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Q:
Is it Appropriate for a Pastor to Loan Money to Members?
Dear Attorney:
God has blessed me financially with a small inheritance that has
grown into a substantial amount through my investments. Once I
was in a position to help others, from time to time I have made
loans to members or joint ventured with members in helping them
purchase a home. These transactions have resulted in a financial
benefit to the member and myself. Do you see any problem with me
engaging any these types of financial transactions with members?
South Bay Senior Pastor
Attorney Answer
Dear Senior Pastor:
The law recognizes that members of a congregation have a special
confidential relationship with their pastors. Because of this
special relationship of trust, a member may claim a pastor has
abused of the confidence reposed in them by taking unfair
financial advantage of them them. The test is whether the
financial transaction between the pastor and member was fair to
the member and whether full disclosure was made of all material
facts. If a claim of breach of fiduciary is made, the
ministerial relationship may give rise to a presumption of undue
influence, particularly where a member is sick, dying, needy,
young, old, or otherwise in a vulnerable position. To protect
the church and pastor, we recommend that members be advised to
seek independent counsel before engaging in financial
transactions that would benefit a pastor or someone the pastor
intended to benefit by the transaction. Each transaction must be
evaluated based upon the unique facts of each case.
Click here to see what
happened to one pastor who loaned money to a member.
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The above is a hypothetical case involving fictional clergy
members. Any similarity to a specific person is purely a
coincidence. If you have a hypothetical question that you
wish to have anonymously published or if you wish to comment
on this hypothetical, please
contact us. The comments herein are not intended as a
substitute for legal advice about a specific situation. Any
clergy who is faced with a legal
issue is urged to consult legal counsel familiar with their
case to protect both themselves and their church. |
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