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CRL Research: Bank Payday Loans Lead to Long-term Indebtedness

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By Charlene Crowell –

(NNPA) As the Consumer Financial Protection Bureau begins operations, the Center for Responsible Lending (CRL) is releasing new findings on the growth and effects of a new short-term and high-cost loan product. Big Bank Payday Loans, a new CRL research brief, details how mainstream banks have entered the triple-digit interest rate payday loan market with a product that on average virtually guarantees repayment within 10 days. Yet for consumers, these loans lead to 175 days of indebtedness for the average borrower – twice as long as the maximum length of time the Federal Deposit Insurance Corporation has advised.

With many banks allowing up to half of a customer’s monthly direct deposit income, or up to $750, an average 44 percent of a bank payday customer’s next deposit is used to repay bank payday loans. For older borrowers already living on fixed incomes, the average bank payday loan repayment from a Social Security check was 43 percent. Senior customers are also 2.6 times more likely to have used a bank payday loan than bank customers as a whole.

Even without bank payday loans, more than 13 million older adults are considered economically insecure, living on $21,800 per year or less. One-fifth of older households have annual incomes below $50,000 but report spending more than 40 percent of their income on debt payments.

Senior women whose lower lifetime earnings result in diminished pension benefits are at acute financial risk – as are African-American seniors with on average only one-sixth of the wealth of older whites.

Although state and federal laws protect Social Security benefits from garnishment by debt collectors or payday lending to military families, problems still persist. For example, if a bank acts as its own debt collector, or a military family takes out back-to-back loans, the door to long-term indebtedness for both borrowers still opens.

The irony to these lending abuses are occurring against a financial backdrop of nearly $6 trillion in lost American household wealth since 2006, an unemployment rate hovering north of nine percent, and nearly half of Americans currently lacking the financial capacity to cope with an unforeseen but costly emergency.

Add to those troubling statistics, a $10 fee for every $100 borrowed and automatic repayment to the banks with an opportunity to add more fees if accounts become overdrawn and people of all ages just become poorer with payday loans. Youthful vigor might enable younger borrowers to take a second or temporary job to end the payday debt trap. But as a country do we want our young people growing up to believe that 400 percent loan interest is the best that they can expect?

Or what’s an older person to do? Do we really want to become a country that allows lenders to tarnish what ought to be golden years for older Americans?

Now that a federal consumer watchdog agency – the Consumer Financial Protection Bureau is available to work with state officials to end financial abuse, a lot of work awaits. In the meantime, CRL is calling for federal regulators to:

Use immediate supervisory and enforcement authority to stop the banks it supervises from making payday loans; Impose a moratorium on payday loans offered by banks under its supervision while data collection on the impact of this product on consumers is further refined – particularly its impact on communities of color; and Limit high-cost, short-term single payment loans to 90 days’ indebtedness or six loans per year – whichever is less.

We’ll soon see if anyone is listening.

Charlene Crowell is the Center for Responsible Lending’s communications manager for state policy and outreach. She can be reached at: Charlene.crowell@responsiblelending.org.

Lottery Ticket Honors Black Woman Who Died of Breast Cancer

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By Wendell Hutson, Special to the NNPA from The Chicago Crusader –

On July 11 Illinois made history when Governor Pat Quinn signed legislation that created the first scratch off lottery ticket named after a person and in this case someone Black. Quinn said he signed Senate Bill 1279, which renamed the “Ticket for the Cure” lottery ticket to the “Carolyn Adams Ticket for the Cure,” because it provides funding for breast cancer research. “Access to quality healthcare is a basic right, and Illinoisans – particularly those who are fighting cancer – should not be denied coverage for participating in trials that might save their lives,” he said. “It is important that Illinois takes the lead in increasing women’s access to new science that can save lives.” Adams, who grew up in the Roseland community on the far South Side, was the superintendent of the Illinois Lottery from 2003 until her death at age 44 from breast cancer in 2007.

The bill also extends the legislation until December 31, 2016. Had the governor not signed the bill the ticket would have been discontinued at the end of the year. According to the Illinois Department of Public Health, more than 8,700 Illinois women were diagnosed with breast cancer in 2010, and more than 1,700 died as a result. The bill was sponsored by state Sens. Mattie Hunter and Jacqueline Y. Collins, state Reps. Constance Howard and Mary Flowers. “It was important to get this legislation passed and signed because it honors a very positive African American woman,” explained Hunter.

“This woman was committed to fighting breast cancer even during her own personal bout with it.” Hunter admits that when she was working on the original legislation in 2005 with the assistance of Adams, she did not know Adams herself was battling breast cancer. “She would leave around noon for lunch but was really going to Northwestern Hospital for treatment,” recalls Hunter.

“And even though she would show up to work the next day a little weak, I never suspected she had cancer.”

Since its inception the Ticket for Cure has generated $8.5 million, according to Susan Hofer, a spokeswoman for the Illinois Lottery. The Illinois Lottery grossed $2.2 billion in sales in 2010, a slight increase from 2009 when it grossed $2.1 billion, according to state records. And, in 2009 it paid $1.2 billion in winnings and $1.27 billion last year. Much of the lottery revenue over the last two years came from sales generated in predominately Black communities on the South and West sides, based on a Crusader analysis of state records. The 60619 ZIP code, which include the Greater Grand Crossing and Chatham communities, grossed $27.7 million in 2009 and $28.7 million in 2010. And the 60628 ZIP codes, which include the Roseland and West Pullman communities, grossed $21.4 million in 2009 and $21.7 million in 2010. Other ZIP codes whose residents are predominately Black, according to the U.S. Census Bureau, were popular included 60639 ZIP code had total sales of $20.1 million in 2009 and $20.9 million in 2010; 60617 did $19.2 million in 2009 and $19. 5 million in 2010; 60651, did $19.7 million and $20.8 million; 60647 did $18.3 million and $19.5 million; 60634 did $17.7 million and $18.9 million; 60609 $16. 3 million and $16.5 million; and 60636 did $15.6 million and $16.3 million.

And more lottery vendors did not add up to more sales either. The 60619 ZIP code, which grossed the highest sales in the state, had 48 lottery vendors in 2009 and 46 in 2010. But the 60647 ZIP code had 61 vendors in 2009 and 64 in 2010 but grossed less in sales than other ZIP codes where there are fewer vendors, such as 60639, which has 51 and 60651, which has 38. The Illinois Lottery was founded in 1974 with the goal of raising additional money to fund public schools. State records show that in 2009 and 2010 the Illinois Lottery paid $625 million into the Common School Fund, which is a state fund used to help finance public schools.

Unlike other lottery tickets where a portion goes to the Common School Fund, 100 percent of the proceeds from the Carolyn Adams Ticket go to fund breast cancer research. Money from the ticket is distributed is then goes to the Illinois Department of Public Health, which provide grants to private and non-profit organizations to fund research on breast cancer and to provide other services for breast cancer victims.

Race a Factor in Pennsylvania Public School Funding?

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By Mignon Brooks, Special to the NNPA from The Philadelphia Tribune –

Most government and school officials agree that Philadelphia and various other schools in Pennsylvania lack funding and resources, but not all agree that it’s based on race.

In a recent report titled “The Myth of Racial Disparities in Public School Financing,” by Jason Richwine, of The Heritage Fund, public school education spending is shown to be similar among all racial and ethnic groups. Yet, when the Center for American Progress performed a state by state analysis, Raegen Miller and Diane Epstein reported clear evidence of racial and ethnic disparities nationally and throughout the districts. “We found in some states there is an inequity,” Miller said. “In Pennsylvania there is work to be done.”

Miller said there are problems with the funding system, the legislative process, and reform. Also, he said, there are issues with the school level expenditures. The inexperienced teachers are mostly going to high poverty areas and are being paid in unbalanced proportions.

“Teacher compensation reform should be based on experience, subject areas, effectiveness, toughness with assignments, and mentoring new teachers,” Miller added.

Miller said states such as New Jersey, Massachusetts and Indiana are doing better in closing the gap in high poverty areas, where people of color mostly attend public schools. New York and Illinois were cited in the brief as states where there are other funding issues as well. The Title I law requirements are being broken. Title I was only supposed to be used if the state and local resources were comparable, and to be provided as a supplement.

Congressman Chaka Fattah has been leading the way to reform public school funding and restore the original intent of Title I funds. He disagrees with the Heritage Foundation and anyone else who believes racial disparities in education are a myth.

“In the entire history in the United States there has been a racial disparity in terms of educational opportunity that persists,” Fattah said. “In the entire history of the United States poor children have had less educational opportunity. Because of the pernicious (nature) of race and poverty, children of color are more likely to be impoverished. They are put in disadvantaged circumstances through this duality.”

But Tim Eller, spokesman for the Pennsylvania Department of Education, said, “school funding in Pennsylvania is not based on race at all.”

According to the Pennsylvania Basic Education Formula, the 2011–12 budget is $5,354,629,000. This is $239,290,000 more than the 2010-11 funding. Instead of race, this formula breaks down funding calculations by the amount each school district received in 2010-11. The student-focused funding supplement will be distributed by a base amount per student in each district, an English language learner supplement, the poverty level in each district, and district size.

A Philadelphia School District spokesman said that it’s clear that Pennsylvania has school funding problems. In a report issued by the commonwealth in November of 2007, “Casting Out the Resources Needed to Meet Pennsylvania’s Goals,” 474 districts out of 500 were shown to lack adequate funding. The District spokesman said Philadelphia schools would have a shortfall of $629 million this year, which is higher than the shortfall they had last year.

Even with the lack of funding, Fattah has introduced the Student Bill of Rights HR 1295 to this and other Congresses. This act requires states to report any remediate disparities between high-performing and low-performing schools. He also created The Fiscal Fairness Act 1294. This act strengthens Title I requirements and makes sure Title I is not used to subsidize inequitable spending within school districts.

“From the anecdotes from anyone who’s visited schools in poor neighborhoods and rich neighborhoods or the hard facts covered by the Center for American Progress, Education Trust, Marguerite Roza, or Data of Civil Rights Data Collection, it is clear we are investing less in some children’s intellectual potential than others,” Fattah said.

Settlement Reached in Hurricane Katrina Housing Discrimination Case

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By Jesse Muhammad, Special to the NNPA from The Final Call –

(FinalCall.com) - In the aftermath of Hurricanes Katrina and Rita in the Gulf Coast, a federally-funded program has drawn criticism due to accusations of discriminating against Blacks in the distribution of recovery funds.

On July 6, a settlement was reached in a lawsuit brought against the U.S. Department of Housing and Urban Development (HUD) and the State of Louisiana regarding the highly criticized Road Home program.

The federal government awarded $62 million in Road Home funds to 1,460 homeowners and an additional year to rebuild their storm-torn homes without fear of fines or foreclosures by the state.

With an establishing budget of $11 billion in federal dollars, the Road Home program was led by HUD and the Louisiana Recovery Authority to aid residents affected by both hurricanes.

“Regrettably, the Road Home program became a road block for many,” said James Perry, Executive Director of the Greater New Orleans Fair Housing Action Center. The center, along with the NAACP Legal Defense Fund, led the charge on the lawsuit filed in November 2008 on behalf of five individual plaintiffs representing over 20,000 Black homeowners.

“This settlement is a step in the right direction toward getting more hurricane-affected homeowners back into their homes. HUD and Louisiana must keep America's promise to build a better New Orleans. And they must do so in a manner that is fair and equitable for all people regardless of their race,” said Mr. Perry.

Nation of Islam Student Minister Willie Muhammad and his family were among those forced to evacuate New Orleans when Hurricane Katrina flooded nearly 80 percent of the city in 2005.

“If inquiries were made in other areas that involve recovery after Katrina, I believe more discrepancies in how Black people were treated would be uncovered,” said Muhammad.

John Payton, Director-Counsel of the NAACP Legal Defense and Educational Fund (LDF), said, “People who had similar homes and suffered the same type of damage should not have been treated differently simply because of the neighborhoods in which they live. All New Orleanians, and all Louisianans, deserve a fair chance at rebuilding their homes and communities.”

According to the Greater New Orleans Fair Housing Action Center, pre-storm values in Black neighborhoods across New Orleans are lower than pre-storm values in predominantly White neighborhoods due to “decades of institutionalized discrimination.”

The lawsuit alleged that the Road Home grant calculations were based on the pre-storm value of hurricane affected houses rather than the cost of repair. The plaintiffs and their legal team argued that this was a direct violation of the federal Fair Housing Act.

The website for the Greater New Orleans Fair Housing Action Center paints a mathematical picture of what that discrimination looked like.

Consider two identical homes, with identical hurricane damage, and identical repair cost of $150,000. One home is in a predominately White area and worth $150,000 while the second home located in a predominately Black area is worth only $100,000.

Under the discriminatory formula, the White homeowner was eligible to receive $150,000 while the Black homeowner would be eligible to receive only $100,000—in spite of the fact that the homes are identical. Because of the discriminatory formula, the Black homeowner was $50,000 short of the amount needed to get back into their home.

“This fact pattern has played out thousands of times leaving Black homeowners far short of the amount they need to rebuild their homes,” the center says.

“In addition to providing significant relief for individual homeowners, the Road Home lawsuit will serve as a warning to HUD and state officials nationwide to avoid the future use of pre-storm market value or similar market-driven criteria that have an obvious discriminatory impact on low-income and minority homeowners,” said Shanna Smith, President and CEO of the National Fair Housing Alliance.

In a decision last September, the U.S. Court of Appeals for the District of Columbia issued an injunction to place a freeze on the remaining funds in Louisiana's Road Home Program. This gave the plaintiffs an opportunity to present proof that the state and HUD did in fact engage in discriminatory practices.

Inmates on Hunger Strike Say They Would Rather Die Than Suffer Inhumane Treatment

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By Charlene Muhammad and Jamo Muhammad, Special to the NNPA from The Final Call –

(FinalCall.com) - National and international support for California inmates who initiated a hunger strike to protest inhumane treatment has increased with urgency following reports of deteriorating health conditions.

Inmates housed in the Security Housing Unit (SHU) at the super maximum Pelican Bay Prison have refused food for 19 days thus far, declaring that they were prepared to die rather than suffer inhumane conditions behind bars.

They told loved ones they simply want to serve their time in dignity and issued their five core demands by letter to the California Department of Corrections and Rehabilitation (CDCR), Governor Edmund “Jerry” Brown and G.D. Lewis, Pelican Bay warden:

• Eliminate group punishments.

• Abolish the debriefing policy and modify active/inactive gang status criteria.

• Comply with the recommendations of the U.S. Commission on Safety and Abuse in Prisons (2006) regarding an end to long-term solitary confinement.

• Provide adequate food.

• Expand and provide constructive programs and privileges for indefinite SHU inmates.

“The message we should receive is the fact that these guys are united around this issue and also the type of torture that's been going on for decades within not only California prisons, but other prisons as well.

America puts forth this face that it's this humane society that doesn't abuse any of its citizens when in actuality that's not the case,” said Jitu Sadiki, of the Black Awareness Community Development Organization, which works to eradicate violence impacting youth and communities.

What's also important to note is that the strike was organized under extreme isolation across racial lines and geographic lines, said Isaac Ontiveros of Critical Resistance and a spokesperson for the Prison Hunger Strike Solidarity Coalition.

Deteriorating health

“They say they are slowly dying anyway by virtue of the conditions that they live under, that they might as well die for a cause, die to put the prison and the CDCR in the position where there is a clamor, a demand statewide, nationwide, and worldwide for change,” said Barbara Becnel, activist, author and film maker who is also part of a five-member mediation team for the Pelican Bay SHU inmates.

By the 12th day of the strike, their health had rapidly worsened, Ms. Becnel told The Final Call.

“We just got word from connections we have at the prison that the prisoners are not even drinking water so as a consequence, they're in bad shape. Some of them are on the verge of renal failure,” she continued.

According to the Coalition, some prisoners have been unable to make urine for three days and some are having measured blood sugars in the 30 range, which can be fatal if not treated.

“The men are going to start dying and my son could be one of them and I'm terrified. I'm sick at work, not even working to my full capability because I'm so distraught with the mental anguish of what they're going through,” said Dolores Canalas, who's 36-year-old son John Martinez authored the June 12 demand letter to prison officials. He has been in the SHU for more than 10 years, she said.

Prison officials refuted reports of deteriorating health conditions.

“No one has died. No one's in critical condition, no renal failure, no transfer to a CTC (critical unit inside the prison). For the most part, everyone seems to be fine,” said Nancy Kincaid, a spokesperson for the CDCR's California Prison Healthcare Services.

Kincaid continued that no inmates are refusing fluids or medications and that nurses conduct visual checks, sometimes two-to-four times a day, depending on the institution, to ensure people are not in conditions that require treatment.

“They have the right to refuse food. They have the right to refuse treatment. They have the right to starve themselves to death if they choose to ... physicians are bound by their ethics which means they have to do what the patient requires of them and if the patient refused treatment, they won't treat them ... they will not force feed anybody,” Kincaid added.

Demand negotiations

When asked if CDCR officials were negotiating or planned to begin talks with the inmates about their concerns, Terry Thornton, CDCR deputy press secretary, told The Final Call that it received the demands quite some time ago and evaluated each of them thoroughly. There were just some things it could do nothing about, like an extra day of visiting, a combined TV/radio unit or additional cable TV, for instance, she said.

But activists argue that the inmates' demands are not trivial as prison officials have made them out to be and they've launched an online petition to raise awareness and support. The petition had garnered 6,000 signatures at Final Call press time.

“If a person is guilty of some crime, they're paying for that through their incarceration but to enhance that by subjecting them to inhumane conditions, it may make some people feel good that they're being punished but that extracurricular stuff that goes on is beyond what their original sentence was,” Sadiki cautioned. He said that CDCR claims that inmates in the SHU are the worst of the worst, non-rehabilitative, amounts to misinformation and propaganda. Prison officials say the cells are used to house inmates who commit crimes that endanger the safety of others or the security of institutions, such as prison gang members accused of murder or attempted murder of another inmate.

Sadiki said that, like himself, many inmates are put in the SHU because of their political views, not a propensity to any violence. He served approximately five years in the SHU at Soledad State Prison in the 1970s.

“I've lived with these men and the misinformation that the CDCR is putting out is not factual ... these are brothers that would stand up to abuse and not accept (it) and as a result, our time was extended to an indeterminate sentence in the SHU program,” Sadiki countered. He said Pelican Bay is a new monster that is designed to break men's spirits. “Many of the men in the SHU have been there for over 30 years. To say there's no redemptive factors about them is untrue. A lot of them have supported me since I've been home. I've been deeply entrenched. I've adopted and raised three young children who are now adults and I'm raising my biological children. What I represent is much of what they represent but because they made the decision not to allow themselves to be abused, they've come up with a new game plan that if they can't break them physically, they'll break them emotionally and mentally.”

When Sadiki went in (around 1977), a typical day was waking up at 5:00 a.m. to exercise, and spend approximately three hours confined to his cell studying because back then they were allowed some books. Not today, according to Ms. Becnel.

She likened the Pelican Bay SHU to a mausoleum or graveyard with all concrete and hardly any windows. She said the cells are soundproof, causing sensory deprivation because they cannot communicate or hear. Inmates are allowed out of the SHU for one-and-a-half hours a day to walk around by themselves and when they receive mail, it's displayed on a monitor for reading.

They aren't allowed telephone calls, and according to what inmates have told her during previous visits. “When they eat tonight's meal, they're also eating yesterday's meal. The plates are brought to them with remnants of the previous day's meal still on the plate, so it's wet with old food and new foods piled on top of the old food,” Becnel said.

She said they have genuine human rights violations according to the international definition of torture.

Growing support

Canalas fasted for five days to show support for her son and the other inmates. She also helped to organize a host of events in Los Angeles between July 9-17, including an encampment at the KRST Unity Center and a rally in front of men's central jail.

“He said it's not something that they want to do but at this point people have been trying to get the message out for years and they feel it's important that they do their part, whatever it takes. It's not one culture, one individual, one group, but in solidarity and unity and they wanted it to be peaceful above all,” Canalas told The Final Call.

Also on July 9, in San Francisco, approximately 150 family members, activists and other supporters held a rally at the U.N. Plaza.

Dorsey Nunn of the All Of Us Or None Prison Advocacy Organization and executive director of Legal Services for Prisoners with Children, helped to organize the rally.

“This event is real significant in reframing what they are doing to human beings. Though the hunger strike itself will not make the California Department of Corrections bend, it's our voices that will,” Nunn said.

Nunn told The Final Call, “For those of you who have seen the movie ‘Roots,' Pelican Bay is where they send people to teach them how to stop calling themselves ‘Kunta Kinte' and begin referring to themselves as ‘Toby.' It's where they try to break the spirit of men.”

“I know personally what's happening in those prisons and I've protested myself many times in solidarity with other inmates while I was in there. I would advise people to stay vigilant in their efforts to see justice done for all those who are suffering in there,” stated Caramad Conley, recently released after serving 18 years for a wrongful conviction.

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