The bait with an unshakeable hook: A biblical answer to predatory payday lending practices

Catching a fish is a fairly simple act. You catch a fish by disguising the hook in something it likes to eat. The fish becomes so excited about the prospects of getting a good meal that it bites first and looks later. Many fine meals have landed on my plate by that simple act of subterfuge.

 Regrettably, this practice isn’t used only to catch fish. It also works on desperate people. Today the practice of baiting the hook to catch the unsuspecting has been honed to a science by some unscrupulous people involved in the practice of so-called payday lending. In payday lending the lender offers to the desperate person what looks like an easy way out of his or her momentary financial dilemma: take out a loan and pay it back in a couple of weeks, with a little bit of interest. The bait is too good to pass up, and the next thing the unsuspecting borrower knows is that he or she is paying that little bit of interest every two weeks with no end in sight, in some cases paying out 360 percent in annual interest.

Lending money at obscene levels of interest to those who demonstrate no ability to repay that money can only be described as a predatory activity. The practice of payday lending violates multiple biblical teachings. In what follows, I will use only the first four chapters of the book of Genesis to demonstrate that payday lending as it is practiced by most businesses today is an affront to man and God. Here are four reasons to oppose payday lending:

1. Human dignity. Genesis 1:26-27 tells us that humans are created in God’s image. In fact, humans are the only species mentioned in the creation account as being created in the image of God. While scholars are divided in their opinions of what this “image” is, they are agreed that it means humans share something of the divine not possessed by any of earth’s other creatures. That affords them a unique dignity by virtue of their very existence. Human dignity leads us to insist that humans be treated as people of inestimable worth regardless of their social, economic, physical, or any other condition. The predatory activity involved in much of payday lending fails to respect the dignity of the person created in the image of God. It treats fellow humans as prey rather than fellow image-bearers.

2. God’s design. God’s expectations for humanity at creation were very high. The book of Genesis states that He gave humans authority over all creation as His stewards (1:26-31; 2:15). They were in partnership with Him in tending to the needs of creation. The expectation was that they would work together to achieve this task. That calling still exists. We are still intended by God to play a part in the respectful stewarding of His creation. Adequately achieving that task requires a mutual beneficence among humans that empowers each person to fulfill his or her potential. The predatory practice of much of payday lending actually interferes with human flourishing. It holds some in a perpetual state of impoverishment for personal gain. There is no partnership for mutual benefit here. Not only do fellow humans suffer as a result, but God’s design for human stewardship of His creation is affected as this predation crushes people.

3. Human nature. It didn’t take long in the biblical narrative for humans to rebel against God’s plan for them. Chapter three of the book of Genesis describes humanity’s rebellion against God. The result of their rebellion brought them separation from God and one another (Gen. 3:7-19). It produced a selfishness that saw fellow humans as objects to be used for personal gain rather than subjects with whom to enjoy rich, mutually beneficial relationships. Predatory payday lending represents some of the worst of fallen human nature at work. Greed for material gain is the ultimate value in this practice. Other humans are no more than objects for personal enrichment.

4. Social responsibility. Chapter four of the book of Genesis introduces us to God’s expectation of human social responsibility. After Cain has killed his brother Abel, God asks him where his brother is. Cain responds with the devastating, revelatory question, “Am I my brother’s keeper?” (Gen. 4:9). The answer is so obvious that God does not even bother to answer. Cain was indeed his brother’s keeper. Jesus developed this point further by reminding us that we are each other’s neighbors. As such we have a responsibility to assist each other (Luke 10:30-37). 

There is no room for predatory behavior in God’s plan for human relationships. In fact, where this does occur in Scripture, God makes sure to eventually balance the scale. So, for example, the people of Israel plundered their Egyptian masters upon their departure from Egypt (Exod. 3:21-22). On a more universal level, God calls on people to be just in their business dealings with each other. He calls for just scales and fair prices (Lev. 19:35-36; Prov. 11:1). He denounces usurious lending practices on multiple occasions (Exod. 22:25-27; Lev. 25:35-37; Neh. 5:1-13). 

God is not opposed to profit. Jesus even spoke well of it (Matt. 25:14-30). But God is opposed to those who take advantage of the weak and vulnerable (Exod. 22:21-24; Deut. 24:10-22; Zech. 7:8-14). There is no other way to describe predatory payday lending than oppressive. Its very business model is based on the inability of the borrower to ever be free of his or her indebtedness. Business must operate with a heart if it is to be respected as a valued member of society. It must see itself deriving a reasonable profit because it contributes to the well-being of those it serves, not simply deriving as much profit as possible because it manages to plunder an unsuspecting public. 

Chapter four of the book of Genesis also introduces us to part of the solution for dealing with predatory payday lending — the civil magistrate. The chapter reveals God’s commitment to regulating broader human relationships. After God confronts Cain over his murder of Abel, he condemns him to a life of wandering. Cain complains that God’s punishment is too great. He fears that “whoever finds me will kill me” (4:14). In response, God says that He will exact a heavy penalty from anyone who kills Cain. In this interaction, we can see the seed of God’s institution of the civil magistrate. He is placing boundaries on how humans are to treat one another. 

God instituted government to help humans live together in harmony. Even if humans were not fallen and sinful, we would still need government to help us organize our lives together. But because of our fallenness, government is essential. As the Apostle Paul states, government’s task is to reward good and to punish evil (Rom. 13:1-7). The divinely ordained task of government is to help humans live within God’s moral standards. Government should not abuse this authority, but it must intervene at times. 

Predatory payday lending exhibits all of the features that make government intervention necessary. Its business model elevates greed as the ultimate value. It devalues humans and puts the very economic system of free markets that have pulled more people out of poverty than any other system known to man at risk of rejection by a public that is tired of being taken advantage of and treated as nothing more than cattle. When people fail to act responsibly toward each other, government is there to ensure the balance.

At times, people may need some emergency financial assistance. Those who make this type of service available are in a high-risk activity. Consequently, to cover their higher risks, they must charge a higher interest rate. But surely there must be a limit to this risk management. A lender should not be able to take advantage of a person’s plight for predatory gain. Some reasonable regulations should be adopted that will ensure that lenders work within appropriate limits and that guarantee borrowers are not trapped in an endless debt spiral that drives them further into the poverty from which they are desperately trying to escape.