Public Justice Review (PJR) explores in depth specific questions of public justice, equipping citizens to pursue God's good purpose for our political community. 

Vol. 9, Issue 5

Predatory Payday Lending: A Public Justice Problem

4. Texas Catholic Conference of Bishops: A Model for Community Action on Issues of Public Justice

Jennifer Carr Allmon

Usury has been a concern of the Church and civil society for millennia. This article outlines ten years of problems, strategies, wins, and losses in Texas as faith leaders and other concerned civic groups have fought for reasonable payday and auto-title lending reform at local, state, and federal levels. Payday and auto-title lenders have a similar business model: market high-cost emergency loans to desperate borrowers. For payday loans, borrowers provide lenders with access to a bank account or Electronic Funds Transfer (EFT), and automobile titles for auto-title loans. This predatory industry receives its revenue primarily from low-income working families. The loans are structured so that a borrower’s inability to repay increases the lender’s profit and deepens the borrower’s reliance on continued extensions of the loan — thereby creating a cycle of debt rather than incentivizing success.  

Faith and community leaders in Texas have collaborated using a variety of strategies to address this cycle of debt. These strategies have been developed through a systematic process of gathering data, reflecting on the trends, developing local internal community solutions, and advocating for legislative change. The coalition efforts have been successful in passing local ordinances and state legislation, as well as making progress toward federal regulatory reform. As with all systemic change, the reforms are sometimes slowed down or even rolled back when the payday and auto-title industry lobbyists begin to exert their influence. Yet, advocates remain vigilant as voices for the working families targeted by predatory lending practices. The engagement processes and strategies used in Texas can serve as a model for community action on other issues of public justice as well.