Governor nixes predatory payday lending plan

Governor nixes predatory payday lending plan

Gov. John Bel Edwards vetoed legislation on Tuesday that would have expanded predatory payday lending in Louisiana by allowing for loans of up to $1,500 (they are currently capped at $350) with triple-digit interest rates. Senate Bill 381 by Sen. Rick Ward authorized loans that could be paid back in installments, rather than a lump sum. Lenders would be allowed to charge 36% interest along with a monthly “maintenance fee” of up to 13% of the original loan amount. The Advocate’s Blake Paterson has the story.

Critics called it a predatory product, and said that allowing payday lenders to make larger, longer-term loans would trap low-income Louisiana residents in cycles of debt. Edwards agreed, writing in a veto message Tuesday that “despite the best efforts of the bill’s author, I do not believe that this bill adequately protects the public from predatory lending practices. I have long been opposed to payday loan products which are designed to keep vulnerable individuals in debt, often times paying exponentially higher rates of interest than would otherwise be available at commercial banks.”

Payday loans are marketed as solutions to short-time financial crises, but these high-interest loans often trap low-income borrowers in long-term cycles of debt. A coalition of advocacy groups led by the Louisiana Budget Project urged Gov. Edwards to veto Senate Bill 381 and thanks him for siding with Louisiana families over out-of-state loan companies. 

Automatic expungement bill advances, but hurdles remain 
Louisiana incarcerates more people than anyplace else on earth, leaving many people in our state with criminal records that make it difficult to find work and housing. A process called “expungement” allows people who were convicted of a crime in the past to have their records sealed, opening up new opportunities. But fees associated with expungements put those opportunities out of reach for many low-income Louisianans. House Bill 707 by Rep. Royce Duplessis sets up a new system to automatically expunge records of arrests, misdemeanors and felonies in certain circumstances, eliminating fees and red tape. But the measure faces opposition in the Senate Finance committee because of its price tag: $3 million in the first year and $1 million annually. The Louisiana Illuminator’s Alex Tirado reports

In his opening remarks, Duplessis addressed the need for the bill and the burden the cost of expungement puts on individuals. “Oftentimes what stands in front of them being able to get an expungement is the cost and the amount of time,” Duplessis said. “Many people don’t get them, and they end up having these matters on their records that stand in the way of jobs, stand in the way of housing.” Because the bill would make the expungement of records automatic, there would no longer be a cost attached to the court process, making it more accessible to individuals in tight financial situations. 

State pausing collections against Road Home grantees
Louisiana’s Road Home program, created in the wake of Hurricane Katrina, provided grants that people could use to elevate their property to reduce the risk of future flooding. But some grant recipients – with verbal approval from program officials – used their elevation grants for other repairs. Those recipients, most of them people with low incomes, are now being sued by the state in an attempt to recoup that money. But on Tuesday, Louisiana paused the suits as it nears a deal with the federal Department of Housing and Urban Development (HUD). The Advocate’s Richard A. Webster and WWL-TV’s David Hammer report

The state wants to send the money it expects from that settlement to HUD to satisfy its obligations for Road Home grants that weren’t spent according to the rules. If HUD agrees, the state will drop its lawsuits against homeowners and cease collection efforts in cases that have gone to judgment, (Commissioner of Administration Jay) Dardenne said. “I think we’re inching very close to that happening,” Dardenne said. Dardenne said he and Edwards have spoken with HUD Secretary Marcia Fudge about accepting the proposed ICF settlement. When asked if he believes Fudge is in favor of dropping the suits, Dardenne said, “I do.”

Meanwhile, attorneys for some grantees argue that aggressive collection efforts by the law firm representing the state have left some grantees with payment plans that take up much of their income.

Alice Sanders, who lives on Social Security, said Mary Cali, a senior partner at Shows, Cali & Walsh, “badgered” her into signing a $200 monthly payment plan last May and said Sanders would lose her home if she didn’t. Sanders did not have an attorney. “It leaves me with no money. I can’t even buy my own groceries or medicine,” said Sanders, an associate minister who lives in Baton Rouge. “It’s a sin, what they’ve done against their own residents.”

Spiking temperature could cause summer blackouts 
A combination of soaring temperatures and volatile gas prices could lead to blackouts across a large swath of the United States this summer, according to a new report from the North American Electric Reliability Corporation (NERC). Many states under the Midcontinent Independent System Operator (MISO), which Louisiana is a part of, are either entirely or partially at high risk of energy shortfalls for the summer months. As Politico’s Catherine Morehouse explains, these blackouts likely won’t be the last. 

This summer’s anticipated tight grid conditions are just the tip of the iceberg as weather grows increasingly unpredictable and the U.S. aims to electrify more high-emitting sectors of the economy — eventually leading to even more demand on the aging power system. Proving the grid can handle periods of high stress in the immediate term is essential to achieving the Biden administration’s longer goal of decarbonizing the power sector by 2035 and the economy by 2050 — and avoiding the worst impacts of climate change that will put further stress on the power system. The transition to more wind and solar resources became the center of political backlash after rolling blackouts struck Texas last year, despite grid failures largely being attributed to natural gas infrastructure. California faced similar criticisms after it faced rolling blackouts in 2020.

Number of the Day
3,100 – Approximate number of people in Louisiana without homes as of January 2020. House Resolution 194 by Rep. Jason Hughes asks the Louisiana Housing Corporation to look into “the lack of affordable housing and to identify potential funding sources to address these issues” (Source: U.S. Department of Housing and Urban Development via The Louisiana Illuminator)