Free From Jail, Imprisoned by Debt

This opinion piece by Libero Della Piana was written for OtherWords and appeared in Truthout.

At 36, Marcus White has spent half of his life in prison. Today he’s no longer behind bars, but now he’s imprisoned by something else: debt.

When White was sentenced, he was saddled with $5,800 in criminal fines and fees. By the time he was released, he was stunned to learn that with interest, his debt had grown to $15,000 — and continues to grow even now.

That debt isn’t just a drag on White’s finances. It’s a drag on his right to vote.

White’s not alone. More than 50 years after the 24th Amendment made poll taxes unconstitutional in the United States, formerly incarcerated people in at least 30 states are still barred from voting because they’re unable to fully pay their court-related fines and fees.

“I have completely changed my life and have been given a fresh start,” White said recently at a conference in Washington D.C. “Voting wasn’t important to me before, but now I want to be a productive citizen in every way… I want a voice in the process.”

“I am accountable for everything I have done,” he said. “But the interest rate on my fines is crazy.”

New research by my organization, the Alliance for a Just Society, shows that millions of people — including an estimated 1.5 million African Americans — are blocked from voting because they can’t afford their criminal debt.

That debt starts at sentencing and can grow at interest rates of 12 percent or more while inmates serve their sentences. It continues to grow after they’re released and face the numerous barriers to finding work and housing.

Some states explicitly require that all court-imposed fees are paid before voting rights are restored. Others are more indirect, requiring the completion of probation or parole — with the payment of fees and fines a condition of completing parole. The laws vary, but the effects are the same.

On the other hand, former offenders with wealthier family or friends, or a savings account, are able to quickly regain their voting rights. The result is a two-tiered system that restores voting rights to an affluent elite and leaves the rest — the majority, in fact — without a vote.

The reality of racism in the United States and the criminalization of poverty means that black people and other people of color are more likely to be arrested, convicted, and locked up for longer than whites. Blacks are also less likely to regain their right to vote once they’re released.

That racial disparity bears a grim resemblance to the poll taxes imposed throughout the South after the Civil War, which were intended to keep newly freed black people from exercising their civil rights.

The problem has worsened since 2013, when the Supreme Court gutted the Voting Rights Act of 1965. Many states — including several in the old Confederacy — have since rushed to impose restrictive voter ID laws and other impediments to voting. But debt as a barrier to voting remains a little-known reality.

The clearest solution is to automatically restore voting rights to formerly incarcerated people, and to register everyone immediately after they complete their sentence. Alternately, lawmakers could repeal all criminal disenfranchisement. Short of that, states should simply remove the payment of court debts as a condition for voting.

Many of us take voting for granted, especially in a presidential election year.

Voting means having a say in the policies that affect your life and community. It’s an opportunity to elect those who will represent your values. Voting is actively participating in a better future.

Voting is hope. And the ability to pay should never be a requirement for that.

Libero Della Piana, leads racial justice and criminalization initiatives for the Alliance for a Just Society, where he is the digital director. AllianceForAJustSociety.org
Distributed by OtherWords.org

Community Organizing Groups Applaud FHFA Principal Reduction Policy

For Immediate Release

April 15, 2016
Kathy Mulady, kathy@allianceforajustsociety.org 206-992-8787
Jacob Swenson-Lengyel, jacob@npa-us.org  312-316-3973

Community Organizing Groups Applaud FHFA Principal Reduction Policy

Yesterday, the Fair Housing Finance Agency announced a principal reduction modification program that will help up to 33,000 borrowers. In response, Alliance for a Just Society and National People’s Action released the following statement:
“The Alliance for a Just Society and National People’s Action applaud the Fair Housing Finance Agency (FHFA) for beginning to provide relief to thousands of families trapped in underwater mortgages.
These homeowners were left owing more than their houses were worth when the housing market crashed almost ten years ago due to the reckless behavior of the country’s big banks.
Since the crash, the Alliance for a Just Society, National People’s Action, their affiliates and allies have mobilized families around the country to call on the FHFA to provide justice for homeowners left in the lurch.
Because of these efforts, FHFA is now making principal reduction available to approximately 33,000 homeowners, helping them get back on their feet and assisting communities struggling to recover from the ongoing devastation of the financial crisis.
While many more families need relief, and while the help will come too late for too many, the action represents a significant step forward in families’ fight for real solutions. We will continue to urge the FHFA Secretary Mel Watt and the Obama Administration to build on this progress.” 

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National People’s Action is a network of 29 grassroots organizations in 18 states working together to advance a racial and economic justice agenda for a new economy and true democracy.

Alliance for a Just Society is a national policy, research and organizing network that focuses on social, economic and racial justice.

LeeAnn Hall: Supreme Court Verdict Assures Unions Can Continue to Help Workers

The Alliance for a Just Society released the following statement from Executive Director LeeAnn Hall in response to Tuesday’s 4-4 Supreme Court verdict in the Friedrichs v. California Teachers Association case. The decision lets stand a lower court ruling upholding public sector unions’ ability to collect “fair share” fees to cover the costs of collective bargaining:

“Today’s outcome is an important victory for teachers, public service workers, and the communities that benefit from the services they provide. Public service unions will be able  to continue helping workers come together in collective bargaining to win better pay, benefits, and work environments.

“This challenge to the long-standing precedent supporting fair share fees was sheer nonsense from the beginning. Brought by the rightwing legal shop Center for Individual Rights, the challenge created a bizarre scenario where people who benefit from the union’s bargaining wouldn’t have to pitch in their fair share to support it. It created a ‘free rider’ scenario that defies both basic logic and stated conservative principles.

“Public sector unions have won important gains toward gender and racial equity in the workplace and created avenues to the middle class for people who have been shut out and discriminated against, especially people of color. It’s important for this work to continue – thanks to today’s decision, it can.

“People coming together in their communities and in their unions to express their opinions is how we build a strong democracy that works for all of us.”

Alliance for a Just Society is a national organization that focuses on social, economic and racial justice issues.

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Debt-Trap Debbie Swimming With the Loan Sharks

Debt-Trap Debbie needs to stop shilling for predatory payday lenders who siphon $8 billion in fees and interest each year from those who can least afford it.

That was the message delivered this week to Florida Rep. Debbie Wasserman Schultz’s doorstep at the Democratic National Committee, which she chairs, by a hundred grassroots leaders from National People’s Action, Alliance for a Just Society, USAction, and allies.

Decrying the “Sharknado” of debt brought on by the loan shark industry, the leaders arrived with more than 13,000 signatures calling on Wasserman Schultz to stop accepting money from the payday lending industry and stop sponsoring legislation that prioritizes predatory lenders over everyday families.

debt speakerThe grassroots leaders found the doors to Wasserman Schultz’ office building closed to them – so they turned up the heat with chants reminding Wasserman Schultz that they were determined to beat back the shark attack.

While leaders waved signs reading “Sharknado 4, starring Debbie Wasserman Schultz, produced and directed by the payday loan industry,” speakers from throughout the country testified to the devastation they and their communities have suffered.

“Once you’re swept up into the tornado of debt one loan turns into another in a cycle that just doesn’t let up,” said Candice Byrd, a member of Illinois People’s Action who spoke at the event. “It has been a nightmare for my family and me. We need our elected officials to stand with us against these predators, not in their pockets.”

Wasserman Schultz is cozy with the predatory payday lenders, having taken $68,000 in campaign contributions from the industry over the last 10 years.

Aide from Deebies officeNow she’s co-sponsoring legislation that would gut the Consumer Financial Protection Bureau’s efforts to crack down on these debt predators – and she’s lobbying her colleagues in Congress to sign on as well.

The Los Angeles Times’ David Lazarus calls her bill (H.R. 4018) “a shameless effort by the payday-loan industry, acting through congressional proxies, to avoid federal rules that would require more responsible behavior. The only choice it offers consumers is the ability to keep taking out high-interest loans even if it’s clear they can’t make payments.”

That’s why the leaders chanted even louder as barricades were brought out, then prayed for families devastated by predatory payday lenders – and for Wasserman Schultz, who does the bidding for an industry that charges up to 390 percent in interest rates.

The voices of so many persistent leaders were too powerful to ignore. After at first resisting a meeting, a representative for Wasserman Schultz emerged from behind the doors to accept the petition and a letter to Wasserman Schultz.

The leaders who descended on the Wasserman’s Schultz’s office will continue the fight.

They are determined not only to stop legislation bought by the predatory debt industry but to also win strong rules from the Consumer Financial Protection Bureau. Joining with Stop the Debt Trap Campaign, they will push for a small-dollar credit system that meets the needs of families and communities, and helps build an economy that’s equitable for all.

New Report: Disenfranchised by Debt

For Immediate Release
March 8, 2016
Contact: Kathy Mulady
Communications Director
(206) 992-8787
kathy@allianceforajustsociety.org

Washington D.C. – Poverty isn’t supposed to be a barrier to voting in the United States, at least according to the Constitution.

Yet, more than 50 years after poll taxes were prohibited by the Voting Rights Act of 1965, people with criminal convictions in at least 30 states are still being barred from voting because they are too poor to pay their jail fines and fees.

Disenfranchised by Debt is a new report by the Alliance for a Just Society released today at the Debt Nation conference in Washington, D.C. The report analyzes how millions of people, especially people of color, are blocked from voting because they can’t afford their criminal debts. Meanwhile, former offenders with means are able to quickly regain their voting rights – creating a two-tiered system.

A history of racism in the United States and the growing criminalization of poverty means that African Americans particularly, are more likely to be arrested, convicted, to receive harsher penalties, and are then less likely to regain their right to vote.

“Ending criminal disenfranchisement would be the ideal way to prevent the loss of voting rights due to court debt,” said Libero Della Piana, national organizer and racial justice leader with the Alliance for a Just Society. “Poverty should never be a reason for withholding anyone’s right to vote.”

Some of the recommendations in the report include:

  • Limiting interest rates and fees attached to unpaid LFOs.
  • Ensuring that those with misdemeanor convictions have the right and ability to vote while incarcerated.
  • Automatically registering people with conviction records when they become eligible to vote.

LFO debts grow at every stage of the judicial process, including while in jail or prison. Costs can even include laundry expenses, or haircuts. These debts also accrue interest at rates as high as 12 percent – including while the person is incarcerated. Many prisoners leave jail thousands of dollars in debt, with few job opportunities.

“Legal Financial Obligations prevent ex-offenders from rebuilding a productive life,” said Allyson Fredericksen, senior policy analyst and author of the report. “Many of these issues can be ended by reducing fees and eliminating interest on debt while incarcerated. The ability to pay should never be a criteria for voting.”

Most formerly incarcerated people never regain their right to vote.

“Our research shows that while some states explicitly require the repayment of legal debt before voting rights are restored, many other states are more indirect, requiring the completion of probation or parole – with the payment of fees and fines a condition of completing parole,” said Linnea Lassiter, co-author of Disenfranchised by Debt.

In Maryland, voting rights have recently been restored to to 40,000 people statewide completing probation, and starting March 10 will be restored automatically upon their release from prison.

In Virginia, Gov. Terry McAuliffe is the only person able to restore voting rights to those with felony convictions, per Virginia’s constitution. He announced last year that “outstanding court costs and fees will no longer prohibit an individual from having his or her rights restored.”

This opens up the opportunity to vote to even more returning citizens, many of them African American.

Virginia Organizing leader Eunice Haigler of Fredericksburg, Va., does workshops to help former felons regain their voting rights.

“I don’t know if a lot of people know how valuable it is to African Americans to be able to vote,” said Haigler. “Many African Americans don’t have a lot of hope, so to be able to vote and have a say in your community, to make it better, is a whole new world.”

Alliance for a Just Society is a national organization that focuses on social, economic and racial justice issues.

Disenfranchised by Debt

Washington D.C. – Poverty isn’t supposed to be a barrier to voting in the United States, at least according to the Constitution.

Yet, more than 50 years after poll taxes were prohibited by the Voting Rights Act of 1965, people with criminal convictions in at least 30 states are still being barred from voting even after serving their sentence because they are too poor to pay their jail fines and fees.

Disenfranchised by Debt is a new report by the Alliance for a Just Society released today at the Debt Nation conference in Washington, D.C. The report analyzes how millions of people, especially people of color, are blocked from voting because they can’t afford their criminal debts. Meanwhile, former offenders with means are able to quickly regain their voting rights – creating a two-tiered system.

A history of racism in the United States and the growing criminalization of poverty means that African Americans particularly, are more likely to be arrested, convicted, to receive harsher penalties, and are then less likely to regain their right to vote.

“Ending criminal disenfranchisement would be the ideal way to prevent the loss of voting rights due to court debt,” said Libero Della Piana, national organizer and racial justice leader with the Alliance for a Just Society. “Poverty should never be a reason for withholding anyone’s right to vote.”

Some of the recommendations in the report include:

  • Limiting interest rates and fees attached to unpaid LFOs.
  • Ensuring that those with misdemeanor convictions have the right and ability to vote while incarcerated.
  • Automatically registering people with conviction records when they become eligible to vote.

LFO debts grow at every stage of the judicial process, including while in jail or prison. Costs can even include laundry expenses, or haircuts. These debts also accrue interest at rates as high as 12 percent – including while the person is incarcerated. Many prisoners leave jail thousands of dollars in debt, with few job opportunities.

“Legal Financial Obligations prevent ex-offenders from rebuilding a productive life,” said Allyson Fredericksen, senior policy analyst and author of the report. “Many of these issues can be ended by reducing fees and eliminating interest on debt while incarcerated. The ability to pay should never be a criteria for voting.”

Most formerly incarcerated people never regain their right to vote.

“Our research shows that while some states explicitly require the repayment of legal debt before voting rights are restored, many other states are more indirect, requiring the completion of probation or parole – with the payment of fees and fines a condition of completing parole,” said Linnea Lassiter, co-author of Disenfranchised by Debt.

In Maryland, voting rights have recently been restored to to 40,000 people statewide completing probation, and starting March 10 will be restored automatically upon their release from prison.

In Virginia, Gov. Terry McAuliffe is the only person able to restore voting rights to those with felony convictions, per Virginia’s constitution. He announced last year that “outstanding court costs and fees will no longer prohibit an individual from having his or her rights restored.”

This opens up the opportunity to vote to even more returning citizens, many of them African American.

Virginia Organizing leader Eunice Haigler of Fredericksburg, Va., gives workshops to help former felons regain their voting rights.

“I don’t know if a lot of people know how valuable it is to African Americans to be able to vote,” said Haigler. “Many African Americans don’t have a lot of hope, so to be able to vote and have a say in your community, to make it better, is a whole new world.”

Alliance for a Just Society is a national organization that focuses on social, economic and racial justice issues.

Vermont Main Street Alliance Members Play Key Role in Paid Sick Days Senate Approval

Matt Birong, owner of 3 Squares Cafe in Vergennes

Matt Birong, owner of 3 Squares Cafe in Vergennes

The member businesses of the Main Street Alliance of Vermont achieved a tremendous victory this month that was over ten years in the making. The Vermont State Senate approved the Healthy Workplaces bill (H.187) with a strong bi-partisan vote of 21-8.

The approval came after several amendments were made by the Senate Committee on Economic Development that had jurisdiction of the bill and five successful floor amendments that received signals of support from the Economic Development Committee.

Key changes in the paid sick days legislation

included a one-year grace period for new businesses, an exclusion for part-time workers that work fewer than 18 hours per week, and one year delayed implementation for companies that employ five or fewer employees working 30 hours or more per week. The bill also excludes any persons under the age of 18.

Other floor amendments not supported by the committee met defeat, including an attempt to exempt businesses with five and fewer employees that failed by a single vote – providing universal adoption of the law to businesses of all sizes. Due to a narrow vote on this amendment the Senate reconvened to address this item specifically and for the second time in one week they voted to defeat the amendment.

The Main Street Alliance of Vermont members were vocal in opposition to any modification that would carve-out and exempt businesses for any purpose. If the exemption had passed, roughly 25,000 workers would not have the same protections as the rest of Vermont workers.

“We appreciate all the work that the Senate did on this bill – and feel that a reasonable compromise has been struck,” says Lindsay DesLauriers, state director of the Main Street Alliance of Vermont. “We were particularly pleased that the Senate did not adopt an exclusion by business size as we hear again and again from business owners around the state that a standard of earned leave should apply to all businesses equally.

“Paid leave should be a workplace standard like the minimum wage and this bill accomplishes that,” she said.

“This bill represents years of work and compromise to achieve a balanced bill. I’m pleased with the result and proud of the work that so many business owners on our coalitions did to ensure such a positive outcome,” said Stephanie Hainley, Main Street Alliance of Vermont board chair and COO at White + Burke Real Estate Investment Advisors.

“I think this bill is one of the best examples I’ve seen of really working hard to figure out how to find the right balance between employers and employees,” says Matt Birong, owner of 3 Squares Café in Vergennes. “I applaud all the work that has gone into this.”

Cracking Down on Abusive Debt Collectors

This article first appeared in OtherWords

Have you ever picked up your phone to find an aggressive voice on the other end demanding payments on a debt you know nothing about? You’re far from alone.

Once you’re in the sights of a debt collector, the impact on your life can be devastating: Your wages can be garnished and your credit ruined. You might lose your driver’s license, or even your job.

And it could happen over a debt you don’t even owe.

In a recent analysis of 75,000 complaints about debt collection practices submitted to the Consumer Financial Protection Bureau — just a sample of the total number — this was the most common complaint by far. Over 40 percent of people being harassed by collectors said they didn’t owe the debt in the first place.

Other complaints charged that the collectors made false statements or threats to coerce people to pay.

The government created the Consumer Financial Protection Bureau — or CFPB ­— to address abusive financial practices after the 2008 financial crash. This year, the bureau is considering strengthening rules to protect consumers from deceptive and aggressive collection practices.

Abusive collection tactics impact people with all kinds of debt — including credit card debt, medical debt, payday loans, student loans, mortgages, and automobile loans. Collectors often strike when people are most vulnerable, such as when they’re recovering from illness or desperately seeking work. They aggressively target the poor, immigrants, and people of color.

About 77 million people — or 35 percent of adults in the United States with a credit file — have a report of debt in collections. That alone makes a compelling case for the bureau to crack down on abusive tactics.

When my organization, the Alliance for a Just Society, analyzed the complaints for ournew reportUnfair, Deceptive, & Abusive: Debt Collectors Profit from Aggressive Tactics — we tallied the complaints in the database and built a list of the 15 companies with the most complaints.

The list is topped by heavy-hitting debt buyers like Encore Capital Group and PRA Group, whose business models hinge on buying portfolios of consumer debts for pennies on the dollar and then wringing payments out of alleged debtors. Both of these companies more than doubled their profits from 2010 to 2014.

Major student loan servicer Navient (formerly Sallie Mae) also makes the top 15 list for complaints about its debt collection tactics.

But it’s particularly worth noting that six out of the top 15 offenders on this list are original creditors, not third-party collectors. They include Citibank, JPMorgan Chase, Capital One, Wells Fargo, Bank of America, and Synchrony Financial (the largest issuer of private label credit cards).

This is important, because the primary protection most consumers have against unfair collection tactics — the federal Fair Debt Collection Practices Act — applies only to third parties, not original creditors. This is a troubling double standard.

The new rules must also to apply to the original creditors — including payday lenders, credit card companies, and big banks — along with third-party collectors and debt buyers.

The rules should limit phone calls to prevent harassment and require collectors to have complete documentation before attempting to collect. The rules should prohibit selling, purchasing, and attempting to collect old, paid, or expired “zombie” debt.

Finally, the bureau should toughen the penalties for collectors breaking the rules.

Living with debt isn’t a personal failing — it’s a national crisis. The bureau needs to stand up for everyday people and put a stop to abusive collection tactics.

LeeAnn Hall is the executive director of Alliance for a Just Society, a national research, policy, and organizing network working for economic, racial, and social justice. AllianceForAJustSociety.org
Distributed by OtherWords.org

REPORT: Debt Collectors Profit From Aggressive Tactics

For Immediate Release
January 26, 2016
Contact: Kathy Mulady, (206) 992-8787
kathy@allianceforajustsociety.org
REPORT PROFILES COMPANIES WITH THE MOST COMPLAINTS ABOUT
ABUSIVE AND DECEPTIVE DEBT COLLECTION TACTICS

Consumer Financial Protection Bureau should write strong rules to protect
consumers from abusive collection practices

SEATTLE – Companies engaging in debt collection activities use abusive and deceptive practices that include harassing people for debts not owed, threatening illegal actions, calling people at work, and contacting their employers and neighbors.

These are among the findings of a new report, Unfair, Deceptive & Abusive: Debt Collectors Profit from Aggressive Tactics, released today by the Alliance for a Just Society. Researchers analyzed 75,000 consumer complaints filed during the last two years with the Consumer Financial Protection Bureau.

The report profiles the 15 companies with the most complaints. The list includes:

  • Encore Capital Group – San Diego, CA
  • PRA Group – Norfolk, VA
  • Enhanced Recovery Company – Jacksonville, FL
  • Citigroup – New York, NY
  • Expert Global Solutions – Plano, TX
  • JPMorgan Chase – New York, NY
  • Navient (the student loan servicer) – Wilmington, DE
  • Wells Fargo – San Francisco, CA

The CFPB is considering whether new rules are warranted to protect consumers from deceptive and aggressive collection practices. Next steps in a rulemaking on debt collections are anticipated as early as February.

About 35 percent of adults in the U.S. with a credit file have a report of debt in collections, leaving a broad swath of households vulnerable to abusive collection tactics.

“This analysis makes it clear that debt collectors routinely engage in unfair, deceptive and abusive practices to maximize their profits,” said LeeAnn Hall, executive director of the Alliance for a Just Society. “We need the Consumer Financial Protection Bureau to stand up for consumers and write strong rules that ends these abusive practices.”

The report includes detailed recommendations to end abusive collection practices.

Meanwhile, secretive groups with undisclosed funding sources have launched a series of dubious attacks on the Bureau since November, seeking to undermine its work to strengthen consumer protections in the financial sector.

“We need the CFPB to stand strong in the face of these deceptive attacks from dark money groups with financial industry ties,” said Hall. “It’s time to rein in abusive debt collection practices and we need strong leadership and a strong rule from the CFPB to do it.”

Findings from the report include:

  • More than 40 percent of the complaints were about continued attempts to collect debts consumers said they did not owe.
  • Nearly 20 percent of complaints were about collectors’ communication tactics; 8 percent cited false statements and 7 percent cited the collector taking or threatening an illegal action.
  • Complaints tied to credit card debt were most common, followed by medical debt, payday loans, student loans, mortgage debt, and finally auto debt.
  • The two companies with the most collection-related complaints, Encore Capital Group and PRA Group, each more than doubled their profits from 2010 to 2014.

The report’s recommendations for the CFPB’s rulemaking include:

  • Apply the new debt collection rules to original creditors – such as payday lenders, credit card companies, and banks – along with third-party collectors and debt buyers.
  • Strengthen remedies and increase penalties to stop abusive debt collection practices.
  • Require debt collectors to have complete documentation before initiating collection actions.
  • Set specific limits on phone calls from debt collectors to prevent harassment.
  • Prohibit the sale, purchase, and collection of time-barred debt (also known as “zombie debt”).

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The Alliance for a Just Society is a national organization that focuses on social, economic and racial justice issues.

The full report can be found here: http://allianceforajustsociety.org/wp-content/uploads/2016/01/2016.01_Debt.Collectors_FINAL.pdf