The Moral Implications of Payday Loans

At Credit Slips, Nathalie Martin has this post on high-interest loans to poor people.  Here's the first paragraph of the post:

Those of us struggling with the issues raised by payday and title loans are consistently told to take morality out of the equation when considering these loans. Thus, it was refreshing to hear a recent presentation by Professor Alex Mikulich of the Jesuit Social Research Institute at Loyola New Orleans entitled “From the Peril of Predatory Lending to the Hope of Economic Justice: A Religious Social Ethical Perspective.” Rather than avoiding morality questions, Professor Mikulich focused exclusively on them in his eye-opening presentation at a recent Family Impact Seminar. He noted that the loans create many unjust results, and then explained that the literal translation of the word usury in Hebrew is to “take a bite out" of the poor.   He distinguished usury from mere  “interest,” which Professor Mikulich defines as part of a mutually beneficial relationship that is good for the community as a whole.

Comments

[Account Deleted]

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[yourposition.co.uk]

you are right about the "take a bite out of the poor".

[John Pollock]

Another interesting piece along similar lines is Steven Graves, "Usury Law and the Christian Right: Faith-Based Political Power and the Geography of American Payday Loan Regulation", 57 Cath. U. L. Rev. 637 (Spring 2008). It also connects religious morality and payday lending, as well as examines the connection between concentrations of payday lending and concentrations of Christians. Interesting reading.

[home improvement loans]

Very insightful post. It's one thing to get a loan, it's another thing to not let it get out of hand. It's a hard situation to be put in when you get dump with the huge interest over time.