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COVID-19 financial warning: Consumers and banks should stay away from payday loans

NNPA NEWSWIRE — Zeroing in on the economic impacts of the crisis, people everywhere are struggling with competing needs in their lives. When living costs exceed available financial resources, tough times lead to tough decisions about how to feed families, keep a home to live in, ways to keep utilities working and a myriad of other day-to-day needs.

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Charlene Crowell is a senior fellow with the Center for Responsible Lending. She can be reached at charlene.crowell@responsiblelending.org. (Photo: iStockphoto / NNPA)

By Charlene Crowell, NNPA Newswire Contributor

For the foreseeable future, ‘normal’ life will be indefinitely suspended due to the global pandemic known as the coronavirus.

Record-breaking employment layoffs in the month of March resulted in the Department of Labor reporting that 10.4 million consumers lost their jobs and filed for unemployment compensation. As medical experts continue to track the virus, the New York Times reported at least 214,461 known infections and at least 4,800 related deaths.

Beyond these statistics, untold numbers of additional school and retail closures, and an expanding army of people working from home have also been directly affected by the virus.

Consumers both young and old have passed as the virus continues to spread across the country. Its viral wrath has spawned hot spots from the Pacific Northwest’s Seattle, to the Gulf Coast’s New Orleans, the Midwest’s Detroit and the nation’s largest urban metropolis, New York City.

Zeroing in on the economic impacts of the crisis, people everywhere are struggling with competing needs in their lives. When living costs exceed available financial resources, tough times lead to tough decisions about how to feed families, keep a home to live in, ways to keep utilities working and a myriad of other day-to-day needs.

Despite a $2 trillion federal rescue enacted with bipartisan support, checks of $1,200 promised to taxpayers, along with an additional $500 per child will arrive too late for first of the month April payments for bills like mortgages and rental payments. Many leaders also warn that despite its size or range of areas addressed, the legislation was not enough.

In a March 27 House floor statement, Congresswoman Maxine Waters, Chairwoman of the House Financial Services Committee warned colleagues that their job was not yet complete.

“[I] must make clear that the legislation is far from comprehensive, and that there are issues it leaves unaddressed and areas where it falls short…The American people need help now and this bill represents a down payment on that relief,” said Waters.

A similar reaction came from AARP chief executive Jo Ann Jenkins.

“Older Americans face the one-two punch of coronavirus’s health and economic consequences, and many need immediate relief and ongoing help and support to cope with the pandemic,” noted Jenkins. “Those needs are only set to grow in the weeks and months ahead.”

What can really make a difference between life’s success and failure is not just what leaders do but also what they didn’t do when they had the chance. The recent legislative package was silent on interest rates, as well as forgiveness of federal student loans, negative credit reports or bans on private evictions for late rental payments.

As the cost of living has risen faster and higher than most consumer incomes for more than a decade, the likelihood of a savings account large enough to cover household expenses for a month or more is slim to none.

The Consumer Financial Protection Bureau (CFPB), the agency tasked with protecting consumers from unscrupulous lenders has been conspicuously subdued. Instead of forceful and timely agency alerts via multi-media communications warning consumers about opportunistic scam artists, CFPB has offered a modest tip sheet on how consumers – not government – can protect themselves. Fortunately, as the viral saga unfolds, some news outlets are reporting on the potential harms of consumers turning to payday and car-title loans.

A joint response by five federal regulars – Board of Governors of the Federal Reserve System, Consumer Financial Protection Bureau (CFPB), Federal Deposit Insurance Corporation (FDIC), National Credit Union Administration (NCUA), and the Office of the Comptroller of the Currency (OCC) – came on March 26 in a statement that encouraged banks, savings and loans, and credit unions to offer “responsible small dollar loans” to consumers and small businesses during the pandemic.

According to the regulators, “responsible small-dollar loans can play an important role in meeting customers’ credit needs because of temporary cash-flow imbalances, unexpected expenses, or income disruptions during periods of economic stress or disaster recoveries.”

Without any specifics defining “reasonable small dollar loans”, the regulators’ statement could be an inducement to join triple-digit lenders’ financial exploitation.

For Black America and other communities of color, predatory short-term loans of $500 or less began decades ago when payday and car-title storefronts took prominent residence in our neighborhoods across the country. Loans that were marketed as quick fixes for millions of consumers morphed into long-term financial nightmares that deepened debt with every renewal. In many cases, the interest paid on these loans was often double or triple the amount of principal borrowed.

A coalition of civil and consumer rights organizations released a joint statement warning of the possible spike in high-cost lending by the nation’s depository institutions – banks, credit unions and savings and loans.

“This is the worst possible time for banks to make predatory payday loans,” said Americans for Financial Reform Education Fund, the Center for Responsible Lending, Leadership Conference for Civil and Human Rights, NAACP, National Consumer Law Center.

“Around the time of the last recession, a handful of banks issued ‘deposit advances’ that put borrowers in an average of 19 loans a year at over 200% annual interest,” continued the leaders.  “These bank payday loans disproportionately harmed the financially vulnerable and badly damaged banks’ reputations. Since 2013 when regulatory guidance warned against this form of credit, banks have mostly stayed away. We trust that they will continue to do so as they do not want to repeat mistakes of the past.”

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

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Black Woman to Lead United States Park Police

 Chief Smith’s experience serving in leadership roles in every U.S. Park Police field office has provided her with an unmatched foundation to lead the diverse agency,” said Flynn, who oversees law enforcement programs at USPP.

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Pamela A. Smith

Pamela A. Smith, a 23-year veteran of the United States Park Police, will lead the nation’s oldest federal law enforcement agency.

Smith, who became the first African American woman to lead the 230-year-old agency, immediately remarked that she would establish a body-worn camera program for USPP within 90 days.

The program will initially begin in San Francisco and be implemented across the country by the end of the year, Smith said.

“Body-worn cameras are good for the public and good for our officers, which is why I am prioritizing implementing a body-worn camera program within my first 90 days,” Smith offered in a statement.

 “This is one of the many steps we must take to continue to build trust and credibility with the public we have been entrusted to serve.”

Smith earned a bachelor’s degree in Education from the University of Arkansas at Pine Bluff and graduated from the FBI National Academy. She is a member of the National Organization of Black Law Enforcement Executives and the International Association of Chiefs of Police.

During her law enforcement career, the proud Zeta Phi Beta Sorority sister has served as a patrol officer, field training officer, canine handler, and academy instructor at the Federal Law Enforcement Training Center.

 According to a news release, Smith also served as executive lieutenant to the chief of police, assistant commander of the San Francisco Field Office, commander of the New York Field Office, acting deputy chief of the Homeland Security Division, and deputy chief for the Field Operations Division.

Smith was the first woman to lead the New York Field Office as its Major.

At the USPP, she will lead a 560-member workforce that protects the public, parks, and the nation’s most iconic landmarks in Wash., D.C., New York City, and San Francisco metropolitan areas.

“Chief Smith’s commitment to policing as public service and her willingness to listen and collaborate make her the right person to lead the U.S. Park Police at this pivotal moment in our country,” Shawn Benge, deputy director exercising the delegated authority of the NPS director, noted in a statement.

 “Over the coming months, the leadership of the National Park Service will explore opportunities with Chief Smith designed to strengthen our organization’s commitment to transparency. Her personal and professional experience make her acutely aware of and ready to meet the challenges and responsibilities that face U.S. Park Police and law enforcement agencies across the nation.”

 Jennifer Flynn, the associate director for Visitor Resource Protection at the National Park Service added that she’s looking forward to Smith’s leadership.

“Chief Smith’s experience serving in leadership roles in every U.S. Park Police field office has provided her with an unmatched foundation to lead the diverse agency,” said Flynn, who oversees law enforcement programs at USPP.

 “As federal law enforcement officers, the U.S. Park Police officers have a new opportunity each day to give their best to the American people. Chief Smith exemplifies that approach as a colleague and mentor, and she will be instrumental in refining and shaping the future of the organization,” Flynn said.

Smith declared that she would lead by example and expects all officers to display integrity.

 “I have dedicated my career to the professionalism of law enforcement, and it is my highest honor and privilege to serve as chief of police,” Chief Smith declared. “Today’s officers face many challenges, and I firmly believe challenges present opportunities. I look forward to leading this exemplary team as we carry out our mission with honesty and integrity.”  

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Children’s Defense Fund: State of America’s Children Reveals that 71 Percent of Children of Color Live in Poverty

“While we reported on the 73 million children in the U.S. in 2019, which is 22 percent of the nation’s population, we also note that 2020 was the first year in American history that a majority of children are projected to be children of color,” said the Rev. Dr. Starsky Wilson, the president and CEO of the Children’s Defense Fund.

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Dr. Wilson did note that the Children’s Defense Fund is pleased about President Joe Biden’s American Rescue Plan, which, among other things, makes it easier for parents to keep their jobs and provides a lifeline for disadvantaged children. (Photo: iStockphoto / NNPA)
Dr. Wilson did note that the Children’s Defense Fund is pleased about President Joe Biden’s American Rescue Plan, which, among other things, makes it easier for parents to keep their jobs and provides a lifeline for disadvantaged children. (Photo: iStockphoto / NNPA)

Part One of an ongoing series on this impactful and informative report.

By Stacy M. Brown, NNPA Newswire Senior National Correspondent
@StacyBrownMedia

The child population in America is the most diverse in history, but children remain the poorest age group in the country with youth of color suffering the highest poverty rates.

“While we reported on the 73 million children in the U.S. in 2019, which is 22 percent of the nation’s population, we also note that 2020 was the first year in American history that a majority of children are projected to be children of color,” said the Rev. Dr. Starsky Wilson, the president and CEO of the Children’s Defense Fund.

Dr. Wilson’s remarks come as the Marian Wright Edelman founded nonprofit released “The State of America’s Children 2021.”

The comprehensive report is eye-opening.

It highlights how children remain the poorest age group in America, with children of color and young children suffering the highest poverty rates. For instance, of the more than 10.5 million poverty-stricken children in America in 2019, approximately 71 percent were those of color.

The stunning exposé revealed that income and wealth inequality are growing and harming children in low-income, Black and Brown families.

While the share of all wealth held by the top one percent of Americans grew from 30 percent to 37 percent, the share held by the bottom 90 percent fell from 33 percent to 23 percent between 1989 and 2019.

Today, a member of the top 10 percent of income earners makes about 39 times as much as the average earner in the bottom 90 percent.

The median family income of White households with children ($95,700) was more than double that of Black ($43,900), and Hispanic households with children ($52,300).

Further, the report noted that the lack of affordable housing and federal rental assistance leaves millions of children homeless or at risk of homelessness.

More than 1.5 million children enrolled in public schools experienced homelessness during the 2017-2018 school year, and 74 percent of unhoused students during the 2017-2018 school year were living temporarily with family or friends.

Millions of children live in food-insecure households, lacking reliable access to safe, sufficient, and nutritious food, and more than 1 in 7 children – 10.7 million – were food insecure, meaning they lived in households where not everyone had enough to eat.

Black and Hispanic children were twice as likely to live in food-insecure households as White children.

The report further found that America’s schools have continued to slip backwards into patterns of deep racial and socioeconomic segregation, perpetuating achievement gaps.

For instance, during the 2017-2018 public school year, 19 percent of Black, 21 percent of Hispanic, and more than 26 percent of American Indian/Alaska Native school students did not graduate on time compared with only 11 percent of White students.

More than 77 percent of Hispanic and more than 79 percent of Black fourth and eighth grade public school students were not proficient in reading or math in 2019, compared with less than 60 percent of White students.

“We find that in the course of the last year, we’ve come to the point where our conversations about child well-being and our dialogue and reckoning around racial justice has really met a point of intersection, and so we must consider child well-being in every conversation about racial justice and quite frankly you can only sustainably speak of racial justice if we’re talking about the state of our children,” Dr. Wilson observed.

Some more of the startling statistics found in the report include:

  • A White public school student is suspended every six seconds, while students of color and non-White students are suspended every two seconds.
  • Conditions leading to a person dropping out of high school occur with white students every 19 seconds, while it occurs every nine seconds for non-White and students of color.
  • A White child is arrested every 1 minute and 12 seconds, while students of color and non-whites are arrested every 45 seconds.
  • A White student in public school is corporally punished every two minutes, while students of color and non-Whites face such action every 49 seconds.

Dr. Wilson asserted that federal spending “reflects the nation’s skewed priorities.”

In the report, he notes that children are not receiving the investment they need to thrive, and despite making up such a large portion of the population, less than 7.5 percent of federal spending went towards children in fiscal year 2020.

Despite Congress raising statutory caps on discretionary spending in fiscal years 2018 to 2020, children did not receive their fair share of those increases and children’s share of total federal spending has continued to decline.

“Children continue to be the poorest segment of the population,” Dr. Wilson demanded. “We are headed into a dark place as it relates to poverty and inequity on the American landscape because our children become the canary in the coal mine.”

Dr. Wilson did note that the Children’s Defense Fund is pleased about President Joe Biden’s American Rescue Plan, which, among other things, makes it easier for parents to keep their jobs and provides a lifeline for disadvantaged children.

The $1.9 trillion plan not only contained $1,400 checks for individuals, it includes monthly allowances and other elements to help reduce child poverty.

The President’s plan expands home visitation programs that help at-risk parents from pregnancy through early childhood and is presents universal access to top-notch pre-K for 3- and 4-year-olds.

“The American Rescue Plan carried significant and powerful anti-poverty messages that will have remarkable benefits on the lives of children in America over the course of the next two years,” Dr. Wilson declared.

“The Children’s Defense Fund was quick to applaud the efforts of the President. We have worked with partners, including leading a child poverty coalition, to advance the ideas of that investment,” he continued.

“Most notably, the expansion of the child tax credit which has the impact of reducing poverty, lifting more than 50 percent of African American children out of poverty, 81 percent of Indigenous children, 45 percent of Hispanic children. It’s not only good policy, but it’s specifically good policy for Black and Brown children.”

Click here to view the full report.

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She Bought Freedom for Herself and Other Slaves Today a Park is Named in Her Honor

Alethia Browning Tanner saved enough money to purchase her freedom in 1810. “The total amount, thought to have been paid in installments, was $1,400. In 1810, $1,400 was a significant amount; about the equivalent of three years’ earnings for an average skilled tradesperson,” attucksadams.com researchers surmised. 

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Alethia Browning Tanner worked to purchase the freedom of more than 20 of her relatives and neighbors, mostly the family of her older sister Laurana including Laurana herself, her children, and her grandchildren.

In her early years, Alethia Browning Tanner sold vegetables in a produce stall near President’s Square – now known as Lafayette Square – in what is now Northwest Washington, D.C.

According to the D.C. Genealogy Research, Resources, and Records, Tanner bought her freedom in 1810 and later purchased several relatives’ release.

She was the first woman on the Roll of Members of the Union Bethel AME Church (now Metropolitan AME Church on M Street), and Turner owned land and a store at 14th and H Streets, which she left to her nephews – one of whom later sold the property for $100,000.

Named in her honor, the Alethia Tanner Park is located at 227 Harry Thomas Way in Northeast DC.

The park sits near the corner of Harry Thomas Way and Q Street and is accessible by foot or bike via the Metropolitan Branch Trail, just north of the Florida Ave entrances.

“The first Council legislative meeting of Black History Month, the Council took a second and final vote on naming the new park for Alethia Tanner, an amazing woman who is more than worthy of this long-delayed recognition,” Ward 5 Councilman Kenyan McDuffie said in 2020 ahead of the park’s naming ceremony.

“[Her upbringing] itself would be a remarkable legacy, but Ms. Tanner was also active in founding and supporting many educational, religious, and civic institutions,” McDuffie remarked.

“She contributed funds to start the first school for free Black children in Washington, the Bell School. Feeling unwelcome at her predominately segregated church, she & other church members founded the Israel Bethel African Methodist Episcopal Church. When the church fell on hard times and was sold at auction by creditors, she and her family stepped in and repurchased the church.”

Born in 1781 on a plantation owned by Tobias and Mary Belt in Prince George’s County, Maryland, historians noted that Tanner had two sisters, Sophia Bell and Laurena Cook.

“Upon the death of Mary Pratt (Tobias had predeceased his wife) in 1795, the plantation, known as Chelsea Plantation, was inherited by their daughter Rachel Belt Pratt,” historians wrote.

“Mary Belt’s will stipulated that Laurena be sent to live with a sibling of Rachel Pratt’s while Sophia and Alethia were to stay at the Chelsea Plantation.”

Tanner sold vegetables at the well-known market just north of the White House in Presidents Park. It is possible – and probable – she met Thomas Jefferson there as he was known to frequent the vegetable markets there along with other prominent early Washingtonians, according to historians at attacksadams.com. 

“There are also White House records suggesting she worked for Thomas Jefferson in some capacity, likely doing various housework tasks,” the researchers determined.

Tanner saved enough money to purchase her freedom in 1810. “The total amount, thought to have been paid in installments, was $1,400. In 1810, $1,400 was a significant amount; about the equivalent of three years’ earnings for an average skilled tradesperson,” attucksadams.com researchers surmised.

“Self-emancipation was not an option for all enslaved peoples, but both Alethia and her sister Sophia were able to accomplish this, almost entirely through selling vegetables at the market,” the researchers continued.

“Alethia Tanner moved to D.C. and became one of a significant and growing number of free Black people in the District. In 1800, 793 free Black people were living in D.C.

By 1810, there were 2,549, and by 1860, 11,131 free Black people lived in D.C., more than the number of enslaved peoples.”

Historians wrote that beginning at about 15 years after securing her manumission, Alethia Tanner worked to purchase the freedom of more than 20 of her relatives and neighbors, mostly the family of her older sister Laurana including Laurana herself, her children, and her grandchildren.

All in all, Tanner would have paid the Pratt family well over $5,000. All accomplished with proceeds from her own vegetable market business, they concluded.

“Alethia Tanner, it’s an amazing story of resilience, hard work, and perseverance,” D.C. Department of Parks and Recreation Director Delano Hunter said at the park’s dedication.

“I just learned about this history through this, so it shows how when you name a park, you really educate people on the historical significance.”

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