Documentary Criticizes Payday Loans

The Micah Center in Grand Rapids, Mich., this week presented a documentary that the organization has done on the multi-billion-dollar payday loan industry.

Although payday loan operations are in business all across the United States and Canada, as well as in Europe and elsewhere, the documentary focuses on the Grand Rapids area, where there are significantly more payday loan operations than McDonald’s restaurants.

Making the issue especially important are biblical mandates that criticize usury. For instance, there is Ezekeil 18: 13 , which asks the question of what happens to a man who engages in usury:“Will such a man live? He will not! Because he has done all these detestable things, he will surely be put to death and his blood will be on his own head.”

The Micah Center takes verses relating to the sinful nature of charging too much interest very seriously, says Jordan Bruxvoort, director of the Micah Center in Grand Rapids. There are Micah centers in other states and in Canada.

Several Christian Reformed Church congregations are members of the Micah Center, a social justice organization that, among other things, provides advocacy and education on issues such as payday loans.

In its documentary. the Grand Rapids Micah Center features two people who received payday loans, an ex-employee of a payday loan operation, as well as Rev. Dallas Lenear, chairperson of the Micah Center’s task force on payday loans.

Meeting on Tueday, Nov. 6 at Hope Reformed Church in Grand Rapids, the Micah center used the documentary to highlight its concerns about a business that often charges, when all is said and done, up to 300 percent interest on loans they give.

“Payday loan businesses have grown exponentially during this time of the recession,” said Lenear, a Grand Rapids pastor.

The payday loan business has to be licensed in Michigan, as it does in many other states in the United States.

While some states cap at 36 percent the interest rate for payday loans, the law in Michigan is lax. It does not place a limit on the interest these operations charge.

People often come to a payday loan outlet because they are in need of a short-term loan to pay bills or cover the cost of emergency needs.

As a result, these people get into trouble when it comes time to repay the loans and, for various reasons, can’t pay it right away.

“We want to develop alternatives for people who need a loan,” says Bruxvoort. “We want to make sure that they don’t have to pay the exorbitant rates of interest.”

Once an alternative is in place, the Micah Center will likely turn its attention to the state of Michigan, asking for legislation that caps the interest rate payday loan operations can charge.

Bruxvoort said the local Micah Center will also be taking part in a nationwide protest in January, drawing attention to how payday loan centers take advantage of people.

In addition, the Micah Center wants to show its documentary to churches and then to discuss the issues involved in payday loans.

“We are involved in this because we want to help protect the rights of the poor by finding alternatives so they can receive a loan at a lower interest rate,” says Bruxvoort.

To view a program that offers a look at the payday loan problem, visit Focus on Issues. To contact the Micah Center, email Jordan Bruxvoort at [email protected].