Legislature protects business that preys on the poor

In a legislature that wants to make the Holy Bible Louisi­ana’s official book, it seems legislators have yet to learn what the good book says about treatment of the poor and usury.

Echoing God’s message in Exodus 3: 7-8, “I hear the cry of my people,” Representative James urged his colleagues to hear the cry of the people for a 36 percent annual percentage rate (APR) cap on payday loans. He urged colleagues to take to heart the courageous voices of victims of the payday debt trap who testified about their suffering. Finally, he named many organizations advocating for the 36% APR cap including the Louisiana Catholic Bishops, the Louisiana Budget Project, and the American Association of Retired Persons, among others.

When I testified before the House and Senate Commerce Committees, I explained that one of the Hebrew words for usury in scripture means “to take a bite out of the life” of the poor. Payday loans give no life; in fact, they create financial distress for vulnerable citizens. That is predatory; that is usury. We know that 68 percent of borrowers make under $30,000 per year and that most get caught in a cycle of debt.

“When a family has nothing to eat because they have to repay loan sharks,” exclaimed Pope Francis on January 29, “that is not Christian! It is inhuman!”

Curiously, Louisiana exempts payday loans from loan sharking and usury laws. Citizens might reasonably expect legislators to scrutinize the pleas from payday lobbyists to maintain these legal protections in the name of a free market.

A Pew study released April 10 found that payday companies charge comparable borrowers far more for essentially the same small loan in states like Louisiana with higher or no interest rate limit. The “free market” is a myth. Legal exemptions protect a predatory product, not a free market.

Nevertheless, both the Senate and House Com­mer­ce Committees block­ed the 36 percent APR cap against the will of the people, against sacred scripture, against morality, against Pope Francis, and against the facts.

As for the good book legislators want to make official, when he fiercely clears the temple of moneychangers, Jesus declares: “My house shall be a house of prayer but you are making it a den of thieves (Matthew 21: 12-13).” These words should ring in the ears of every legislator and citizen until we heed God’s call to hear the cry of the oppressed.

– Alex Mikulich, Ph.D.

This article originally published in the April 21, 2014 print edition of The Louisiana Weekly newspaper.