September - October 2017

Written by Keith Schwanz

From his column It's Your Money

wolfMy pastoral friend suggested we meet for lunch. As we sat down in the restaurant, the conversation turned to businesses that make short-term loans at exorbitant interest rates. He went on to tell me about how low income families get trapped in a predatory borrowing system that confiscates the little they have.

The Old Testament guidelines about usury clearly reveal God's disgust with it, so my friend called his congregation to action and talked with attorneys and bankers to brainstorm how together they might be a catalyst to fence in the predators. I volunteered to see if I might uncover similar programs. What I discovered echoed my friend’s initial idea to develop a system that combines training in personal finance, incentives for folks to regularly add to personal savings accounts, and short-term assistance for situations that precipitate the initial contact with families in need.

Affinity Fraud

While usurious lending is generally a secular enterprise, there are predatory activities that occur within the Christian community. I have witnessed this first hand.

One Sunday a man in my congregation asked if I had seen the headline in the newspaper a few days before. He referred to a report about a man who enticed church members to invest with him. But instead of investing their money, he used it for personal purchases. “I went to college with this man,” my friend told me. I knew the school where he attended—a Christian college.

While usurious lending is generally a secular enterprise, there are predatory activities that occur within the Christian community.

Affinity fraud is when someone uses affiliation with others as a launching pad to swindle. In June 2017, the news broke about a couple who spoke at religious events, received investments from individuals and congregations, and allegedly used the funds to acquire a 9,000-square-foot mansion, a yacht, and a Lamborghini. Ten years earlier, the husband had been arrested and sentenced to prison for defrauding a neighbor out of $800,000.

I have been in congregations where individuals promised prospective clients gains and ironclad security on a variety of financial products. The person listening to the pitch believed the one making it must be trustworthy since they were church members and worshiped together every Sunday. But as a pastor, I knew the vulnerabilities of those involved. I struggled with whether to intervene, and pondered how our congregation might respond when the bubble popped and the promises evaporated. I’ve seen relationships severed and dark clouds descend over congregations when folks use the church directory to troll for income.

Recently, a pastor asked if I could help him understand a life insurance policy he had purchased. As we looked at his documents and compared them with other options, we discovered that his monthly premium was almost four times what it might have been for the same coverage. My friend had assumed that the person who sold him the policy was acting in his best interest—he was, after all, a brother in Christ. The legal requirement in this transaction, however, involved only suitability. The salesman had no fiduciary responsibility to do what was best for my friend. And he didn’t.

Some financial advisors target ministers who eventually sign ill-advised contracts. A recent conversation with such a person began with the line, “I like to help pastors,” but a careful review of the financial products offered revealed a high fee structure buried in the fine print.

I grieve when I learn of pastors who have scraped by with low compensation throughout their service, often with inadequate savings for retirement, and end up following the advice of someone with church connections who siphons off the little they have. A governmental study in 2015 found that hidden fees in retirement accounts cost investors $17 billion a year. The actions have been legal, but are financially devastating all the same. Some of my pastor friends have been victims.

Wise But Innocent

In Matthew 10, Jesus talked to His disciples before sending them out to engage in God’s mission. He characterized them as “sheep going into the midst of wolves.” The imagery brings to mind a roaming, destructive pack of animals. “So be wise as serpents and innocent as doves,” Jesus admonished (v. 16). The disciples were to be as astute in their engagement in the mission of God as the serpent in Genesis 3 had been crafty in pulling Adam and Eve toward sin.

We do well to continue to heed the counsel Jesus gave to his associates. Most of those within our churches are genuine followers of Christ who truly want to serve Him and be a help to those around them. However, we should remain vigilant that there may be within our flocks those who, beneath the sheepskins, are in reality wolves.

Keith Schwanz is a writer and editor. He previously served as a pastor, church musician, and seminary educator.

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