Human Dignity  Predatory Lending

ERLC opposes the OCC’s “True Lender” rule

The ERLC opposes unjust lending practices that exploit the vulnerable, are predicated on consumer loss, and trap families in cycles of debt. Payday lending serves as a significant contributing factor to the economic struggle for many Americans. The practice of providing short-term cash loans at unreasonably high interest rates forces families and individuals to make financial decisions that are often impossible to recover from. Southern Baptists are opposed to predatory lending practices that target financially unstable persons. Any lending practice that intentionally uses and exposes vulnerable individuals is unacceptable and should be strictly regulated by government protections.

Scripture strongly condemns usurious and exploitative lending practices. Recognizing the dignity of every person extends to business and financial relationships as well as interpersonal ones. As the Southern Baptist Convention affirms, “God is opposed to those who take advantage of the weak, poor, and vulnerable” and “predatory lending fails to respect the dignity of the person created in the image of God and interferes with human flourishing.”

Currently, 19 states and the District of Columbia have implemented interest rate protections to prohibit predatory lenders from exploiting vulnerable Americans. The Office of the Comptroller of the Currency (OCC)’s “National Banks and Federal Savings Associations as Lenders” rule overrides existing state protections by legalizing predatory lending even in states that have prohibited it.

The OCC‘s rule allows non-bank lenders to partner with banks as the “true lender” and evade state interest rate caps. Lenders can charge unfair interest rates regardless of existing state protections under the OCC’s “true lender” rule. 

The average annual interest rate on payday loans in states without an interest rate cap is 391 percent. This high-cost lending often traps families in cycles of debt that leave already impoverished families with crippling debts. The payday lending industry exploits individuals with financially desperate situations. The industry’s business model is predicated on borrower failure and specifically targets vulnerable people. Predatory lenders should not be granted a loophole from state laws that promote responsible and honest lending practices. 

The ERLC strongly opposes the OCC’s “True Lender” rule as it undermines state authority, threatens existing consumer protections, and allows predatory lenders increased access to financially vulnerable Americans.  

Related Content

A 2021 Letter in Support of Ending Predatory Loans

Letter sent to the U.S. Senate in May 2021

Scripture condemns usury and teaches us to respect the God-given dignity of each person...

Read More

ERLC Opposes Efforts to Expand Gambling

Southern Baptists have long voiced their opposition to predatory gambling. Our Convention has adopted...

Read More

ERLC Supports Payday Loan Regulations

While the Bible supports loans made at reasonable interest charges, it denounces usurious practices,...

Read More

The ERLC Opposes Taxpayer Funding for “Gender Transition” Surgeries and Procedures

Southern Baptists have resolved that efforts to “gender transition” conflict with God’s good design...

Read More
Nurses and doctors in a hospital

The ERLC Opposes Harmful “Gender Transition” Surgeries and Procedures

Southern Baptists have resolved that efforts to “gender transition” conflict with God’s good design...

Read More
2024 State Policy Agenda

What’s in the 2024 State Policy Agenda?

One of the primary ways the Ethics & Religious Liberty Commission fulfills its ministry...

Read More