Research finds geographic link between conservative Christian population and high-interest loan locations
February 11, 2008 — Payday lenders, creditors that charge interest rates averaging about 450 percent, are more prevalent in Conservative Christian states, according to a new study coauthored by University of Utah law professor Christopher Peterson. The study, which is based on the most comprehensive database of payday lender locations yet compiled, maps a surprising relationship between populations of Christian conservatives and the proliferation of payday lenders.
“We started this project hoping to find out more about the spatial location of payday lenders and were surprised when a pattern reflecting a correlation with the American Bible Belt and Mormon Mountain West emerged,” said Peterson, who conducted the research and coauthored the article with Steven M. Graves, an associate professor of geography at California State University, Northridge. “The natural hypothesis would be to assume that given Biblical condemnation of usury there would be aggressive regulation and less demand for payday loans in these states, but ironically, the numbers show the opposite is true. It’s sad that states with a pious and honorable religious heritage now disproportionately host predatory lenders.”
Peterson and Graves’ article, titled “Usury Law and the Christian Right,” is forthcoming this Spring in the Catholic University Law Review. It profiles states all around the nation examining the unprecedented spread of payday lenders during a time of growing Christian engagement in the political process. “A generation ago, populist Christian leaders were among the most aggressive opponents of usurious lending. But today many Christian leaders take large campaign contributions from the credit industry and no longer support the Biblical injunction against usury in public life,” Peterson said.
The extensive research underlying the study, conducted over two years, involved the creation of the nation’s most comprehensive database mapping the locations of payday lenders. For each state, Peterson and Graves gathered data about payday lending locations and 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. Peterson said, “We can pinpoint the top 30 ZIP codes in the nation for locations of payday lenders, and we can do the same with legislative districts within each state. Our research showed that the correlation between payday lenders and the political power of conservative Christians was stronger than the correlation between payday lenders and the proportion of a population living below the poverty line,” Peterson explained.
Peterson, who also holds an appointment at the University of Florida, Fredric G. Levin College of Law, said he believes part of the explanation for their findings lies in politics. “When the Christian Right allied itself with conservative Wall Street business interests in the 1980s and early ‘90s, consumer protection law was placed to the side as an inconvenient sticking point. The laws allowing an astonishing number of triple-digit-interest-rate lenders throughout most of the Christian South and Mormon West are a legacy of that political alliance.
In addition to the article presenting their findings, Peterson and Graves have posted online the charts, maps and tables they prepared for the study. “We believe that these materials graphically and conclusively demonstrate that conservative Christian Americans are a prime demographic target of the payday lending industry,” Peterson said.
Peterson explained that the authors of the study hope the results of their work will give lawmakers, as well as spiritual leaders and people of faith, insight into the problem of payday lending. “Our findings should serve as a wake-up call reminding Christian leaders of the Biblical duty to expel usurious money changers from their flocks,” he concluded.