EDITORIAL

The Heresy of Payday Lending

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Some point to the election of politicians who favor abortion or a redefinition of marriage as a sign that Catholics in Rhode Island have not allowed their faith to enter the public square. While that is true, it is also the case that an unwillingness to confront economic injustices is a sign that Catholic faith has not penetrated political life.

Last week the R.I. House of Representatives Finance Committee held a hearing on a proposed cap on so-called pay-day lending. As the Providence Journal reported this week, R.I. remains the only state in New England that allows triple-digit interest rates for storefront lenders.

Many Catholics erroneously believe that payday lending like other economic issues simply allows a variety of opinion open to prudential judgment. That is not quite accurate.

Usury — the charging of extreme interest — is condemned by Catholic doctrine. Recently Pope Benedict XVI explicitly condemned usury in his encyclical letter Caritas in Veritate. St. John Paul II called usury “a scourge that is also a reality in our time and that has a stranglehold on many people’s lives.”

Rhode Islanders — especially R.I. Catholics — should stand up against payday lending, the usury of our time. The extremely poor need protections from what appears their only option in a challenging economy. Extreme rates of interests, with little chance of payment in a timely fashion, are not the way to grow a healthy economy. Instead, the poor need regulations against financial charlatans who seek the economic ruin of those on the margins.