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Car-title loans: $3.6 billion in Interest Paid on $1.6 Billion in Loans

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(NNPA) In today’s struggling economy, many consumers find themselves short on cash. When consumers seek a credit remedy, one particular lender is likely to bring more problems than solutions: companies that make car title loans.

According to new joint research report by the Consumer Federation of America (CFA) and the Center for Responsible Lending (CRL), the average car-title loan of $951 winds up costing the typical borrower $2,142 in interest. Nationwide, 7,730 car-title lenders in 21 states reap $3.6 billion in interest on loans valued at only $1.6 billion.

The car-title loan uses a borrower’s personal vehicle as collateral and additionally charges triple-digit interest rates, like those of payday loans. And similar to payday loans, the typical car-title loan requires full repayment in just one month. When borrowers cannot afford to pay in full, they are forced to renew their loan by paying additional interest and fees. The report found that a typical customer renews their loan eight times.

The report also found anecdotal instances in which car-title lender marketing practices have lured consumers by advertising 25 percent interest per month for a two-week loan. The actual rate of interest, however, equates to 300 percent annual percentage rate (APR). And it’s not as though 300 percent APR is an offsetting risk to the lender: Car-title loans are usually made for only a fraction of the vehicle’s market value – approximately 26 percent.

When borrowers can no longer keep up with interest payments, cars are repossessed and yet another fee is added to the borrower’s debt. On average, these repossession fees run in the range of $350-$400 or about half of the borrower’s remaining loan balance. The report found that one in six consumers was charged expensive repossession fees.

It’s easy to sum up the central problems with car-title loans. As the authors write in the report, these loans “carry inherently unsuitable terms that cause already vulnerable borrowers to pay more in fees than they receive in credit while putting one of their most important assets at risk.”

If you’re thinking that there ought to be a law against this obviously predatory product, be sure to tell your state legislators. Most states with car-title loan laws either have no interest rate caps, or authorize triple digit interest.

Tracking how these loans affect consumers is one thing; financial reforms are quite another. In this regard, the CFA-CRL report calls for public policy actions at the state and federal levels.

For example, the federal Consumer Financial Protection Bureau could enact protections addressing loan terms and underwriting. States, on the other hand, could adopt rate caps of 36 percent on these loans.

Other policy recommendations include:

Changing loan terms to equal monthly payments that would enable borrowers to gradually pay down their debt;

Require written notice prior to borrowers and the right to redeem the vehicle before lenders repossess or sell the car; and

In the event of a vehicle sale, return to the borrower any surplus between a new sales price and the remaining amount of money owed.

In 2006, similar consumer protections were enacted to protect the military and their families. If President George W. Bush and Congress could agree to cap small loans at 36 percent annually for this consumer sector, it seems reasonable that the rest of us should be given the same protections.

Charlene Crowell is a communications manager with the Center for Responsible Lending. She can be reached at: Charlene.crowell@responsiblelending.org.

More Meteors Coming Our Way by Bill Fletcher, Jr.

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(NNPA) We should not have been as surprised as we were. The 10-ton, 55-feet meteor that struck Russia on Friday, February 15 unleashed 500 kilotons of energy – at least 30 times that unleashed at Hiroshima in 1945. More than a thousand people were injured and heavy damage was done in the vicinity of the meteor.

And this was a small meteor.

The February 15th incident should be taken as a wake-up call to the nature of universe in which we live. While the February 15th meteor was the largest strike in a century, the reality is that there are even more dangerous objects in space, some of which have or will come quite close to Earth.

It is the case that some dangers can simply not be prevented. The February 15th meteor, for example, was relatively small and hard to detect. But there are species-ending objects in space that are being watched and for which we will need to be prepared.

Over time there have been various commercial films that suggest dangers that exist from various space objects. Generally speaking, in those films Earth survives a strike or a near strike, though there is always some degree of damage. Yet there have been moments in the history of the planet when there have been serious strikes. The dinosaurs, for instance, were very likely annihilated as a result of the “nuclear winter” that resulted from the collision of an object with Earth, the result of which was a dramatic shift in the climate.

At a moment in time when elected officials are focusing so much of their attention on cutting budgets rather than identifying the real needs of the population, it may seem a bit strange to emphasize the need for space exploration and preparedness. Yet that is precisely what is necessary. In 2029, an object designated as “99942 Apophis” will come very close to Earth. There were some predictions that it might strike, the results of which would be disastrous. Objects such as these will need to have their trajectories deflected in such a manner as to get them out of harm’s way. That means resources will need to be put into the necessary technology. I can only imagine what the Tea Party’s response would be to such suggestions.

As long as we view events such as the February 15th meteor as an aberration in an otherwise calm solar system, and, as a result, fail at long-term planning and risk assessment, we set up humanity for potential catastrophe. As with climate change, we can continue to act as if it is not happening, but when all the signs point in the direction of danger, one is a fool not to change course.

The February 15th meteor was not a made-for-TV film and neither was it a hoax. It was a reminder that nature engages in the unpredictable and unexpected. But it was also a reminder of the dangers inherent in this solar system, some of which can be addressed through a serious investment in research and planning.

Enough with the rhetoric surrounding budget deficits; let’s talk about the survival of life on this planet!

Bill Fletcher, Jr. is a Senior Scholar with the Institute for Policy Studies, the immediate past president of TransAfrica Forum and the author of “They’re Bankrupting Us” – And Twenty Other Myths about Unions. Follow him at www.billfletcherjr.com.

What Killed President Kennedy and Trayvon Martin?

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By Marian Wright Edelman
NNPA Columnist

(NNPA) Tuesday, February 26 marked one year since 17-year-old Trayvon Martin was killed by a gun wielded by self-appointed neighborhood watchman George Zimmerman after he saw Trayvon walking home from a 7-Eleven with a bag of Skittles and bottle of Arizona iced tea.

Black children, youths, and families know first-hand that the killing of Black children by gun violence is not new but a relentlessly unreported and under-reported plague that has been disproportionately snuffing out Black child lives for a very long time. Fifteen percent of children and teens are Black but 45 percent of all children and youths killed by guns in 2010 were Black. Black boys 15 to 19 years old were 28 times more likely than White boys the same age to be killed in a gun homicide.

Shortly after President John F. Kennedy’s assassination, Dr. Martin Luther King, Jr. wrote that it was time for our nation to do some soul-searching, and while the question “Who killed President Kennedy?” was important, answering the question “What killed President Kennedy?” was even more critical. Dr. King believed the answer was that “our late President was assassinated by a morally inclement climate”: “It is a climate filled with heavy torrents of false accusation, jostling winds of hatred, and raging storms of violence. It is a climate where men cannot disagree without being disagreeable, and where they express dissent through violence and murder. It is the same climate that murdered Medgar Evers in Mississippi and six innocent Negro children in Birmingham, Alabama.”

Dr. King further noted that the undercurrents of hatred and violence that made up this morally inclement climate were fueled by our cultural embrace of guns: “By our readiness to allow arms to be purchased at will and fired at whim, by allowing our movie and television screens to teach our children that the hero is one who masters the art of shooting and the technique of killing, by allowing all these developments, we have created an atmosphere in which violence and hatred have become popular pastimes.”

The same winds of hatred, storms of violence, and easy access to and glorification of guns that Dr. King believed killed President Kennedy would soon also kill Dr. King. Fifty years after Dr. King described our morally inclement climate, the outward signs of racial intolerance and hatred have undoubtedly diminished but there are still far too many reminders of the dangers lurking everywhere that devastate us all—like Trayvon’s senseless death for walking home while Black. Between 1963, when President John F. Kennedy was assassinated, and 2010, nearly 60,000 Black children and teens were killed by guns, more than 1,200 every year for 48 years. This is 17 times the number of reported lynchings of Black Americans of all ages since 1882 but we have not had an equivalent Black community anti-lynching movement to save our children from gun violence.

While there are troubling undertones of racial suspicion and fear in Trayvon Martin’s killing which must be addressed as justice is sought, the fact is that most Black young people murdered by guns are killed by Black shooters —just as most White children and teens murdered by guns are killed by White shooters. Sadly, the tragedies of Tucson, Aurora, Newtown and elsewhere made clear that none of us are safe anywhere or immune to the pervasive threat of gun violence.

We are all in the same boat and must act together to stop the plague of violence. Gun safety laws that only apply in one city or state can’t fully stop our national epidemic of gun proliferation and violence any better than we can stop a flu epidemic by vaccinating one family. We must struggle together to stop gun violence and to change the morally inclement climate that Dr. King warned about if we are going to protect all of our nation’s children everywhere.

Marian Wright Edelman is president of the Children’s Defense Fund whose Leave No Child Behind® mission is to ensure every child a Healthy Start, a Head Start, a Fair Start, a Safe Start and a Moral Start in life and successful passage to adulthood with the help of caring families and communities. For more information go to www.childrensdefense.org.

It's Time for Us to Deliver for the Postal Service

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(NNPA) I have written about this previously but I am getting more and more concerned that the Postal Service will go the way of the dodo bird. Like virtually every other part of the legitimate role of government, the Postal Service is and has been under attack by conservatives. The perpetrators of the assault are the same crew that have been trying to privatize everything that is standing. Organizations such as the right-wing Cato Institute and their allies in Congress wish to see the U.S. Postal Service weakened to the point that it ceases to exist. Then they would have the mail handled through privately owned operations.

There are many reasons that we should be concerned about this attack. First, postal delivery is actually a Constitutional right. It is there in the Constitution. Now, our conservative friends will throw their hands in the air and exclaim that they are not challenging the Constitution. Rather, they will argue, mail delivery can, allegedly, be handled more efficiently by private outfits. There is no particular reason to believe that private companies can handle the mail more efficiently than the USPS.

With the USPS we are guaranteed that everything of a certain weight gets delivered to specific sites in the U.S.A. for a given price. In other words, a letter weighing one ounce does not cost more if it is mailed from Baltimore to Spokane or from Baltimore to New York. With privatization we can be guaranteed that the cost of mail would vary according to where the mail is being sent.

A second reason for concern has to do with the workforce. The Postal Service has been an important employer of African Americans and, especially since the unionization of the Postal Service in the early 1970s, it has provided employment at good wages with good benefits. In a situation where good jobs are vanishing as quickly as one can say ‘Jack be nimble…,’ the Postal Service jobs cannot be easily dismissed. There is a ripple effect with good jobs. With good paying jobs people have more money to spend in their neighborhoods. With poorly paying jobs—or no jobs at all—the neighborhood suffers. Thus, each time you hear about the closing of a post office or a bulk mail center, it is not only an inconvenience to you but it probably is having a net negative impact on that community.

There is one more piece to this whole affair. The conservatives are yelling about the Postal Service not making money. Yet, let’s keep in mind, as the Economic Policy Institute has reminded us, that making money was and is not the main purpose of the Postal Service. Their purpose is to ensure the efficient and speed delivery of the mail to all residents of the United States. Certainly, that does not mean that one should condone backwardness. But it does mean that it is patently unfair and disingenuous to compare the USPS to a private company, such as an auto company. When auto companies are charged with providing all people in the U.S.A. with efficient, low cost, environmentally safe vehicles, we can reopen this discussion.

It is now time for the public to respond to this attack. I don’t know about you but I have simply had enough of the attacks on the U.S. Postal Service. To me, there remains a certain level of magic in knowing that you can put that letter or package in the mail and, presto, it appears somewhere else in such a relatively short amount of time. I do not want to have to bargain with someone or some company over how quickly and efficiently my mail will be delivered.

Bill Fletcher, Jr. is a Senior Scholar with the Institute for Policy Studies, the immediate past president of TransAfrica Forum, and the author of “They’re Bankrupting Us” – And Twenty Other Myths about Unions. Follow him at www.billfletcherjr.com.

The Evil Ways of Environmentalists

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(NNPA) The environmental movement has been around since the days of naturalist John Muir (late 19th century), the founder of the Sierra Club. Back then, it had high credibility and did great work to promote and preserve our natural beauty such as national parks, lakes and rivers. Sometime in the 1950s it started straying into scare tactics. A popular claim was global cooling – we were going to freeze to death via our polluting ways. Then it turned to the opposite claim of global warming after a few warm years.

President Nixon used this cause to divert our attention from the Civil Rights Movement and the anti-war furor over Vietnam. He proclaimed Earth Day as an annual event and enlarged the Environmental Bureau into a separate agency, the Environment Protection Agency (EPA). This worked and today the EPA has become one of the most meddling entities in the federal government. It is a friend of the environmentalists and is often used as a weapon for their advocacy.

Under the Clinton administration, the environmentalists started an outrageous claim. They accused corporate America of seeking Black communities to dump their waste, poison the water and render the land toxic. They summed it up by calling the mythical activity “environmental racism” and persuaded (funded) local civil rights groups to join in the fight and demand “environmental justice.” This died down after about 10 years.

One of the current activities of the environmentalists is the assault on coal. They want to kill the coal industry. New York City Mayor Michael Bloomberg donated $50 million to the Sierra Club for the sole purpose of killing off our coal industry. Right now they have the EPA planning to shut down more than 31 coal fired utility plants by way of a “Rule.” Rules are like executive orders in that they can avoid congressional approval. With the blessing of the president they just do it as if it were voted legislation. This will wreck our economy and destroy our personal worth if we don’t fight back and stop the action. Think of the many thousands of jobs that will be lost and the rising cost of electricity we will all be stuck with.

Another tactic by the environmentalists is a legal proceeding known as “Sue and Settle.” This is done by collusion between the environmentalists and pro-environmentalist bureaucrats. These groups will file a massive lawsuit against the EPA, Department of Interior, Bureau of Land Management, Fish and Wildlife Services, etc. The problem is the “deal” has already been made. Thus, the agency being sued will quickly sit down and settle with the environmentalists. In the end, it is like a wish list for the suing environmentalists as the federal agency gives them just about everything they want.

According to Marita Noon, executive director of Energy Makes America Great Inc., “In 2011, the Fish and Wildlife Service (FWS) entered into a massive settlement of a lawsuit filed by environmental groups in which the agency promised to address more than 250 candidate species it had previously found warranted protection but were precluded from listing due to a backlog. As a part of the behind-closed-door agreement, the FWS also pledged to review hundreds more species proposed for listing.” According to Senator David Vitter (R-LA), “It is the sue-and-settle agreements. This future regulation could prohibit many beneficial uses of tens of millions of acres of private property. All this was set in motion while no affected landowner or other stakeholder was given any opportunity for input”.

You can’t “break ground” on land that houses a registered endangered species – factual or not. Just like that millions of acres will be denied any development or growth. Economic opportunities and millions of jobs will be put on “ice” so that the environmentalists can have their way. This sue-and-settle racket is growing in use and we and Congress must stop this mockery. In effect, it is a conspiracy to behave in such a matter within the court of law.

The National Black Chamber of Commerce spends an inordinate amount of time fighting these environmentalists who come after our communities in so many ways. They lie, cheat and deceive in so many ways. Internationally, they have a collective treasury of over $8 billion to push their agenda. What is that agenda? To stop growth and positive change as Commerce is their enemy. Jobs, commodities, manufacturing, etc. are bitter items to them. Funny, most of these groups are made up of very wealthy people who got their wealth through plain American style capitalism. They now want to prevent the rest of the population from having a chance to do the same. They will continue their evil ways and we will continue to fight them. Free Enterprise is our mission.

Alfred C. Alford, co-founder, president/CEO of the National Black Chamber of Commerce®. Website: www.nationalbcc.org. Email: halford@nationalbcc.org.

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