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The payday loan industry is looking a bit desperate in its attempt to derail an initiative petition in Missouri seeking to more strictly regulate short-term lending.
This week, a law firm in Grapevine, Texas, of all places, sent a letter to some Kansas City area churches, issuing dark and dishonest warnings about the perils of getting involved in the movement to clamp down on businesses that can legally charge interest rates of up to 1,950 percent for a loan.
The initiative petition drive to change state law and set a cap of 36 percent on the annual percentage rate of a short-term loan is being led by faith-based and community groups in Missouri.
The letter from the Texas law firm, Anthony & Middlebrook, advised churches in bold letters that “strict statutes carrying criminal penalties apply to the collection of signatures for an initiative petition.”
That’s true, of course, if one distributes a false affidavit or signs someone else’s name to a petition. No one has accused the payday loan opponents of doing any of those things.
The letter also warns churches that their tax-exempt status could be threatened if they engage in lobbying or attempts to influence legislation. The letter interprets “influencing legislation” to include “supporting or encouraging action with respect to the (payday lending) petition.”
That is intimidation, pure and simple. Federal tax law does prohibit churches and charities from supporting or opposing candidates. It also says that those groups must limit advocacy activities on behalf of a particular cause so that they don’t constitute “a substantial part” of an organization’s total activities.
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