By Jo Mannies, Beacon political reporter                

A law firm hired by the payday industry is blanketing the state with letters telling clergy, church board members and religious groups that their active support for a ballot initiative restricting payday loan interest rates could threaten their tax-exempt status.

The letters appear to have been sent out, in part, in response to a gathering of religious leaders in Jefferson City in favor of the proposed initiative, which would cap payday loan rates at 36 percent. Current rates can be more than 400 percent.

Some churches and religious groups already have begun participating in the collection of the roughly 90,000 signatures needed to get the proposal on the ballot. Both sides also are in court battling over the proposed ballot wording approved by Secretary of State Robin Carnahan's office.

"You know you're on the right track when your opponents stick a nasty letter under a lawyer's letterhead,'' said the Rev. David Gerth, executive director of the St. Louis-based Metropolitan Congregations United (MCU).

But Rabbi Susan Talve, who also received one of the letters, said she is concerned that its warnings might scare some religious activists. The letter has gone to church and synagogue board members, who she said aren't usually targeted.

Talve, who often has been active on the issues, said she cannot recall previously receiving such a letter from opponents.

The letter came from a Texas law firm, Anthony & Middlebrook, which wrote that it was acting on behalf of Missourians for Equal Credit Opportunity, a group aligned with payday-loan firms opposing the ballot measure.

Missourians for Equal Credit Opportunity has raised more than $850,000 but has done so with a handful of large donations from another allied group -- so that the individual donors are not identified.

A lawyer at the Anthony & Middlebrook firm, Shane Hamilton, referred all questions about the letter to Missourians for Equal Credit Opportunity. The group has not returned the Beacon's calls or emailed requests for comment.

In the letter, the firm alleges, among other things, that "church-based political activity may give rise to campaign finance reporting obligations."

"Furthermore,'' the letter says, "a church or religious organization that engages in activities that attempt to influence legislation (i.e. lobbying) may lost their tax-exempt status."

Actually, religious institutions can lobby as they please for or against an issue. They run into problems if they endorse a candidate.

Campaign-finance requirements come into play, in Missouri, if any group or person spends more than $500 on public communications or more than $2,000 to inform members on a political issue.

Gerth contended that parts of the letter were "clearly misleading,'' by implying that collecting signatures for a petition drive would put a religious institution's tax-exempt status at risk.

Eva Schulte, executive director of the Kansas City-based Communities Creating Opportunity, has sent a response letter to her group's membership of 40 religious institutions, as well as Missouri Faith Voices, a statewide organization of congregations and faith-based groups.

Schulte said in an interview that the letter from the law firm "was inflammatory,'' particularly in its reference to state campaign-finance laws.

In her letter to member of religious groups, Schulte asserted that the payday loan industry is spending money and "employing the same intimidation tactics they use on their customers on churches, synagogues and other religious organizations in their attempts to defeat the faith community movement to confront usury and create greater economic dignity for families.

"Their threatening letter to you reminds us that we need to be clear in our message, clear in our legal rights, and clear in our moral conviction."

As for Talve and the Central Reformed Congregation, the rabbi said, "Because of that threatening, demeaning letter, I'm going to make sure we get involved" in the payday loan fight.