Predatory payday lending proliferates in Louisiana. Hundreds of storefronts – mainly in low-income communities – offer short-term loans with triple-digit interest rates to cash-strapped consumers. Rather than curtail this industry, the Senate voted earlier this week to expand it by allowing payday lenders to offer new installment loans. Senate Bill 365 moves to the House after a narrow 20-17 vote in the Senate. The bill’s supporters say it’s needed because of a forthcoming federal rule. Southern University law professor (and former LBP Board member) Chris Odinet puts the issue in national perspective with Davida Finger in an Advocate guest column.
The [Consumer Financial Protection Bureau] rule is a commonsense one. But payday loan lobbyists have a lot of money to throw around in Washington, and they have found members of Congress willing to do their bidding. Resolutions have been filed in the House (H.J. Res.122) and Senate (S.J. Res. 56) to overturn the Consumer Bureau’s rule under an obscure fast-track procedure. The sponsors of the House resolution have taken $471,725 from the payday loan industry, and the Senate sponsor has received at least $35,800. This set of consumer protections against predatory lending may be living on borrowed time. Louisiana’s U.S. Senators and our Representatives in Congress, none of whom has signed on as a co-sponsor of the resolutions to undo the rule, could breathe life back into this much-needed safeguard for Louisiana consumers.
What if there’s no budget?
Louisiana could be entering uncharted territory with its budget. As the June 30 end of the fiscal year draws closer, it’s still not clear that there are enough votes to pass a 2018-19 operating budget that can pass muster with the House, Senate and Gov. John Bel Edwards. The ongoing uncertainty has prompted administration officials to start to ponder what happens if a budget is not passed and signed by the Governor. Jeremy Alford of LAPolitics reports:
Being budget-less is not unheard of in the United States. The Illinois Assembly, for example, failed to pass a budget for fiscal years 2016, 2017 and most of 2018. Other states have failed to pass budgets, too, leading to government shutdowns in certain cases. The Associated Press has reported that two dozen states have this shutdown option in their laws, but Louisiana is not one of them. Plus the Bayou State’s laws are “silent,” in general, when it comes to available avenues, according to Commissioner of Administration Jay Dardenne. “We’re very much in uncharted territory,” he says. “Obviously, it’s being looked at.”Matthew Block, the governor’s general counsel, sounded just as uncertain when interviewed today. “We don’t have a firm or final answer right now on what will happen in that—hopefully—not very probable or possible eventuality. The Constitution doesn’t give a whole lot of guidance.”
Lake Charles hospital would close clinics
The House-passed budget proposal would cut nearly $2 billion in Medicaid funds that supports hospitals, doctors, nursing homes and other health care providers. The cuts would result in loss of services for tens of thousands of vulnerable Louisianans. Officials at Moss Regional Hospital in Lake Charles is beginning to evaluate what would happen to its services, patients, and employees if these cuts were to become reality. John Guidroz of the American Press reports.
Dr. Mohammed Sarwar, medical director at Moss, has worked at the hospital for more than 20 years. He said a complete cut of state funding would be “a disaster” for poor patients who need specialized medical care. “If any of these disruptions of services happen, I can’t imagine what will happen to the patients,” Sarwar said. “I’m afraid they are going to die on the streets.” … Along with reduced patient services, Loyd said a complete lack of state funding would eliminate 225 jobs on the Moss campus, and an additional 175 employees throughout the Lake Charles Memorial Health System.
On Monday at 8 a.m., the Senate Finance Committee will hear public testimony on the budget.
Employment growth not matched with wage growth
The national unemployment rate is at its lowest level since 2000, dropping to 3.9 percent in April, according to the latest Bureau of Labor Statistics report. While more workers are able to find jobs and disconnected workers are re-entering the labor market, wages have not grown along with the strengthening job market as they have during past economic upticks. Labor economists are trying figure out how employers are able to avoid raising pay. Natalie Kitroeff of the New York Times:
Wages increased by 2.6 percent over the past year, not much faster than inflation. … “Wage growth is just not picking up as would have expected at this point,” said Matthew Luzzetti, a senior economist at Deutsche Bank.” One mystery of the American economy is this: How can employers can continue to raise pay so gradually, when the labor market keeps getting tighter? In the 1990s and early 2000s, the last time the job market looked like this, wages for rank-and-file workers rose at an annual rate of around 4 percent.A host of explanations — ranging from globalization to slow gains in productivity — have been offered to explain the disconnect. Ms. Barrera says businesses may just be stuck in their ways.
Number of the Day
2.2 – the percentage change in Louisiana’s real Gross State Product economic growth in the fourth quarter of 2017. (Source: Bureau of Economic Analysis)