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Disabled Americans Seek More Consumer Protection

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By Jazelle Hunt
Washington Correspondent

WASHINGTON (NNPA) – In a popular TV advertisement, ordinary citizens loudly declare to the world, “It’s my money, and I need it now!” It seems like a reasonable request. But this instant-gratification, through a process called structured settlement factoring, may not be in a person’s best interest.

As part of commemorating the 24th anniversary of the American Disabilities Act, the American Association of People with Disabilities (AAPD) turned its attention to consumer protections, particularly as relates to settlement factoring.

Incidents and accidents that result in disability often come with “make whole” cash settlements from the responsible party. Structuring the settlement allows the money to be safeguarded and split into uniform, tax-free, market-independent monthly payments for life, even if one is able to, and does, work.

“[T]he factoring of structured settlements…it is an important issue to many people with disabilities. On average, there are about five to six thousand people a year who factor their structured settlements, so it’s something that’s really critical for us to look at,” says Mark Perriello, president and CEO of the AAPD.

“So when we talk about structured settlements and the factoring of structured settlements, we really need to think of the broader context with which this is all occurring, and I think some of the numbers really paint a powerful picture.”

People with disabilities usually rely heavily on their disability settlements and/or social assistance for all or most of their income. Nearly 1 in 5 Americans with disabilities live below the poverty line. The poverty rate is even higher for Black Americans (20 percent of whom have disabilities, according to Census data collected in 2012)—36 percent of Black people with disabilities are poor, compared to the overall rate of 21 percent among all people with disabilities.

When financial emergencies arise, beneficiaries in a bind can’t simply draw funds from their settlements (outside of the established monthly payments). Factoring allows people to draw against their settlement by selling the rights to some or all of the monthly payments in exchange for an immediate lump sum of cash. In many cases, factoring also cuts future monthly payment amount to stretch the remaining funds across the lifetime. Of course, this reduction can set the stage for future factorings.

“There is a component of poverty that we need to consider; there’s a component of financial literacy that we need to consider as well,” Perriello explains. “There’s a reason why so many people with structured settlements decide to factor. It’s a perfectly legal practice in the United States, and we believe it needs to remain a legal practice. But there needs to be regulation.”

Decades of inadequate regulation have allowed predatory practices, such as charging steep fees or underpaying beneficiaries for their settlement rights,  to seep into the factoring industry. To address this, the federal government installed structured settlement consumer protections into the tax code.

As of July 2002, all transactions to transfer settlement rights from a beneficiary to a third party have to be court-approved. Also under this tax code amendment, any person or entity purchasing settlement payments without court approval must pay a punitive tax. And almost every state has passed legislation (known as SSPA laws) to provide its own version of these protections. For a while, these provisions worked—until courts were inundated with requests to approve transactions.

“The theory is that a state court judge who now has to approve one of these structured settlement sales is not going to allow a plaintiff to get ripped off,” says Martin Jacobson, vice president and general counsel at Creative Capital, Inc., a law firm that specializes in structured settlements. “Unfortunately, it’s become a rubber stamp. [The tax code amendment] and SSPA have become ineffective, and we need something better.”

Enter Rep. Matt Cartwright (D-Penn.), who introduced the SAFER Structured Settlements Act at the start of this year. It would eliminate rip-offs by preventing companies from taking any more than 5 percentage points higher than the current ideal interest rate, and would limit administrative fees to 2 percent of the lump sum’s value. Finally, companies would be required to disclose information to help payees understand the process in general, and their transaction in particular.

“This bill acts as a backstop,” says Shelby Boxenbaum, legislative aid to Rep. Cartwright. “We live in a capitalist society, and people should be able to do what they want with their money, to an extent. But there’s a difference between having freedom and being completely taken advantage of.”

The sustained advocacy and legislative efforts toward consumer protections for all have been generally praised, but they have also been tempered by socioeconomic realities. Ideally, Jacobson advises his clients to have a bulk of their settlement structured; negotiate a Life Care Plan that accounts for emergencies and life events; and receive the remaining portion in cash to invest, with the help of a qualified adviser.

More commonly, beneficiaries are unaware that such a safety net could have been created at the time of their settlement. Now, living on economic edge, settlement factoring presents the only personal finance safety net they can access.

“We all have expenses that come up that are unexpected. But I think it goes back to the financial literacy question and I think what we need to do is really educate consumers on what factored structure settlements are,” Perriello says. “Because if [a settlement] is done right, and if your spending is right, you should be able to plan for unexpected needs just as you can plan for expected needs as well.”

Spike Lee Creates Video About NYPD Chokehold Incident Involving Eric Garner

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By Courtney Jacobs
Special to the NNPA from the Afro-American Newspaper

In a new video, Spike Lee expressed his opinion about a recent incident in which an NYPD officer used an illegal chokehold to restrain a man.

Eric Garner, 43, a father of six and grandfather of two, died last week after police officers in Staten Island attempted to arrest him. One of the officers, eight-year NYPD veteran Daniel Pantaleo, used an illegal chokehold to bring him down to the ground.

In a now-viral video of the incident, Garner can be heard telling the police multiple times that he could not breathe while five officers surrounded him on the ground. Garner was allegedly selling bootleg cigarettes.

According to Newsone, Lee took the video of the incident with Garner and intercut scenes of Radio Raheem’s death sequence in his seminal 1989 film, “Do The Right Thing.” The video is apparently intended to hold a mirror to reality, emphasizing how much his art seemingly imitates real life 25 years after that film’s release.

Lee also took to Twitter, writing “Brother Eric Garner No Longer Breathes Courtesy of Banned NYPD Chokehold.  Rest In Power.”

Pantaleo was stripped of his gun and badge.

Garner was laid to rest July 24 in Brooklyn, with Rev. Al Sharpton featured as one of the speakers in a service which included family, friends and people from the community.

According to the New York Daily News, NYPD Commissioner Bill Bratton has ordered that the department’s 35,000 officers be re-trained in the use of force.

Black Men Show Little Signs of Progress in 40 Years

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By Freddie Allen
NNPA Washington Correspondent

WASHINGTON (NNPA) –Black men are no better off than they were more than 40 years ago, due to mass incarceration and job losses suffered during the Great Recession, according to a new report by researchers at the University of Chicago.

Derek Neal and Armin Rick, the co-authors of the study, found that reforms in the criminal justice system at the state-level largely contributed to disparities in arrests and incarceration rates that ultimately stifled educational and economic progress for Black men.

“The growth of incarceration rates among Black men in recent decades combined with the sharp drop in Black employment rates during the Great Recession have left most Black men in a position relative to White men that is really no better than the position they occupied only a few years after the Civil Rights Act of 1965,” the co-authors wrote.

The report cites research conducted by James Smith and Finis Welch published in 1989 that showed, “the black-white gap in completed years of schooling among males ages 26-35 fell from 3.9 years of schooling in 1940 to 1.4 years in 1980.”

Blacks also experienced “dramatic economic and social progress” during that time period. That progress slowed for Black men during the 1990s, and in some cases, reversed course entirely.

“Today, Black-White gaps in math and reading scores among youth and Black-White gaps in overall educational attainment among young adults are quite similar to the corresponding gaps observed around 1990,” stated the report which also suggested that “relative to Whites, labor market outcomes among Black men are no better now and possibly worse than they were in 1970.”

Neal, an economics professor, said that he was surprised that the rise in our nation’s prison population, which correlated with the fall in employment rates for Black men, really was a policy choice and that the war on drugs was just a small part of a much bigger story.

Beginning in the 1980s, in an effort to get tough on crime, states eliminated discretionary parole, established independent sentencing commissions, and crafted “Three Strikes and You’re Out” enhanced sentencing guidelines for repeat offenders.

Truth-in-Sentencing (TIS) Incentive Grants Program gave states money to build prisons and indirectly encouraged state officials to adopt policies “requiring sentenced offenders to serve large portions of their sentences.”

Neal said that it wasn’t one or two types of crimes that we got tougher on, it was across the board.

“We started to lock people up for a really long time relative to what we had done in the past,” said Neal.

The report said that changes in criminal justice policies accounted for more than 70 percent of the growth in the prison population between 1986 and 2006.

The United States leads the world when it comes to locking people up “with 2.2 million people currently in the nation’s prisons or jails – a 500% increase over the past thirty years” according to The Sentencing Project.

The report said that “on any given day in 2010, almost one in ten black men ages 20-39 were institutionalized” and “because turnover among prison populations is quite high, these results suggest that far more than ten percent of prime age black men will serve some time in prison or jail during a given calendar year.”

Neal explained that the change in how we punish people in the state criminal justice system and adopted harsher penalties for all types of crimes was across the board that affected people that were arrested in roughly the same ways regardless of whether you were Black or White.

“However, as a fraction of the population, Blacks have always been more likely to be arrested than Whites, which is not surprising given the historical patterns of discrimination, lower earnings and labor market opportunities,” said Neal.

Black men over 20 years-old still face a double-digit unemployment rate, the highest rate among all adult worker groups. According to the Labor Department, the jobless rate for Black men was 10.9 percent compared to 4.9 percent for White men, 4.8 percent for White women and 9 percent for Black women.

The same economic crisis that crippled many Black families and robbed nearly half of all wealth from the Black community, also forced cash-strapped states to cut spending in the billion-dollar prison industry. The prison boom was just an unlikely casualty of the Great Recession, according to Neal.

Neal also said that the “Smart on Crime” initiative proposed by Attorney General Eric Holder in 2013, that will ultimately affect the lives of thousands of nonviolent, drug offenders, was just “a drop in the bucket,” because those policies will mostly affect people doing time in federal prisons. Most offenders are locked up in local jails and state prisons.

Local jails, state and federal prisons combined house close to a million Black men.

“I’m not saying it’s a trivial thing, but when you’ve got a million people behind bars, a reduction of [less than 50,000] is a good start, but it’s nothing to write home about,” said Neal.

Neal said that if you’re a Black man 25-35 years-old without a high school diploma, you’re about as likely to have a job as you are to be in prison; under 25 without a high school diploma, you’re more likely to be in prison.

“You have to get to the 35 and above age group, before you’re more likely to have a job than be in prison, said Neal. “I don’t think the typical person on the street or the typical congressman knows how messed up things are.”

Neal added: “It’s important to know the truth.”

Upcoming Changes to PLUS Loans May Help Blacks

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By Freddie Allen
NNPA Washington Correspondent

WASHINGTON (NNPA) – This fall, the Department of Education plans to announce changes to PLUS loans that officials say will make it easier for parents to qualify for the financial aid program that thousands of Black college students rely on every semester.

In an effort to combat a rising number of parent loan defaults in 2011, the department began to enforce more strict borrowing guidelines, a move that disproportionately affected Black parents, especially ones that lost homes and jobs and were burdened by high levels of debt incurred during the Great Recession.

“Since the change, we’ve been working directly with the schools to try and re-enroll as many students as possible. Our data basically says that, even in those first cohorts, we were able to get 76 percent of students enrolled into the colleges that they applied to originally,” said Jim Shelton, the secretary of education and executive director of the task force for My Brother’s Keeper. “Additionally, we just finished the rule-making process that allows us to adjust the flexibility around the PLUS loan program and that will come out more formally in the fall.”

Shelton said that teams from the federal student aid organization are working with college admissions officials at historically Black colleges and universities to help students apply for aid.

In private conversations, some HBCU presidents say the damage to Black enrollment is more severe than the White House describes.

The policy revisions will make credit requirements for the PLUS program more flexible, according to Shelton. He said the updated eligibility standards that the Department of Education is going to put into effect will allow close to 300,000 students who may have been denied under the old rules to qualify for PLUS loans without having to go through the reconsideration process.

Department of Education officials discussed the PLUS loan program, the My Brother’s Keeper initiative and other topics related to improving educational outcomes for students of color, during a recent meeting with reporters.

Officials with the department said that for the first time in the nation’s history, public schools from kindergarten through the 12th grade will enroll more minority students than White pupils.

“Urban school districts across the nation are already 80 percent African American, Hispanic, and Asian American,” said Michael Casserly, the executive director of the Council of the Great City Schools (CGCS), a national network of urban public school systems. “We are the future.”

Casserly said that 40 percent of Black and Hispanic students that live below the poverty line and 32 percent of the nation’s African American males attend in CGCS schools.

The CGCS network, working in conjunction with the president’s My Brother’s Keeper initiative, pledged to increase the pipeline of high achieving students of color by expanding access to preschool, advanced placement and gifted classes and decreasing the disproportionate rates of suspensions and expulsions.

“What’s nice about what’s happened so far is that we’re starting to gather the best practices from cities that have been working on suspensions issues, that have been working on growing their [advanced placement], gifted and talented programs districts that have been trying to grow the number of African Americans and Hispanics in their preschool classes,” said Casserly.

Education Secretary Arne Duncan said that by any measure, our young men of color are not where they need to be.

According to the Schott Foundation for Public Education the national Black-White male graduation gap was more than 25 percent in 2009-2010.

Black male students also endure higher rates of suspensions, expulsions and referrals to law enforcement than their White peers. Black children, some as young as 3-years-old, account for roughly half of preschoolers suspended more than once.

Duncan said that he was stunned to learn that schools were suspending students that young.

The education chief said that in a lot of ways the research for My Brother’s Keeper came right out of Civil Rights Data Collection project, which talked about the lack of access to advanced placement classes, the lack of access to early childhood education, disparate labeling for special education and the school to prison pipeline.

“Academically, [boys and young men of color] don’t have the tools they need to be successful and, to really challenge that status quo in a really profound way, we think this is absolutely the right thing to do,” said Duncan.

Duncan said that the Department of Education will challenge states to not only take a very open and honest look at the mix of their teachers working in disadvantaged communities, but to also develop plans to address any disparities they find.

A Center for American Progress report on improving access to effective teachers in public schools highlighted The System for Teacher and Student Advancement (TAP), an “approach that provides opportunities for career advancement, professional growth, instructionally focused accountability, and competitive compensation for educators.”

TAP currently supports 200,000 students and 20,000 teachers.

The report also showcased North Carolina’s Charlotte-Mecklenburg Schools’ strategic staffing initiative designed to assist low-performing students that staffed poor schools with talented teachers and “priority access to district resources.”

The CAP report also recommended cultivating talented teachers and school administrators, developing better data collection and evaluation tools, and compensating highly effective teachers when they move to poor schools where they’re needed the most.

“If we all believe that great teachers make a difference in students’ lives, if we all believe that great principals make a huge difference in students’ lives, we have to be much more creative in how we attract, support, and retain that great talent in underserved communities,” said Duncan.

Duncan said that the Department of Education wants to take pockets of creativity and innovation to scale.

“Anyone who has historically said that providing a high quality education for Black kids and Brown kids was just important for that community, that’s simply not the case,” said Duncan. “This is the right thing to do for our nation.”

Duncan continued: “If we don’t have great educational opportunities, [advanced placement] classes, reduced dropout rates, and [more] kids college, if we’re not making that the norm for our students of color, our nation is going to suffer our, economic competitiveness is going to suffer our ability to have upward mobility our ability to have more families entering the middle class and to reduce inequities is going to suffer.”

Feds Vote to Retroactively Reduce Sentences on Drug Crimes

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By Zenitha Prince
Special to the NNPA from the Afro-American Newspaper

More than 46,000 drug offenders—many of them Black and Hispanic—could be eligible for reduced sentences following a decision by the United States Sentencing Commission earlier this month.

Members of the Commission on July 18 voted unanimously to apply a reduction in sentencing guidelines for most federal drug crimes—a move decided upon in April—retroactively, meaning many offenders currently in prison could be eligible for reduced sentences beginning November 2015.

“This amendment received unanimous support from commissioners because it is a measured approach,” Judge Patti B. Saris, chair of the Commission, said in a statement. “It reduces prison costs and populations and responds to statutory and guidelines changes since the drug guidelines were initially developed, while safeguarding public safety.”

Congress has until Nov. 1, 2014, to nix the amendment to reduce drug guidelines. If they are allowed to stand, prisoners can begin petitioning the courts for sentence decreases but would not be eligible for release until Nov. 1, 2015. The year-long lag will give judges time to review cases to ensure that sentence reductions do not pose a risk to public safety among other considerations, the Commission said.

“The delay will help to protect public safety by enabling appropriate consideration of individual petitions by judges, ensuring effective supervision of offenders upon release, and allowing for effective reentry plans,” Saris said.

The Commission’s recommendation has been praised by the Obama administration, which has expressed its enthusiasm for implementing the plan.

“We have been in ongoing discussions with the Commission during its deliberations on this issue, and conveyed the department’s support for this balanced approach,” said Attorney General Eric Holder, chief of the Department of Justice, which has jurisdiction over the prison system.

“In the interest of fairness, it makes sense to apply changes to the sentencing guidelines retroactively, and the idea of a one-year implementation delay will adequately address public safety concerns by ensuring that judges have adequate time to consider whether an eligible individual is an appropriate candidate for a reduced sentence,” Holder added. “This is a milestone in the effort to make more efficient use of our law enforcement resources and to ease the burden on our overcrowded prison system.”

According to federal data, the population of U.S. federal prisons exceeds capacity by around 32 percent. Half of that population are drug offenders, who also represent 66 percent of the increase in the federal prison population. Overcrowded prisons cost taxpayers millions. Just the retroactive application of the Commission’s amendment could save an estimated $2.3 billion.

And there are other tolls.

“While these figures are staggering, the human cost has been even greater,” U.S. House Judiciary Committee Ranking Member John Conyers Jr. (D-Mich.) and Ranking Member of the Judiciary Subcommittee on Crime, Terrorism, Homeland Security and Investigations Robert C. “Bobby” Scott (D-Va.)  said in a joint statement.

“For decades, the federal ‘War on Drugs’ has been the primary engine of mass incarceration….This war has been waged almost exclusively in poor communities of color, even though studies have consistently shown—for decades—that people of color are no more likely to use or sell illegal drugs than Whites,” the congressmen added. “…The Commission’s historic vote today also seeks to right this disproportionate racial impact.”

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