Payday loan backers unfairly attack Missouri churches
The Kansas City Star
A curious letter from a Texas law firm landed on the desks of pastors and church staffers around Missouri last week.
“It felt like a letter full of ifs and buts and threats,” said Steve Engler, a pastoral associate at Visitation Catholic Parish in Kansas City.
The letter, from the Anthony & Middlebrook law firm near Dallas, was written on behalf of a campaign committee creatively called Missourians for Equal Credit Opportunity. The committee has beaucoup bucks at its disposal to make sure that payday loan shops retain the right to lend people money at annual percentage rates that average 445 percent and can legally reach as high as 1,950 percent.
A petition drive supported by religious congregations and other groups is seeking a statewide vote to clamp down on the predatory short-term lending businesses that are rampant in Missouri. And by the looks of the Anthony & Middlebrook letter, the industry is running scared.
“It has come to our attention that you, your church, or members of your church may be gathering signatures or otherwise promising to take directions from the proponents’ political operatives,” states the letter, which is signed not by a person but with the name of the law firm.
It goes on to remind the churches that, as 501(c)(3) non-profits they need to be careful about engaging in political activities, lest they jeopardize their federal income tax-exempt status.
If you call the offices of Anthony & Middlebrook and get put on hold, as I did, you will hear a woman with a lovely English accent say that A&M is “a boutique law firm specializing in the representation of nonprofit, tax-exempt organizations,” and that it has a special church law group.
With those credentials, A&M surely knows its warning to the Missouri churches is a lot of hooey.
Federal tax law does prohibit churches and tax-exempt charities from supporting or opposing candidates. It also says 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.
The Kansas City churches that received A&M’s letter hold services, visit the sick, feed the hungry and much more. There is no way that endorsing a petition drive constitutes a substantial part of their activities.
If the law firm’s letter was meant to intimidate, some of its recipients missed the point.
“It made me kind of proud,” said the Rev. Ernie Davis of St. Terese Little Flower Parish in Kansas City. “People are being overcharged with these very high interest rates and this shows that the people who benefit from the high interest rates are getting scared.”
Davis said his Catholic parish was “as involved as we can be” in the move to put the payday lending issue on the ballot and the law firm’s letter “just makes me more dedicated to getting the problem taken care of.”
I was told that Anthony & Middlebrook wasn’t commenting on its involvement in Missouri’s payday loan issue, but that I could go to the web site of Missourians for Equal Credit Opportunity, and send an inquiry to the group from there.
Whatever. Records from the Missouri Ethics Commission show that Missourians for Equal Credit Opportunity has received around $800,000 from a 501(c)(4) non-profit called Missourians for Responsible Government.
Missourians for Responsible Government is the creation of Kansas Citian Patrick Tuohey, a communications consultant. In the past it has poured money into a campaign to make Missouri judges less, well, responsible. It is a convenient vehicle for people who want to anonymously influence Missouri politics. As a non-profit, it doesn’t have to disclose its donors.
How rich is this? A 501(c)(4) non-profit that appears to exist solely for political purposes pays a campaign committee to hire a “boutique” law firm to scare 501(c)(3) non-profits away from taking a stand on an issue that affects the people they work with every day.
It’s payday, all right — for lawyers and campaign consultants. Purveyors of short-term, high-interest loans will do whatever they can to stop Missouri from joining the growing list of states that set tight caps to stop lenders from trapping people with impossible debt.
Reach Barb Shelly at firstname.lastname@example.org or 816-234-4594.