Organizations team up against payday loans, insufficient minimum wage

Saturday, January 28, 2012 | 5:34 p.m. CST; updated 7:02 p.m. CST, Monday, January 30, 2012

COLUMBIA — A joint campaign between two Missouri organizations was launched with a kickoff event Saturday in an aim to educate the public and gain supporters.

The general focus of the event was the role each person plays in what the committees see as the war against payday loans and insufficient minimum wage.

Missourians for Responsible Lending has teamed up with a newer initiative, Give Missourians a Raise, to help get two working family issues on the November ballot.

“We don’t want to compete,” Grass Roots Organizing Director Robin Acree said. “We want to combine.”

The Missourians for Responsible Lending initiative aims to cap the payday loan interest rate. Currently, the interest rate is at 400 percent; the initiative would cap it at 36 percent per year. It also aims to fight predatory lending, a practice that involves high interest rates, excessive fees and deceptive marketing on some types of loans.

The Secretary of State approved language for the Missourians for Responsible Lending initiative in August.

That initiative's recent partner, Give Missourians a Raise, want to increase the current state minimum wage by a dollar, putting the minimum wage at $8.25 an hour.

The kickoff event for the partnership was held at the Boone County Commission Chambers and hosted by GRO. About 80 people attended and joined together in chants, such as, “Beat back the shark attack, we’re gonna beat, beat back the shark attack.”

Barbara Ross, a representative of Missouri Faith Voices, a group that associates with churches, faith communities, clergy and faith leadership in Missouri, spoke from the standpoint of “social injustice” in regard to the payday loans industry. She also talked about helping others in need.

“There’s an old African Proverb,” she said. “When you pray, move your feet. Well, we can’t just sit around and pray about these things. We have to move our feet.”

Ross said she is fortunate to have never had to take out a payday loan, but it doesn’t stop her from seeing what a “horrid thing it is.”

Rachel English, the community organizer for the joint campaign, said churches have received letters from groups opposing the campaign telling them not to join it.

“I think they know churches are really powerful,” English said. “And they know people of faith will often come out and act on their faith and their values and their morals. And so, if they can scare churches away, they think they can stop the campaign.”

English said earning $7.25 an hour — $15,000 a year — is not enough for people supporting families to make it.

“I’ve worked for minimum wage before, in a state that has a higher minimum wage, and I came back to Missouri and I’m like ‘What’s going on?'" she said. "It’s $7.25. It ought to be $8.25, which it is in a number of other states.”

MU Extension specialist Brenda Procter gave a summary of the Show-Me Predatory Lending: Where Does the Money Go? research report.

She said that patterns in industry data show repeat borrowing as core to the business model of high-cost lenders. She also said of all the people who take out loans, only 2 percent of the borrowers pay them off on time and do not return for another loan within the year.

Missourians for Responsible Lending and Give Missourians a Raise plan to continue gathering signatures in a petition to support their campaign. They hope to gather 105,000 signatures statewide.

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Bob Hill January 30, 2012 | 9:51 a.m.

If you want to change payday loans, then put your money where your mouth is and start a business loaning money @ 36%. I'm tired of everyone wanting others to change their behavior & models without no skin in the game. And as far as minimum wage, the notion that you can't raise a family on minimum wage is ridiculous. If you started a family that you can't support, then why should I?

(Report Comment)
Zach Rubin January 30, 2012 | 10:15 a.m.

@Bob - A better question to ask would be "how did low income people meet their needs before this practice was legalized 20 years ago?" Many of the people I have met who are working on this campaign are either making minimum wage or have been the victim of payday lending themselves. Both petitions work hand-in-hand to ensure that those trapped in the vicious cycle of payday lending have the resources they need to climb out and make a decent living.

I don't even know how to begin responding to your last point. You obviously haven't worked a minimum wage job in a while. You do know that's $290 a week, right?

(Report Comment)
John Schultz January 30, 2012 | 2:24 p.m.

Zach, how many people do you know raising a family where the primary breadwinner is making minimum wage? The numbers that I recall prior to the election that set a higher minimum wage (2007ish?) was that 80,000 Missourians earned the minimum wage, but most of those were teenagers and were not supporting a family.

(Report Comment)
Ray Shapiro January 30, 2012 | 3:41 p.m.

I've spoken to a few petition signature gatherers and discovered that of those I spoke to, none were getting paid to gather signatures, unlike the ones looking to hurt the puppy breeding industry.
I respect them for that.
Yet, I wouldn't sign either petition.
Not because I don't know what it's like to be poor, broke or homeless, but because I don't believe the free market should have a minimum wage and because I believe that churches and nonprofits should be helping with loans to people who actually have low paydays.
At the same time, while $1,200 a month for a single person on a temporary minimum wage job may not seem a lot to wealthy people, in a town like Columbia, one week's pay can rent a room or home share while resources can be pooled for food, etc.
It might also explain why bicycle transportation and buses are a big needs issue in this town.
However, considering the help available to low income individuals and single moms, from government programs and nonprofits, surviving on the current minimum wage is do-able, just not lavish.
It should also be noted that while $290 a week in Columbia does not sound like a liveable amount, many deemed disabled Missourians live on half that amount. (Although, once again, with other assistance.)
Also, over the years, the increase of minimum wage always seems to have a ripple effect on inflation or the availability of minimum wage jobs. (Even Walmart hesitates to open "too many" cash registers.)
And then minimum wage becomes like a "cost of living increase" and the cycle repeats itself.
I really don't see what purpose it serves, except as a rally call for the poor. Believe me, we have bigger issues then minimum wage or the availability of free market "loan sharks."
Don't be duped by those who are trying to convince you that a buck an hour will change your life.

(Report Comment)

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