Resources for your pastoral role with persons in deep financial waters

11/12/2014


By Dr. Marian McClure Taylor

I recently received a call from Richard Cordray, Director of theConsumer Financial Protection Bureau (CFPB). What I learned is timely at any point in the year, but especially at year's end when families are stretching themselves financially.

 
The CFPB, which opened its doors in 2011 following passage of Wall Street reform, is the first federal agency devoted to consumer protection in the financial marketplace. Director Cordray explained that the central mission of the CFPB is to make markets for consumer financial products and services work for all Americans. That includes mortgages, credit cards, student loans, payday loans, auto loans, bank accounts, credit reporting, debt collection, international money transfers and more.
 
Director Cordray described his appreciation for the role communities of faith play in building neighborhoods, supporting members, and when necessary, caring for people experiencing financial trouble. He echoed what many of us know: that communities of faith often serve as "first responders" when it comes to the financial security of families. At the level of state-wide organizations such as the Kentucky Council of Churches, faith communities also ask legislators and regulators for better policies to protect people and means of recourse for people who are harmed by predatory practices in the marketplace.
 
As a leader in churches and/or charitable service agencies, you might very well find yourself in situations where you could help people by sharing information about the interactive tools the CFPB has developed. These tools exist to help consumers get clear, unbiased answers to their financial questions and to get help when necessary. 
 
Below are links to the CFPB's web-based resources. Please share these. Some of the resources are designed to help families avoid or prevent financial mistakes. Others are for when the problem already exists.
 
Foremost among these is a groundbreaking consumer complaint system, where the CFPB can help anyone having trouble with a financial institution.  Director Cordray said that more than 300,000 American consumers have already made use of this system. 
 
You'll also notice item #7 is a link to an order form for free CFPB materials, which can be handed out in houses of worship or anywhere else.
 
By reaching out to faith communities as he is doing, Richard Cordray is both complimenting us and challenging us. God's blessings on you and your churches and organizations as you work to assist so many people who are struggling to get by on limited resources or who get in over their heads with financial dealings. May you find the resources listed below helpful as you do that.

Consumer Financial Protection Bureau (CFPB) Resources
 
You may view all these resources at www.consumerfinance.gov 

  1. To file a complaint about consumer financial products or services (mortgages, credit cards, student loans, bank accounts, credit reporting, auto loans, debt collection, payday loans, money transfers, and more), visit the CFPB Consumer Response Center at www.consumerfinance.gov/complaint or call 855-411-CFPB. The CFPB call center offers assistance in 189 languages. 
  2. To share a story - positive or negative - about a consumer financial product or service, visit "Tell Your Story" at https://help.consumerfinance.gov/app/tellyourstory 
  3. To find answers to questions about consumer finance, visit "Ask CFPB" at www.consumerfinance.gov/askcfpb 
  4. To make informed decisions about paying for college, from comparing costs to repaying student debt, visit "Paying for College" at http://www.consumerfinance.gov/payingforcollege 
  5. To learn how to prevent elder financial exploitation and to view easy-to-understand booklets to help financial caregivers for older Americans, visit http://www.consumerfinance.gov/older-americans/ 
  6. To learn about financial resources and financial protection for servicemembers (armed forces), visit http://www.consumerfinance.gov/servicemembers/
  7. To order free CFPB publications in bulk for distribution to consumers, visit http://promotions.usa.gov/cfpbpubs.html 
  8. To find the CFPB's Federal Register notices, as well as to read and submit public comments related to CFPB rulemakings, visit http://www.consumerfinance.gov/notice-and-comment/ 
  9. To view the CFPB website in Spanish, visit http://www.consumerfinance.gov/es/ 
  10. To connect with the CFPB on social media:

 You also may find many more resources at www.consumerfinance.gov

God's Concern for People in Economic Jeopardy

God’s concern for the poor, the “widow and the orphan” and anyone treated unjustly translates into important priorities for the churches today. Together through the Council, Kentucky’s churches in recent years prioritize these issues: ending exploitative lending practices, stopping efforts to expand gambling casinos’ operations, establishing an Earned Income Tax Credit in Kentucky, and encouraging tax reforms that are sustainable and progressive.

Council finds payday loan interest rates “predatory” and calls for caps

Too many people are having to live from paycheck to paycheck, juggling difficult decisions about what bills to pay. Under such high-pressure circumstances it is not surprising that payday loans are seen as an attractive way to secure shelter, utilities and food for another week or two.

But when these kinds of loans go unregulated, a trap closes around the people who are most vulnerable. Usually they do not know the dimensions of the trap because no one explains the true amount of money they will really end up paying once they have repeatedly borrowed in this way. Most borrowers return at least six times.

Scriptures prohibit taking advantage of the poor, and specifically forbid usury against the poor (Exodus 22:25). Payday lending is the clearest form of usury against the poor that exists in our state. Payday loan rates in Kentucky exceed 400% APR. According to the Kentucky Coalition for Responsible Lending, each year an estimated 175,000 Kentucky families become ensnared in the payday loan debt trap, paying approximately $158 million annually in fees.

Local jurisdictions of 12 denominations serving nearly a million Kentuckians speak together through the Kentucky Council of Churches. We have issued a public statement calling for “limits or prohibition on predatory lending”. Our opposition to payday lending is in the larger context of our desire for a better life for people who are poor, especially a desire that they have wages they can live on, and access to quality, affordable health care.

We oppose predatory lending because it is counter to the care for our neighbors that God expects of us. This kind of lending cannot be described as aid, because true aid empowers persons to thrive and become responsible, contributing members of our community. Instead this kind of lending is a sinful exploitation of another person’s emergency, often leaving them much worse off.

We urge the faith community to support a cap on the interest rates that can be charged. The proposed cap of 36% will rank us with the states that are addressing this serious problem. In 2011, good progress was made toward this goal. Let’s keep working to educate Kentuckians so a cap can be instituted in 2012!

Stop the expansion of gambling

We seek to stop the expansion of gambling because it exploits people whose families can least afford the losses, fosters addictions and corrupts public decision-making. Recent research from health and social sciences only serves to heighten concerns as you will see if you read Why Casinos Matter at this link. Legislators and the press have repeatedly heard from the Council on this issue of economic justice because of our policy statements about gambling. Our member dioceses of the Catholic Church have offered their distinctive voice as well. Be sure your public officials hear from you too! On Kentucky Tonight (KET) in February 2012, KCC Executive Director Marian McClure Taylor expressed the opposition of churches to gambling; see especially minutes 15-17 on this KET video.

Establish an Earned Income Tax Credit


Together with the Kentucky Youth Advocates we encourage the public and our elected officials to consider the benefits for the working poor of having an Earned Income Tax Credit in Kentucky to mirror the successful program that lifts families out of poverty nationally. Please watch the Bread for the World video that helps to explain this idea's merits.

Bring about Tax Reforms

In 2012 a blue ribbon tax reform commission is studying ways to modernize the Commonwealth's tax system to take into account the shifts in the economy toward services, to consider what will attract more business investments and to provide a more adequate and sustainable flow of revenue to pay for necessary public services and programs. The Council works to make sure that the search for business competitiveness is enlightened by a broad acknowledgement of the link between human development (health, education, community life) and a good business environment. We also want to make sure the commission hears about the dire needs for help many families experience, and that the commission avoids tax approaches that give an undue share of burden to people who are struggling economically.