World News
Faith-based groups say biblical call guides payday-lender campaign
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WASHINGTON (CNS) -- The Rev. Mitchell Kent knows about the risks of payday lending very well -- to the tune of $5,000. Those risks include loan fees that add up quickly, fees that faith-based and consumer groups pushing for reform of the industry say are exorbitant and akin to usury. For the Columbus, Ohio, minister, it all began about nine years ago when he needed $100 to pay a utility bill. With no cash in hand but a secure paycheck just two weeks away, he walked into one of the city's proliferating payday lending stores. Within minutes he had cash, underwritten by a personal check dated two weeks into the future. The $15 fee seemed worthwhile. "It was so easy to get the money in advance. It was a godsend," he said. Two weeks later, when the loan came due, Rev. Kent had already spent his next paycheck on another bill and the check he wrote to cover the original loan bounced. So he took out another two-week loan to pay off the first. Two weeks later it was more of the same. The cycle -- Rev. Kent called it a "downward spiral" -- kept going for two years. Adding up the fees for each new transaction and overdrawn-account fees from his bank for the bounced checks, Rev. Kent estimated that the original $100 loan cost him between $5,000 and $6,000.
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