Reform of Payday Lending

Payday loans are very high-interest, short term loans, which must be paid back when the borrower gets their next paycheck. Unfortunately, the lenders prey upon people who are very poor and in desperate circumstances, and the loans are set up in such a way that make it difficult for the borrower to get out of the loan cycle. Borrowers take loan after loan to pay the previous loans, while paying fees with each loan that in Minnesota range from 391% – 1,170% interest (APR). The issue was identified by Holy Trinity Lutheran Church of Minneapolis as being problematic in 2011, when a payday lender moved into their church neighborhood. In years since, resolutions have been passed by five of the six ELCA Minnesota Synods, to raise awareness regarding the usury and exploitation resulting from payday loans.

A broad coalition of ecumenical partners, led by the Joint Religious Legislative Coalition (JRLC), came close to passing a compromise bill at the state legislature in 2014. LA-MN will continue to work closely with JRLC and other partners of the Minnesotans for Fair Lending Coalition, to pass legislation to

  • Reform financial products that contain unethical features and create cycles of indebtedness, and
  • Create a process for the formation of new financial products that allow low-income people methods to access the economy in healthy ways.


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