December 18, 2014
By Charlene Crowell
NNPA Columnist
From Christmas carols to decorations that celebrate the season, the holidays mark the time of year when families and loved ones anticipate joyous celebrations and gift-giving. It’s a season when excesses can easily go beyond over-eating to over-spending, bringing debts that can last well into the New Year.
The holidays are also a time when predatory lenders actively use tempting advertisements of extra cash to seek potential victims. If your holiday list calls for more money than available, don’t make the mistake of falling into the trap that may take most of next year to escape.
Car title lenders can put not only your household budget at risk, but your car as well. With promises such as a 50 percent interest off of the first month, or $25 cash payment for referring new customers, these financial predators will take a title to a borrower’s vehicle in exchange for several hundred or even a few thousand dollars.
Like payday loans, these enticements are designed to trap consumers into predatory loans that are certified debt traps that few consumers can fully repay in just a single payment. The typical car title loan carries a 300 percent annual percentage rate. While borrowers are only loaned a fraction of their vehicle’s value, if vehicles are repossessed, car-title lenders have the right to sell the vehicle at fair market prices, pocketing the profit from its sale – despite borrowers still being stuck with paying debt.
According to research by the Center for Responsible Lending (CRL), each year one particular predatory loan product drains $4.3 billion in fees on loans valued at $1.9 billion. Nationwide, car title lenders operate in 21 states through more than 8,100 retail outlets. States with annual loan volumes surpassing $100 million per year include: Alabama, Arizona, Tennessee, Texas and Virginia.
The road of predatory car title loans leads most often to one of two dead-ends: refinancing the loans in exchange for paying another hefty fee or losing the car to repossession. The typical car title borrower refinances their original loan eight times. As a result, CRL research finds that the typical borrow pays twice as much in interest and fees ($2,349) as the amount of credit extended ($1,042).
Nor will repossession be the end of fated consumers’ financial obligations. The loan payments and all applicable fees must still be repaid despite the loss of the vehicle. Adding to this misery, repossessions usually lead to a new series of increasingly difficult lifestyle adjustments: reliably arriving at work on time, managing personal business or even accessing medical care.
The Federal Deposit Insurance Corporation (FDIC) found that the typical car-title borrower earns $25,000 or less and often comes from unbanked household, those lacking a relationship with mainstream financial institutions. For communities of color, one in five Black and Latino households is unbanked.
Military members are similarly targeted by these financial predators. Earlier this year, both the U.S. Department of Defense and the Consumer Financial Protection Bureau publicly addressed how consumer loan terms circumvented the Military Lending Act (MLA) intended to remove financial stress from active duty members. Since MLA’s enactment, some lenders have extended loan terms to more than the 180- day period cited in the law. Some extensions are as little as one day or 181 days.
When financial challenges already haunt most low-to-moderate-income consumers, those considering these loans should ask themselves: “Is this the way I want to begin my New Year?”
“Car title loans, like payday loans, are designed to create a long-term cycle of debt,” said Diane Standaert, CRL’s director of state policy. “Whether big or small, car title loans lead borrowers down a road of financial disaster. State and federal lawmakers have the ability to enforce against the car-title debt trap and should do so.”
This year, keep your holiday safe from predatory lending. There’s nothing ‘merry’ about debt traps.
Charlene Crowell is a Communications manager with the Center for Responsible Lending. She can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it. .
December 11, 2014
City News Service
A Los Angeles County supervisor called recently for broadcasting the names and photographs of “johns” on websites and billboards to battle prostitution and child sex trafficking. Supervisor Don Knabe recommended that county attorneys draft an ordinance allowing officials to publish the names of those who solicit prostitution, especially those who seek to pay for sex with minors.
“We can go a lot farther in holding these lowlifes responsible,” Knabe said of what he called a “shame campaign.”
“I want the faces of those who buy sex from minors to be plastered across the county,” Knabe said.
Supervisor Mark Ridley-Thomas called it the “moral question of our time ... how we deal with those who prey on children.”
Much of the county's effort in the battle on sex trafficking has focused on making sure child prostitutes are not further victimized by the judicial system. However, Knabe said it’s time to turn to the “demand” side of the issue. For many years, the Sheriff’s Department was pressured not to prosecute cases involving prostitution, which was viewed by some as a “victimless crime,” a department representative told the board. Sting operations are now regularly conducted, targeting both pimps and johns and using younger female deputies as decoys. Knabe said he hoped the threat of public exposure would do even more to discourage the practice.
“I believe that displaying photographs of the so-called ‘johns’ on the Internet, on billboards and other public places will be a powerful deterrent for anyone considering purchasing a young girl for sex,” Knabe said. “It’s time for the perpetrators to pay the price for taking the innocence away from young children.”
County lawyers were directed to report back with a draft ordinance in 45 days.
December 04, 2014
LAWT News Service
Congresswoman Maxine Waters (CA-43) this week, announced that the city of Gardena has been awarded $500,000 in federal funding to meet the housing needs of its lower-income residents. Awarded by the California Department of Housing and Community Development, the funds have been distributed as part of the U.S. Department of Housing and Urban Development’s HOME Investment Partnerships Program, which provides grants to states and localities that fund a wide range of activities, including the building, buying, and/or rehabilitating affordable housing for rent or homeownership.
“Affordable housing is the cornerstone of a productive and thriving society. It impacts a family’s ability to afford other necessities, such as food, transportation and medical care. Unfortunately, cities like Gardena continue to face a shortage of affordable housing, leaving its residents young and old struggling to make ends meet. I’m pleased that this important federal support has been awarded to the City, which will increase the supply of affordable housing and allow more of Gardena’s families to live a healthy, productive life.”
Among other uses, the City can use the funds to provide downpayment assistance to purchase a family’s first home, rehabilitate housing to allow lower income families and seniors to remain in their homes, and make rental housing affordable through tenant-based rental assistance.
As Ranking Member of the Financial Services Committee, Rep. Waters has long been an advocate of affordable housing, and of the HOME Program. In October, she participated in a roundtable discussion on Gardena’s housing issues, which included an in-depth conversation of ways to increase the supply of affordable housing for the city’s aging population.
“In Washington, I remain committed to using my role as Ranking Member of the Financial Services Committee, which has jurisdiction over housing issues, to ensure we are working to meet the housing needs of our aging population in Gardena and across our community.”
HOME is the largest Federal block grant to state and local governments designed exclusively to create affordable housing for low-income households. Funds are awarded annually. The program’s flexibility allows states and local governments to use HOME funds for grants, direct loans, loan guarantees or other forms of credit enhancements, or rental assistance or security deposits.
The award is part of $11.8 million awarded in 2014 to help meet the affordable housing needs of California’s families.
November 27, 2014
LAWT News Service
On November 22, Congresswoman Karen Bass (D-Calif.) joined hundreds of families, insurance seekers, and healthcare advocates for a Healthcare Resource Fair and Town Hall. More than 300 people turned out for the event at Los Angeles Trade-Technical College, which featured dozens of onsite health practitioners as well as enrollment counselors from Covered California, Medi-Cal and My Health L.A. Nearly 150 families, comprising 188 individuals, completed enrollments.
“Thanks to the Affordable Care Act and programs like My Health LA, our community has greater health care access than ever, and the positive impact is clear,” said Bass after the event. “We brought together dozens of clinics and community health organizations to make sure that people of all backgrounds and incomes can understand their health insurance options and get enrolled. Healthcare is a human right, and we must do everything we can to make sure that everyone has access to quality care.”
Participating organizations included St. John’s Well Child and Family Center, SEIU-UHW, Community Coalition, One L.A., Northeast Community Clinics, South Central Family Health Center, Southside Coalition of Community Health Centers, Planned Parenthood, Brotherhood Crusade, Watts Health, T.H.E. Health and Wellness Centers, UMMA Community Clinic and dozens more.
Open enrollment for Covered California began on November 15 and will conclude on March 15, 2015. Medi-Cal insurance enrollment continues as well, and Los Angeles County has a new program called My Health L.A. for people who cannot be covered by other health programs. Residents who wish to speak with enrollment counselors can attend local community events or call Rep. Karen Bass's office at 323-965-1422 to get help. People can also visit Covered California online at www.coveredca.com for health facts and explanations of available plans and services.