MEDIA RELEASE
CSUN Professor Co-Authors Study that Finds Predatory
Payday Lenders More Prevalent in Conservative Christian States
(NORTHRIDGE, Calif., Feb. 12, 2007) — Predatory payday lenders, creditors that charge interest rates averaging 450 percent, appear to be more prevalent in Conservative Christian states, according to a new study co-authored by a pair of professors from California State University, Northridge and the University of Utah.
Northridge assistant professor of geography Steven Graves and Utah law professor Christopher Peterson said they were surprised to find a relationship between populations of Christian conservatives and the proliferation of payday lenders in their study, which is based on the most comprehensive database of payday lender locations yet compiled.
"Given the political power of conservative Christians and the numerous, unequivocal Biblical teachings about usury, we were surprised to find how friendly politicians in those areas have become toward an industry that routinely loans money at over 400 percent interest rate. Old Mafia loans were regularly half that," Graves said.
The results of Graves and Peterson’s research appear in an article, titled "Usury Law and the Christian Right," in the spring issue of the Catholic University Law Review.
The pair examined payday lender patterns in states across the nation and discovered an unprecedented spread of such businesses during a time of growing Christian engagement in the political process.
The two spent more than two years on their study, which involved the creation of the nation’s most comprehensive database mapping the locations of payday lenders. Graves and Peterson gathered data on lending locations for each state. They then analyzed the practice on the basis of six different statistical categories: states, counties, ZIP codes, state lower house legislative districts, state upper house legislative districts and federal U.S. House of Representatives districts.
Graves and Peterson said they can pinpoint the top 30 ZIP codes in the nation for locations of payday lenders, and can do the same with legislative districts within each state.
"Our analyses can help analysts and ordinary citizens see how extensive this component of the national subprime lending crisis is playing locally," Graves said. "It will help everyone hold local politicians accountable for the rampant usury in their districts."
The researchers have posted online maps, tables and summary findings for each state studied for their article. The data can be found at the Web site http://www.csun.edu/~sg4002/research/usury.html.
Graves and Peterson drew national attention three years ago when they released a study indicating that military families, who are often particularly vulnerable during periods of deployment, were targeted by payday lenders. They testified before state legislatures across the country, and even before Congress about their findings. As a result, a federal law was passed to protect military personnel.