Predatory payday lending is
having devastating effects on our communities. It strips consumers of
their income and traps them in a never-ending cycle of high-cost debt.
Predatory payday loans wreck family finances, stripping American
families with 4.2 billion dollars in excessive fees each year. In 2009,
Wisconsin consumers paid 168.6 million dollars in payday loan fees. The
number of licensed payday lenders in Wisconsin has increased sharply
from 346 in 2004 to 530 in 2008 with an average of 3,325 loans per
The urgent need to
stimulate the economy makes reforming payday lending a priority because
it will put more cash back in consumers’ pockets.
profit from repeat borrowers, charging abusive fees and interest rates
that surpass 400%. The average borrower pays $800 to borrow $300.
Consumers struggle to pay the loan back, fall behind on basic expenses
and often seek taxpayer help from social service organizations and
publicly funded government programs that provide food and assistance to
cover rent and utilities.
is no cap on payday loan interest rates, or limits on loan fees and the
number of times a loan can be rolled over, adding additional fees and
charges. The problem for the borrowers—and the payoff for the
lenders—is that the terms of these loans are designed to be very
difficult to meet. The borrower must keep coming back and renewing their
loan because they aren’t allowed to pay it down and can’t afford to pay
Legislative Action Needed
Cap payday lending interest rates at a
double digit percentage rate
Limit the number of rollovers on loans
Establish a database of all payday
loans in the state of Wisconsin
WISDOM Religious Leaders Call
a “Moral and Religious Issue”
organization of people of varied faith traditions, WISDOM believes
that the regulation of lending practices in Wisconsin is a moral
imperative. All of our faith traditions have a core belief that it
is wrong for anyone to profit from the desperation of the most poor
and needy on our midst. For example, the prophet Isaiah (3: 13-15)
LORD arises to contend,
And stands to judge the people.
The LORD enters into judgment with the elders and princes of His
‘It is you who have devoured the vineyard;
The plunder of the poor is in your houses.
‘What do you mean by crushing My people
And grinding the face of the poor?’
Declares the Lord GOD of hosts.
Loan industry, often charging in excess of 500% interest on loans to
the most economically disadvantaged among us is clearly guilty of
usury. Our own experience has shown us countless examples of needy
people – often members of our religious communities – who have
thought they were getting short-term help for a specific need, only
to find themselves trapped in an endless cycle of interest payments
and rollovers, until they have lost everything.
that it is imperative for the state of Wisconsin to enact serious
regulation, which will cap interest rates, limit rollovers, and
ensure that individuals will not be crushed by interest and
unpayable debt. This is a political and economic issue, to be
sure. But, it is a clear moral and religious issue – one that is
addressed directly by the Sacred Scriptures and teachings of every
one of our religious traditions.
No amount of
lobbyists or campaign contributions can erase the clear moral and
ethical imperative for our leaders to protect the needy from the
WISDOM is comprised of 10 local
congregation-based organizations around the state of Wisconsin. It
includes more than 140 congregations, or 17 different religious
traditions. WISDOM gathers diverse people to build stronger,