Ahead of the Iowa caucuses that begin the formal process of picking the Republican presidential contender, the public policy arm of Iowa’s Bishops’ Conference and an Iowa-based evangelical organisation are working together to put payday lending on the agenda, reports Catholic News Service.
The faith groups commissioned a poll into people’s opinions towards payday lending which showed that opposition to the high-interest loans was especially strong among religious conservatives, 87 per cent of whom opposed the practice once they were told the average interest rate people were forced to pay.
Tom Chapman, executive director of the Iowa Catholic Conference, told Catholic News Service that inroads are being made on the payday lending issue and that inquiries have been put to some of the Republican Party nominees who are in the state for the caucuses.
"This is something the Iowa Catholic Conference has been working on for many, many years," he said. He added that progress has been made at the legislative level, where an Iowa House bill that would have required lenders to judge the applicant's ability to pay back the loan, and that would have set caps on the number of loans an individual borrower may take out in a year, passed the lower chamber's Commerce Committee last year.
Mr Chapman added that caps on borrowing are an important feature of any bill. "If you take out one payday loan, you're likely to take out a dozen," he said, adding that 20 per cent of payday loan borrowers take out 20 loans a year.
Unfortunately the full House did not vote on the bill, so it reverted back to committee. Chapman said no companion bill in the Democratic-run Senate has been introduced.
The findings of the payday-lending poll should interest presidential hopefuls who will be looking to attract the Christian vote, especially in Iowa where The Times reported that half the electorate consider themselves born-again Christians.
Other findings in the survey showed that 78 per cent of people supported requiring payday lenders to first determine whether a borrower can repay the loan before issuing it, and 74 per cent backed limiting interest rates to 36 per cent a year.
Jan Henryson, director of the Centre for Financial Education in Sioux Centre in Iowa, told Catholic News Service that families in Iowa are being destroyed by predatory lending practices: "Unbelievable interest rates cause people to make the choice of paying on a loan that they probably can never repay instead of paying for housing and food for their families. These practices need to be eliminated immediately to preserve Iowa families and protect our children."