Commentary

Payday loans.jpgThe federal Consumer Financial Protection Bureau is unveiling some long-awaited proposed rules targeting the predatory payday lending industry at a big hearing in Richmond, Virginia today and you can follow along on Twitter at the hashtag #StoptheDebtTrap. Generally, the proposed rules amount to a promising start. There are, however a few worrisome potential loopholes. The good people at the Center for Responsible Lending explain:

Consumer Financial Protection Bureau to Limit Payday Loan Debt Trap; Curb 400% Interest Rate Loans

The Consumer Financial Protection Bureau will offer a first look at where the agency’s efforts to rein in the abusive practices of payday and car title lenders are headed at a Thursday hearing in Richmond, VA. The consumer agency will release information outlining their deliberations and take testimony from a panel of consumer and civil rights advocates as well as industry representatives.

Mike Calhoun, President of the Center for Responsible Lending, will present testimony at the hearing.

Calhoun comments on the proposal:

“The proposal endorses the principle that payday lenders be expected to do what responsible mortgage and other lenders already do: check a borrower’s ability to repay the loan on the terms it is given. This is a significant step that is long overdue and a profound change from current practice. If made mandatory, the ability to repay standard will help millions of borrowers avoid dangerously high-cost payday and other abusive loans. The requirement would prevent debt traps, an all-too common practice where a lender flips loans over and over and the consumer ends up paying double the amount borrowed in interest and fees. And the Bureau appropriately applies the standard to both shorter and longer term loans, including vehicle title loans.

At the same time, we are deeply concerned about provisions in the proposal, the so-called “debt trap protection options,” which would in fact permit payday lenders to continue making both short- and longer-term loans without determining the borrower’s ability to repay. The industry has proven itself adept at exploiting loopholes in earlier attempts to rein in the debt trap. The consumer agency can look to necessary revisions to the Military Lending Act after widespread abuses were found, dragging active service members into debt so damaging that a Defense Department report found it undermined military readiness.

These “options” are an invitation to evasion. If adopted in the final rule, they will undermine the ability to repay standard and strong state laws, which give consumers the best hope for the development of a market that offers access to fair and affordable credit.

We urge the consumer bureau to adopt its strong ability to repay standard without making it optional.”

Let’s hope the regulators are listening.

News

Guilford County Schools chief Maurice “Mo” Green is asking the county for an additional $26 million in local funds to help fill the gaps that schools are facing thanks to years of disinvestment in public education by state lawmakers.

The News & Record reports that school leaders say they’re persistently seeing increased needs and mandates but dwindling funds.

“We’re just not doing what we know is educationally sound for children,” Guilford schools superintendent Green said Tuesday.

The $26 million would go toward mitigating some of the following scenarios Guilford schools are dealing with, according to the N&R:

  • Enrollment has increased by more than 1,200 students since 2008-09 but there are 185 fewer full-time teacher positions, district figures show.
  • The fiscal 2015 budget included almost $18 million in reductions and included a dip into the school system’s fund balance.
  • The amount of local funds allocated per student has steadily dropped over seven years from $2,416 to $2,340.
  • The school system hopes to avoid increasing class sizes once again and have enough funds to provide students and teachers with the resources they need, like textbooks.

Governor McCrory’s latest budget proposal would translate to a $4.4 million loss for Guilford County schools that would sap funds for teacher assistants and driver’s education, among other line items. Read More

Commentary
Senator Tom Apodaca

Senator Tom Apodaca

It is becoming increasingly clear that the single, best thing that North Carolina lawmakers could do to aid public education in our state is this: nothing.

Seriously, lawmakers would do our young people, educators, public education officials, employers, and the state at-large an enormous service if they would simply pass one bill each year providing the funding that our schools really need and then get the heck out of the way and check back in five or ten years. No more “ABC’s” of this or that or “Excellent Schools Acts.” Nothing, nada, zip. Just give our professionals the money and the mandate and let them do their jobs.

Unfortunately, the urge to meddle, micromanage and pass half-baked ideas that some lawmaker heard something about over dinner or on Fox News assures that this will never happen. For the most recent example of this apparently irresistible tendency, check out the proposal in the North Carolina Senate to “bill” local schools for the cost of remediation courses that students take in Community College. As NC Policy Watch reporter Sarah Ovaska reported this morning, one of the bill’s key sponsors, Senator Tom Apodaca, thinks this will make a difference:

The desire, Apodaca said, is to make sure the state’s K-12 system is turning out graduates ready to jump into the higher levels of education.

“We’re sending a message to our schools that we want quality coming out,” Apodaca said.

You got that? The premise of the law — as with so many other conservative education proposals in recent years — is that North Carolina can wring better results out of its public schools through sheer force. Rather than addressing poverty, providing universal pre-K, lowering class sizes or investing the money that it would really take to hire the teachers and counselors and other professionals who could perform the miracle of preparing millions of kids for the insanely competitive 21st Century economy (half of whom come from families too poor to afford lunch), the Senate would propose to get better K-12 grads by threatening to take away more money from their schools.

What a great idea! Maybe this can even set a precedent for other parts the education system. For instance, Read More

News

MR_EducationA flurry of bills are being filed in the state Senate this week in advance of today’s deadline* for introducing public bills and resolutions. Here are five bills you may have missed that merit watching:

Senate Bill 384Increase Pay/Experienced Teachers – Senator Joyce Waddell may be a freshman in the NC Senate, but she knows veteran teachers deserve better pay. Her bill would appropriated more than $20 million from the General Fund to the Department of Public Instruction  to establish a new salary schedule that supports experienced educators:

salary schedule

Senate Bill 515Driver Education Funding – Senator Erica Smith-Ingram bill would restore funding from the Highway Fund for the Driver Education program administered by the Department of Public Instruction. Local boards of education would be permitted to charge up to $65 to offset the costs of providing the training. Read Lindsay Wagner’s piece on the challenge school districts face without this dedicated funding.

Senate Bill 463Increase Access to Education – Sen. Fletcher Hartsell’s bill spells out that an individual who has attended school in North Carolina for at least three consecutive years immediately prior to graduation and has received a high school diploma from a school within North Carolina (or their GED) would be accorded resident tuition status when applying for higher education.

Senate Bill 510NCVPS/Equal Access to Education – This bill would provide access for both public and non-public school students to the the North Carolina Virtual Public School (NCVPS) program. Home-schooled children would not pay any more for access than students attending traditional public schools. Virtual education is a growing area of interest for state lawmakers.

Senate Bill 512Delay Law Implementation/VIVA/Paper Ballots.- Very simply this bill would delay full implementation of the Voter Information Verification Act (VIVA) and the use of paper ballots until the court has issued a ruling in Currie v. North Carolina. You can read more about that case in this post by our courts and law reporter Sharon McCloskey.

*The deadline for filing public bills in the state House is April 8th for bills that don’t involve Appropriations or Finance.

Commentary
Gerrymandering

Image: Southern Coalition for Social Justice

In case you missed it, the U.S. Supreme Court took actually issued a promising 5-4 ruling yesterday in the challenge to Alabama’s racially gerrymandered redistricting plan.

Moreover, as the good folks at the Southern Coalition for Social Justice explain in the statement below, the decision could have a significant and positive impact in the challenge to the unconstitutional “Rucho plan” now in effect in North Carolina:

“U.S. SUPREME COURT’S DECISION IN ALABAMA REDISTRICTING CASE HAS IMPLICATIONS FOR NORTH CAROLINA’S REDISTRICTING PLANS

In a win for voting rights advocates, the U.S. Supreme Court today put the brakes on using explicit racial criteria in redistricting. The 5 to 4 decision constrained the cynical use of the Voting Rights Act to justify race-based redistricting that minimizes the voting strength of minority voters—a strategy employed by several Southern states in the 2010 redistricting cycle.

The Court ruled that race predominated in the Alabama legislature’s redistricting of state house and senate districts when it moved black voters into majority-minority districts in order to prevent the percentage of minority voters from declining. Read More