Pay-day loans - the scandal of silence

“Lord, who may live on your holy hill?” asks David in Psalm 15. Answer, the one whose walk is blameless, who does what is righteous and, tucked away at the bottom, “He who lends his money without usury” (v 5, NIV).

That little word ‘neshek’ is one that ought to be written large over our Western culture. Indeed it may turn out to be its economic epitaph.

Simply, it means ‘charging interest’, which is of course at the basis of modern capitalism. In Mere Christianity, C S Lewis pointed out that our economies were therefore based on something which, until the end of the medieval period, all Christian traditions had taken to be a sin. Whilst admitting that he was no economist, he said it would nevertheless be remiss of him not to make this observation.

Personally, I think we now know how right he was. An economy driven by interest charges is fatally flawed. Furthermore, it seems to me Jesus also had this ‘traditional’ take on economics.

In the parable of the talents, the master says to the man who accuses him of reaping where he has not sown, “then you should have put my money on deposit with the trapezites” — according to the Greek English Lexicon of the New Testament a broker or banker who ‘exchanges money for a fee, and pays interest on deposits’. In other words, he should have lent to someone as grasping as he makes his master out to be.

Some still want to argue that the Bible is not opposing ‘sensible’ or ‘business’ loans. Personally I doubt that, but whatever one’s view there is surely something utterly scandalous about the increasing proliferation of so-called ‘pay day loans’. Our television screens are full of their adverts, and that alone surely indicates a booming business. With a typical repayment rate of over 4000% (that’s right, four thousand per cent) they surely qualify by anyone’s standards as ‘excessive’.

Furthermore, it is not just the desperately poor or the economically ignorant who are falling victim to what is basically a scam. In today’s Daily Telegraph, a reporter writes of her experiences with just such a loan, pointing out that with the so-called ‘credit crunch’, banks and other lenders are being urged to be cautious in the loans they offer.

Her conclusions are hard to dispute:

“Legal loan sharks have simply stepped in to the breach, devoid of proper regulation that might provide a cap on lending, and now, worst of all, this Government is actually cosying up to them. As was revealed in The Daily Telegraph a fortnight ago, Wonga executives attended the recent Conservative Party conference and paid £1,250 a head for face-to-face meetings with ministers from the Treasury and the Department for Business.

Instead of financial lessons about loans being learnt, it feels as if the normalisation of debt is close to being complete. You never hear anybody talk about “saving up” any more, unless it’s for a house, and even then that process is only in place so that you can take out a whopping great loan. Entire lives and lifestyles are still built on credit, and it is seen as uncontroversial that one of the Prime Minister’s closest employees goes to work for a company that has been investigated by the OFT.”

This makes me angry. I hope it makes you angry too. Every time I see a ‘Wonga’ advert, I want to throw up. And every day there seem to be more such companies. Yet the Church, along with society as a whole, seems to be strangely muted in response.

This is not a case of wanting the Church to leap on a crusading bandwagon. Nor is it the traditional call for the Church to attack the profit motive. It is about the exploitation of the poor and indeed the spread of poverty. If the directors of these payday loan companies are getting rich, we know exactly at whose expense they are doing so — the poor sap who thought they could pay for that car repair or that little treat for the kids by taking out just a little extra.

In my book, payday loan companies and heroin dealers are not that different. They both relying on getting the needy client hooked and then milking them for all they can.

In God’s book it is already clear where they stand — and it is not on his holy hill.

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