Oklahoman religious leaders in the state have been working to defeat a bad credit loan-associated bill that they claim gives payday lenders more power and authority. While the federal government in the U.S. is working on enacting more stringent standards in the payday loan industry, lobbyists have been talking to Oklahoma legislators to do just the opposite. The industry advocates are asking that legislation be passed that would permit payday lenders to feature a broader range of financial services and products.
Some church leaders are not happy about the news. According to Pastor Mitch Randall, who presides over Norman’s New Haven Church, “. . . Payday lending is not good news to the poor.” He added, “It is the worst news possible.” The pastor is one of a group of religious leaders in the state who opposes SB 1314. The bill, if enacted into law, would permit payday lenders to lend up to $3,000 versus $500 at a time to borrowers.
Randall said, “[Payday lenders] are making money on the backs of the poorest citizens of our state and that is immoral. It’s wrong and they need to be out of business.” Jill Hatchers, who is the wife of a pastor at Norman’s First Baptist Church, made the following observation. She said, “Predatory lending . . . is a debt trap. . . . [Lenders] seek out those who are most vulnerable.”
Besides church leaders, the Oklahoma Policy Institute is also against SB 1314. Members of the organization say that the bill would enable lenders to charge interest as much as 20% each month. On a $3,000 loan, that would amount to around $600, including fees.
Senator David Holt, who authored SB 1314, said that he did not necessarily believe that personal loans for people with bad credit financing is an ideal choice. However, he said he does believe in a free marketing and offering consumers varying alternatives as long as they receive adequate disclosures about a product. Holt added, “If it’s a really bad financial product for people, I would like to think they won’t pursue it.”
Opponents of the bill said they would fight diligently to defeat the passage of the bill, possibly supplanting the measure with one that would drive payday loan businesses from the state. Pastor Randall said that the lending of payday loans “is an evil practice.”
However, proponents for passage of the bill say that Oklahomans in the state value the simplicity and flexibility of short-term credit products that are regulated by law. They say that payday loans allow an accessible form of credit – one that is customized to a borrower’s current financial requirements.
SB 1314 did pass out of committee and will probably move onto the next legislative phase (the Senate). However, in one of the latest developments, Senator David Holt tweeted that he will not be advancing what he considers a controversial bill. He made the move after receiving backlash through social media. Holt said, “Any appeal for a less-regulated economy still appeals to me as a free market champion, but I will not be advancing . . . flex loans.”