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Payday Lender ACE Cash Express Fined $10 Million

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(NNPA) For the second time in as many years, the Consumer Financial Protection Bureau (CFPB) has fined a major payday lender. On July 10, Director Richard Cordray announced that one of the nation’s largest payday lenders, ACE Cash Express,  will pay $10 million in restitution and penalties for directing its employees to “create a sense of urgency” when contacting delinquent borrowers. This abusive tactic was used to perpetuate the payday loan debt trap.

CFPB has ordered ACE Cash Express to provide consumers with $5 million in refunds and the same amount in penalties for its violations. The firm operates in 36 states and in the District of Columbia with 1,500 storefronts, 5,000 associates and online loans.

“We believe that ACE’s aggressive tactics were part of a culture of coercion aimed at pressuring payday borrowers into debt traps,” said Cordray.  “Our investigation uncovered a graphic in ACE’s training manual that lays out a step-by-step loan and collection process that can ensnare consumers in a cycle of debt. When borrowers could not pay back their loans, ACE would subject them to illegal debt collection threats and harassment.”

Commenting on CFPB’s actions, Mike Calhoun, president of the Center for Responsible  Lending, said, “This enforcement action also confirms what our research found long ago: payday lenders depend on keeping vulnerable consumers trapped in an endless cycle of debt of 300-400 percent interest loans. . . .It’s real, it’s abusive and it’s time to stop.”

CRL research shows that payday loans drain $3.4 billion a year from consumers.  Further, CRL has long held that the payday industry preys on customers who cannot repay their loans.

Now, with CFPB releasing an item from ACE Cash Express’ training manual, that contention is proven to be true. The ACE graphic shows how the business model intends to create a debt cycle that becomes increasingly difficult to break and urges its associates to be aggressive.

Across the country, the South has the highest concentration of payday loan stores and accounts for 60 percent of total payday lending fees. Missouri is the only state outside of the South with a comparable concentration of payday stores.

Last year, another large payday lender, the Fort Worth-based Cash America International, faced similar enforcement actions when CFPB ordered it to pay $5 million in fines for robo-signing court documents submitted in debt collection lawsuits. Cash America also paid $14 million to consumers through one of its more than 900 locations throughout the United States, Mexico and the United Kingdom.

On the same day that the CFPB’s enforcement action occurred, another key payday- related development occurred.

Missouri Gov. “Jay” Nixon vetoed a bill that purported to be payday reform. In part, Gov. Nixon’s veto letter states, “allowing payday lenders to charge 912.5 percent for a 14-day loan is not true reform. . . Supporters point to the prohibition of loan rollovers; but missing from the legislation is anything to address the unfortunately all-too-common situation where someone living paycheck-to-paycheck is offered multiple loans by multiple lenders at the same time or is encouraged to take out back-to-back loans from the same lender. . . .This bill cannot be called meaningful reform and does not receive my approval.”

Speaking in support of Gov. Nixon’s veto, Pastor Lloyd Fields of Kansas City added, “The faith community applauds Governor Nixon’s moral leadership in holding lawmakers to a higher standard on payday lending reform. Missourians deserve nothing less.”

On the following day, July 11, the Federal Trade Commission (FTC) fined a Florida-based payday loan ‘broker’ $6.2 million in ill-gotten gains. According to FTC, the firm falsely promised to help consumers get payday loans. After promising consumers to assist them in securing a loan in as little as an hour, consumers shared their personal financial data. However that information was instead used to take money from consumers’ bank accounts and without their consent.

Speaking on behalf of the FTC, Jessica Rich, director of FTC’s Bureau of Consumer Protection, said, “These defendants deceived consumers to get their sensitive financial data and used it to take their money. The FTC will continue putting a stop to these kinds of illegal practices.”

Looking forward, CFPB’s Cordray also sees a need to remain watchful of payday developments.

“Debt collection tactics such as harassment and bullying take a profound toll on people – both financially and emotionally”, said Cordray. “The Consumer Bureau bears an important responsibility to stand up for those who are being wronged in this process.”

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

Cyber Child Abuse

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(NNPA) I was strolling down a very busy Broadway in New York City a couple of weeks ago.  It was a very nice Saturday and it seemed like everyone was out walking and shopping.  In front of me was a woman and her very young child (maybe 3- or 4-years old).  The woman was completely entranced by her cell phone.  She was texting away.  Her daughter was walking a few steps behind her and was meandering around.  My wife and I found this very unsettling.  So, too, did two young men who were approaching us.  They looked at each other and got ready to say something to the young mother.  My wife beat them to the punch, telling the woman that she needed to pay attention to her child because someone could simply grab the child since the mother appeared completely oblivious to the surroundings.  The mother grunted –  there is no other way to describe it – and yelled to her child to stay with her.  As we crossed the street I looked behind me and noticed that, while the daughter was closer to her mother, the mother was back at texting.

This all reminded me of an episode from Star Trek:  The Next Generation, where members of the crew discover this toy that completely captivates them to the point that they can do nothing but play with it.

On another recent day, I saw a mother and her child walking to school with the mother texting away, ignoring the child altogether. Let me be clear.  I use my cell phone regularly. But what I am seeing is not simply the usage of cell phones.  Rather, it is the cell replacing real human contact. It is the cell as a narcotic.  The woman in NYC had completely lost focus.  Her child could have vanished in a nano-second and she would not have noticed.

Yet, there is another aspect to this.  When I was a child and with my parents, my parents would talk with me.  I do not mean that I was the center of every conversation, but we spoke about all sorts of things.  If a parent is focused on that cell –  and  dollars to donuts they are not cutting deals for some hedge fund or handling major issues in their organizations – they cannot pay attention to the questions that the child might be asking or might wish to ask.

Let me put it even more directly in case I have been too subtle:  what is so important in that cell phone that one feels comfortable ignoring a child?

Bill Fletcher, Jr. is a racial justice, labor and global justice activist and writer. Follow him on Facebook and at www.billfletcherjr.com.

Immigration: Organized Chaos

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(NNPA) It appears nearly impossible for our nation to have an orderly and simple immigration program. It should be quite easy and routine with a simple application form and a written process and time lines. A big problem is that obtaining American citizenship is a very big accomplishment for a foreigner. No other nation on earth has such demand. It is because of our capitalistic society where dreams can come true and democracy flourishes. The demand is so high that corruption, manipulation and schemes get in the way of doing the right thing.

We have many thousands of educated people who have H1B work visas and work in many technical fields. When their visas expire they have to leave. Why can’t they receive permanent status as they are an asset to our workplace and society? It seems that our elected officials can’t seem to work that out.

Instead, what we have now is another big scandal coming at the request of the White House. Normally, Mexico strongly secures its southern border. Now people are crossing into the country to connect with smugglers known as “coyotes.” Each person is usually charged about $700 to be led across Mexico to our southern border. Once they arrive, our border agents who should be turning them around, actually let all of them in and put them on a bus. Then they drive them to a processing station. After a cursory screening, they are released on their own. At this point, they have completed an illegal process and become illegal aliens – compliments of the American government. Thus, we now have an administration that is involved (actually created) an illegal act. The whole thing is unconstitutional.

These illegal aliens travel through Mexico at great risk. Many of the girls are being raped along the way, some as young as 10 years old. There is no sanitation provided. Disease is spreading among them at a rapid rate. The whole picture of this is ugly. The processing centers are at full capacity as the population of the aliens is growing exponentially. Homeland Security is now taking them to military bases, causing even more confusion. Recently, more than 20,000 have arrived at various stations along the southern border.

Wait. It gets worse. As they are being processed, there are buses waiting to transport them to unsuspected towns. Phoenix, Dallas, Tucson are just some of the towns receiving these indigent, non-English speaking people. They have even put them on planes and have flown them to Baltimore and other cities. They release them to empty buildings and hope the local governments will provide for them. These buses and planes have been contracted by the federal government to do this dirty activity. What kind of contracting is that? The federal government is letting formal contracts to violate the constitution and commit illegal and dangerous acts.

When they release them, Homeland Security assigns them a date to appear for formal review. None of these illegal aliens are going to show up for the review. They are going to melt into our population and live a life in hiding and on the run. The quality of life for many of our towns and neighborhoods will be disrupted for a very long period of time.

This is indeed chaos. But the worst thing about it is that it is organized. It is well organized by the White House. The only response the White House is giving is to ask for $3.8 billion to handle this mass flow of illegal activity. They are predicting that this is going to last for a long time and as much as 50,000 more will cross the border illegally.

Another illegal act the White House is committing is to silence their employees working in the processing centers. They cannot speak to the press or anyone else about this without getting fired. Visitors cannot take pictures or speak with the illegal aliens. Even the press is denied access. Congressmen have been turned away. Is this America?

Some communities are starting to protest this government-sponsored invasion of illegal aliens. They find it detestable that our own government is doing such a low life thing. One town, Murrieta, Calif.,, formed a crowd and blocked the buses from dropping off the unsanitary, disease and lice ridden illegal aliens. The buses left and went off to another center.

America has never seen such brazen illegal acts by the federal government. I guess government officials are saying “what are you going to do? Report it to the government – ha! It is so shameful and sad that things are going awry without an end in sight. Impoverished people fleeing despair in one place; traveling incognito across thousands of miles; being abused and raped along the way to arrive in a place called America as illegal aliens. Their dream of free citizenship is highly unlikely.

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

Supreme Court Seeks to Gut Labor Unions

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(NNPA) The Supreme Court’s decision in the case of Harris v Quinn essentially means that personal care attendants who are represented by a union do not need to pay a service fee that would cover the cost of representing and advocating on their behalf.  The Supreme Court’s conservative majority justified this decision purportedly on the basis of freedom of speech.

What is clear is that the Supreme Court’s conservative majority has a sniper’s scope trained on workers and unions.  They will soon aim to eliminate the ability of labor unions to collect service fees from non-members to cover representation.  The implications of this are profound but a little context is necessary.

In the public sector, there are many states, counties and municipalities that permit union membership and collective bargaining, but do not require that employees in a given agency join the union. While they may join the union, they are obligated — if there is such an agreement– to pay a service or agency fee. The idea here is that regardless of whether one is a union member or not, the union is obligated by law to represent fairly and fully all workers in what is called a “bargaining unit,” which is a recognized body of workers who share similar interests.

This means that whether a given worker likes the union or not, if they have any challenges, the union must represent them.  As you can imagine, representation costs money, including legal fees, cost of staff, administrative costs, etc.  Additionally, the union lobbies on behalf of those workers around salaries, benefits and working conditions.  Thus, in the absence of a fee, a worker can benefit from all that the union brought about but pay nothing.  This is why agency or service fees are permitted.

The Supreme Court’s conservative majority is trying to say that this is a violation of free speech. Thus, using the Supreme Court’s logic, a person working in a given situation who gains the benefits of a labor union and can be guaranteed representation, should not have to pay anything. This is frequently called “right to work,” but a more accurate description is freeloading.

Think about it for a moment. Is there any other institution in the U.S. that permits this?  If you do not agree with the policies of a government, can you choose not to pay taxes yet gain the benefits of public education, water, police and fire?  Of course, not.  So, why should it be different in a collective bargaining context?

The answer is simple. The Supreme Court’s conservative majority, along with other forces on the political Right, simply wish to gut labor unions.  It is really that simple and that deadly.  And, unless they are stopped, they will succeed in doing just that.

I was wearing a T-shirt the other day from the Coalition of Black Trade Unionists.  A guy sitting next to me on a plane said to me:  ”Yes, we really need unions.  At a time when there is such a polarization of wealth, we really need unions to fight for us.”  I smiled.  It is not rocket science. Which is precisely why the forces of wealth and greed are so determined to bring about an extinction moment for unions.

Bill Fletcher, Jr. is a racial justice, labor and global justice writer and activist.  He is the author of “They’re Bankrupting Us” – And Twenty Other Myths about Unions.  Follow him on Facebook and at www.billfletcherjr.com.

The Supreme Court’s 'Religious Freedom' Scam

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(NNPA) Last week, the U.S. Supreme Court issued two decisions that the Court’s conservative majority and the larger conservative movement pretended were about “religious freedom.”

In the one case, involving the Hobby Lobby chain of craft stores and the Conestoga Wagon Specialties company, which makes wood cabinets, the majority ruled that a federal law guaranteeing “religious freedom” means family-owned corporations don’t have to provide insurance coverage for contraception under the Affordable Care Act.

That decision, which the Court issued on June 30, seemed to leave in place the law’s provision governing nonprofit organizations in place. The law allowed nonprofit organizations to, if they wished, transfer the delivery of free contraception to others. However, in the second ruling, which the Court handed up on July 3 and specifically involved Illinois’s Wheaton College, a conservative Christian institution, the court majority temporarily exempted it from having to comply at all with the contraception provisions of the law.

Critics of the decisions, which produced extremely sharp dissents from the court’s three female justices, said they have stripped women workers of any guarantees that contraception coverage will automatically be part of their health insurance. That’s because these rulings aren’t about “religious liberty.” They actually have an entirely different purpose: jerry-rigging a legal framework around the efforts of the white Christian right to impose its religious beliefs on other Americans. The Christian Right has been pursuing that goal, of course, for decades. But it’s become clear in recent years that it was losing control on two of its most important issues: women’s reproductive rights, and the rights of gays and lesbians, especially regarding same-sex marriage. So, now they’ve re-cast themselves as “victims” whose “freedom” to adhere to their religious beliefs is being violated. It’s a scam the conservative political movement is pushing in brazen fashion—as exemplified by a strikingly apt word in the Hobby Lobby opinion written by Justice Samuel A. Alito.

That word is “fiction.”

On page 18 of the majority opinion, Alito acknowledges that defining corporations as persons in legal terms is a “fiction,” but asserts that “the purpose of this fiction is to provide protection for human beings … When rights, whether constitutional or statutory, are extended to corporations, the purpose is to protect the rights of those people.” A moment later, Alito defines “those people” in this way: “And protecting the free-exercise rights of closely-held corporations thus protects the religious liberty of the humans who own and control the companies.”

As Washington Post columnist Dana Milbank pointedly noted two days before the Wheaton College decision, that sentence does not contain any mention of the rights of these corporations’ employees. In other words, in declaring that a family-owned corporation –  which, after all, is an artificial entity created in accordance with governmental regulations –  can, in effect, take on the religious coloration of “those who own and control” it, the court’s conservative bloc was indulging in another of the “fictions” by which it’s been trying to hold back the expansion of democracy for more than a decade.

That became even clearer once it issued the Wheaton College ruling.

Given that it is indeed a “fiction” to pretend the ruling was not a politically driven gift to the Christian right, here are some questions to think about:

How long will it be before some conservative Christian business owners require their female employees to wear dresses (no slacks, please) down to their ankles? And for all employees to genuflect before crosses set up at entrances to their businesses? And to join them in “prayer sessions” before and after the workday? And to attend only those houses of worship they “approve” of?

And how long will it be before some white business owners claim—as in the Jim Crow days—that their  “religious beliefs” require that they not serve or employ Black Americans? Or, will they try that on Muslim Americans first? Or gays and lesbians? Or Hispanic Americans? Or Jewish Americans?

If those possibilities sound far-fetched to you, you’ve forgotten that for most of American history, the “white” version of Christianity was part and parcel of the many crackpot justifications for the exclusion and oppression of women and Americans of color.  And you’ve forgotten that the Court’s conservative majority crafted numerous “fictions” in its 2010 Citizens United decision to enable corporations to make unrestricted political contributions, and again in the 2013 decisions that significantly narrowed affirmative action and voting rights protections.

Those facts underscore that there’s little in the Christian right’s efforts to limit the freedom of others that the Supreme Court’s “5 political operatives” (as a headline in The Huffington Post so accurately put it) will consider “far-fetched.”

Lee A. Daniels is a longtime journalist based in New York City. His latest book is Last Chance: The Political Threat to Black America.

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