Faith Leaders Organize to Protect Vulnerable New Yorkers from Bad Actors in the Unregulated Lawsuit Lending Industry
More Than Three Dozen Clergy Members Statewide Unite, Join Forces with Consumers for Fair Legal Funding Coalition to Demand Reform & an End to Predatory Practices
ALBANY, NY – Thirty-seven clergy members representing Black churches and religious organizations across New York today announced the formation of Faith Leaders Against Predatory Lending to raise awareness among their parishioners and the community about the widespread harm caused by the booming, unregulated lawsuit lending industry.
Faith Leaders Against Predatory Lending will join forces with Consumers for Fair Legal Funding (CFLF), a coalition of community groups, social justice organizations, and business interests formed in 2022 to educate elected officials, regulators, and members of the public about the predatory practices of bad actors in the third-party litigation finance (TPLF) industry due to the absence of any guardrails to protect vulnerable plaintiffs.
“The Bible is clear that usury – lending money at ruinous interest rates – is immoral, particularly when it is perpetrated by the rich at the expense of the poor,” said Rev. Kirsten John Foy, a lawsuit lending victim and CFLF spokesman. “Scripture clearly states that when someone impoverished seeks financial help, we have a responsibility to help them, not extort them. As faith leaders, we have a moral responsibility to stand up for the least among us and protect them from all manner of harm – physical, emotional, and financial.”
New York is turning a blind eye to the lawsuit lending industry, which is operating in a manner tantamount to legally sanctioned usury. Due to a complete absence of regulation, lenders are profiting significantly off the misery and desperation of vulnerable New Yorkers.
Lawsuit lending can provide a critical lifeline for individuals who are unbanked, underbanked, or lacking a financial safety net to pay medical or daily expenses while awaiting the outcome of their legal action. However, because lawsuit lending is legally classified as an “investment” and not a traditional loan, lenders can charge whatever they want in interest – sometimes as high as 100 percent or more – at rates that compound every month. Borrowers can owe most of or all their financial settlement to the lender. Some even end up in debt.
The average rate of interest for a lawsuit loan runs between 27 and 60 percent a year – higher than New York’s 25 percent criminal usury and 16 percent civil usury rates. Since the interest on these loans compounds every month, a $25,000 loan could result in about $12,500 pinterest or more in just one year. That is not significantly different from payday loans, which are prohibited, and is a distinction without much difference.
It takes, on average, between one and three years to negotiate a personal injury settlement or obtain a verdict in such a case in this state. Medical malpractice cases can take far longer – especially if they go to trial. As borrowers await their day in court or financial relief through a settlement, that compound interest is adding up.
The existence of a lawsuit loan does not have to be disclosed at any time during the litigation process, making it impossible to know if conflicts of interest exist between lenders and plaintiffs’ attorneys. This makes a mockery of our legal system. True reform will include disclosure of lawsuit loans to ensure a level playing field in the courtroom for all participants and an interest rate cap to protect vulnerable borrowers.
“Proverbs 22:7 reminds us that ‘the rich role over the poor and the borrower is a slave to the lender,’” Rev. Foy said. “We have a moral obligation to shine a light on the suffering of everyday New Yorkers who fall prey to the shadowy, unregulated lawsuit lending industry and ensure they receive the protections they deserve.”
The following faith leaders have signed on to this new effort:
Rev. Dr. Cheryl Anthony, Judah International Ministries. Brooklyn
Rev. Phil Craig, Springfield Gardens Community Church, Queens
Rev. Troy DeCohen, Mt. Vernon Heights Congregational Church, Mt. Vernon
Rev. Dr. Jospeh Brickhouse, Lovely Hill Baptist Church, Brooklyn
Bishop Robert Butler, Glory Tabernacle, Brooklyn
Bishop Carlton Brown, Bethel Gospel Assembly, Manhattan
Pastor Lindsey Williams, The Glory House, Queens
Pastor Christopher Lawrence, Full Effect Church, Brooklyn
Pastor Elijah Boone, Open Heaven Worship Center, Queens
Pastor Terrie Boone, Open Heaven Worship Center, Queens
Pastor Craig Williams, Greater St. Stephen’s Church, Brooklyn
Pastor Michael Battle, Transformation Church, Queens
Rev. Charles O. Galbreath, Ph.D. Alliance Tabernacle, Brooklyn
Rev. Dr. Francko Harris, Mount Olive Baptist Church, Queens
Minister Naquan Davidson, The Freedom Church, Brooklyn
Bishop Shelvis Green II, Christway Church, Brooklyn
Pastor Steven Carter, Mount Ararat Baptist Church, Brooklyn
Rev. Dr. Chris Williams, Greater Zion Hill Baptist Church, Manhattan
Bishop Orlando Findlayter, New Hope Christian Fellowship, Brooklyn
Rev. Jannie Poullard, Liberty Baptist Church, Brooklyn
Pastor Louis Straker, Reflections Church Brooklyn
Bishop Darren Duncan, Bethany Baptist Church, Jamaica, Queens
Pastor Alex Williams, Institutional International Ministries, Brooklyn
Rev. Adolphus Lacey Bethany, Baptist Church Brooklyn
Pastor Jason Hendrickson, Restoration Tabernacle Brooklyn
Rev. Maurice McRae, Second Baptist, Church, Baldwin,
Rev. Earl Jones Jr. Morningstar, Missionary Baptist Church, Jamaica, Queens
Rev. Gabby Cudjoe-Wilkes, Double Love Church, Brooklyn
Rev. Joseph Jones, Mount Hermon Baptist Church, the Bronx
Pastor Fred Johnson, First Genesis Baptist Church, Rochester
David Williams Church, The Wild Movement, Rochester
Pastor Melvin Cross, Glory House International Church, Rochester
Bishop E. John Crocker, Faith Hope and Charity, Rochester
Justice Flaggler, Glory House International Church, Rochester
Minister Justin Morris, Untrapped Ministries, Rochester
Robert Carlos Untrapped Ministries, Rochester
Bishop E John Crocker, Faith Hope and Charity, Rochester
