At the 2016 Synod Assembly, Resolution #3 regarding Predatory Lending in South Dakota was adopted. As a part of that resolution, the South Dakota Synod of the ELCA resolved that it condemns any interest rate that exceeds 36% APR and encourages congregations to become trusted sources of information on the two 2016 South Dakota state ballot measures related to predatory lending:
- The Synod encourages congregations to advocate support of Initiated Measure 21 which puts a 36% APR limit on payday loans, car titles, and installment loans; and
- To oppose adoption of Amendment U which changes the State Constitution to allow unlimited interest and fees on these loans.
Responsible lending is a moral issue. We are called to love our neighbors and keep them from harm instead of taking advantage of the poor through excessive interest rates and financial arrangements. Pay day loans have high fees and short repayment periods that are often beyond the borrowers’ capacity to repay. Loans with triple-digit interest fees and short-term repayment periods routinely trap vulnerable borrowers in a cycle of debt. This way of life is unacceptable.
In scripture, Martin Luther’s writings, and the principles found in Lutheran ethical teaching expressed in our ELCA social statements warn us about gaining wealth through exploiting the poor and direct us as Christians in society to advocate on behalf of the poor, the powerless, and those who suffer.
Below are some resources that can be shared across your communities and congregations during this year’s elections:
- “A Moral Response to Payday Lending”, South Dakota Faith in Public Life
- “Responsible Lending is an Economic and Moral Issue”, The Center for American Progress
- Congregational Study: “Modern Day Usury, The Payday Lending Trap: A Discussion Guide for Churches”, Center for Responsible Lending
