Community Groups, Religious Leaders Urge Supervisors to Limit Where ‘Payday Lenders’ Can Open

November 16, 2017 by · Leave a Comment 

A coalition of community-based organizations and religious leaders on Tuesday urged the Los Angeles County Board of Supervisors to do more to regulate “predatory” practices in the short-term loan industry, often referred to as “payday and car-title lenders.”

In a letter dated Nov. 14 to supervisors, the Stop the Debt Trap Los Angeles coalition accused payday, auto title, and installment lenders of targeting and “preying on financially vulnerable populations.”

Areas with high family poverty rates are particularly at risk, Paulina Gonzalez, executive director of the California Reinvestment Coalition said in a press release announcing the coalition’s action.

“Payday and car title loans are advertised as quick, one-time Band-Aids for financial challenges, but the reality is four out of five of their customers get caught in a long-term debt trap,” Gonzalez said.

According the group’s letter, signed by nearly 100 representatives of community groups and religious leaders, they want the “County to take reasonable action to address and, where possible, prevent the over-proliferation of fringe financial entities.”

They urged supervisors to follow the example of other municipalities and enact an ordinance to limit the saturation of these types of lenders in low-income communities and communities of color.

Not all loans are bad, acknowledged the coalition. Responsible loans from banks and credit unions can help consumers affordably spread out the cost of a purchase or financial crisis over time, but “payday, car title, and installment loans put the majority of consumers in a worse financial situation than they were prior to obtaining these loans,” says the community-based coalition.

The Stop the Debt Trap coalition is calling on Los Angeles County Supervisors to place limits on the number of payday and car-title loan locations than can open in low-income and communities of color. (EGP Photo)

The Stop the Debt Trap coalition is calling on Los Angeles County Supervisors to place limits on the number of payday and car-title loan locations than can open in low-income and communities of color. (EGP Photo)

“Their high interest rates and fees, difficult repayment schedules, abusive collection practices, and lack of adequate underwriting to ensure the consumer can afford payments create a high-cost cycle of debt for consumers,” the group says in its letter to supervisors.

Payday loans are small dollar, short-term loans secured by a personal check written from the borrower’s bank account. In California, a payday loan can be as much as $300, which includes the fee. At first glance, the loan amount may seem insignificant, but according to data from the state Department of Business Oversight ‘s (DBO’s) most recent annual report, “the average annual percentage rate (APR) for a payday loan in 2016 was 372%, which can cause the amount to spiral out of control.

Borrowers who secured car title and installment loans – both of which fall under California’s Finance Lender Law – did not fair any better, according to the DBO. In most cases, borrowers own their vehicle outright and put up the title as collateral. Because there is no interest rate cap for loans above $2,500, monthly payments are often unaffordable and continue for long stretches of time, leading to my car owners losing their vehicles. Earlier this month the DBO reported that over half (58%) of loans between $2,500 – 4,999 carried APRs of 100% or higher in 2016.

Interests rate fees generated over $458 million in 2016 for lenders, over half of which came from borrowers whose annual income was $30,000 or less. Seniors aged 62 and older took out more payday loans than any other age group last year, according to DBO data.

“It was troubling to learn that seniors are now the largest group of borrowers in California,” said Rabbi Jonathan Klein, executive director of Clergy and Laity United for Economic Justice, urging supervisors to take action. “Local action,” he said, “would also help send a strong message to our state policy makers that reforms are sorely needed.”

It’s a scenario Isaias Hernandez, community service director at the nonprofit Mexican American Opportunity Foundation says the organization sees over and over again among its low-income clients.

“People take out one loan to help with a financial emergency but instead they’re quickly in over their heads and drowning in fees, collection calls, closed bank accounts and financial heartaches,” Hernandez said. Easy access to the money is a big part of the problem, he says.

“If we can limit the number of storefronts, we can make these harmful products less accessible to people in dire financial situations and prevent them from falling deeper into expensive debt that they can’t climb out of,” Hernandez contends.

It’s a situation Montebello resident Davina Esparza knows all too well.WEB 2 PaydayIMG_4486

“Payday loans create financial disasters for people,” says Esparza, who believes her credit was damaged “thanks to pay day loans.”

It made it hard to find housing and caused her a lot of stress, Esparza said.

“I know my story isn’t unique and most borrowers get caught in the same ‘debt trap’ I found myself in.”

The coalition’s letter goes on to criticize state and federal lawmakers for failing to enact strong consumer protections against such abuses. “State legislators do not have the political will to impose limits on these lenders, who have a long history of contributions to political campaigns,” reads the letter, citing as example a California bill that would have restricted interest rates on loans between $2,500 and $10,000 to 24% APR, but failed to gain enough support to advance out of the Assembly Banking Committee last April.

Leticia Andueza, associate executive director of New Economics for Women, said the coalition is concerned that the payday, car-title lenders are “disproportionately located in certain neighborhoods – namely in black and Latino communities. The board can put a stop to our communities being saturated with these financial predators,” she said.

Specifically, the Stop the Debt Trap Los Angeles wants supervisors to enact an ordinance that will:

—Limit the number of alternative financial services locations allowed within the unincorporated areas of Los Angeles County.

—Require conditional use permits for any new alternative financial services storefront locations.

—Impose distancing requirements between alternative financial services businesses so that they don’t cluster in low-income communities and neighborhoods of color.

—Impose distancing requirements between alternative financial services businesses and other sensitive uses, such as residential areas and liquor stores.

The Critical 0 to 5 Learning Years

April 28, 2016 by · Leave a Comment 

Los Angeles resident and mother Gesele McGlothin enjoys her role as educator to her two children, ages five and one. Spending time talking, reading and singing has created a stronger bond with them, she said, explaining she wants her children to excel in school and “have better opportunities in life.”

According to McGlothin, she tries to make learning fun. “We go to parks, museums; we go to the zoo,” she said Monday during a panel discussion on the importance of early childhood education hosted by New America Media: Participants included early childhood experts, parents and ethnic media reporters who county officials hope will get the word out to parents — especially in immigrant and low-income communities of color—that how they engage with their children during the critical learning years of birth to age three is key to brain development.

Lea este artículo en Español: Del 0 al 5 Son los Años Críticos de Aprendizaje

There is a growing body of evidence that the experiences parents and caregivers provide during the first three years can make a major difference in a child’s future.

McGlothin told the audience she reads a lot to her 1-year old. “I ask him some questions as if he can answer me,” the African-American mother said, proudly adding that her 5-year-old reads at a second grade level because she did the same with him.

A fifteen-year investigative study found that early learning is more than just acquiring cognitive skills. The study, What More Has Been Learned? The Science of Early Childhood Development, looked at the scientific foundation for learning during a child’s first three years of life and concluded that early relationships, biology and environment are all significant.

We don’t have to have the “nature vs. nurture” debate because both are very significant, explained Barbara Andrade Dubransky, director of program development for First 5 LA.

Gesele McGlothin says she reads and sings to her children every day to improve their learning skills. (EGP photo by Jacqueline Garcia)

Gesele McGlothin says she reads and sings to her children every day to improve their learning skills. (EGP photo by Jacqueline Garcia)

When parents talk, read and sing they are supporting the nurturing part, she said.

A child’s brain and early learning, however, can also be affected by problems at home, such as stress, domestic violence, mental health and/or poverty issues, she emphasized.

Joshua Lozano, 26, came to understand those problems first hand when his former partner’s drug use left him the sole custodian of his two children. The idea of educating a 5-year and 16-month-old alone was stressful and challenging, he said.

He knew, however, that his boys’ education was important and said with help from his parents he found ways to give them better educational experiences.

Lozano explained that he took time to research what was available, which led him to enrolling his oldest son in an early childhood program offered by the Mexican American Opportunity Foundation (MAOF) before starting kindergarten. His younger son will soon start an early starters home-based program, which Lozano said not only teaches the baby but the parent as well.

I spend as much time as possible with the boys, he told EGP.

In a recent study by the Public Policy Institute of California, 68% of Californians surveyed said attending preschool is very important, but 42% said affordability is a big issue.

Lozano and McGlothin said early childhood programs and reading materials can be expensive, and agreed that parents have to re-examine their priorities to find ways to pay for it.

Sometimes you have to give up something—like going out or shopping—to give your kids an education, McGlothin said.

There are about 800,000 children aged five and under in Los Angeles County. Of those, 47% of are children of immigrants, according to the panelists.

(EGP photo by Jacqueline Garcia)

(EGP photo by Jacqueline Garcia)

Immigrants are usually reluctant to use professional childcare and instead “choose family or friends” to care for their children, Dr. Margaret Lynn Yonekura with LA Best Babies Network said.

“Parents feel like childcare places don’t love their children as much as a family member,” she told the audience. “[But] you have to think how language rich is that family member” engaging with your kid, she said.

There are many early education programs available in the county, through groups like First 5 L.A. Welcome Baby, Opening Doors-Abriendo Puertas, LA Best Babies network and Crystal Stairs, panelists said. Low-income families can apply for subsidies to help them pay for the programs through an Alternative Payment Program (APP) or access free services available through the L.A. Unified School District, they explained.

The Welcome Baby program, for example, offers personalized support and education from pregnancy until the baby reaches 9-months of age. Mothers get help with breastfeeding, doctor visits, health care coverage issues and other community services.

Crystal Stairs helps families from different income levels reach self-sufficiency by helping to find childcare, quality early learning and preschool, and teaches parents about advocacy to benefit childcare.

LAUSD programs, starting with the Early Education (for potty trained kids) to Extended Transitional Kinder (ages 4 and 5), and then kindergarten (5 and up) are considered a safety net for many little ones.

“Kids not only come to socialize but are also learning in these programs,” Martha Godinez, L.A. Unified’s attendance improvement program coordinator told EGP Tuesday.

This Saturday, LAUSD is partnering with other agencies to bring the “L.A. Unified Early Childhood Linkages to Wellness and Pupil Services” to the East Los Angeles community in the Roybal Learning Center from 8-3pm.

The objective is to “empower the parents” and show them they can teach their kids at an early age and don’t have wait until they go to school, Godinez said.

They also want to show parents methods in their native language they can use to teach their children, which doesn’t have to take place in a public setting, Ezequiel de la Torre, specialist with LAUSD’s early childhood linkage to wellness program.

He explained that sometimes parents are unaware of the services LAUSD provides and they want to keep them updated.

“This is very important for the children’s academic success,” he said.


Twitter @jackiereporter

MAOF to Help Low-Income Seniors Secure Food Benefits

July 16, 2015 by · Leave a Comment 

The Mexican American Opportunity Foundation (MAOF) is partnering with the National Council on Aging (NCOA) to assist seniors in applying for Supplemental Nutrition Assistance Program (SNAP), which provides an average monthly benefit of $113 to help participants buy healthy food.

Nationally, adults aged 65+ have an average annual income of $41,000, and they spend nearly $5,200—or more than 12%—on food. Adults 10 years younger have a greater income (averaging $63,000 annually), but they spend less (10.6%) on groceries.

The U.S. Department of Agriculture estimates that only 2 out of every 5 seniors who are eligible for SNAP are enrolled in the program.

“We’re confident that increasing SNAP enrollment with BenefitsCheckUp® and other proven outreach methods will have a profound effect on lives of seniors in Los Angeles County,” said MAOF President and CEO Martin Castro.

To find out more about SNAP eligibility, contact MAOF or call (323) 890-1555. MAOF will use NCOA’s free online BenefitsCheckUp® tool, to screen older adults with limited income for SNAP eligibility.

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