Study Links Bible Belt to Payday Lenders

Feb 15, 2008 by Jeff Robinson

A University of Utah law professor has just co-authored a study that's sure to generate controversy. Professor Chris Peterson says over the past two years, he and a colleague discovered that payday lenders are the most prevalent in the Bible belt and the Mormon Mountain West.

Peterson says he didn't see this coming when he began the study. He says he mapped out the locations of payday lenders, then found the correlation.

Payday lenders are known to charge interest rates of several hundred percent and rely on low-income customers. Payday lenders loan an average of $325 to a customer, Peterson says, but that customer ends up paying back nearly $800.

Peterson believes the connection between religious right and payday lenders began in the late 1980s. He says religious leaders used to condemn the practice, but have since began taking contributions from the credit industry.

In researching this topic, Peterson believes he and his co-author have created the most comprehensive database of payday lenders. His study will be published in the Catholic University Law Review this spring. To listen to a full conversation with Peterson, download today's Midday Metro podcast.

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