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Faith Leaders Release Research on American Christians’ Views on Payday Loans

Faith Leaders Release Research on American Christians’ Views on Payday Loans

For Immediate Release 

April 13, 2023

Press Contact:
Debora Haede
debora.haede@cpjustice.org
(202) 695-2667

Faith Leaders Release Research on American Christians’ Views on Payday Loans

Christians Expect Both Government Regulations and Church Involvement to Address the Issue of Payday Lending

WASHINGTON, D.C. — Faith for Just Lending (FJL), a diverse coalition of faith-based organizations, announced today the results of new polling from Lifeway Research on payday lending, which details congregations’ and borrowers’ experiences with payday loans. 

The Lifeway survey data of 1,000 Christians in 27 states without meaningful payday lending regulations revealed that payday lending is widely viewed and experienced negatively. The majority of Christians consider payday loans to be “expensive” and “harmful.” More than 3 in 4 Christians believe that lending money in a way that harms the borrower financially is a sin. 

Even though Christians have a growing concern about the impacts of payday lending, the number of Christians who have taken out a payday loan has doubled since a similar Lifeway study was released in 2016. Additionally, 45% of Christians know someone who has received a payday loan. The survey also found that African Americans are the most likely to have obtained a payday loan (56%) and to personally know someone who has obtained a payday loan (65%). These statistics highlight the need for both short-term financing and borrower protections. 

The Consumer Financial Protection Bureau reports that “80% of payday loans are rolled over or followed by another loan within 14 days” (i.e., repeated or continued). And “half of all payday loans are in a sequence at least 10 loans long.” With interest rates as high as 600%, payday loans trap borrowers in a debt cycle. The majority of Christians believe that the maximum reasonable annual percentage rate should be 36% or less. More than 3 in 4 (78%) respondents believe regulations should protect borrowers from lending practices that create loans that can’t realistically be repaid without additional loans. Specifically, 84% say laws or regulations should prohibit lending at “excessive interest rates.” 

There is overwhelming support among Christians for laws or regulations that protect borrowers from predatory loans. These findings echo previous polling demonstrating strong support for regulations on payday lending. The Christians surveyed not only desire for the government to help protect borrowers but also for their churches to help borrowers as well. When asked what they’d like to see their church offer related to payday loans, 53% point to guidance for those with financial needs. More than a third (36%) would like to see their church provide gifts or loans for those facing financial emergencies. Twenty-two percent of Christians surveyed want their congregation to advocate for changes in laws or regulations, and 19% would like to see their churches deliver sermons that emphasize biblical principles on fair lending. 

Members of the Faith for Just Lending steering committee include the Center for Public Justice, Cooperative Baptist Fellowship, Ecumenical Poverty Initiative, Ethics & Religious Liberty Commission of the Southern Baptist Convention, National Association of Evangelicals, National Baptist Convention, USA, Inc., National Latino Evangelical Coalition, Faith in Action, and the United States Conference of Catholic Bishops.

While representing distinct institutions with different histories and practices, these organizations hold a shared conviction that Scripture speaks to the problem of predatory lending—believing that just lending is a matter of biblical morality and religious concern. In May 2015, the coalition released the following set of principles for just lending:

  • Individuals should manage their resources responsibly and conduct their affairs ethically, saving for emergencies, and being willing to provide support to others in need.
  • Churches should teach and model responsible stewardship, offering help to neighbors in times of crisis.
  • Lenders should extend loans at reasonable interest rates based on ability to repay within the original loan period, taking into account the borrower’s income and expenses.
  • Government should prohibit usury and predatory or deceptive lending practices.

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Faith for Just Lending is a coalition of faith-based institutions working to end predatory payday lending. To learn more about Faith for Just Lending, visit www.lendjustly.com. For more information, view the complete report or visit LifewayResearch.com.

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