Shark Week 2016 – We’re going to need a bigger boat!

It’s Shark Week! While ocean going sharks will be in the spotlight, it’s the predatory payday loan sharks that are the real danger in our neighborhoods.

This year, we’ve got a chance to build a lifeboat to keep our families out of harm’s way with new proposed rules from the Consumer Financial Protection Bureau. The only problem is that the boat is full of holes, and a leaky boat won’t keep the loan sharks at bay.

This Shark Week, demand the CFPB plug the leaks in their proposed rule.

The business model of payday and car title loan sharks is to keep people trapped in endless cycles of debt. These sharks rely on direct access to borrowers’ checking accounts and holding the title to your car to get paid first. That’s the definition of predatory. The CFPB rules must truly dismantle the debt trap by letting payday lenders make a loan only when they have made sure the borrower can afford to pay it back.

Right now the CFPB proposed rules don’t guarantee that. They need to hear from you. Tell the the CFPB to plug the holes in their proposed rule so our communities are safe from predatory payday loan sharks who put profits over people.

This #Sharkweek, let’s make sure we come out ahead of the loan sharks.

03 Car Title Loan Sharks

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.

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

You Are Not a Loan – You Are Not Alone!

Debt isn’t a personal failing – it’s a national crisis.

We are standing up for those burdened by debt that is threatening their future and ours: students, homeowners, the working poor, and those with serious illness and crushing medical debt.

We are gathering the nation – inviting everyone to come together – and help us we begin building a national road out of debt.

The future belongs to all of us. Join us on Saturday to fight for it!

“Up From Debt” will connect our experiences, share our stories, and launch a national movement that addresses debt as a deep and broad problem that needs real solutions right now.

Join us for a national online conference on Saturday, March 14 – watch it live here 

What you can do right now:

Tell us your story. Fill out our brief survey on your experience with debt. We will release the results at Up From Debt. 

Spread the word on social media. Use Facebook and Twitter to spread the word about Up From Debt.

‪#‎UpFromDebt
‪#‎YouAreNotALoan
‪#‎DeclareYourDebt

Join our Thunderclap to add your voice to others the day of the event.

Declare your debt! You are not alone in being in debt. And you are not a loan! We are in this together. See what others have shared.

Watch the Up From Debt summit from your computer live Saturday, March 14.

You are not a loan – and you are not alone! People all over the country will speak in one voice to end predatory lending, and take back our future.

Caldwell, ID City Council Asked to Move Payday Lenders Out of Sight, Out of Mind

Community and ICAN Push Council to Limit Industry From Preying on the Poor

 

“With the average payday loan in Idaho carrying an interest rate of 350% and with the average borrower taking out 7 payday loans to pay off the initial loan”, 20131004_101226predatory loan businesses continue to swarm into our state.  Last year alone, payday loans accounted for a negative economic impact of $1 BILLION! http://www.insightcced.org/uploads/assets/Net%20Economic%20Impact%20of%20Payday%20Lending.pdf  This is money that our communities lost, nationwide.

Volunteers and members of Idaho Community Action Network went into the neighborhoods of Caldwell and gathered 400 signatures from families who both see and personally experience the impact of payday and title loan businesses.  The canvassers met families; families who have lost their only vehicle; families who lost their home; their job and even their children, because they needed help.  They learned about loved ones who died owing a debt to a predatory lender.   Read more

Payday Lending is a Drain on the U.S. Economy

The Insight Center for Community Economic Development released its latest report finding the payday lending industry cost the American economy $774 million in 2011, causing the estimated net loss of more than 14,000 jobs.  Add in the costs caused by an increase in Chapter 13 bankruptcies from borrowers unable to keep afloat of the draining debt cycle, and costs soar to nearly $1 billion. Read more

The Nation: US Bank, Fair Lending and the Job Gap

This Week in Poverty: Banks Got Nowhere to Run To, Baby
Greg Kaufmann | April 12, 2013
Last year, US Bank held its annual shareholders meeting in Minneapolis, Minnesota, home of its corporate headquarters. The event was dominated by shareholders
and proxies who are members of Minnesotans for a Fair Economy [1], an alliance of community, faith, and labor organizations working for a more equitable economy.

Read more

Taking on Predatory Lending in Idaho

Thousands of Idaho residents are strapped for cash. The economic recession has devastated the lives of Idahoans across the state. As the need to make the dollar stretch increase, financial resources from traditional banks decrease.

Payday loan centers have seized an opportunity to profit from the misfortune of those in need.  Predatory lenders have lined the sidewalks of low-income and communities of color with promises of instant cash and no credit checks.  Having no available alternatives, residents are left to turn to payday loan centers for relief; but that relief keeps coming with a cycle of interest rates as high or higher than 520%. Read more

Broken Hearts, Broken Budgets: ICAN Valentine’s Day Action

Thanks to ICAN Intern Emma Ayers for this report.

February 14th this year, members of Alliance affiliate Idaho Community Action Network (ICAN)  had some very specific valentines to deliver to payday lending stores across the valley.  These over-sized valentines with broken hearts of pink and red symbolized a message and a demand: stop breaking our hearts and stop breaking our budgets.   Read more