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GRAND RAPIDS (WZZM) -- Dozens of local religious leaders have teamed up to fight the multi-billion dollar industry known as payday lending.

Rev. Dallas Lenear is the leader of theMicah Center Anti-Lending Advocacy Group and executive pastor of New Hope Baptist Church in Grand Rapids. The Micah Center is a social justice organization made up of a consortium of about 40 churches. It considers payday lending a prevalent problem in Michigan.

"We feel frankly that payday lending is unjust because it is preying on those who can least afford their business model," he said.

Tarra Davis is one of those people. Davis borrowed money from one of the companies several years ago. It took much longer than she expected to pay the loan back.

"I was in my late 20's and working at a relatively decent job but it paid just enough to pay the bills," said Davis, who added that there was no extra money for savings.

Davis is one of several people featured in a documentary, "The Case against Payday Lending" written and produced by The Micah Center. She recalls a time when her car broke down and needed repairs.

"I didn't have the extra funds available to take care of that, so I had to make a choice between paying and not getting the repairs done or get the car fixed so I could go to work and continue to make money," she said. "I made the decision to take the money for my car payment and a portion of my rent to get the car fixed which led me to a new situation when the car and rent payment became due."

Davis says she continued to "robbing Peter to pay Paul" until she broke down and went to borrow money from a Payday loan store.

"Immediately, I felt the pressure relieved. I didn't think about the interest rate. I didn't think about anything other than I needed the relief and they were the first people to say 'yes'," she said.

It didn't take long for Davis to realize the repercussion of decision. As with most Payday loan stores, the full amount of the loan, plus interest and fees are due two weeks later.

"Of course, if you are living paycheck to paycheck on a small budget, you don't have hundreds of dollars to pay, so I found myself having to redo the loan all over again," said Davis.

"It gets really bad. The average person who takes out one of these loans has to recycle the loannine times and so if they borrow $600 they wind up paying $1,800 by the time it is all said and done," said Sue Ortiz director of housing and family services for Inner City Christian Federation. "We've seen people who are trapped in the cycle for over 2 years. They are constantly paying $150 a month but not touching the principal. That is why it gets so horrible for them. They are paying and paying and paying and getting no where on the debt."

One reason for that, Ortiz argues, is the exorbitant interest rates the companies charge. In Michigan, interest rates range between 350% to 400% plus the additional fees.

"It is corporate loan sharking. It is predatory practice at its best. No reasonable person would be willing to pay 400% interest for a short term, small dollar loan, but in a moment of desperation, someone may be willing to lay aside reason to get their needs met," said Lenear. "So that is why we are trying to change that reality and create a responsible lending alternative."

"We are planning to do a combination of loans, plus education and reasonable repayment terms so it is affordable," said Ortiz, putting emphasis on the importance of educating borrowers about managing their money. She says this alternative is needed now more than ever because payday lending centers are exploding across the nation and online.

"Believe it or not, there are 23 McDonalds restaurants here in Kent County. By comparison there are 32 payday lending stores," said Lenear. "Although many of us have never even heard of these stores or notice them they are strategically placed in communities that are financially strapped already."

The group is seeking grants and investors to help get the program up and running. They are modeling their efforts after other communities that have successfully done similar things.

"There is an institution in Pittsburgh. They've been around forfive years now. The first year they helped 52 households now in yearfive they are planning to help 2,000. But, it is just a small drop in the ocean," he said. "The national numbers say there are over 12 million people annually who use these payday loan services. We are just one of about 25 to 30 communities nationwide coming together to try and address this issue. We believe these little Davids can come together to defeat this Goliath."

Lenear says they are working on securing approximately $50,000 from grants and donors to launch a pilot program within the next 3 to 6 months.

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