].