The PATHWAYS of PAUL Pilgrimage, Sept. 18-28, 2019 -- Information

 
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What Catholics are doing to help victims of predatory loans 

Washington D.C., Jun 5, 2016 / 04:44 pm (CNA) - As the federal government considers regulating the infamous “payday loan” industry, Catholics are already acting to help borrowers saddled with loan debt.

“I think that, from a social justice standpoint, we have the ability to speak for an entire group of people who are being marginalized and taken advantage of,” Stacy Ehrlich, executive director of the Society of St. Vincent de Paul for the Diocesan Council of Austin, told CNA in an interview about the society’s predatory loan conversion program.

The program allows people burdened with one or several onerous short-term loans to pay them off with a low-interest loan from a local credit union. The program exists “to offer some sort of resolution” for borrowers who are “being preyed upon,” Ehrlich explained.

Payday loans and similar types of loans have been criticized as capitalizing on people in desperate situations by charging exorbitant interest rates and fees in terms that customers often do not fully understand and to people who may have no other choice but to take the loan despite the extreme conditions.

Although the rise in “payday loans” is a recent phenomenon, there is a history of “loan sharks” in the U.S. that goes back much further. The basic idea is the same, however: for borrowers who are often strapped for cash and have an emergency expense, lenders offer a small amount of money for a short period of time – until the next paycheck, for example – but attach high interest rates or high “rollover” fees.

With all the fees taken into account, these loans can carry annual interest rates approaching 400 percent, the Consumer Financial Protection Bureau notes.

Some people are able to pay off such a loan quickly, but the process often ends in debt for the borrower, said Dr. Robert Mayer, a professor of political theory at Loyola University Chicago who authored the book “Quick Cash: the story of the loan shark.”

People take out payday loans because they are “speedy” and “convenient” where “relatively few questions are asked,” Mayer told CNA.

A typical borrower is not necessarily among the “poorest of the poor” who has no credit, he noted, but can be a low-to-middle income working-class person without sufficient savings who needs “fast credit,” perhaps for an emergency expense like a car repair or dental work.

“I think the way household finances work these days, people are living from paycheck to paycheck,” he said, “so a bridge loan that’s convenient, in which people can think they can pay back quickly, can make a lot of sense for people, the way they get started.”

Other borrowers can be simply be those with little to no financial knowledge who are the “ultimate optimists” because they think that their situation – like a part-time job, for example -- will be good enough to pay off a short-term loan, Ehrlich said.

However, because of high rates of interest or fees that are attached to a loan which rolls over to the next pay period, loans not paid off quickly can increase rapidly. The consequences can be serious – many borrowers can go further into debt or face debt collection or asset seizure, the Consumer Financial Protection Bureau says.

Lenders can have access to borrowers’ bank accounts, and if their accounts have insufficient funds to pay the loan, overdraft fees can compound the costs. Thus, those without sufficient financial knowledge, or those without savings who need fast cash to pay for an emergency, can easily become trapped in nasty debt.

The Church has “definitely” been a leader in pushing for reform of the payday loan industry and has historically spoken out against usury, safe Mayer.

In November of 2013, Bishop Stephen Blaire of Stockton, then-chair of the committee on domestic justice and human development for the U.S. bishops’ conference, wrote the head of the Consumer Financial Protection Bureau about payday lending abuses.

Most payday loans are used “to meet recurring, basic needs,” he wrote, but they “are structured in such a way as to make repayment very difficult, initiating a cycle of deeper indebtedness that adds to borrowers’ financial stress, rather than relieving it.”

Such lending is immoral because it “preys on the financial hardship of poor and vulnerable consumers, exploits their lack of understanding, and increases economic insecurity,” he said.

And bishops elsewhere have fought for payday loan reforms, like in Texas, where the state’s Catholic Conference has pushed for regulations at the state legislature.

On Thursday, the Consumer Financial Protection Bureau proposed new regulations of the payday loan industry. Companies, before lending, must conclude that the borrower is capable of paying back the loan. There are other proposals, like limits on the number of times a lender could access a borrower’s bank account to prevent overdraft fees from piling up if the account has insufficient funds.

Regulations could successfully curb lending abuses, Dr. Mayer said, but they could also carry adverse consequences for some people needing a fast line of credit.

“Insofar as lenders are being forced to be more responsible or more cautious,” he noted, “that can help prevent people from getting trapped in cycles of debt, as long as loopholes don’t open up.”

However, he added, “some people will lose access to emergency credit,” including perhaps those who have successfully paid off such loans in the past without incurring large amounts of debt.

This is where the Church and faith-based organizations could step in to help those who need emergency cash at a low cost. And some groups are already doing just that.

The Society of St. Vincent de Paul in Austin started its loan conversion program in 2014 under Bishop Joe Vasquez, a leading voice for predatory loan reform in the state, after he encouraged them to actively help those saddled with debt.

“We also felt like there needed to be a little bit of money where our mouth was,” Ehrlich said, noting “that calling to be actionable and not just talk.”

Although in Texas there is a cap on the direct interest rate for a loan, there are no limits on “rollover renewals,” Ehrlich said, meaning that despite seemingly innocuous interest rates, hidden costs on loans can add up with each session.

For instance, a two-week loan might have an advertised 10 percent interest rate with a $50 paperwork fee, Ehrlich said. However, for each period that loan is not paid, another $50 paperwork fee is added on to the outstanding payment. Over the course of several weeks, that cost can easily balloon into a debt that is enormous for someone with a limited budget or irregular income.

With all the costs and fees included, the average annual interest rate for a loan ends up at an astonishing 303 percent, Ehrlich said. “300 percent interest rate for anyone is just not sustainable,” she insisted.

The society partnered with a local credit union shared-loan program, offering short-term low-interest loans to people who need to pay off their payday loans. They made their first loan in April of 2014 and the program took off later in the summer.

With $100,000 the society raised, the money acts as collateral to guarantee loan payments. The loans are offered at 2.5 percent annual interest, enough to cover operating costs. Neither the credit union nor the society profits from the endeavor, Ehrlich said.

Since the start in 2014, 88 loans of 54 people have been converted, she noted; borrowers often have several loans out at a time, and may take out one loan to pay off another. The average loan size is $720.

The society does its due diligence at first by determining the ability of a borrower to pay back a loan. They must have a “sustainable source of income,” Ehrlich noted, and room in their budget for a loan payment. Oftentimes people forget their normal living expenses like mortgages, rent payments, and groceries when taking out a loan.

In addition, the society offers a financial literacy course for borrowers; if they complete the course and pay off their loan, they receive 10 percent of the original amount back.

Ultimately, Ehrlich sees the society’s work as protecting the vulnerable. “I think it’s the recognition that we need to do everything we possibly can to give voice to people who have no voice,” she said.

 

 

 

Past Issues

Dec. 9, 2018

Nov. 25, 2018

Nov. 11, 2018

Oct. 28, 2018

Oct. 14, 2018

Sept. 16, 2018

KEYWORDS, PHRASES: 2018 Golf Classic; student athletes; physically challenged; Leonard Stegman; Lesson in forgiveness; Sending us on a mission

Sept. 2, 2018

KEYWORDS, PHRASES: Priest crisis; Scandal; Opioid addictions; Seeds of Suicide; Leightons; St. Anne; Vincke; seminarians; Dominican Sisters; Stewardship Conference; Dead Sea Scrolls; PSR programs; Roe V. Wade

 

August 12, 2018

KEYWORDS, PHRASES: Prayer and Action; Totus Tuus; Janee Bernal; Diana Ramirez; Heidy Ramirez; Bishop Gilmore honored for 20 years ministry; suicide; contraception and abortion; Dead Sea Scrolls; Humanae Vitae; certification in youth ministry; Chuck Weber; Cathedral rectory chapel; Sister Viola Heichelbech; Adam Urban

July 15, 2018

KEYWORDS, PHRASES: Immigration Protest/Rally; Faith and Light Fiesta; Seeing the Dead Sea Scrolls; Corpus Christi procession; Prayers for priests; Sisters turn 100; Michael Brungardt; Gerald Vincke; Massacre in San Salvador; Action for Alex 

 

June 3, 2018

KEYWORDS, PHRASES: Parish Pray for Priestly Vocations; Appeal reaches $10 million; Gangs; Seminarians; Pam Willis; Why I like being a priest; Happy Father's Day; Patricia Lujan; Tyler and Rachel Bennett; Adoption Protection Act.

May 20, 2018
KEYWORDS, PHRASES: Track meet; Beloved Sinners; Benjamin Martin retires; Smiles; Future of Fortune Telling; Hoisington mission; DofI; Getting Equipped; Spring Social; First Communion; Confirmation
KEYWORDS, PHRASES: Track meet; Beloved Sinners; Benjamin Martin retires; Smiles; Future of Fortune Telling; Hoisington mission; DofI; Getting Equipped; Spring Social; First Communion; Confirmation

May 6, 2018

KEYWORDS, PHRASES: Archbishop Romero; Seeing, Touching, Tasting; Exhortation; Father Patrick Conroy; Happy Mother's Day; A child on your doorstep; Vibrant Ministries Grant; From the heart of a young father; Love Gives Life; Roman Holiday; Smartphone; retirement
Fossil Hunting

 

April 15, 2018

 KEYWORDS, PHRASES: Easter Vigil; Angelica Village; Colorado woman; The art of anger; Cimarron Couple; Staats; Adoption; 

Father Ultan Murphy anniversary; Coughlan; Spiritual Advisor to Hoodlums; Woman of Courage; Oration contest; Darcy Feist  

 

April 1, 2018

 

 KEYWORDS, PHRASES: Defending Adoption; Led by the Spirit; Knights; ABC Pregnancy Center;
Memorial of Mary; Homeless; Relics; Down syndrome abortion; Chrism Mass

 

March 18, 2018

KEYWORDS, PHRASES: SKYAC; Aleksandr Men; Fasting for Priestly Vocations; Uganda; School for deaf; Rannah Evetts; Oberle; Rachel and Doug Trombley; Oscar Romero; Paul VI; DACA

 

 

March 4, 2018

KEYWORDS, PHRASES: Fasting for priestly vocations; Father Juan; Fasting and prayer;
Quest Weekend 2018; DACA; With God, anything is possible; Homelessness in our communities; Rhubarb, Kansas;
What's the point of fasting; Rite of Election; same-sex couples

 

Feb. 18, 2018

KEYWORDS, PHRASES: Catholic Schools Week; Rachel Doll; Ellinwood; Great Bend; Garden City; Ness City; Dodge City; Sister Rita Schwarzenberger; Nigeria; Bishop Hermes; Fasting for Priestly Vocations; World Day for Consecrated Life; 50th Anniversary St. Dominic School; What will life be like in 50 years?

 

 

Feb. 4, 2018

 

KEYWORDS, PHRASES: March for Life; Tracy and Ross Smith; Adoption; Vibrant Ministries; Faith and Light;
Pro-Life; Mortal sin to discard elderly; DACA; Abortion; Dreamers; Human Trafficking

 

Jan. 21, 2018

 KEYWORDS, PHRASES: Louise Korbe; Anne Frank; Miep Gies; Home Heat; Father Solanus

 

Jan. 7, 2018

KEYWORDS, PHRASES: Good news and kingdom living; dreamers; Sister Teresa Orozco; Infant Adoption; Elderly; a moral conundrum; seminarian; feast of Our Lady of Guadalupe

 

Dec. 17, 2017

KEYWORDS, PHRASES: Celebrate Christmas 'unplugged'; Msgr. Matthew Smith; Klan; Catholic Charities Annual Appeal; Fr. Larry Rosebaugh; A Guadalupe Encounter; Laci and Joe Salazar; A Christmas Wish; Adoption; Confession; Advent; EWTN; Christmas Blues; Tilma; Pittsburgh; PSR

 

Dec. 3, 2017

 KEYWORDS, PHRASES: 2017 NCYC; Wheel of Balance; Marita Rother; Stanley Rother; slavery; trafficking; Windthorst water damage; martyred priests; confession; reconciliation; How to go to confession; recipe for codfish cakes; Catholic schools; appeal

 

Nov. 19, 2017

 KEYWORDS, PHRASES: Saints; Father Kola; Black Elk; Giving Tuesday; velvet Elvis; a Slice of Time; Dani Sandoval; Mexican Village; Father Tim Hickey; New faces at chancery; priests share thoughts on confession; Wheel of Balance

 

Nov. 5, 2017

KEYWORDS, PHRASES: Matrimony Anniversary Mass, 2017; Riebel; Faith and Light; Scripture Day; Sex in the Bible; Quilt, Mexican Village Story; Finance; Fatima pilgrimage; Fowler church window renovation; Medicare; Crazy Glue


Oct. 15, 2017

KEYWORDS, PHRASES: Father Francis Jordan; Sister Renee Kirmer; Father Rother beatified; religious liberty; RCIA Kansas; V Encuentro; Bishop Weisenburger; Daughters of Isabella; Bishop Gerber Science Center


Oct. 1, 2017

KEYWORDS, PHRASES: De Colores; Rebein; Dreamer; Pies; Kellner; Code Quilts; Sister Crucita; Feezor; Formed.org; Sin and pain

 

 Sept. 17, 2017

 

 KEYWORDS, PHRASES: Sister Lucy Fidelis; Underground Railroad; Sister Irene Hartman; DACA; new priests; teachers; Volunteer of the Year; Golf Classic; St. Francis Xavier; St. Nicholas Parish Center, Kinsley; seminarians; Knights Lite; Stewardship Day 2017

Sept. 3, 2017

Aug. 13, 2017

 KEYWORDS, PHRASES: Coronado Cross; Masada; Moody Gardens; Elders; Rother; undocumented children; cages; year of mercy; Kumi; Hollywood makeup artist; New Mexico; refugee women.

July 16, 2017

KEYWORDS, PHRASES: Summer camp; tithing and almsgiving; Bill Baalmann; Nathan Schaller; Jubilarian Sisters; Sister Hortencia Rodriguez; Sister Petrona Stockemer; Sister Denise Sevart; Convocation of Catholic Leaders; Mother talks about her son entering seminary; Arcoiris; Youth group travels to Colorado Springs; Major Phillip Roth

June 11, 2017 (Updated)

Ordination; Mark Brantley; Jacob Schneider; Father's Day; Thanks, Dad!; Appeal; Sister Mary Martin Weaver; Bishop Maralit; Budget; Trafficked women; Deacon Michael Brungardt; Dead Sea Scrolls; softball; Father Urban retirement; Sister Kravec retirement; Father Mazouch retirement; Authentic Joy; Pris Climate Accord; Jack Schramm; Pieta.

May 28, 2017 (Updated)

 

Grateful Hearts; MSFS Provincial; Reddy; Reif; Opossum; Dead Sea Scrolls; Our Lady of Fatima; Jorge Herrera, Jr.; Cursillo; Kough; First Communion; Confirmation

May 14, 2017

Esteban Hernandez; citizen; Lilly Ann Rein, Amberly Jimenez, Mother's Day; peacock; Quattrocchi; President Kennedy; Teen Moms; Junior High Youth Rally; Encounter With God's Call; granny/nanny; seniors' contributions; tornado anniversary; harvest; healthcare; Mr. Brown; Store-bought teeth; Louis and Zelie Martin; Father John Sullivan; Irish priest whose prayers could heal; Mexican beauty queen; Esmaralda Gonzalez; religious life

April 30, 2017

   KEYWORDS, PHRASES: Easter Vigil; bully; TEC; Father Marvin Reif; Bet'sie; What makes a hero?; St. Mary of the Plains; tornado

Easter, 2017

 KEYWORDS, PHRASES: SKYAC; Honorable courtship; footsteps of migrants; CHRISM Mass 2017; honoring priests; Encuentro Cross blessed; Daughters of Isabella State Convention; Fatima pilgrim statue; Mary Sharon Moore interview; Senate advances pro-life measures; love must be at the core of family life; Father John Forkuoh's car story; Confirmations; Sisters of Concordia; CNN hero Father Khalil Jaar

March 26, 2017

KEYWORDS, PHRASES: From the heart; kidney; Rother; Friar Carmelo; Schnauzer; Lauren Seachris; Lauren's Treat; fire; Guatemala; immigration; Lenten Regulations 1888; Hot Cross Buns; budget; Trump; Forkuoh; Seiwert; South Sudan; hot ashes

March 12, 2017

KEYWORDS, PHRASES: Refugees; immigrants; Gilbert Herrman; When you give alms'; Lent; Call to Continuing Conversion, Rite of Election; Charell and Jeremy Owings; adoption; Our Growing Church; Sisters of St. Joseph of Concordia; water; creation; Sudan; Darlow Lampe

Feb 26, 2017

 KEYWORDS, PHRASES: Night to shine; Immigration; immigrants; Knights of Columbus; Pete Gomez; this foreign mission; Creole; Robin Doll; Eagle Scout; Quest

Feb 12, 2017

KEYWORDS, PHRASES: Catholic Schools Week; March for Life; Pro-life; Executive Order; Secular Franciscan Order; teachers; Down Syndrome; Eagle Scout; Bronze Pelican

Jan. 29, 2017

KEYWORDS, PHRASES: Thank you, religious; SEEK 2017; homeless man to priest; Fourth Sunday; Secret Service to Sacred Heart; Dr. Gerard Brungardt; Martin Luther King; 110 year old nun; Toddler miracle; Letter from undocumented immigrant; health care; immigration

Jan. 15, 2017

KEYWORDS, PHRASES: Mary helps us share; Tighe donates home to Birthright; Pro-life billboard; Theobald Hattrup; Helen and Steve Eck; Pearl Harbor; Reigning Grace

Dec. 18, 2017

KEYWORDS: Feast of Our Lady of Guadalupe, 2016; Pope Francis Christmas schedule; 2016 high school youth rally; Aerospace engineer; Father Stanley Rother; Radio station; Dying girl's letter; Scout nominations; 12 days of Christmas

Dec. 4, 2016

KEYWORDS: Vocations Day; Pope Advent advice; Ex-prostitute; Spearville mission; Pilgrims v. Zombies; Face of God; Mission bazaar; Ness City fall festival; Rural health care; Archbishop Gomez; Bishops congratulate Trump

Nov. 20, 2016

Nov. 6, 2016

Oct. 23, 2016

Oct. 9, 2016


Sept. 25, 2016


Sept. 11, 2016

 
Aug. 7, 2016

July 10, 2016

June 12, 2016

May 29, 2016

May 8, 2016


 April 24, 2016

 April 10, 2016

 March 27, 2016

March 13, 2016

Feb. 28, 2016

 

Feb. 14, 2016


Jan. 31 , 2016

Jan. 17, 2016

Dec. 20, 2015

Dec. 6, 2015

Nov. 15, 2015

Nov. 1, 2015

Oct. 18, 2015

Oct. 4, 2015

Sept. 20, 2015

Sept. 6, 2015

August 9, 2015

July 12, 2015

Jun 14, 2015

May 17, 2015

May 3, 2015

April 19, 2015

Easter, 2015

 

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