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About The skanner. (Portland, Or.) 1975-2014 | View Entire Issue (April 3, 2013)
Opinion Payday Lending Drains Economy “Challenging People to Shape a Better Future Now” B ERNIE F OSTER Founder/Publisher B OBBIE D ORE F OSTER Executive Editor T ED B ANKS Advertising Manager J ERRY F OSTER Account Executive L ISA L OVING News Editor H ELEN S ILVIS Multimedia Editor B RUCE P OINSETTE Reporter D AVID K IDD Graphic Designer M ONICA J. F OSTER Seattle Office Coordinator J ULIE K EEFE S USAN F RIED Photographers O ne of the worst ironies of the nagging economic recession is that consumers with the fewest financial resources have lost the most. Now, a new report finds that payday loans not only strip much-needed income from low-income families; but also harms the economic viability of the communities where they operate, draining nearly $1 billion a year. Written by the Insight Cen- ter for Community Economic Development (Insight Center), it also reveals other net negative impacts of these small-dollar, high cost loans on economic growth and personal bankruptcy filings. The Insight Center examined the net economic impact of the $3.3 billion in interest that borrowers paid to non-bank payday lenders in 2011. The study found that if consumers collectively had an additional $3.3 billion in discre- tionary spending, it would have resulted in $6.34 billion in eco- nomic activity and created 79,000 jobs. In comparison, payday lending activity added $5.56 billion to the national economy and created 65,000 jobs. Combining these figures shows a net loss from payday lending of $774 million in economic growth R ESPONSIBLE L ENDING Charlene Crowell and over 14,000 jobs — in addi- tion to $169 million lost through Chapter 13 bankruptcies. The report states, “This nearly $1 billion loss in economic activi- “In addition, we estimate that more than 38 people lose their jobs each day due to the economic drain of payday lending.” Payday lending has been a cen- terpiece of the Center for Respon- sible Lending’s research and policy efforts over the past decade. CRL also supported the new report’s development. Earlier CRL research deter- mined that each year 12 million Americans become entrapped in payday loans, taking out an aver- age of nine loans per year. With Research shows a net loss from payday lending of $774 million in economic growth and over 14,000 jobs — in addition to $169 million lost through Chapter 13 bankruptcies ty should serve as a strong signal that, in addition to the well-docu- mented harm to the families directly receiving payday loans, payday lending harms local com- munity economies and the overall economy.” “Payday lending drains over $2.5 million from the economy each day”, continued the report. more than 22,000 locations, there are more than two payday stores for every Starbucks coffee store. CRL has also documented how storefront payday lenders tend to concentrate locations in low- income and communities of color. The Southern states of Alabama, Louisiana, Mississippi, Tennessee, and South Carolina had the high- est number of payday stores per 10,000 residents. Outside of the Deep South, Missouri and Nevada were the only states with compara- ble density of payday storefronts. Similarly, the Insight Center found that five states were charged the greatest amount of payday loan interest were California, Texas, Florida, Mississippi and Illinois. In these locales, financial payday losses ranged from $135 million in California to $55 million in Illi- nois. Remarking on the Insight Cen- ter’s new findings, Keith Corbett, CRL executive vice-president said, “Payday lending is really financial assault on communities of color. By preying on consumers with few resources, this predatory product takes what little they have and winds up leaving borrowers worse off than before these loans.” Corbett’s comments are under- scored by the Insight report. “Far from creating opportunity, payday lending creates impoverished households and endangers local economies. Charlene Crowell is a communi- cations manager with the Center for Responsible Lending. Will Supreme Court Kill Affirmative Action? The Skanner Newspaper, established in October 1975, is a weekly publica- tion, published each Wednesday by IMM Publications Inc., 415 N. Killingsworth St., P.O. Box 5455, Portland, OR 97228. Telephone (503) 285-5555. E-mail: info@theskanner.com World Wide Web site: http://www.theskanner.com Fax: (503) 285-2900 The Skanner is a member of the National Newspaper Pub lishers Associ- ation and West Coast Black Pub lishers Association. All photos submitted become the property of The Skanner. We are not re - spon sible for lost or damaged photos either solicited or unsolicited. © 2012 The Skanner. ALL RIGHTS RE SERVED. REPRODUCTION IN WHOLE OR IN PART WITHOUT PERMISSION PROHIBITED. To see The Skanner News on your smart phone go to theskannermobile.com or scan this QR code with your app. • • • • • • • • Local news Opinions Jobs, Bids Sports Entertainment Music reviews Bulletin board RSS feeds A decade after carefully rul- ing in two University of Michigan cases – striking down the undergraduate admis- sions procedures and upholding those implemented by the law school – the U.S. Supreme Court seems on course to strike down even the mildest form of affirma- tive action admissions in higher education. After oral arguments in a case brought by a White student who was denied admission to the Uni- versity of Texas at Austin, the jus- tices are expected to hand down a ruling in late June or early July. Rather than await the outcome of that case, last week the court accepted another challenge to affirmative action in Michigan, which will not be argued until the October term. The fact that the court accepted the Texas and Michigan cases, after higher education officials thought the matter was settled law, is a clear indication that the con- servative-leaning court plans to eviscerate race- and gender-con- scious college admissions pro- grams, no matter how conservative or narrowly drawn. If the court had other intentions, it would have left lower court rul- ings favorable to affirmative action in the two cases stand. Fisher v. University of Texas at Austin, the case the court is expected to rule on in late June, was brought by Abigail Fisher, a 22-year-old White woman who was rejected for admission in the fall of 2008. Under the University of Texas admissions program, the top 10 percent of each high school graduating class was guaranteed admission to the state’s flagship university. When Fisher applied, 90 percent of the students were selected that way. Page 4 The Portland Skanner April 3, 2013 T HE C URRY R EPORT George E. Curry The other 10 percent of appli- cants were admitted based on a variety of factors, including extracurricular activities, awards and honors, work experience, socioeconomic status, standard- ized test scores and race. Of all of and appeals courts agreed, ruling against Fisher. But the Supreme Court decided to accept the case anyway. Even more surprising was the court’s decision to accept another Michigan case, Schulette v. Coali- tion to Defend Affirmative Action, while Fisher is still pending. After the Supreme Court upheld affirmative action in the Universi- ty of Michigan law school case, 58 percent of voters adopted Proposal 2 in 2006, which prohibited dis- crimination or preferential treat- ment in public education, government contracting and pub- lic employment based on race, eth- If the court had other intentions, it would have left lower court rulings favorable to affirmative action in the two cases stand those factors, Fisher decided to challenge admissions because the university considered race as one of many factors. “Race is only one modest factor among many others weighed; it is considered only in an individual- ized and contextual way… and admissions officers do not know an applicant’s race when they decide [who] to admit in UT’s process,” the university argued in its brief. University of Texas officials said if the modest affirmative action program had not been in place, Fisher still would not have quali- fied for admission. The district nicity or gender. It was modeled after a ballot measure passed by California voters in 1996. Supporters of affirmative action in Michigan, lodged a legal chal- lenge to Proposal 2, paving the path for the U.S. 6th Circuit Court of Appeals in Cincinnati to rule 8- 7 that ballot initiative, which amended the state constitution, violated the federal Constitution’s Equal Protection Clause. According to the NAACP Legal Defense and Educational Fund, the percentage of Black students enrolled at the University of Michigan had dropped from 6.7 percent in 2006 to 4.5 percent in 2010 as a result of Proposal 2. The permissible use of affirma- tive action was thought to be decided for good in 2003. In Gratz v. Bollinger, the court ruled that the University of Michigan’s undergraduate admissions pro- gram violated the Equal Protection Clause of the 14th Amendment when it assigned 20 points to minority applicants. But in Grutter v. Bollinger, the court ruled that when narrowly tai- lored, race can be lawfully used in combination with other factors as part of the University of Michigan Law School admissions process. In her written opinion, Justice Sandra Day O’Connor cited bene- fits of “obtaining the educational benefits that flow from a diverse student body.” O’Connor, who has since retired from the court, said she did not envision affirmative action in place forever. In fact, she suggest- ed 25 years, without giving a rea- son why it would not be needed beyond that point. Now, just 10 years later – and despite this nation’s horrible histo- ry on race – the conservative majority on the court seem unwill- ing to leave affirmative action in place for another 15 years. As Justice Stephen G. Breyer, a supporter of affirmative action, said last October: “Grutter said it would be good law for at least 25 years, and I know that time flies, but I think only nine of those years have passed.” George E. Curry, former editor- in-chief of Emerge magazine, is editor-in-chief of the National Newspaper Publishers Associa- tion News Service (NNPA.) He is a keynote speaker, moderator, and media coach.
