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FILE - In this Nov. 27, 2014 file photo, a woman pays for merchandise at a Kohl's department store in Sherwood, Ark. (AP Photo/Danny Johnston, File)

Everyone in St. Louis seems to have an opinion on payday lending. Politicians decry the industry as usurious. Consumer advocates demand that “predatory lenders” be shut down. Middle- and higher-income people don’t understand why the loans cost so much, or why anyone would take one out. Meanwhile, the consumers who use these services just want access to a short-term loan so they can pay rent, repair their car, keep the lights on, and more. Presently, payday lenders fill that need and are accessible.

Many people are struggling to get by. According to the 2018 Prosperity Now Scorecard, despite nationwide low unemployment rates, nearly a quarter of all jobs in America are low-wage. Add to that the fact that 45.8 percent of white renters and 53.9 percent of renters of color are cost-burdened (meaning they spend more than 30 percent of their income on housing). For those living on a fixed income, primarily seniors and the disabled, the picture is increasingly bleak as their benefits remain flat and the underpinnings of state and federal safety nets continue to fray.

Throwing stones at the payday lending industry is easy. Building something with those stones requires thought leadership, investment and awareness. Thankfully, St. Louis has an opportunity to turn the tide against payday lenders through existing market-based solutions.

Community Development Financial Institutions and nonprofit loan funds operate in our area to offer consumers small-dollar loans ($100 to $1,000) at more affordable rates and the opportunity to engage with financial experts who can provide free guidance on how to build credit, eliminate debt and manage household finances. CDFIs like Justine Petersen and St. Louis Community Credit Union give consumers a pathway to financial well-being through a host of affordable opportunities. Prosperity Connection, a nonprofit, established RedDough Money Center in 2016 to compete directly against payday lenders by offering small-dollar loans, check cashing services and more.

Not only have these organizations developed the right tools to help economically vulnerable people, they’ve deployed facilities and staff in areas devoid of financial services. Take for example Prosperity Connection’s Wealth Accumulation Center in Pagedale. By partnering with the credit union, the 24:1 Community Land Trust and Beyond Housing, their multiuse financial service/education center offers the community the chance to get a lower-cost, small-dollar loan through RedDough Money Center, open a mainstream checking account, and connect with a financial coach through Prosperity Connection’s Excel Center.

Dealing with these difficult issues often draws calls for policy action or philanthropy to swoop in and solve the problem. Unfortunately, we live in a state where there is an unwillingness to institute targeted legislation that would crack down on abuses against consumers. Further, even if Missouri were to take a bold step forward and ban payday lenders from operating, it doesn’t solve the real issue: access to short-term credit to live.

Philanthropy, too, can only go so far. Foundations, corporations and individuals can help struggling families meet immediate needs through small monetary gifts to pay for past-due rent, utility payments, etc. However, that doesn’t solve for the longer-term issue: access to short-term credit to live. It also doesn’t provide these entities with any hope of a sustainable solution that doesn’t involve their perpetual generosity.

By meeting underserved people where they live and work, as well as aligning with policies and interventions derived from the community (i.e. Ferguson Commission Report; Opportunity to Thrive section — Financial Empowerment Centers), payday lenders and other predatory organizations can be diminished over time. Market-based solutions offer the real promise for change, which can be sustained through the patronage of people who critically need access to more affordable sources of credit when a financial emergency strikes or when a family’s paycheck can’t be stretched any further.

CDFIs and nonprofit loan funds in the St. Louis area have solutions that are sustainable and give borrowers a much less expensive opportunity to cover emergency expenses. What role can you play? Consider supporting CDFIs and nonprofit loan funds with your deposits, your loan needs (car, house, etc.), and your donations so that they can do more for families facing tough times. Together, we might go beyond talk and have real impact to move St. Louis forward.

Paul Woodruff is executive director of Prosperity Connection.