(On February 22, Suzii Paynter - Director of the Texas Baptist Christian Life Commission; and a member of the TBMaston Foundation Board of Trustees - testified before the Texas Senate Committee on Business and Commerce in support of Senate Bill 253, which would close the payday lending loophole.)
Friday, February 25, 2011
Testimony by Chad Chaddick on Payday Lending - February 22, 2011
(On February 22, Chad Chaddick - pastor of Northeast Baptist Church, San Antonio - testified before the Texas Senate Committee on Business and Commerce in support of Senate Bill 253, which would close the payday lending loophole.)
Questions Posed to the Senate Committee Considering SB 253 on Payday Lending
(On February 22, Chad Chaddick - pastor of Northeast Baptist Church, San Antonio - testified before the Texas Senate Committee on Business & Commerce in support of Senate Bill 253, which would close the payday lending loophole. The following is excerpted from a letter he sent to the committee the following day.)
Reflecting on the testimony and questions of yesterday, I wish to share two thoughts.
1. Regarding the protections extended to our military personnel, I find it interesting that not one person objected to these protections being extended to our soldiers. That the Department of Defense has found that such credit practices are “a threat to our national security” was accepted by all. Whether this acceptance was out of a sense of real patriotism or whether it was simply out of the desire to be seen as patriotic, such acceptance begs the question – if one mark of patriotism is that we protect our military from usurious practices by capping the interest and fees that can be charged them at 36%, is it not a matter of state pride that we would extend equal protections to all the citizens of our own state? To do otherwise is to establish a double standard by which we grant one class of people greater protection than another class of people.
2. Likewise, it is interesting to me that all present yesterday would accept the need to protect our military personnel from usurious lending, but none of us made the connection that protection is necessary only if there is a threat of real harm. If our military personnel need to be protected, it stands to reason that they need to be protected from something harmful. Yet what I heard yesterday both from industry lobbyists and from committee members was that payday lending practices are good, beneficial, and necessary. Indeed, the committee went out of its way to make the point that they wanted to ensure the continued prosperity of these businesses and their practices.
My question is, do you really want to ensure the continued prosperity of practices that we, in our patriotic pride, have all agreed are harmful? I do not deny that there is a need for some extension of credit to the working poor, but I would suggest that there are alternative ways to do so – ways that actually help the citizens of the state rather than harm them. In a government designed to be “for” the people, I would hope you agree.
I would urge your careful consideration of these matters as you hammer out final details of the bill.
Reasons for Christians to Oppose Payday Lending and Support Texas SB 253
(On February 22, Chad Chaddick - pastor of Northeast Baptist Church, San Antonio - testified before the Texas Senate Committee on Business & Commerce in support of Senate Bill 253, which would close the payday lending loophole. The following was part of the prepared remarks he presented to the committee.)
As a pastor, I've reflected on my own particular encounter with the payday loans, and with payday loans in general so that our church could understand our moral and theological motivation for opposing the continuation of these unregulated practices. There is, quite naturally I think, the sheer shock and outrage a person feels that any group could legally arrange or issue a line of credit with terms that amounted to upwards of 740% interest. My outrage only increased when I discovered that the only way someone could offer such a line of credit was to do so under the guise of a Credit Service Organization (CSO) which, by definition, exists to help people. It seems ludicrous to me that 740% interest could ever be considered “helpful.” As my own experience has proven, it is education and accountability that are truly helpful to families with damaged credit and few financial resources – NOT an available line of credit burdened with usurious interest.
As a pastor, I've reflected on my own particular encounter with the payday loans, and with payday loans in general so that our church could understand our moral and theological motivation for opposing the continuation of these unregulated practices. There is, quite naturally I think, the sheer shock and outrage a person feels that any group could legally arrange or issue a line of credit with terms that amounted to upwards of 740% interest. My outrage only increased when I discovered that the only way someone could offer such a line of credit was to do so under the guise of a Credit Service Organization (CSO) which, by definition, exists to help people. It seems ludicrous to me that 740% interest could ever be considered “helpful.” As my own experience has proven, it is education and accountability that are truly helpful to families with damaged credit and few financial resources – NOT an available line of credit burdened with usurious interest.
But I have discovered something else as I reflected on these types of loans. I have discovered that, the more I tell this story, the more 740% interest becomes just another number. It eventually loses all shock value and any moral connotation; to be honest, any argument that rests solely on its shock value is a very shallow argument. Several resources have helped me dig a deeper foundation for my own position on the issue. One is the Christian Scripture. Both Old Testament and New are clear that justice for the poor is an extremely meaningful issue to God. “Evil” is the name given in Scripture to “oppressing the poor” and “crushing the needy” (Amos 4:1). A line of credit carrying usurious interest targeting the financially fragile certainly qualifies as oppressing the poor and crushing the needy.
But a second resource in understanding this position is to follow the logical outcomes of viewing such practices as helpful and good. By such reasoning, we find ourselves in a surreal world of absurd values.
Consider this: if taking such a loan is helpful or good, then we must immediately admit that these CSOs are operating under an unfair market advantage, since our banks, credit unions, and other loan providers are unable to offer such good and helpful products. Were we to admit that such products are good for our citizens and for ourselves, then we must remove the constitutional limit of 10% interest and open the regulatory doors for our banks to offer such helpful products. After all, which of us, by this reasoning, would not want easier access to such a good thing? Just imagine the good that could be done if every bank and credit union could offer us 700% car and home loans! Indeed, the State of Texas is currently in a financially difficult situation. No doubt the state would benefit from taking loans from its citizens in the form of bonds guaranteed at 700%. As a civic duty, I would like to be the first to buy some.
But if this seems ridiculous, and it is, and if such bonds would obviously be bad for the state of Texas, and they are, then we must be ready to admit they are bad for individual citizens, too. Our citizens should be afforded some protection from such harmful practices.
Of course, one objection to regulating such practices is that the market within which they operate will condense and some people may lose jobs to keep the corporations profitable. Job loss is certainly not a good thing. But if the good of creating and maintaining jobs outweighs our consideration for the fairness of the practices those jobs support, then I fear that we find ourselves again in the position of the absurd. If we cannot regulate these practices because the creation and preservation of jobs is more important than protecting the most vulnerable of our citizens, then we must question some of our other existing regulations.
Consider, for instance, our strenuous regulation against the manufacture, transport, and sale of illicit drugs. Such regulation is clearly oppressive, and, no doubt, “hurts” those involved in such activities. If our consideration for job creation and preservation is our foremost concern, then we must face the fact that we are robbing drug dealers of their fairly-earned, market-driven livelihoods. Imagine how many jobs we could create with less strenuous regulation!
Consider also how the regulation of prostitution is hurting the bottom-lines of pimps throughout our state. The exploitation of women and the sex trade of underage girls aside, the state’s regulation of prostitution is hurting jobs. If job creation, growth, and preservation outweigh the moral nature of the practices those jobs support, then ultimately, we are robbed of any moral foothold to oppose such practices. There is no end to the types of practices we might unleash upon the citizens of our state if we followed such reasoning. It is absurd.
But clearly we are against these and other hurtful practices, and our citizens have been afforded some protection from them. If the shock of a 740% APR loan is not enough to bring payday and auto-title loans under existing regulation, then perhaps an appeal to moral conviction, consistent reasoning, justice may help. It is for these reasons that I support SB 253 to close the loophole that allows such usurious practices to continue in Texas.
An Experience with Payday Loans at Northeast Baptist Church in San Antonio
(On February 22, Chad Chaddick - pastor of Northeast Baptist Church, San Antonio - testified before the Texas Senate Committee on Business & Commerce in support of Senate Bill 253, which would close the payday lending loophole. The experience related here was part of the prepared remarks he presented to the committee.)
About a year ago, a couple joined our church. With six kids, a dependent mother-in-law, and one income, they were understandably financially fragile. The church gave them some financial assistance not long after they joined.
Six months later, they requested more financial assistance from the church. At present, the policies of our church provide that we do not require much from the individual church member-with-a-need other than to answer a few questions regarding the need and how it came to exist. If requests are made a second time, however, we require that those with the need meet with another member of our church who can assist them in developing a household budget and who can provide a measure of accountability with regard to living within that budget. The needy family in question willingly met with our Vice Chairman of Deacons and his wife.
In the course of developing the household budget, our deacon discovered that the family would be able to live within their means except for one item of debt that was dragging them down . . . . a $700 payday loan they had taken out roughly four months earlier to help with a rent payment on their home. The terms of the loan: $200 every two weeks was automatically deducted from the husband's paycheck. This $200 did not reduce the original amount of the loan. It merely allowed for the $700 principal to roll-over until the next pay-period. In the course of the four months the family had maintained this loan, they had rolled the principal over 9 times – at a cost of $1,800. (Had they continued to pay on the loan for a year, they would have paid $5,200, for an APR of over 740%!) Now, as they approached the church again for help, they needed help to pay their rent or face eviction.
The financial assistance that the church is able to provide for any family is limited. To help this particular family meet their financial obligations for the month and get them out from under the loan that would have kept them perpetually struggling (and us or others perpetually trying to help), we needed nearly $1,500. The loan accounted for half of that amount when the principal and associated fees were factored together. This certainly exceeded the usual amount the church was prepared to pay, but through the generosity of several church members, and even one non-church member, the money was raised.
It was then that we hit an unexpected speed bump – it took us three days to 1) determine exactly where the loan should be paid, and 2) discover a means acceptable to the company for paying off the loan (our offers of a check and an initial credit card were rejected). The system was certainly not set up to make it easy to pay off the loan. By the time we had located the company, talked with a representative who could authorize this pay-off, and agreed how the loan was to be paid, we had accrued nearly $100 worth of additional fees.
I am pleased to say that the family – being out from under the payday loan, and receiving some basic education on how to handle money and some accountability on their budget – has successfully lived within its means for the past three months.
About a year ago, a couple joined our church. With six kids, a dependent mother-in-law, and one income, they were understandably financially fragile. The church gave them some financial assistance not long after they joined.
Six months later, they requested more financial assistance from the church. At present, the policies of our church provide that we do not require much from the individual church member-with-a-need other than to answer a few questions regarding the need and how it came to exist. If requests are made a second time, however, we require that those with the need meet with another member of our church who can assist them in developing a household budget and who can provide a measure of accountability with regard to living within that budget. The needy family in question willingly met with our Vice Chairman of Deacons and his wife.
In the course of developing the household budget, our deacon discovered that the family would be able to live within their means except for one item of debt that was dragging them down . . . . a $700 payday loan they had taken out roughly four months earlier to help with a rent payment on their home. The terms of the loan: $200 every two weeks was automatically deducted from the husband's paycheck. This $200 did not reduce the original amount of the loan. It merely allowed for the $700 principal to roll-over until the next pay-period. In the course of the four months the family had maintained this loan, they had rolled the principal over 9 times – at a cost of $1,800. (Had they continued to pay on the loan for a year, they would have paid $5,200, for an APR of over 740%!) Now, as they approached the church again for help, they needed help to pay their rent or face eviction.
The financial assistance that the church is able to provide for any family is limited. To help this particular family meet their financial obligations for the month and get them out from under the loan that would have kept them perpetually struggling (and us or others perpetually trying to help), we needed nearly $1,500. The loan accounted for half of that amount when the principal and associated fees were factored together. This certainly exceeded the usual amount the church was prepared to pay, but through the generosity of several church members, and even one non-church member, the money was raised.
It was then that we hit an unexpected speed bump – it took us three days to 1) determine exactly where the loan should be paid, and 2) discover a means acceptable to the company for paying off the loan (our offers of a check and an initial credit card were rejected). The system was certainly not set up to make it easy to pay off the loan. By the time we had located the company, talked with a representative who could authorize this pay-off, and agreed how the loan was to be paid, we had accrued nearly $100 worth of additional fees.
I am pleased to say that the family – being out from under the payday loan, and receiving some basic education on how to handle money and some accountability on their budget – has successfully lived within its means for the past three months.
Saturday, February 12, 2011
Francis Wayland: The First Baptist Ethicist
Francis Wayland (1796-1865), a Baptist minister who served as President of Brown University from 1827-1855, was the first Baptist ethicist and was America’s foremost ethicist during the pre-civil war era. His popular Elements of Moral Science, first published in 1835, sold more than 100,000 copies before the end of the 19th century and yet another reprint was issued as recently as April 2010.
D.H. Meyer in his 1972 book The Instructed Conscience suggested that Wayland offered the first serious attempt by an American intellectual to answer Ralph Waldo Emerson’s call for a public ethic to guide the “liberated conscience” of American society. Emerson was looking for “some kind of formal consensus on the fundamental principles of morality, agreement on the meaning of basic moral terms, and the formation of a reasonably coherent code of moral maxims.” Wayland’s book provided the basic form and common point of reference for a series of philosophically varied proposals with similar moral outcomes by American academic moralists and intellectuals. Chief among them were Mark Hopkins and Asa Mahan, both Congregationalists, Francis Bowen, a Unitarian, Archibald Alexander and James McCosh, both Presbyterians. Most of them were college Presidents like Wayland. Some of them were clergymen like Wayland. All of them were trying to provide a resource for the kind of moral leadership Americans felt the young nation needed. Most of their works were texts for senior level capstone courses that were expected to provide the highpoint and culmination of a good college education.
Wayland’s ethics were exhortative rather than analytical. Though he was concerned with the epistemology of morals and how to recognize a moral obligation, his primary concern was to instruct the conscience rather than to stimulate the intellect. The innovation in his method was to teach moral philosophy as a “science” related to religion but distinct from theology. That is why people of varied theological positions could find it appealing.
Modern ethicists would classify Wayland’s ethic as intuitionist and deontological, as opposed to teleological. His thinking was shaped primarily by the apologetic method of Joseph Butler, whose sermons on conscience comprise one of the highest achievements of rationalist Christian moralism, and Dugald Stewart, the most influential moralist of the Scottish “common sense” school of philosophy.
Contemporary ethical theory faces challenges that are both deeper and broader than those that Wayland faced. In relation to ethics, science no longer enjoys the confidence it did in his day. Darwin, Freud, Nietzsche and the results of very diverse and ever expanding fields of scientific research have made any kind of “formal consensus” on the principles of morality elusive for our day. Yet, the need for some such consensus is greater today than it was then.
The way forward does not lie in a revival of the methods of the past, but the concerns and aspirations of the past can provide an ideal and inspiration for the future. We need to renew a practical concern for the study and teaching of philosophical and theological ethics in our institutions of higher learning. While Logsdon and McAfee seminaries have been setting the pace among us in ethical instruction, some other moderate Baptist seminaries do not even require a basic course in ethics as a requirement for obtaining a degree. All of our colleges and seminaries need to resume their role as leaders in the teaching of ethics and they ought to be encouraging the brightest minds among us to take up the challenge of forming a cross-disciplinary consensus on ethics and morality. Baptists today are as capable of being trend setters in this area as were Baptists in the 19th century.
If the labors of our scholars are to bear fruit beyond the world of academia, then we will also have to cultivate other means for promoting conscience formation in our homes and churches. That is why it is vital to provide ongoing support for agencies like the Baptist Center for Ethics and the Texas Baptist Christian Life Commission, for foundations like the T.B. Maston Foundation, and for publications like Christian Ethics Today .
This entry is cross-posted from the Mainstream Baptist weblog.
D.H. Meyer in his 1972 book The Instructed Conscience suggested that Wayland offered the first serious attempt by an American intellectual to answer Ralph Waldo Emerson’s call for a public ethic to guide the “liberated conscience” of American society. Emerson was looking for “some kind of formal consensus on the fundamental principles of morality, agreement on the meaning of basic moral terms, and the formation of a reasonably coherent code of moral maxims.” Wayland’s book provided the basic form and common point of reference for a series of philosophically varied proposals with similar moral outcomes by American academic moralists and intellectuals. Chief among them were Mark Hopkins and Asa Mahan, both Congregationalists, Francis Bowen, a Unitarian, Archibald Alexander and James McCosh, both Presbyterians. Most of them were college Presidents like Wayland. Some of them were clergymen like Wayland. All of them were trying to provide a resource for the kind of moral leadership Americans felt the young nation needed. Most of their works were texts for senior level capstone courses that were expected to provide the highpoint and culmination of a good college education.
Wayland’s ethics were exhortative rather than analytical. Though he was concerned with the epistemology of morals and how to recognize a moral obligation, his primary concern was to instruct the conscience rather than to stimulate the intellect. The innovation in his method was to teach moral philosophy as a “science” related to religion but distinct from theology. That is why people of varied theological positions could find it appealing.
Modern ethicists would classify Wayland’s ethic as intuitionist and deontological, as opposed to teleological. His thinking was shaped primarily by the apologetic method of Joseph Butler, whose sermons on conscience comprise one of the highest achievements of rationalist Christian moralism, and Dugald Stewart, the most influential moralist of the Scottish “common sense” school of philosophy.
Contemporary ethical theory faces challenges that are both deeper and broader than those that Wayland faced. In relation to ethics, science no longer enjoys the confidence it did in his day. Darwin, Freud, Nietzsche and the results of very diverse and ever expanding fields of scientific research have made any kind of “formal consensus” on the principles of morality elusive for our day. Yet, the need for some such consensus is greater today than it was then.
The way forward does not lie in a revival of the methods of the past, but the concerns and aspirations of the past can provide an ideal and inspiration for the future. We need to renew a practical concern for the study and teaching of philosophical and theological ethics in our institutions of higher learning. While Logsdon and McAfee seminaries have been setting the pace among us in ethical instruction, some other moderate Baptist seminaries do not even require a basic course in ethics as a requirement for obtaining a degree. All of our colleges and seminaries need to resume their role as leaders in the teaching of ethics and they ought to be encouraging the brightest minds among us to take up the challenge of forming a cross-disciplinary consensus on ethics and morality. Baptists today are as capable of being trend setters in this area as were Baptists in the 19th century.
If the labors of our scholars are to bear fruit beyond the world of academia, then we will also have to cultivate other means for promoting conscience formation in our homes and churches. That is why it is vital to provide ongoing support for agencies like the Baptist Center for Ethics and the Texas Baptist Christian Life Commission, for foundations like the T.B. Maston Foundation, and for publications like Christian Ethics Today .
This entry is cross-posted from the Mainstream Baptist weblog.
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