One attorney's approach to payday loans

While it's an issue of concern for many people, others say they had no idea about predatory lending. The question now is whether anything should be done about the situation.

Newly published information from LifeWay Research shows 77 percent of self-identified Christians in dozens of states think it is a sin to lend money to someone who cannot afford to pay back the loan. Still, few say payday loans are immoral, and one in six Christians has admitted to taking out a high-interest payday loan. LifeWay also finds that many believers lack knowledge of how such loans work, nor do they look to the Bible for guidance about lending.

"Scripture lays out clear context for usury, exorbitant interest being charged, and payday loans prey on the ignorance and desperation of some of the most vulnerable in our society," says Abraham Hamilton III, attorney and public policy analyst for the American Family Association. 

Hamilton has a history with payday loans.

"My church, a small church, got wind of a lot of things that resulted in us doing what we now know to be community-based lobbying," he explains. "Amongst the things that we fought against was this payday loan scheme, where these companies intentionally place themselves in the most vulnerable societies and communities where they know it's filled with poor people or older people who are desperate, and they charge them exorbitant interest for very, very small loans."

The federal government's Consumer Financial Protection Bureau (CFPB) says a typical two-week payday loan charges the equivalent of a 400 percent APR. CFPB also reports four out of five payday loans are rolled over for an extended time. And LifeWay Research finds 85 percent of Christians underestimate how often these types of loans are repeated.

"I think the first thing that has to happen is informing the public that these things exist," Hamilton submits. "Secondarily, I think there has to be a large adjustment in the Christian community to where we include financial management and financial understanding as a part of our equipping the saints to do the work of the ministry."

Hamilton also recommends utilizing a citizen-based effort to oppose these things at the governmental level. 

"I'm not one to necessarily say, 'Hey, you guys can't do business,' but I do think a lot of these things should be illegal, and I think it should be something that follows an outcry from the community, as opposed to it being like a top down type of squelching process," the attorney concludes.