Testimony against Payday Lending (SB 5899)

For the last time this session, I made my way to the Capitol to testify on a bill. When I go, I am there usually at the behest of the Jewish Federation of Greater Seattle, an umbrella Jewish organization, and the Faith Action Network, a statewide interfaith organization which works on issues of social justice. Each have a legislative agenda. There are other rabbis and ministers who testify of course, but for these 8:00 a.m. hearings, it is usually the Olympia clergy who are called upon.wa capitol

This morning, representing FAN, I spoke against SB 5899, a payday lending bill. These are the loans, sold by Moneytree and other like companies, which charge high interest rates and fees. Because they tend to trap people in debt and are most often used by those more disadvantaged, a coalition of poverty, labor, immigration and faith groups are opposed to such loans in general and this bill in specific.

There were two bills this session, one in the House and one in the Senate. While the House bill failed to come up for a vote, the Senate bill passed after two and a half hours of floor debate. It is now in the House for consideration.

While others speak to the specifics of a bill, I usually offer the “moral argument”–that the decisions we make are not merely legal or economic, but moral, and we need to take that into consideration. Here are the words I shared this morning:

Mr. Chair and members of the committee, my name is Seth Goldstein and I am a rabbi serving the Olympia Jewish community, and I am here representing the Faith Action Network, an interfaith statewide organization representing Washington communities of faith working for social justice and the common good, in opposition to SB 5899

For people of faith, responsible lending is not merely an economic concern, but a moral concern. We are taught in our sacred texts and traditions to extend our hand to our neighbor in need, and to help provide for their needs. Sometimes this involves direct gifts, and sometimes this involves a loan.

Loaning money can empower those in need. At the same time, lending can be used to exploit those in need. We are warned against usury—charging excessive interest. We are warned against taking advantage of those in our debt. We are warned about the installment loans in this bill with their high interest rates and excessive fees.

Loans should be a means to self-sufficiency and independence, not continued debt and dependency.  The type of loans in this bill—and this type of lending in general—easily allows people to fall deeper and deeper into debt and can worsen rather than alleviate conditions of poverty and economic disparity. And when one is enriched at the expense of others, we need to really examine what is fair and just in our society.

It is our concern, as communities of faith, that we protect the most vulnerable among us. Past reforms have worked, and we do not need another product that could potentially have such harmful effects. For these reasons, we urge your opposition to SB 5899.

Thank you.

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