Christians and Payday Lending

Is payday lending a scourge to the poor, or is it a chance to help them past a tough financial spot? Are people responsible and capable of making the best decisions for themselves may be the real question.  

I recently attended a conference in which there was a debate on payday lending, a hot button issue. One side argues that payday lending violates Biblical restrictions on rates of interest and oppresses the poor. The other side contends that payday lending provides small, short term albeit expensive loans that provide financial flexibility for people without credit cards or bank accounts, and that ultimately such flexibility helps borrowers. At the conference, payday lending was defined as follows:

“The practice of lending small amounts of money, usually $350 or less, to individuals for two week periods (i.e. until the next pay day), potentially trapping borrowers in an endless cycle of two week loans, often at an annual interest rate up to or exceeding 360%.”

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