Oct. 14: Ending the debt trap

Oct. 14: Ending the debt trap

New guidelines from the Consumer Financial Protection Bureau aim to rein in abusive lending practices by the payday loan industry.

New guidelines from the Consumer Financial Protection Bureau aim to rein in abusive lending practices by the payday loan industry. The proposed rules require lenders to do a better job of underwriting to determine a borrower’s ability to repay loans. Sam Barnes of the Greater Baton Rouge Business Report has the story:

Jan Moller, director of the Louisiana Budget Project, was part of a 2014 coalition that supported bills in the Louisiana Legislature to cap payday annual loan interest rates at 36%…According to an LBP report, the annual percentage rate for a payday loan in Louisiana is 780%, compared to an annual percentage rate of 24% for major credit cards. Along with capping the annual loan interest rate, as North Carolina does, LBP says Louisiana should prohibit borrowers from taking more than eight loans in a 12-month period (as Washington state does), and require minimum repayment terms of six months (as Colorado does). Moller says the payday lenders’ business model is based upon customers remaining trapped in endless cycles of debt. “The legislative audit showed what we had been saying—that these short-term instruments with extremely high APRs create long-term cycles of debt for families that can least afford it,” he says. “If you have a product that charges interest rates in the triple digits, it’s a fundamentally broken product.”


Racial disparities in use of force

As Baton Rouge community leaders call for a swifter resolution to the investigation of the shooting death of Alton Sterling by a police officer, a new study of the Austin police department showed evidence of racial bias in that department’s use of force. German Lopez of Vox.com explains that the finding held up even when controlling a number of variables:

The conclusion: No, local crime rates and economic factors do not explain why police are more likely to use force and use more severe force against black residents. While crime and other factors do explain some of the disparities, race alone predicted use of force and severity of force, the report found…So no matter the percentage of college-educated residents, homeownership rates, median household income, or crime rates, for every increase of people of color in an area, the rate and severity of use of force also goes up. Race is closely tied to use and levels of force.

Meanwhile, Chuck Wexler of the Police Executive Research Foundation praised the NOPD for instituting policies limiting the use of force. The Advocate’s Jim Mustian has this story:

Wexler also praised the NOPD’s emphasis on preserving the “sanctity of human life” in its approach to policing, pointing in particular to a policy that forbids officers from firing on moving vehicles during pursuits. NOPD policy differs in that regard from agencies like the Jefferson Parish Sheriff’s Office and Louisiana State Police. “You say, ‘We’re not going to kill someone over a stolen car,’ ” Wexler said.


Coastal master plan gets rewrite

An updated plan to deal with Louisiana’s vanishing coast will be released next year. The update walks back previous hopes to end land loss by 2035 and emphasizes that ongoing efforts will be needed well beyond the plan’s original 50-year scope. Karim Belhadjali, the deputy executive director of the state Coastal Protection and Restoration Authority, believes it’s critical that investments in restoration projects are made as soon as possible. As NOLA.com/The Times Picayune’s Mark Schleifstein reports, what projects get funded will depend on the amount of money available.

Belhadjali said the goal is to have three alternative sets of projects, based on both their effect on the environment and on the varying budgets of $40 billion, $50 billion and $60 billion. The plans are likely to include the biggest chunk of money for restoration projects that can be built by 2027, and an even bigger share of money for storm surge risk reduction projects that will at least be started by 2047, officials say. The final plan is not expected to be released until late December or early January.


Will D.C. lead on leave?

The United States is the world’s only industrialized country that doesn’t offer its citizens paid family and medical leave. Four states have instituted their own leave policies and the District of Columbia may be next. Paid leave policies have strong support throughout the country and both major party presidential candidates have a version of paid leave as part of their platform. Rachel Cohen of The American Prospect has the story:   

The United States is the only industrialized nation in the world to not offer paid leave, and only 12 percent of U.S. workers are currently entitled to it through their employer. While Congress passed the Family and Medical Leave Act in 1993—which offers new parents and those with sick family members the right to take 12 weeks of unpaid leave from their jobs—even this law covers only about 60 percent of the workforce, and many eligible workers simply cannot afford to take unpaid time off. … D.C.’s Universal Paid Leave Act would be funded through small employer contributions—up to 1 percent of a worker’s salary—into a citywide fund. Self-employed workers would pay directly into the program, though they would have the option to opt out if they wanted. A citywide pool of coverage, advocates say, means a more affordable contribution rate for everyone.


Number of the Day

2.6 – Percentage increase in police use of force incidents when the percentage of black residents of Austin, TX increased by one-point, holding all other variables constant. (Source: The Urban Institute and the Center for Policing Equity via Vox.com)