What’s religion got to do with it?
Last time, we talked about how Graves and Peterson’s study on payday loans and the Christian right made false claims regarding whether the short term loan product targets the poor or minority groups. Now, let’s continue our look at Lawrence Meyers‘ critique of a very flawed treatise against payday loans with his exploration of how the authors misstep in their views regarding whether it is usury that should be condemned by the Christian right.
Usury and Christianity
As a refresher, here are a few key Bible scriptures through which the Christian right claims that usury is condemned:
Exodus 22:25 - “If thou lend money to any of my people that is poor by thee, thou shalt not be to him as an usurer, neither shall thou lay upon him usury.”
Ezekiel 22:16-16 – “In thee have they taken gifts to shed blood; thou hast taken usury and increase, and thou has greedily gained of they neighbors by extortion, and hast forgotten me, saith the lord GOD. Behold therefore I have smitten mine hand at thy dishonest gain which thou hast made, and at they blood which hath been in the midst of thee. Can thine heart endure, or can thine hands be strong in the days that I shall deal with thee? I the LORD have spoken it, and will do it. And I will scatter thee among the heathen, and disperse thee in the countries, and will consume thy filthiness out of thee. And thou shalt take thin inheritance in thyself in the sight of the heathen, and thou shalt know that I am the LORD.”
Ezekiel 18:8-17 – “He that hath not given forth on usury, neither hath taken increase, that hath withdrawn his hand from iniquity, hath executed true judgment between man and man, hath walked in my statutes, and hath kept my judgments, to heal truly; he is just, he shall surely live, saith the Lord GOD.”
However, there are Old Testament passages that appear to permit Hebrews to make interest-bearing payday loans to non-Jews, but not to fellow Jews. Jesus Christ’s ministry later led Christians to believe that loans with interest were verboten. However, the Renaissance and Protestant Reformation cured this malady. This is apparently when Christians discovered how to run a business that was both honest and profitable (not just the former). Religious leaders began to question whether interest was indeed valuable. John Calvin, Martin Luther and others said that only out-of-control interest was wrong. Pope Paul II even went on to approved pawnshops in 1461, so there has historically been a place for money lending in Christianity.
So what’s Graves and Peterson’s main problem?
Meyers concedes that taking advantage of the poor has never been good for PR or business. Thus, it wasn’t good in the church’s eyes. But the inherent flaw in the authors’ argument is that payday loans harm the consumer, without presenting sufficient evidence to back up their claim. There have been numerous unbiased academic studies that suggest that payday loans actually help consumers, so the author’s need to do better than opinion to make a counterclaim. They need evidence. However, I can sympathize with their dilemma a bit here, as conclusive studies that show payday loans as a weapon against society do not exist.
Meyers points out that “consumer behavior and true rates of on-time repayment demonstrates the product’s value.” There are no comprehensive studies of payday loan borrowers, but perhaps it is telling that 154 million such transactions occurred in 2008 (according to Meyers). This could indicative that consumers prefer this choice over other options.
Religious leaders know good business when they see it
The Bible is a fan of commerce. It is neither holy, Godly, nor intelligent to shut businesses down because of a voice in one’s head. Only when there is overwhelming demonstrable harm can a reasonable stance be taken against payday loans in this way. Since many consumers support the product, shutting the industry down would send who need borrow money but are perhaps struggling with their credit to less desirable alternatives.
Meyers is also flabbergasted by the authors’ failure to pin down how payday loans are usury in the modern sense. He points to this article, which clearly illustrates that payday loans do not fit the definition. So, as the authors pose, “If the Bible so clearly and forcefully condemns usury, one would hypothesize that political jurisdictions with a traditional, conservative Christian perspective would adopt law reflecting this Biblical value.” Well, wouldn’t one?
Yes, but it just doesn’t happen. Meyers attacks this position. “The hypothesis that Christian political jurisdictions would adopt laws reflecting Biblical value is false if lawmakers do not consider payday lending to be usury,” he says.
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Oh, the Christians charging interest started a bit further back than the era of Calvin and Luther. The first instance occurred when the Knights Templar happened upon a huge treasure (the leftovers of the treasury of the Temple of Solomon, now the Dome of the Rock) and created a banking system, wherein people could deposit funds. The Pope forbade interest, but said they could charge rents, essentially the same thing. Granted, it meant that nobles on pilgrimage or crusade could keep their money somewhere safe. This lasted until the King of France got the Pope (a later one, Clement V) to let him seize their funds, and then he had most of them put to death. The reason? He was heavily in debt to the Templars. Payday loans don’t even compare, in any way shape or form to credit cards or student loans, yet there isn’t NEARLY the vitriol of protest over those rackets.