A Call for Faithful Lending Practices

2016 Book of Resolutions, #4064

Biblical and Theological Foundation

The Bible is consistent in its witness that God desires humans to live together in authentic community: in an economy of abundance in which neighbors love and care for each other and no one lives in scarcity. God created humankind to inhabit the good earth on which God amply supplied the needs of all creatures (Genesis 1). In the Sinai covenant, God commanded the people of Israel to refrain from usury and to care for the most vulnerable among them (Exodus 22:25; Deuteronomy 26:12). Isaiah, Amos, Micah, and other prophets warned the people of Israel to honor God by seeking justice for the poor. Jesus Christ taught his followers to treat others as they would want to be treated (Matthew 7:12), and he warned against measuring the abundance of life by possessions (Luke 12:15). The earliest Christian community lived with “all things in common” (Acts 2:44).

In the General Rules, John Wesley warned Methodists against doing harm by greedy or self-indulgent behaviors, including “the giving or taking things on usury,” and “borrowing without a probability of paying; or taking up goods without a probability of paying for them” (United Methodist Book of Discipline, ¶ 104).

Current Concerns

Today’s global economy is premised on credit involving individuals, businesses, and institutions that exchange goods and services with the promise of future payment. This credit market has enhanced efficiency and brought many consumer benefits. These markets have also given rise to abusive and predatory practices, however, that challenge the conscience of Christians. Among our most pressing concerns are contemporary financial practices and business models that entrap people in cycles of debt. These practices are exacerbated by lenders employing tactics to exempt themselves from banking regulation and traditional usury laws.

These practices include:

  • Operations that profit by charging unconscionable rates of interest, often disguising the costs as “fees” rather than “interest,” thereby exempting themselves from financial oversight and effectively extracting very high rates of return at the expense of the borrower;
  • Bank and credit agency fees that entrap consumers into schedules of penalties that charge the equivalent of interest rates up to 1,000 percent for “services”; and
  • Plans in which consumers are enrolled without knowledge or consent. In addition, consumers are burdened with hidden transfer charges, inappropriately large late fees, and sudden-rising interest rates.

Credit card marketing practices and convoluted contract agreements lack transparency and clarity on full pricing, fees, and alterations to the terms of agreement.

Our history of concern for the poor calls us to be attentive to these alternative banking systems that are often the way people living closer to the economic margins find space to participate in our economy. We call our congregations to investigate the current situations in their communities, states, and nations. We call our congregations to demand that our systems be regulated in a way that does not profit the rich at the expense of the poor, that benefits both parties involved in the transaction, and that has integrity in that it is characterized by honesty, disclosure, equal access, and equal power to begin or end the transaction. We advocate the establishment of bankruptcy laws that provide a full opportunity to be released from debilitating debt and enable individuals or families to restore financial stability.

We call on United Methodist members, churches, institutions, and agencies to adhere to and advocate for the following faithful principles:

  • Promoting honesty, clarity, transparency, and even handedness. All sides should have the same opportunity to understand and negotiate a contract. Kickbacks and fees should be eliminated that distort lender and broker incentives to deal fairly with customers.
  • Prohibiting unconscionable rates of interest. Usury caps should be reinstated to address abusive lending.
  • Holding lenders accountable for only funding loans that borrowers have a reasonable ability to repay.
  • Establishing equity in credit across communities. Practices must be ended that particularly burden communities of color or low-income communities.
  • Limiting fee-based penalties and business models that depend on consumer overspending and recurrent indebtedness. Penalties against repaying debts early should be eliminated.


See Social Principles, ¶ 163J.

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