Payday loans create a dangerous trap that keeps struggling folks in cycles of debt. In Louisiana, these loans carry annual percentage rates (APR) of interest averaging 400%. While these high-cost loans are marketed as quick solutions to a financial emergency, the lenders’ business model is based on repeat borrowing, not the one-time assistance they advertise. But Louisiana can cap payday loans at a 36% APR with legislation that’s been filed during the 2022 legislative session. The Louisiana Budget Project and Center for Responsible Lending explain how House Bill 675 by Rep. Edmond Jordan would stop the debt trap caused by payday loans in Louisiana.
The most effective way to prevent the fee drain and consequent harms of payday loans is for states to enact a rate cap of about 36% or less. These rate caps allow states to prevent and enforce unsafe lending practices, whether online or in a store. Active-duty military families are protected with a 36% rate cap under the federal Military Lending Act, but veterans remain unprotected and are still subject to 400% interest predatory lending in Louisiana. Currently, 18 states and the District of Columbia have enacted rate caps of about 36%, saving billions of dollars annually in abusive fees. Research shows these states have achieved a combined savings of $2.2 billion per year in fees that would otherwise be paid to predatory lenders.
Senate Bill 381 by Sen. Rick Ward, which would expand predatory lending by creating new “installment loan” products with triple-digit interest rates, is up for debate in the Senate Commerce, Consumer Protection and International Affairs on Wednesday morning.
Economy is top voter concern
Voters in Louisiana are increasingly pessimistic about the state’s direction, listing the economy, infrastructure and education as their top concerns. That’s according to the 2022 Louisiana Survey, the first part of which was released Tuesday by LSU’s Reilly Center for Media and Public Affairs. Only 26% of respondents believe the state is headed in the “right direction” – the lowest total since the annual survey began in 2004. Piper Hutchinson, with LSU’s Manship School News Service, has more:
The pessimism is widespread across political and demographic backgrounds. Seventy-one percent of Republicans report that they feel the state is headed in the wrong direction and 54% of Democrats agree. The numbers are closer among racial identities, with 68% of white and 61% of Black respondents having a pessimistic view. Regionally, 69% of South Louisiana residents and 64% of those living in North Louisiana having a negative view.
Tuesday’s results were the first of six reports from the survey.
Nursing homes push secrecy bill
The chaotic evacuation of 800 nursing home residents to an old pesticide warehouse in advance of Hurricane Ida shined an overdue spotlight on Louisiana’s light regulation of the powerful industry. Now the state Department of Health wants nursing homes to submit detailed reports to the state each time they are forced to evacuate residents. But the agency wants the reports to be kept from the public, because they think it will increase the likelihood that nursing homes will actually tell the truth about what happens when vulnerable residents are forced to flee from a natural disaster. The Illuminator’s Julia O’Donoghue reports:
The measure has been criticized for its lack of transparency. Nursing homes are privately operated and owned but rely on public funding through the Medicaid and Medicare programs to operate. Scott Sternberg, an attorney for the Louisiana Press Association, questions why after-action reports would be confidential when the public has a great interest in nursing homes. “The entirety of the report being withheld is extremely concerning,” Sternberg said. “[Being transparent] would inspire confidence in the nursing home industry and in the Legislature’s ability to manage the industry.”
(T)he reports would be exempt from public disclosure, so families looking for a safe place to send their loved ones wouldn’t be able to evaluate how well operators protect and care for vulnerable residents when hurricanes strike. This secrecy is unnecessary, since sensitive details like patient names and medical conditions can be redacted. Yet it’s hardly surprising to see Democratic and Republican politicians looking after the interests of the politically powerful nursing home industry, rather than their own constituents.
The DCFS needs help
The state Department of Children and Family Services is badly understaffed, with high rates of employee turnover among the front-line workers who handle cases of child abuse and neglect. High caseloads and low pay have made it difficult for the agency to retain caseworkers. While Louisiana is flush with nearly $3 billion in excess cash, much of this is one-time money, and an agency like DCFS needs annual, recurring revenue to fulfill its responsibilities — and higher pay rates for frontline workers who make less than $30,000 a year in difficult jobs that require a college degree. An Advocate editorial explains how caseworkers are struggling to care for Louisiana’s most vulnerable residents even in good economic times.
With significant funding coming from federal sources for programs like food stamps, DCFS is an agency that is — regrettably — not as much front-and-center for state legislators. God knows there is not much political benefit in supporting it. But the state funding remains a critical element in the lives of Louisiana’s vulnerable children. Rescuing a kid left in a park, working with law enforcement to take over the case and deal with the child’s needs, making progress through counseling the family, or going through the courts to deal with problems — that’s the kind of daily project that many of us would not want to take on for a lot more money than caseworkers earn.
Essential Worker Focus Groups
We want to hear from essential workers and employers about worker skillsets and training opportunities! We will host two focus groups on Zoom, one with employers and one with workers. Participating in the focus group will take one hour. The essential worker focus group will be on April 20th, 2022 at 7:00 PM. The focus group for business owners or managers will be on April 20th , 2022 at 12:00 PM. Focus group participants will receive a $50 gift card as a thank you. Your answers will not be discussed with employers or employees and your name will not be used in any reports. Sign up here.
Participants must be 18 or older. Must be able to use an internet-capable device to access a Zoom meeting.
Number of the Day
68% – Percentage of Louisiana voters that support a 36% interest cap on payday lenders. Payday loans in Louisiana carry annual percentage rates (APR) of interest averaging 400%, but House Bill 675 by Rep. Edmond Jordan would cap the APR of payday loans at 36% (Source: Morning Consult via LBP)