Overture 04-59. On Preparing a Policy Statement on Usury in the United States—From the Presbytery of Utah.

The Presbytery of Utah overtures the 216th General Assembly (2004) to direct the Advisory Committee on Social Witness Policy to investigate the question of usury in the United States and to prepare a policy statement for the 217th General Assembly (2006) that would do the following:

1. More clearly define the sin of usury for the 21st century.

2. Suggest parameters (for example, a certain APR or a quadrupling of the amount of the original loan within a short period of time) beyond which Presbyterians could agree that the sin of usury was taking place.

3. Encourage Presbyterians to become aware of usury laws in their states and to advocate for stricter limits and enforcement when necessary to protect the poor.

Rationale

The Larger Catechism, one of the basic confessions of Presbyterianism, defines usury as a sin (The Book of Confessions, 7.252).

Over the centuries, Christians have changed the definition of usury from the charging of interest on a loan, to the charging of excessive interest on a loan. Although people of good will may disagree on the definition of “excessive,” there must be an upper limit beyond which most people of good will can agree that usury is taking place, or the definition is pointless.

Utah is one of the few states with no usury law and Presbyterians advocating for the establishment of one find no clear guidance in Presbyterian policy. The rise of payday lending companies in the past two decades has been a helpful way of providing loans for people with no easy access to credit, but has also been found to be predatory in some cases. Christians have a special duty to advocate on behalf of the poor.

Standard policy for many payday lenders is an interest charge of 10 percent per week, which equates to an APR of 525 percent (or a quintupling of the amount of a loan within the space of a year; by contrast, a home mortgage at present rates will only triple or quadruple the amount of a loan over a thirty-year period). Many Christians believe this APR is excessive, and therefore sinful, and would welcome guidance from the General Assembly on this issue.