National payday lending corporations are going around the country peddling legislation that would expand their predatory industry in the states, and Louisiana is the latest target. Predatory payday lending already drains more than $240 million each year from Louisiana workers by saddling vulnerable borrowers with high-interest loans that they often cannot afford. But instead of working to address this problem, the Legislature is considering a bill that would make it worse. Read a full analysis of Senate Bill 365 on LBP’s Two Cents Blog:
Senate Bill 365 aims to expand predatory lending in Louisiana by allowing payday and car title lenders to issue “installment loans” with annual interest rates of up to 167 percent. The bill is being pushed by national payday lenders as a way to evade new federal regulations that protect consumers. Similar bills have already been rejected in several other states (Florida being the lone exception). The payday loan industry markets its products as a solution to short-term financial problems. But the reality is much different. The Consumer Financial Protection Bureau reports that the typical payday customer is stuck in 10 loans per year – many customers take out far more – creating a long-term debt for vulnerable borrowers.
Health care providers spell out danger
Louisiana is inching closer to the end of the fiscal year without a commitment or a plan from leaders in the Legislature to address the fiscal cliff. As a result, some health care providers that rely on funding from the state are beginning to make exit plans. Hospital operators and medicaid school leaders shared their deep concerns with lawmakers on Monday on the House Appropriations Committee, which is crafting an initial version of the state budget for the Legislature. The AP’s Melinda Deslatte:
Over two days of House and Senate budget hearings, managers of the charity hospital system that cares for the poor cautioned of clinic shutdowns and widespread service eliminations if plans to dramatically scale back their financing take hold. Medical school leaders said shuttering of clinics, inpatient beds and services would give them fewer places to train students and fewer dollars to run their programs. “We’re very, very concerned. Unless a viable budget is approved … what I can tell you is that it’s going to be catastrophic,” G.E. Ghali, chancellor of LSU Health Sciences Shreveport, told the Senate Finance Committee on Sunday.
Today, members of the public will have an opportunity to share their thoughts on the proposed budget cuts with the House Appropriations Committee. You can watch their testimony here.
Backtracking on criminal justice “reinvestment”
When lawmakers passed sweeping criminal justice reforms last year, the savings that came from shortening criminal sentences and parole probation periods were intended to be used for programs to ensure the overhaul was successful – job training, substance abuse treatment and educational programs. On Tuesday, the House Appropriations committee discussed plowing some of the savings into paying sheriffs for housing state inmates. Critics of these fund diversions say this may put the criminal justice reforms, which are barely six months old, in jeopardy. Nola.com/The Times Picayune’s Julia O’Donoghue reports.
When the Louisiana Legislature lowered criminal sentences as well as parole and probation periods last year, it was with the understanding that the savings from making those changes would go toward programs that would help people not re-offend and end up back in prison. It would also go toward substance abuse treatment and mental health programs that might keep people out of prison in the first place. … But due to the state budget crisis, about $5 million may be taken out of that $14.5 million pot and put toward paying sheriffs who currently house about half of Louisiana’s state inmates. The prison system believes it will be about $5 million short of what it needs to make those payments to sheriffs in the current budget cycle, which ends June 30.
Sociologist Michael Desmond brought the issue of widespread evictions to the public’s attention in his 2016 book, Evicted. The book focused largely on stories of families being evicted and the impact it had on their lives. Now, Desmond has turned to analyzing data on evictions across the country, and the data has revealed some disheartening patterns. Emily Badger and Quoctrung Bui for The New York Times’ Upshot blog:
It’s in the Southeast, where the poverty rates are high and the minimum wage is low; it’s in Virginia, which lacks some tenant rights available in other states; and it’s a city where many poor African-Americans live in low-quality housing with limited means of escaping it. “This isn’t by happenstance — this is quite intentional,” said Levar Stoney, Richmond’s mayor. A quarter of households here are poor, leaving many people a car repair or a hospital visit away from missing the rent check. But that poverty collides with a legal structure that responds to such moments swiftly.
Under its current structure, the popular four-year TOPS Opportunity scholarship is only available to high school students who enroll directly into a four-year college or university. That could change under Sen. Mack Bodi White’s Senate Bill 394, which was approved by the full Senate on Monday. Under White’s proposal, TOPS Opportunity would be available to TOPS Tech community college students who enroll in four-year institutions after earning an associate’s degree within two years. LSU Manship School reporters Tryfon Boukouvidis and Ashley Wolf were there, and caught testimony from one senator about how useful a “second chance” at TOPS would have been for him:
Sen. Rick Ward, R-Port Allen, advocated for the bill by recounting his personal experience with TOPS. When Ward graduated from high school he fell one class short of qualifying because he had not taken a required physics class. Without the TOPS award, Ward went to community college for two years and transferred to LSU, where he completed his bachelor’s degree. “I’m probably the only member of this body who was in school when TOPS came about,” Ward said. “Had this bill been in place, Sen. White, I’d probably have a lot less student loans to be paying on right now.”
If Senate Bill 394 becomes law, the changes to TOPS would not take effect until 2025.
Number of the Day
18,041 – Number of individuals who are slated to lose mental health services under the current version of the state budget. (Source: House Fiscal Division)