Wednesday, August 27, 2014

missouri residents use payday loans twice as much as the national average...,


pitch |  The new money started announcing itself at St. Ann sometime around 2008.

"It was most obvious at the school auctions," says one member of the Prairie Village Catholic church. (Like many people interviewed for this story, this source did not want to be identified by name.) "You'd see these cliques of people pulling up in limos, acting wild, dropping a lot of money on exotic two-week vacations and the other lavish items up for bidding. Or all of a sudden so-and-so has a brand-new Range Rover. Or so-and-so family is moving into some giant Mission Hills mansion. And you see it enough times and you start to go, 'Where is this money coming from?'

"And on one hand, it's St. Ann — this is a school and a church that serves Mission Hills and Prairie Village," the member continues. "You expect to see nice cars in the parking lot. But there was something so sudden and loud about this. It was this bizarre explosion of really extreme wealth."
Word trickled out: Some members of the church had become mixed up in the online payday-loan industry.

Payday lenders advertise their loans as short-term, emergency solutions. But every credible study of the industry has found that the high interest rates and fees these outfits charge are designed to turn the loans into long-term debt burdens on the borrowers. These parishioners were involved in various business interests that enjoy astronomical profits by lending to borrowers at interest rates that commonly reach unholy heights of 700 percent.

St. Ann's pastor, the Rev. Keith Lunsford, joined the parish in 2009, after replacing Monsignor Vincent Krische, who retired. "I don't have any firsthand knowledge of anybody at St. Ann involved in the payday-loan industry," Lunsford tells The Pitch.

But according to a number of people The Pitch contacted for this story, the presence of families who have amassed tremendous wealth through their involvement in online payday lending was, and continues to be, a taboo topic and a source of tension in the parish.

"It presented a moral conundrum for St. Ann," says a different parishioner. "Because there was all this money coming into the church through donations and through the auctions and, I mean, it was huge money. And gradually everybody realized that it was money that, if you trace it back to its root, came from poor people who were being taken advantage of, who were being charged crazy interest rates. So there were a lot of behind-closed-doors, hushed-tones conversations happening about it. People on the finance committee and the school board were talking about the morality of taking that money. But in the end, I think they just looked the other way." (Last year, the church reached an $8 million capital campaign goal to fund extensive renovations. It does not disclose specific donations.)