Predatory Payday Lenders Threaten Missouri Churches For Circulating Petition In Favor Of New Regulation

As ThinkProgress has reported, millions of struggling Americans have resorted to taking out payday loans in a desperate attempt to pay for unexpected expenses. But too often the loan is a trap for borrowers who are stuck in a cycle of loan “churning,” paying off exorbitant interest costs for years.

Now, Faith in Public Life reports that payday lending companies are trying to intimidate churches in Kansas City, Missouri that are educating their communities about the dangers of these loans. The Kansas City Star describes threatening letters that suggest church members could face prison time for circulating a petition in favor of a ballot initiative that would cap payday loan interest rates at 36 percent:

The letter from the Texas law firm, Anthony & Middlebrook, advised churches in bold letters that “strict statutes carrying criminal penalties apply to the collection of signatures for an initiative petition.”

That’s true, of course, if one distributes a false affidavit or signs someone else’s name to a petition. No one has accused the payday loan opponents of doing any of those things.

The letter also warns churches that their tax-exempt status could be threatened if they engage in lobbying or attempts to influence legislation. The letter interprets “influencing legislation” to include “supporting or encouraging action with respect to the (payday lending) petition.”

That is intimidation, pure and simple.

The law firm represents a campaign committee that has already raised $850,000 to stop the initiative petition regulating payday lenders. They’ve insisted the menacing letters were simply intended as an “educational tool.”


Forty-four percent of payday loan borrowers ultimately default, even after paying back their loans several times over, pushing them even closer to poverty. Payday lending has ballooned to a $7 billion industry by charging interest rates as high as 1,950 percent, which is still allowed under current law in many states.