Before you know it, Nov. 3 will come and go. But as we are yet to approach the date, many of us are sitting and contemplating: How should I vote in this particular race or that particular race? Another question many of us are asking ourselves is: What should I do about the ballot initiatives?
While elections understandably focus on candidates, their personalities and policy positions, elections are also an important time to focus on specific issues that come before us in the form of ballot initiatives.
This election cycle brings us two important issues: payday lending reform (Initiative 428) and expanded gambling (Initiatives 429, 430 and 431). The Catholic bishops of Nebraska are urging voters to vote for Initiative 428 to implement just limitations on interest rates imposed by payday lenders. The bishops are also urging voters to vote against Initiatives 429, 430 and 431 which, collectively, would allow full-fledged casino gambling in Nebraska.
Using faith and reason as our guides, let’s take a look at each issue.
INITIATIVE 428: PAYDAY LENDING REFORM
Nebraska law currently allows payday lenders to issue small-dollar loans to consumers at unreasonable rates. Payday lenders can charge an annual percentage rate (APR) of up to 461% on a $425 loan that is typically due in full two weeks later. When borrowers are unable to repay their loan after two weeks, they usually have no choice but to take out a second loan to repay their first. This inability to repay can lead to a vicious “debt cycle” which can continue for years.
The Nebraska Department of Banking and Finance 2019 report on payday lending practices reveals that the average borrower was charged 405% APR on a $362 loan and was trapped into 10 loans in a single year. In 2019 alone, payday lenders have extracted over $30 million in fees from borrowers.
So why does this matter to Catholics?
Rather than providing just forms of lending to those in financial need, the payday lending industry all too often preys on the financially destitute, exalting profits over persons.
Catholic social teaching is very clear on such practices. It recognizes that it is both morally acceptable to earn reasonable and equitable profits in economic and financial activities, and morally reprehensible to lend money at unreasonably high rates of interest (a practice also known as usury).
The Catechism of the Catholic Church categorically condemns usury as a violation of the Seventh Commandment (“Thou shall not steal”). As St. Pope John Paul II said, usury is “a scourge that is also a reality in our time and has a stranglehold on many people’s lives.”
By voting for Initiative 428, Nebraska can implement a reasonable interest rate cap of 36% on payday loans. This policy honors the poor and vulnerable in our state, who are simply looking for a hand-up – not a hand-out – during a time of financial need.
INITIATIVES 429, 430, 431: EXPANDED GAMBLING
Catholic social teaching recognizes that gambling can be a moral activity, but that it becomes immoral when it becomes excessive, immoderate, disregards the needs of one’s family or the poor, or supports immoral or illegal activities.
Three ballot initiatives (429, 430, 431) seek to establish full-throttle casino gambling at currently-operated and future-operated horse racing tracks. These initiatives would permit 24/7 casino gambling (including slot machines, card games, sports betting and online gambling) 365 days per year, if the racetrack holds merely one race per year.
While expanded gambling proponents claim the initiatives would increase tax revenues, it is important to remember that public policy is not solely determined by economic growth. Other important social and moral factors must also be considered.
The research on expanded gambling is clear: for every one dollar of increased tax revenue, casino gambling creates three dollars in social costs. In short, the costs of expanded gambling far outweigh the benefits. And it is important to recognize that the costs are no small thing. When gambling is expanded, our communities see more broken families, increased addictions, additional bankruptcy and financial instability, and more crime.
By voting against Initiatives 429, 430 and 431, Nebraska can ensure that out-of-state gambling interests do not gain a foothold in our communities, all the while trampling our poor and vulnerable populations, which they often exploit for financial gain.
Nebraska’s Catholic bishops are urging votes against Initiatives 429, 430 and 431, which would expand gambling in the state. They contend that when gambling is expanded, our communities see more broken families, increased addictions, additional bankruptcy and financial instability, and more crime. ANTONIODIAZ/SHUTTERSTOCK
Commentary
VENZOR: Nebraska Catholic bishops weigh in on ballot initiatives
October 14, 2020
Before you know it, Nov. 3 will come and go. But as we are yet to approach the date, many of us are sitting and contemplating: How should I vote in this particular race or that particular race? Another question many of us are asking ourselves is: What should I do about the ballot initiatives?
While elections understandably focus on candidates, their personalities and policy positions, elections are also an important time to focus on specific issues that come before us in the form of ballot initiatives.
This election cycle brings us two important issues: payday lending reform (Initiative 428) and expanded gambling (Initiatives 429, 430 and 431). The Catholic bishops of Nebraska are urging voters to vote for Initiative 428 to implement just limitations on interest rates imposed by payday lenders. The bishops are also urging voters to vote against Initiatives 429, 430 and 431 which, collectively, would allow full-fledged casino gambling in Nebraska.
Using faith and reason as our guides, let’s take a look at each issue.
INITIATIVE 428: PAYDAY LENDING REFORM
Nebraska law currently allows payday lenders to issue small-dollar loans to consumers at unreasonable rates. Payday lenders can charge an annual percentage rate (APR) of up to 461% on a $425 loan that is typically due in full two weeks later. When borrowers are unable to repay their loan after two weeks, they usually have no choice but to take out a second loan to repay their first. This inability to repay can lead to a vicious “debt cycle” which can continue for years.
The Nebraska Department of Banking and Finance 2019 report on payday lending practices reveals that the average borrower was charged 405% APR on a $362 loan and was trapped into 10 loans in a single year. In 2019 alone, payday lenders have extracted over $30 million in fees from borrowers.
So why does this matter to Catholics?
Rather than providing just forms of lending to those in financial need, the payday lending industry all too often preys on the financially destitute, exalting profits over persons.
Catholic social teaching is very clear on such practices. It recognizes that it is both morally acceptable to earn reasonable and equitable profits in economic and financial activities, and morally reprehensible to lend money at unreasonably high rates of interest (a practice also known as usury).
The Catechism of the Catholic Church categorically condemns usury as a violation of the Seventh Commandment (“Thou shall not steal”). As St. Pope John Paul II said, usury is “a scourge that is also a reality in our time and has a stranglehold on many people’s lives.”
By voting for Initiative 428, Nebraska can implement a reasonable interest rate cap of 36% on payday loans. This policy honors the poor and vulnerable in our state, who are simply looking for a hand-up – not a hand-out – during a time of financial need.
INITIATIVES 429, 430, 431: EXPANDED GAMBLING
Catholic social teaching recognizes that gambling can be a moral activity, but that it becomes immoral when it becomes excessive, immoderate, disregards the needs of one’s family or the poor, or supports immoral or illegal activities.
Three ballot initiatives (429, 430, 431) seek to establish full-throttle casino gambling at currently-operated and future-operated horse racing tracks. These initiatives would permit 24/7 casino gambling (including slot machines, card games, sports betting and online gambling) 365 days per year, if the racetrack holds merely one race per year.
While expanded gambling proponents claim the initiatives would increase tax revenues, it is important to remember that public policy is not solely determined by economic growth. Other important social and moral factors must also be considered.
The research on expanded gambling is clear: for every one dollar of increased tax revenue, casino gambling creates three dollars in social costs. In short, the costs of expanded gambling far outweigh the benefits. And it is important to recognize that the costs are no small thing. When gambling is expanded, our communities see more broken families, increased addictions, additional bankruptcy and financial instability, and more crime.
By voting against Initiatives 429, 430 and 431, Nebraska can ensure that out-of-state gambling interests do not gain a foothold in our communities, all the while trampling our poor and vulnerable populations, which they often exploit for financial gain.