Dear Friends,
The Catholic Church teaches us to work for justice for all people. The Church proclaims that human life is sacred and that the dignity of the human person is the foundation of a moral vision for society. Every human person is made in the image of God; every person is a child of God. This belief is the foundation of all the principles of our social teaching. We believe that every person is precious, that people are more important than things, and that the measure of every institution is whether it threatens or enhances the life and dignity of the human person.
The person is not only sacred but also social. How we organize our society in economics and politics, in law and policy directly affects human dignity and the capacity of individuals to grow in community. We believe people have a right and a duty to participate in society, seeking together the common good and well-being of all, especially poor and vulnerable people. Our tradition teaches that human dignity can be protected and a healthy community can be achieved only if human rights are protected and responsibilities are met. Therefore, every person has a fundamental right to life and a right to those things required for human decency.
In keeping with Catholic teaching, I have chosen to get involved on a local issue of human dignity and care for the poor. This week, there will be a press conference in Lincoln announcing that a group of individuals and institutions will be working to put an initiative on the ballet for November 2020 to limit payday lending to an interest rate of 36%. Voices for Children is leading the charge and I am one of the officials on the ballot committee.
Presently, most people are having to pay around 400% interest on a payday loan. Borrowers typically pay back $800 on a $325 loan. Loan renewal or “loan flipping” traps the borrower in a cycle of indebtedness that demands additional fees as borrowers are unable to repay their loans when they are due. “Rollover” or renewal fees typically amount to $50 every payday until the borrower can pay back the original loan.
Pope Francis has addressed this issue in some of his homilies, “When a family doesn’t have enough to eat because it has to pay off loans to usurers,” the pope said, “this isn’t Christian!” He added for good measure, “It’s not human!”
Usury has always been considered a sin in the Catholic tradition. The Catechism even goes so far as to describe it as a kind of murder: “Those whose usurious and avaricious dealings lead to the hunger and death of their brethren in the human family indirectly commit homicide, which is imputable to them.” While the Catechism does set a particular interest as usury, the Catholic tradition describes usury as exorbitant interest. Clearly 400% is exorbitant, but the present laws of our state do not prevent such rates.
The real question is what is the impact of such loans on those who are poor. As Pope Benedict in his encyclical, Caritas in Splendor, said “This is all the more necessary in these days when financial difficulties can become severe for many of the more vulnerable sectors of the population, who should be protected from the risk of usury and from despair. The weakest members of society should be helped to defend themselves against usury, just as poor peoples should be helped to derive real benefit from microcredit, in order to discourage the exploitation that is possible in these two areas.”
Peace,
Fr. Damian