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About The skanner. (Portland, Or.) 1975-2014 | View Entire Issue (Jan. 29, 2014)
Opinion Banks Pull Exploitive Payday Loans “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 D AVID K IDD Graphic Designer M ONICA J. F OSTER Seattle Office Coordinator J ULIE K EEFE S USAN F RIED Photographers 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. M ore good news keeps coming for consumers in early 2014. On the heels of new mortgage rules that took effect January 10, the following week four banks making payday loans pulled their products from the market. Announcing a halt to their triple-digit interest rates were Wells Fargo, Regions, Fifth Third and US Bank. Together, these lenders have combined assets of $2.1 trillion, serving customers through 30,000 branches and more than 21,500 ATMs across the country. Sometimes known as advance deposit loans, or trademarked names such as US Bank’s Check- ing Account Advance or Wells Fargo’s Direct Deposit Advance, the loans operate in the same man- ner as payday loans hawked by stores. Customers borrow a few hundred dollars and then the bank repays itself from the borrower’s next direct deposit, assessing a fee plus the entire loan amount. Research by the Center for Responsible Lending (CRL) has found that the typical bank payday borrower: • Is charged a fee of $10 per $100 borrowed, amounting to an annual percentage rate (APR) of 300 percent; • Has a one in four chance of also being a Social Security recip- ient; • Is twice more likely to incur overdraft fees than bank cus- tomers as a whole and • Often remains in debt for six months of a year. Consumer advocates and civil rights leaders have been shining a bright light on banks that chose to R ESPONSIBLE L ENDING Charlene Crowell engage in this kind of lending over the past two years. Below are a few examples of that consumer activism. In early 2012, 250 organizations and individuals sent a letter to fed- eral banking regulators expressing concerns. A year later in 2013, more than 1,000 consumers and sachusetts in May 2013 sent a joint letter to the Office of the Comp- troller of the Currency (OCC). “As Chairman and member of the Senate Special Committee on Aging, we take very seriously our responsibilities to seniors and eld- erly consumers who expect and deserve fair and transparent finan- cial services,” said the Senators. “Social Security was created to provide seniors with financial sup- port to help them cover basic liv- ing expenses not for banks seeking new sources of revenue by exploit- ing retirees with limited means. Therefore it is critical that banks be discouraged from using gov- ernment benefits as proof of Announcing a halt to their triple-digit interest rates were Wells Fargo, Regions, Fifth Third and US Bank organizations told the Consumer Financial Protection Bureau about elder financial abuse, including bank payday lending. CRL in coordination with CREDO, an organization that funds progres- sive nonprofits, delivered a peti- tion with 150,000 signatures in an appeal to federal regulators. By April 2013, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency proposed regula- tory guidance on bank payday loan criteria. Weeks later amid still- growing consumer concerns, Florida’s U.S. Senator Bill Nelson and Sen. Elizabeth Warren of Mas- income, and we would hope such a provision would be included in the final guidance.” By November 2013, FDIC and OCC finalized regulations and advised banks that a borrower’s ability to repay a loan must be considered when issuing these loans. In December 2013, the Leader- ship Conference on Civil and Human Rights (LCCR), represent- ing more than 200 diverse nation- al organizations, unanimously adopted a resolution urging states, Congress and federal agencies to increase regulatory oversight and enforcement of all payday lenders. “Low-income people and people of color have long been targeted by slick advertising and aggres- sive marketing campaigns to trap consumers into outrageously high interest loans,” said Wade Hender- son, LCCR president and CEO. “We’re simply advocating for rea- sonable regulatory oversight that ensures that low-income people won’t be swindled out of the little money they do have at their dis- posal.” Reactions to the bank decisions resulted in cheers from consumer advocates. For example, Dory Rand, president of the Chicago- based Woodstock Institute, said, “We applaud these decisions to stop offering these dangerous products. For too long, these prod- ucts – like storefront payday loan products – have wreaked havoc on borrowers’ finances and trapped them in a cycle of debt.” In short, it was the constant call for consumer protections that ulti- mately led to banks foregoing pay- day loans. By combining efforts on a single issue, advocates accomplished together what none might have done alone. I am hoping the rest of 2014 will be energized by the success of these early 2014 consumer victo- ries. Perhaps federal regulators will soon put an end to all con- sumer debt traps. As we celebrate this key consumer victory, let us strive towards more financial reforms. Charlene Crowell is a communi- cations manager with the Center for Responsible Lending. She can be reached at Charlene.crow- ell@responsiblelending.org. Telephone (503) 285-5555. E-mail: info@theskanner.com World Wide Web site: Reforming Outdated School Discipline http://www.theskanner.com 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. © 2014 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 routine school disci- plinary infraction should land a student in the principal’s office, not in a police precinct.”—Eric Holder, United States Attorney General On January 8, U.S. Attorney General Eric Holder and Educa- tion Secretary, Arne Duncan came to Baltimore’s historic Frederick Douglass High School to announce a comprehensive set of guidelines to tackle the problem of “zero tolerance” disciplinary poli- cies in our schools. As the Nation- al Urban League and others have been pointing out for years, stu- dents of color and students with disabilities receive disproportion- ately more and markedly harsher punishments for the same misbe- haviors as other students. This obviously discriminatory treat- ment is not only denying an edu- cation to thousands of minority students, it is funneling too many of them into the criminal justice system and feeding the school-to- prison pipeline. According to data collected by the Department of Education’s Office for Civil Rights, African American students without dis- abilities are more than three times as likely as their White peers with- out disabilities to be expelled or suspended. The New York Times, in its Sunday editorial, called the treatment of disabled students “a Page 4 The Portland Skanner January 29, 2014 T O B E E QUAL Marc Morial national disgrace.” The Times cites a finding by the Center for Civil Rights Remedies at the Uni- versity of California that “in ten states, including California, Con- necticut, Delaware and Illinois, more than a quarter of black stu- League’s State of Black America, Children’s Defense Fund Presi- dent Marian Wright Edelman wrote, “The growth in school expulsions and suspensions con- tributes to increasing numbers of children and teens entering the prison pipeline. Discouraged teens who are suspended or expelled are more likely than their peers to drop out of school alto- gether.” To respond to this challenge, the Obama administration guidelines direct educators to take three deliberate actions. First, do more to create the positive school cli- “A routine school disciplinary infraction should land a student in the principal’s office, not in a police precinct.” — Eric Holder, United States Attorney General dents with disabilities were sus- pended in the 2009-10 school year.” The National Urban League has long stood with parents and others who have challenged so-called “zero-tolerance” policies that have unfairly targeted students of color and done more harm than good in many public schools. In fact, in a 2007 essay in the National Urban mates that can help prevent and change inappropriate behaviors. Second, ensure that clear, concise and consistent expectations are in place to prevent and address mis- behavior. And third, schools must understand their civil rights obli- gations and strive to ensure fair- ness and equity for all students. The administration is distributing a resource package to schools and targeting grant money to train teachers and staff in ways to improve student behavior and school climate. We applaud this action and believe the elimination of racially skewed zero tolerance policies must be an indispensable part of any future discussion of education reform. A growing number of school districts and schools, including Baltimore’s Frederick Douglass High, have already begun to reform their approach to discipline and are seeing positive results. Suspensions have dropped 46 percent at Frederick Douglass since 2007. More schools should follow their lead. As Attorney General Holder said, “Too often, so-called zero-tolerance policies – however well-intentioned…dis- rupt the learning process and can have significant and lasting nega- tive effects on the long-term well- being of our young people – increasing their likelihood of future contact with juvenile and criminal justice systems.” We cannot afford to keep putting our kids at risk or wasting their poten- tial and jeopardizing the future of our nation with this misguided policy. Marc H. Morial, former mayor of New Orleans, is president and CEO of the National Urban League.
