The curse of usury
CTALK - Cito Beltran (The Philippine Star) - July 15, 2019 - 12:00am

After hearing how so many Israelites were suffering in poverty and being charged one percent for money, grain, new wine and Olive oil, the Prophet Nehemiah angrily rebuked the nobles and officials of the city for charging their own people interest! For those of you not in the know, Nehemiah was the prophet chosen by God to rebuild the walls of Jerusalem and consequently rebuilt the self respect of the Israelites.Given the times and culture we live in, you might find the 1 percent interest rate surprising and a small mattter considering that in today’s Philippines, thousands if not millions of Filipinos are paying interests on loans and down payments between 20 to 30 percent. Some I am told have loans that charge a 1 percent per day interest and it is not just the “Bombay” or south Asian money lenders who have promoted the “business.” Today more and more companies have turned to money lending utilizing Apps and the Internet. What many don’t know is that GOD himself specifically instructed the Israelites that they were not to “profit” from their brothers particularly from those in dire need.If you Google for Bible verses about Usury, most of what’s written is written in the Bible comes as a warning, a curse for those who do it and blessings and long life for those who don’t practice it.

In the book of Nehemiah chapter 5 verses 12 & 13 you’ll learn that Nehemiah attached a curse to those who would continue to charge interest on their fellow Jews; “I also shook out the folds of my robe and said in this way may God shake out of their house and possessions anyone who does not keep his promise. So may such a person be shaken out and emptied.!”

I’ve written about “Digital debt” or “On-line Loans” previously and from there, we featured the topic on our TV program Agenda. What we discovered is that Online lending is more wide spread, patterned after the 5-6 lending system where they send out collectors after the 7 or 30 day period. But here’s the real shocker, if you borrowed P3,000 you only get P2,300 because they automatically deduct 700 pesos as processing fee! In addition, the credit collector won’t pressure you to pay the full amount but usually encourage you to pay minimum so that you carry on paying interest charges!

Because there is very little government monitoring and regulation of this type of transactions, the business model has boomed. But what I learned from our guest panelist on the show is that the biggest attraction for fly-by-night lenders is the absence of an Anti-Usury Law or a legislated cap or limit on how much interest lenders can charge. We used to have an Anti-Usury law but it was scrapped altogether under the premise that the courts have the power to determine if any type of interest falls under what is defined as “Usurious” or “Unconscionable”. But as many lawyers and writers have commented, for every individual or corporation that goes to court, there are millions who are suffering silently because they are all broke and desperate in the first place.

I personally suspect that the Anti usury law was scrapped through the lobby of banks and lending institutions because of disparities between government interests rates, cost of money and many such reasons years ago. The problem is today’s financial environment has drastically changed. Banks barely give you any interest for banking with them, they charge for any and all transactions even after digitalization has resulted in lesser manpower and operational costs and worse of all the lending infrastructure and community has been invaded by non-banking institutions and probably dummy representatives of companies funded out of China and other countries.Some of the Digital Lenders are allegedly not even registered with the SEC and very little scandal has popped up because Filipinos are ashamed to admit being in debt and very little media attention has been given to this curse that is powered by greed and Usury.

What we’ve determined is that there is an urgent need for Congressmen and Senators to revisit and reinstall the Anti-Usury Law. If the banking community and institutional lending groups are uneasy about generalized interest caps, then lets all agree on a percentage that is unconscionable or abusive of community standards. To simplify matters, lets ask the question: how much interest would you allow someone to impose on you or your family before you cry foul! we cannot simply defend our vested interests to the point that others can wickedly benefit or take advantage of the vulnerable or the financially desperate members of society. I believe that if interest were not usurious, more people would be enticed to borrow especially if banks actually got their act together to simplify the process while making sure of the financial capability of their borrowers to pay back. Another thing the panelists pointed out was a need to require lenders to inform by way of numbers and explanation the terms and conditions of the digital loan before the loan is granted. It seems that many people  are shocked by the automatic deduction of processing fees that is more than 25 percent of what they were borrowing!

Finally the government, LandBank and the DBP even the Veterans bank through legislation could be pressured to develop a far more viable and humane lending system that is Barangay based rather than such impersonal On-line loans. People know each other in their Barangays, there is some semblance of a social support system and a barangay based lending system would truly be more inclusive and less oppressive. So here’s a shout out to our friends in the government and Congress; PLEASE REVIVE THE ANTI-USURYLAW and legislate a Barangay based lending system.

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