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Payday Loan Industry May be Targeting Certain Religious Groups

[May 26, 2008.]


A pair of researchers believes that the payday loan industry may be targeting certain religious groups.

Experts Christopher Peterson and Steven Graves found that conservative Christians are a demographic target for expensive payday loans.  Peterson and Graves state that “living in a state with a great deal of conservative Christian legislative power actually puts moderate and lower income consumers at greater risk from usurious payday loans.”

Peterson, who is with the University of Florida’s Levin College of Law, states, “The natural hypothesis is to assume that given strenuous Biblical condemnation of usury there would be more aggressive regulation and less demand for payday loans in these states, but ironically, the numbers show the opposite is true.”

Peterson adds that the “findings should serve as a wake-up call to pastors, religious leaders and people of faith that usurious lenders are thriving in their neighborhoods, communities, and states.”

The study also examined the number of payday loan locations in comparison with the number of McDonald’s restaurants in a given area.  The report shows Washington boasts 462 more payday loan locations than McDonald’s outlets.    Meanwhile, states such as Missouri, Mississippi, and Alabama reported more than 900 more payday lenders than McDonald’s restaurants.

Part of the irony of the study is that conservatives are less likely to support greater regulation of the payday loan industry than liberals would.  Conservatives tend to oppose stepped-up government regulation of business, while liberals applaud the idea.  It’s unclear at this point whether this study could prompt conservative politicians to support a crackdown on payday loan outfits.

Low-income Americans are the most likely to turn to payday loans in their time of need, and they may view the local payday loan outlet as their personal bank.  The problem is that such loans can come with exorbitant fees attached, making it difficult for consumers to repay them.


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