Minneapolis Area Synod, ELCA
Report date
June 2021
What has been most instrumental to your progress?
Convening and connection-building in specific communities impacted by payday lending was the most instrumental component of our overall work. Particularly in Mankato, Duluth, and Moorhead we were able to increase community understanding of the issue and uncover local people who experienced the issue first hand.In Moorhead in particular, this increased understanding led local residents to take matters into their own hands and develop an innovative and effective solution to the problem of predatory payday lending as a local ordinance. We are thrilled that this could prove to be a model for other cities to replicate, offering both immediate relief and a pathway to statewide action. The development and implementation of this model has been the result of deep listening in communities. It made all the difference having paid contractors on the ground to be a consistent touchpoint on the issue for local conversations and a core staff person to offer infrastructure and support so that communities could compare and contrast their experiences of the issue.
The staff capacity to network with both national and local partners to keep Minnesota in the conversation as this issue progressed at the federal level was another key component. Thanks to the thoughtful and relationship-based staffing support of statewide coalition, local community members from across the state had the opportunity to tell their stories in public settings -- from community meetings and webinars to city-level press conferences to statewide hearings with Senators and Congressional Representatives. Having a full-time core staff person to learn how this issue of payday lending was playing out in other states. Our Midwest neighbors in Nebraska and Illinois both passed ballot measures on payday lending during the course of this grant term and we were able to lift out key similarities and differences to the community-based solutions in our own contexts.
Key lessons learned
One key lesson we learned was the importance of context, as we deal with an issue that’s experienced throughout the state. The experiences of those in Duluth, and the ideas for solutions varied quite a bit from the experiences and ideas of those in Anoka County, or Blue Earth County. It was so important to lay the groundwork of listening, one-on-one conversations, community convenings for issue education and conversation before crafting solutions at either the state or local levels. For an issue that’s so widespread, there’s also a lot of shame involved for the people experiencing the debt trap, and so it took time, trust and local connections to uncover some of the on-the-ground realities of the problem.
We also learned how painfully slowly democracy moves. Over the grant period we’ve been able to both uncover and uplift that the experiences of people who use payday loans is overwhelmingly negative. These businesses target vulnerable communities, particularly communities of color, and drain them of wealth and resources. There is a huge discrepancy between the way that Minnesotans feel about the issue of payday loans and the way that the Minnesota legislature acts (or fails to act) on the issue. While our inability to move community-based statewide policy solutions during this grant term could be characterized as a failure, we’re more poised now to make change than when we started. Policy is often slow to catch up with public opinion. However, we’ve gained clarity and insight about the public’s opinion on this issue, we have gained partners and developed communication to better represent the growing support for both local and statewide solutions, and we’re now ending this grant term poised to step into the next phase of this innovation process.
Reflections on the community innovation process
Testing and implementing solutions proved to be the most important. As local leaders, organizations, and community members learned more about this often-hidden issue, there were so many ideas for a broad range of solutions. Leaders spent a lot of time learning what other states have tried and wrestling with the values of direct service vs. advocacy vs. organizing as means to achieve a solution. They also spent time drawing connections between this particular economic justice issue and the entire web of economic justice -- from income inequality to social safety nets. We learned that even though Exodus Lending is a key partner and provides a direct service, this approach doesn’t actually reduce the number of Minnesotans harmed by payday lending. While it serves as a critical support, the experiences of their program participants underscores the need for more systemic policy change solutions.
Progress toward an innovation
The creation and implementation of the “Moorhead Model” for capping the interest rate on payday loans is an incremental innovation that we achieved as a result of this grant period. Because of this innovation we are so much closer to achieving a more comprehensive solution to the problem of predatory payday lending in Minnesota. This innovation launches a whole new cycle through the community innovation process as more communities show an interest in joining Moorhead to take a stand on this problem. We will be the first state in the country to use a locally-based policy campaign to influence statewide legislation on payday lending. We believe this groundswell of community-based innovation will lead to an ultimate solution on the issue -- when these local successes force the issue at the Capitol, it will no longer be an option to deny statewide action to protect all Minnesotans from these products.
What's next?
We have applied for further funding on this project so that we can continue to run with our“Moorehead Model” innovation and replicate it! We received additional funding through a grant from the Impact Project that is supporting us to do statewide polling on this issue. With this new polling data available to us at the end of June 2021, we can launch full-speed into further building local solutions and empowering communities to hold this legislature accountable for their inaction on this crisis. We expect to expand the number of communities who are convening around this process, growing the statewide coalition.
If you could do it all over again...
“We don’t win because we’re right, we win because we build power.” And this power-building is slow, intensive work. This is an issue with little to no moral ambiguity - in all of the issue education we’ve been doing over the grant period, we’ve rarely needed to convince someone that this predatory practice was a serious problem - everyone on the ground agrees that 200% interest is wrong. And yet, high-level decision makers refuse to act on it because of the financial interests of the few who stand to benefit from this exploitative practice. If all we needed to do was win over hearts and minds on this issue, we would have been done shortly after we started - but it’s the slow, deliberate process of convening community members and building power together that led us to developing and implementing the Moorhead model. And this is the process that we will carry on until we win sweeping reform in MN.