In 1996, Derek Drewery was a young man stationed at Wright-Patterson Air Force Base in Ohio when he ran into money problems.
“I can’t remember exactly what I needed a loan for,” Mr. Drewery said, “but I needed to borrow a few hundred dollars or so.” He turned to one of the short-term, high-interest lending businesses near the base for a “payday loan,” in which people borrow money against their paychecks and are typically supposed to pay it back within two weeks.
“When I went to pay it back it was a lot more than I had borrowed, so I had to borrow again to pay that back, and had to borrow again to pay that back,” Mr. Drewery recalled. “I got into the real churning situation to borrow this week to pay for last week.”
To help pay off the loan, Mr. Drewery cut back on food. “Finally, my dad caught wind of what was going on and sent me some Kroger gift cards, so I ate,” he said. “But at one point, I was sharing my last box of Cheerios with my little Jack Russell dog. I couldn’t afford food or anything.”
Now, Mr. Drewery, who works as an electrician and is the pastor of a nondenominational evangelical church in Springfield, Ohio, has joined an unusually diverse coalition of Christians that unites conservative churches with liberal ones to oppose predatory lending. One of these umbrella campaigns, Faith for Just Lending, includes, among others, groups of black Baptists and Latino evangelicals, the United States Conference of Catholic Bishops and the Salvation Army, which is considered conservative and evangelical.
In 2014, the conservative Southern Baptist Convention, the country’s largest Protestant denomination, passed a resolution proclaiming that payday lending “conflicts with God’s plan for human relationships” and “is a direct violation of the Love Commandment.”
The broad range of Christians seems to be making progress on the lending issue.
Last week, the Consumer Financial Protection Bureau released a long-awaited proposal to regulate payday loans, loans against the borrowers’ vehicle titles and other “high-cost installment loans.” The rules, which are now subject to public comment, would require that “before making a covered loan, a lender must reasonably determine that the consumer has the ability to repay the loan” and would limit the lenders’ ability to withdraw money from indigent borrowers’ bank accounts.
While the rules are a good start, they will not solve a problem of such enormousness, said Molly Fleming, a Roman Catholic from Kansas City, Mo., who leads the payday lending reform campaign for the faith-based organization PICO.
“In Missouri, the interest rate cap on payday loans is 1,950 percent annual percentage rate,” she said. “They are charging an average of 450 percent A.P.R.”
And payday lenders, which tend to base themselves close to the working poor, are ubiquitous. “In Missouri, we have more payday lenders than Walmart, Starbucks and McDonald’s combined,” Ms. Fleming said.