Banking on the Poor

Green America, 5/1/13

Payday borrowers are trapped in a spiral of revolving loans and compounding penalties.
What’s a fair interest rate to pay on a loan?

If you think a 300 percent annual percentage rate (APR) is no big deal, you can stop reading. But if you’d be outraged to learn that some of the country’s biggest banks — like Wells Fargo, Regions, US Bank, and Fifth Third — charge exorbitant triple-digit interest on their most vulnerable customers, you might want to read on.

The latest predatory schemes come with innocuous-sounding names like “Checking Account Advance” or “Direct Deposit Advance” from banks that offer direct-deposit services. They work like this: A bank provides a customer an “advance” on an upcoming direct deposit. When the funds appear, the bank immediately pays itself back, plus a fee.

The short term of the loan (a matter of weeks) combined with the huge size of the fee, usually pencils out to an APR between 225 and 300 percent. Even worse, if the borrower’s deposit can’t cover both their loan and other expenses, typically the bank pays itself anyway, triggers an overdraft, and simply pockets a second fee.

Ironically, banks have pitched payday loans to their customers as a way to avoid costly overdraft fees. But a recently released report by the Center for Responsible Lending exposed the emptiness of this enticement.

The organization reports that payday loan software consultants have assured the mega-banks not to worry about “overdraft revenue cannibalization,” and they’re right. CRL reports that the opposite is true: Payday borrowers are twice as likely as all bank customers to incur overdraft fees.

All of this traps payday borrowers (a quarter of whom are Social Security recipients, according to CRL) in a spiral of revolving loans and compounding penalties. CRL found the median payday borrower took out at least 13 payday loans in 2011. Taking out 20 or even 30 loans a year isn’t uncommon.

Payday schemes prey on those least able to throw money away like this. Such abuse demands stronger regulation.

Currently, 13 states either ban the practice of storefront payday lending (which doesn’t apply to the mega-banks), or cap APRs for all lenders far below 300 percent. And for some borrowers, the federal government sets the standard. In 2006, after a Defense Department study found returning veterans vulnerable to predatory payday lending, Congress made it illegal to charge more than 36 percent APR on loans to military families.

Through creative loan structuring, banks evade the letter of all of these laws, issuing their super-high-interest-rate products to anyone they want, and anywhere they want.

To close the loopholes exploited by the banks, more than 250 organizations — including the AARP and the NAACP— have called for government action….

keep reading at Green America

Look Ma No Hands!

by Lisa Longo, 6/9/13

Sometimes our children do amazing things. And we all like to brag about their amazing feats of agility, strength and intelligence. But sometimes you come across a parent who likes to bitch instead of brag. We’ve all met them, the drama queens who love to tell you every misery and mistake their child makes. The tall tale tellers who say they don’t want to create “more” drama, and then carry on with their melodramatic musings and pedantic pronouncements.

These parents take great pleasure in sharing their “misfortune” and seem to create circumstances that put their children in the worst possible light, but puts them in the spotlight. There is even a name for it, Munchausen Syndrome by proxy.

According to Wikipedia:

Münchausen syndrome by proxy (MSbP or MBP) is a controversial term that is used to describe a behavior pattern in which a caregiver deliberately exaggerates, fabricates, and/or induces physical, psychological, behavioral, and/or mental health problems in those who are in their care

We’ve been friends with such a parent. And it isn’t easy. The constant catastrophes. The continual complaints and contrived circumstances that always end in this parent being “misunderstood”. The doctors who don’t get it. The hospital staff that won’t agree with her diagnosis. The therapists who give bad advice. It is hard to watch. We’ve had our concerns and tried to help, but you can’t help someone who is hell-bent on being the producer, director and star of their own scary movie. They simply don’t want the help. It dims their spotlight.

But I’ve come to the conclusion that this syndrome is actually a national problem. And the biggest victims are a few Republicans in the House and the conservative commentators on Fox and talk radio. Yes indeed, the Grand Old Party seems to have a bad case of “deliberately exaggerating, fabricating and inducing physical, psychological, behavioral and/or mental health problems in those who are in their care.”…

continue reading at Lisa Longo

NSA whistleblower Edward Snowden: ‘I do not expect to see home again’

by Ewen MacAskill, The Guardian, 6/8/13 (includes video)

Source for the Guardian’s NSA files on why he carried out the biggest intelligence leak in a generation – and what comes next

Edward Snowden was interviewed over several days in Hong Kong by Glenn Greenwald and Ewen MacAskill.

Q: Why did you decide to become a whistleblower?

A: “The NSA has built an infrastructure that allows it to intercept almost everything. With this capability, the vast majority of human communications are automatically ingested without targeting. If I wanted to see your emails or your wife’s phone, all I have to do is use intercepts. I can get your emails, passwords, phone records, credit cards.

“I don’t want to live in a society that does these sort of things … I do not want to live in a world where everything I do and say is recorded. That is not something I am willing to support or live under.”

Q: But isn’t there a need for surveillance to try to reduce the chances of terrorist attacks such as Boston?

A: “We have to decide why terrorism is a new threat. There has always been terrorism. Boston was a criminal act. It was not about surveillance but good, old-fashioned police work. The police are very good at what they do.”

Q: Do you see yourself as another Bradley Manning?

A: “Manning was a classic whistleblower. He was inspired by the public good.”

Q: Do you think what you have done is a crime?

A: “We have seen enough criminality on the part of government. It is hypocritical to make this allegation against me. They have narrowed the public sphere of influence.”

Q: What do you think is going to happen to you?

A: “Nothing good.”

Q: Why Hong Kong?

A: “I think it is really tragic that an American has to move to a place that has a reputation for less freedom. Still, Hong Kong has a reputation for freedom in spite of the People’s Republic of China. It has a strong tradition of free speech.”

Q: What do the leaked documents reveal?

A: “That the NSA routinely lies in response to congressional inquiries about the scope of surveillance in America. I believe that when [senator Ron] Wyden and [senator Mark] Udall asked about the scale of this, they [the NSA] said it did not have the tools to provide an answer. We do have the tools and I have maps showing where people have been scrutinised most. We collect more digital communications from America than we do from the Russians.”…

continue reading and follow links at The Guardian

Randi: Philadelphia Superintendent Demolishes Public Schools

by Diane Ravitch, 6/8/13

William Hite, the Broad-trained superintendent of schools in Philadrlphia, released his plan to demolish public education in that poor district, which has been controlled by the state for more than a decade. There is plenty of shame to go around: to Governor Corbett, who wants to destroy public education in his state; to the Legislature, which has let the governor have his way; and to the business and civic leaders of Philadelphia, who didn’t care enough to fight for Other People’s Children. Here, Randi Weingarten details the carnage:

June 7, 2013

AFT President Calls Philadelphia School Layoffs a Travesty

Washington—AFT President Randi Weingarten released the following statement on the announced layoffs of nearly 3,800 Philadelphia educators and school employees.

“What was Superintendent Hite brought in to do? Mass close schools even though it makes the corridors and streets less safe for kids and destabilizes neighborhoods? Make draconian budget cuts that strip schools of nurses, libraries, guidance counselors, art, music and after-school activities, and rob children of the rich learning experience they deserve? And now impose nearly 3,800 layoffs so that public schools can’t function?

“This is a travesty. We are watching before our very eyes the evisceration of public education in the City of Brotherly Love. And instead of an all-hands-on-deck approach, instead of investing in our children’s futures, we see Gov. Corbett and Mayor Nutter sit on their hands while Superintendent Hite and the School Reform Commission have the gall to strip our schools to the bone and blame the very people who work closest with kids—the very people who devote their lives to helping children achieve their dreams. Where are the priorities of the governor, the mayor, the superintendent and the SRC? Certainly not with the children of Philadelphia.”