US Christians call 'payday loans' sinful, survey finds

People who identify themselves as Christians in 30 U.S. states - from Alabama to Wyoming - say it's a sin to lend money to someone who can't afford to pay it back.

Payday loans came under fire last year in the United Kingdom when they were condemned by the spiritual leader of the Church of England, Archbishop Justin Welby and now they are coming under fire in the United States.

Most of them want the government to protect consumers from loans with excessive interest.

Still, one in 6 Christians has taken out a high-interest payday loan, while few of their fellow believers know how such loans work or look to the Bible for guidance about fair lending.

These are among the findings of a new online survey of Christians' views of payday lending from LifeWay Research.

The Nashville-based research firm surveyed 1,000 self-identified Christians in 30 states, each of which has little or no regulation of payday loans.

Scott McConnell, vice president of LifeWay Research, said most Christians find payday loans impractical and morally questionable and many seem unaware the Bible addresses lending practices.

"Ask people if charging high interest is wrong, and they'll say yes," McConnell said. "They forget the Bible calls it 'usury' and condemns it as sinful."

A typical two-week payday loan charges the equivalent of a 400 percent APR (annual percentage rate), the Consumer Finance Protection Bureau (CFPB), a U.S. federal government agency tasked with consumer protection in the financial sector.

The survey, conducted Feb. 5-17, was sponsored by Faith for Just Lending, a national coalition of diverse and nonpartisan faith leaders opposed to predatory loans.

Among its key findings:

● Christians are no strangers to payday loans. Overall, 17 percent of them have taken payday loans - 20 percent of Protestants and 12 percent of Catholics. Half of African-American Christians (49 percent) and a quarter of Hispanic Christians (24 percent) say they've taken out a payday loan.

● Most believe taking advantage of borrowers is sinful. But few say payday loans are immoral. Three-quarters (77 percent) of Christians say it's sinful to lend money in a way that harms the borrower financially. They also describe payday loans as "expensive" (62 percent), "harmful" (37 percent) and "predatory" (33 percent). Still, more Christians say such loans are "helpful" (16 percent) than "immoral" (11 percent).

● About half (55 percent) say the "maximum reasonable" annual percentage rate (APR) for loans should be 18 percent or less. That includes 37 percent who say APR should be capped at 12 percent interest or less and another 18 percent who want to see a cap at 18 percent interest. Five percent say interest should be capped at 36 percent.

● Few Christians see a connection between faith and fair lending. Nine percent say the Bible has the most influence on how they view lending practices. That's less than the news media (14 percent) but more than their church (1 percent). Politicians (1 percent) and national Christian leaders (less than 1 percent) have little influence on the issue of fair lending.

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