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CFPB We're helping build savings at tax time

Posted by klawton on 11/25/2014

Our friends at the CFPB asked that we share the below message with the A&O Network about their efforts to help build savings at tax time.

Good afternoon,

Every tax season since the CFPB was formed, we’ve worked to help taxpayers build savings from their tax refunds. Having a savings cushion provides more financial stability and security, especially for consumers who have limited income or are economically vulnerable.

Last year we helped train volunteers at Volunteer Income Tax Assistance (VITA) sites, and we distributed materials for consumers to help them focus on savings when they filed their taxes. About a dozen VITA sites around the country participated to help test the effectiveness of this approach.

One key lesson we learned: It’s important to have dedicated staff or volunteers in the tax site talking to taxpayers about savings. If you work with a VITA site or see an opportunity to lend a hand, consider making this part of your tax time initiatives.

This year, we’re making our training and consumer information available to VITA sites around the country. If you work with a VITA office, or if you have other opportunities to help people save part of their tax refunds, we look forward to sharing the materials with you.

For VITA sites + Training manual for staff and volunteers + Webinars to help staff and volunteers promote savings + Web banners for posting on your organization’s site + Posters encouraging taxpayers to consider saving + Savings video for tax sites to show in their waiting areas

For consumers + Checklist, to help taxpayers prepare for their tax appointment + Worksheet, to help taxpayers decide how much to save

The materials will be available for download or order in December. You’ll receive an e-mail letting you know when they’re ready and how to access them. At the same time, you’ll receive the schedule of webinars for staff and volunteers and instructions on how to sign up.

Stay tuned for more news from the CFPB about saving at tax time.

Sincerely, The Consumer Financial Protection Bureau

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Support the Employer-Based Payday Loan Alternative in Texas

Posted by lgates on 11/20/2014

The Community Loan Center of Texas is a nonprofit 501(c)3 program that provides a sustainable and scalable, low cost, market-based alternative to high cost payday and auto title loans. This innovative employer-based program is expanding statewide after impressive results during a pilot project over the last three years in the Rio Grande Valley. The program allows employees the opportunity to borrow up to $1,000 at 18% interest and a small fee of $20. Borrowers will have up to a year to pay back their loan. Your support will help us launch and scale the Community Loan Centers across Texas.

A network of nonprofit organizations are working together to jumpstart the program and raise loan capital from several sources including a CrowdFunding campaign on Indiegogo. Through grassroots efforts we hope to raise $20K through crowdfunding for our initial loan pool. These funds will help more than 150 employees borrow money at reasonable rates and save them over $500,000 in fees compared to the costs of payday or auto-title loans. We’ve now raised over $2,000 toward this goal from 40 individuals who think the Community Loan Center is an idea worth investing in.

There are now 17 days left in the Indiegogo campaign. If you’d like to support Texas communities, here are some ways to help:

  • We’re asking for your donation – $5, $10, anything helps!
  • Would you be willing to feature a story in your newsletter or a blog about our efforts?
  • Would you help us promote this fundraising effort through social media?

For more information on the Community Loan Center of Texas, visit the website or the crowdfunding campaign website.

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Reflections on the First-Ever National Head Start Stakeholder Convening

Posted by klawton on 11/20/2014

Yolanda Gonzales

Thirty years ago, I was a Head Start parent. Now, I am the Director of a $28 million Head Start program, covering 8,000 square miles in Kern County, California. If someone had told me thirty years ago that this is where I would be, I would have thought they were insane.

I’m a living testament that Head Start and financial capability programs work. Building the financial security of Head Start parents is an issue that touches home for me because I had the opportunity and determination to break the cycle of poverty. I know how difficult it is for parents. I understand the fear of not knowing if you can make it to the next month. I had to make a difference in my life, and going back to school, even if it was a struggle, helped me make a difference for my children. All my children have master’s degrees, and soon I’ll have a master’s degree of my own.

As the Director of the Head Start program at Community Action Partnership of Kern (CAPK), I am an advocate for integrating a financial-capability approach into Head Start programs. Fortunately, CAPK was selected in January 2014 from a pool of over 70 Head Start applicants to receive technical assistance from CFED as part of the ASSET Initiative Partnership to help us implement an integrated approach.

CAPK began our integration project with the goal of working directly with Head Start families to improve their financial future. However, it quickly became apparent that there was work to be done with program staff─ not only with their comfort level in discussing finances with clients, but also their own financial security. According to an Employees Financial Empowerment survey we conducted, 43% of respondents indicated that they were either neutral or uncomfortable discussing financial topics with clients, and faced financial challenges similar to their clients. We learned it was imperative to empower staff with tools to improve their own finances, and help them convey these resources to clients.

A successful first step towards increasing staff capacity was to train them on the Consumer Financial Protection Bureau’s “Your Money, Your Goals” toolkit. More than 20 CAPK employees, from administration and the centers, attended the full-day training and came away with a better understanding of the importance of financial security for client families and for themselves. Additional staff and a select group of Head Start parents will receive the “Your Money, Your Goals” training in January and October of 2015.

As CAPK expands its financial-capability approach for Head Start parents, we are eager to share our lessons learned and contribute to the national dialogue. In October, I had the opportunity to participate in a one-day Head Start Stakeholder Convening where I shared my personal story and why strengthening the financial capability of Head Start parents is so important to me. The Convening was a “first-of-its-kind” event hosted by Office of Community Services’ in partnership with the Office of Head Start. I was greatly impressed and inspired by the financial capability work others have done within their Head Start programs. Including financial capability as a policy priority will ensure that all Head Start programs have the institutional and financial support needed to carry out this important work. Through my own personal and professional experiences, I believe that financial literacy and inclusion can change the lives of low-income children and families.

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New Unbanked and Underbanked Rates Underscore Need for Affordable and Accessible Financial Services in Arkansas and Mississippi

Posted by tedwards on 11/20/2014

As a Community Development Financial Institution (CDFI) seeking to provide affordable and accessible financial services to Arkansans and Mississippians, a recently released FDIC survey on unbanked and underbanked households in America caught our attention. The study breaks down the rates of unbanked and underbanked households by state as well as providing information on rates of savings account ownership and usage of prepaid debit cards and mobile financial services.

For background, the FDIC defines “unbanked” households as not having a checking or savings account, and “underbanked” households as those having a checking and/or a savings account but using alternative financial services, such as non-bank money orders, non-bank check cashing services, payday loans, rent-to-own services, pawn shops or others in the past 12 months.

While still higher than the national average of 7.7 percent, Arkansas’s unbanked rate was stable over the last two years at 12.3 percent. Further, the underbanked rate decreased from 28.1 percent to 25.7 percent, which is exceptionally noteworthy because of its significant increase from 22.3 percent in 2009 to 28.1 percent in 2011. In Mississippi, the unbanked rate decreased 0.6 percent from 15.1 percent in 2011 to 14.5 percent. However, Mississippi’s underbanked rate took a turn for the worse: the percentage of underbanked households jumped from 23.8 percent in 2011 to 32.8 percent.

Unbanked, 2011 Unbanked, 2013 Underbanked, 2011 Underbanked, 2013
Arkansas 12.3% 12.3% 28.1% 25.7%
Mississippi 15.1% 14.5% 23.6% 32.8%
U.S. 8.2% 7.7% 20.1% 20.0%
Source: FDIC, 2014.

In addition to the unbanked and underbanked rates, the FDIC’s findings on the increased usage of prepaid debit cards and mobile banking are also of interest. In Arkansas, 10.2 percent of households used prepaid debit cards in the last 12 months; in Mississippi, the rate of prepaid debit card usage is 14.9 percent. Unbanked households had the highest rate of usage of prepaid debit cards, whereas underbanked households are more likely to use mobile financial services than fully banked or unbanked households.

So what does this mean for Southern? Arkansas and Mississippi are both relatively poor states, so higher unbanked and underbanked rates are not surprising as the FDIC survey shows there is a strong negative relationship between lower-income households and ownership of a bank account. But as a CDFI, Southern works to extend the availability of credit and capital to everyone, and provide responsible, fair financial services to its customers. As demonstrated at the national level in the FDIC survey, 35.6 percent of unbanked households reported the main reason for not having an account was insufficient money to meet minimum balance requirements, and 34.1 percent of households that recently became unbanked experienced either a significant income or job loss they said contributed to becoming unbanked. To help alleviate financial stress amongst our customers, Southern currently offers several different kinds of accounts with no service fees and no or low minimum balance requirements.

To learn more about Southern’s efforts to reach unbanked and underbanked households and create economic opportunity in Arkansas and Mississippi, please contact Meredith Covington, Policy & Communications Manager, at meredith.covington@southernpartners.org.

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2014 Assets Learning Conference Brings Innovation to North Carolina

Posted by rlynch on 11/18/2014

On October 22, 2014, NorthCarolina Asset Alliance, Asset Coalition through United Way of Greensboro, and J.P. Morgan Chase & Co. came together to support financial capability in North Carolina. North Carolina is the first market to bring lessons of the 2014 Assets Learning Conference to local leaders. The goal: bringing together the nonprofit and for profit sector in order to create solutions that “help fragile consumers to better manage their finances to improve stability, financial security, and eventually economic mobility.”

The decision to convene this conference came at an opportune time. Since the city of Charlotte ranked last in Harvard's Economic Mobility Report, providers have been seeking new innovative solutions to provide hope and opportunity to low-income families to move them out of poverty. In order to meet the needs of the consumers and increase their chances of achieving financial security, service providers must provide best practices by leveraging information through tools and skills that take into account behavioral economics, have a willingness to collaborate as a part of a continuum, and provide high quality services and products that meets the needs of their consumers.

The conference allowed service providers to engage with one another and learn about innovative ideas, which promote the importance of savings, understanding credit, creating assets, and utilizing financial capability as a tool for increasing economic security and mobility for our most vulnerable citizens.

Like always we are excited to share with you asset building opportunities and if you have any information you would like to share with us, please feel free to contact us.

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Bringing CSAs to the Legislative Forefront in Arkansas

Posted by tedwards on 11/17/2014

Promoting savings as a way of building assets has long been a focus of Southern Bancorp’s work, which is why we were so excited to read CFED President Andrea Levere’s op-ed in last month’s New York Times that highlighted the effectiveness of Children’s Savings Account (CSA) programs. CSAs have been a household term and practice throughout the family economic security field for over a decade. They come in all shapes, and sizes, ranging from accounts held by private financial institutions to demonstrations run by research universities to 529 plans administered by a state government entity. Like Individual Development Accounts (IDAs), CSAs are designed to make opportunities possible for economic mobility – in essence, they are savings accounts created to establish a foundation for children to ultimately increase their net worth, whether it be by achieving a post-secondary educational degree, buying a home, and/or starting a business, all key indicators of economic mobility in Southern’s view. While CSA programs are still relatively small in number, they’re starting conversations in families about planning and paying for higher education early.

Throughout the last ten years, Southern has engaged in a variety of CSA programs in Arkansas and Mississippi. In addition to offering IDAs, Southern has participated in the SEED demonstration, Save for America program, Aspiring Scholars Matching Grant Program, and the Mississippi College Savings Account initiative. While all of these programs have had great success in providing savings accounts for Arkansas and Mississippi children, scalability and sustainability for the programs has been challenging.

Throughout the country, several universal CSA programs have emerged at the city, county, and state levels. As Ms. Levere’s op-ed points out, the Kindergarten to College initiative in San Francisco has sparked national interest by delivering CSAs to all San Francisco public school kindergartners. The city of St. Louis is planning to unveil a similar program in fall 2015. Cuyahoga County (Cleveland), Ohio launched its own CSA program by establishing a savings account for every child entering kindergarten in fall 2013. Further, Colorado, Hawaii, Maine, and Nevada have implemented or have started the process of implementing different models of CSA programs in their states using various government agencies, all providing a CSA to a child at a particular grade or age level.

As mentioned earlier, Southern was behind the Aspiring Scholars Matching Grant (ASMG) program, enacted by Act 597 through the Arkansas Legislature in 2007. The ASMG program provides a savings incentive to low and moderate income families by matching funds saved for their child’s college education in the state’s 529 GIFT College Investment Plan. The ASMG Program provides matching grants of up to $500 per year to eligible students, based on a household’s income level. The ASMG program was only enacted to serve as a two-year pilot. The funds came from a surplus in management fees charged on all GIFT Plan accounts.[i] Despite management fees continuing to fund the matches, the legislative funding source has officially ended.[ii]

Undeniably, the ASMG program successfully served its purpose to financially assist low-to-moderate income families in saving for post-secondary education; however, less than 1 percent of Arkansas children have an ASMG account established for their benefit.[iii] Hence, the program’s reach is limited, and as noted earlier, it does not have a legislatively committed funding source. That said, the management fees are still being collected on the GIFT Plan accounts, which means there is a pot of money there that could be reallocated for other purposes. In the State of Nevada’s Treasurer’s Office, management fees on their 529 college savings account plans serve as seeds to establish a $50 account for all Nevada public school kindergartners.[iv]

Based on U.S. Census data, Arkansas has approximately 41,000 kindergartners. If Arkansas sought to seed every Arkansas public school kindergartner a $50 account through its 529 GIFT Plan using management fees, it would cost around $2 million per year. And here’s why we think this is so important for Arkansas lawmakers to consider: + According to the Georgetown University Center on Education and the Workforce analysis on occupation data and workforce trends, 52 percent of Arkansas’s jobs will require some kind of postsecondary education or training by 2018. Right now, only 21 percent of the population holds a four-year college degree, with 27 percent having a two-year degree.[v] + Putting every child on the same starting line at a young age and showing them they have options after high school will increase the economic mobility of Arkansas’s children and better enable them to contribute positively to Arkansas’s future. + Building a college-bound culture will help prepare the future workforce Arkansas needs to attract well-paying jobs. + Further, a recent study finds that children with savings accounts in their name, including 529 plans, could be up to seven times more likely to attend college if those children expressed an expectation to attend college – regardless of family income, ethnicity, or the educational attainment of the child’s parents.

If all Arkansas children were on the same level playing field, their opportunities for educational attainment, career advancement, and asset-building would be significantly improved. As a Community Development Financial Institution (CDFI), our mission is to create economic opportunities for people in rural communities, so supporting post-secondary education through savings is a natural fit.

To learn more about our efforts, please contact Meredith Covington, Policy & Communications Manager, at meredith.covington@southernpartners.org.

[i] DeLong, KR. (2009). Aspiring Scholars matching grant program: A successful first year. Policy Points, Vol. 33. Little Rock, AR: Southern Good Faith Fund Policy Program. Available at http://southernpartners.org/assets/archived_publications/pub_pp/pp_v33_9_09.pdf.

[ii] Covington, M., & Edwards, T. (2014). Evaluating college savings plans: A case study on Arkansas and Mississippi. Policy Points, Vol. 41. Little Rock, AR. Southern Bancorp Community Partners Public Policy Program. Available at http://southernpartners.org/assets/PP_VoL41_20140428.pdf.

[iii] Ibid.

[iv] Nevada State Treasurer website. Available at http://www.nevadatreasurer.gov/CollegeSavings/CSP_Home/.

[v] CFED. (2013). Assets & Opportunity Scorecard. Available at http://scorecard.assetsandopportunity.org/2014/state/ar.

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Louisville Metro Council draws closer to minimum wage vote

Posted by tlentz on 11/14/2014

By Ryan Cummings, WDRB.com, Nov. 10, 2014

LOUISVILLE, Ky. (WDRB) -- Louisville's Metro Council is close to possibly making a decision on increasing the minimum wage.

Whether to raise it is a hot topic. Some say it will help workers, but others believe it will hurt local business.

The last public comment session on the issue was held Monday night. Both sides addressed council members to make sure their voices were heard.

Read more...

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TEXAS SAVES AT TAX TIME 2014

Posted by slopez on 11/07/2014

Tags: Matched Savings, savings, taxes, tax time, tax, financial stability, VITA, free tax, free tax prep

Published on Tuesday, 07 October 2014 11:36 in the Opportunity Digest

Written by Scott Zienty

After deciding to save part of her tax refund, Sharon Jones only expected to receive a $25 gift card offered at her VITA site through the OpportunityTexas Tax-Time Savings Project (TSP). A few weeks later, smiling for cameras in Austin City Hall, she held a giant $25,000 check from D2D’s “SaveYourRefund” campaign and remembered back to the moment she learned of the promotion and decided to save. For the single mother of two, the TSP incentive nudged her to save for a home and her education.

Household savings can be a catalyst to helping families get ahead. It can also protect them from falling behind and resorting to predatory financial products when an emergency occurs. Fifty percent of Texas households do not have sufficient “rainy day” savings and over one-third of Texans do not have a savings account.

Volunteer Income Tax Assistance (VITA) sites, which provide free tax preparation services to low-income families, have emerged as a primary platform to provide financial stability services to low-income families. Over the past four years, OpportunityTexas, CPPP’s joint grantmaking initiative with RAISE Texas, has led the Tax-Time Savings Project (TSP) to promote savings through this platform. The TSP, which includes Opportunity to Save and Opportunity Savings Accounts, helps Texas VITA filers increase household savings and reduce asset poverty by encouraging them to save a portion of their tax refund in either a savings bond or a matched savings account.

Opportunity to Save (previously the Savings Bond Incentive Project) works in collaboration with partners, including United Ways of Texas, local United Ways and Foundation Communities, to offer $25 grocery or discount store gift cards to VITA clients who use a portion of their tax refund to purchase $50-$100 in U.S. Savings Bonds. During the 2014 tax season, 1,076 VITA filers purchased savings bonds through this project, with two thirds of purchasers reporting it was their first time saving a portion of their refund. The project yielded over a 6:1 return on savings generated to dollars invested in the project.

We surveyed project participants to determine their savings goals, summarized in the following table.

1

TSP’s other promotion, the Opportunity Savings Account, is a joint initiative with Cornerstone Credit Union Foundation. For the past two tax seasons, Border Federal Credit Union in Del Rio and Coastal Community Federal Credit Union in Galveston have offered filers matched savings accounts at their VITA sites through the promotion. Filers receive an up-front incentive of either a $25 or $50 gift card for depositing $250 or $500 of their refund into the Opportunity Savings Account. Opportunity Savings Account holders are also eligible to receive a dollar-for-dollar match up to $75 on the difference between their initial refund deposit and their ending balance on January 15, 2015.

The following table charts the growth and success of these tax-time savings projects.

2

The first year of the Opportunity Savings Account project was a success. Total account balances, including the savings match, grew by 38 percent to $56,240 and two-thirds of all account holders increased their savings by an average of $165. In a survey administered to 2013 Opportunity Savings Account holders after the program ended, 76 percent of respondents felt that their involvement in the promotion had improved their savings habits, and 59 percent reported feeling less stressed about their finances as a result of their new accounts. Further, 73 percent of respondents indicated that they would consider saving a part of their refund in the future, even if no incentive was offered.

3

Border’s project has been especially successful at growing client savings because of procedures particular to its program. For instance, in Border’s program, a client must meet with the program administrator to explain the need for a withdrawal before making it. Clients report that this meeting forces them to reconsider whether they truly need to withdraw funds.

Two other tax-time savings initiatives in Houston and San Antonio also encourage VITA filers to save their refund. The United Way of San Antonio and Bexar County completed its fourth year of its SaveUSA program, which offers a 50% match (up to $500) to filers who save part of their refund and maintain that savings over the course of a year. Similarly, United Way of Greater Houston collaborated with Neighborhood Centers Inc. for a third tax season to promote United Way SAVE, which offers filers who save and maintain a part of their refund in a savings account a 25% match on the lowest balance in the account over the project year. As a result of these programs’ efforts along with TSP, the total number of Texas VITA savers grew by 6% in 2014 to 2,152 savers, with Houston, San Antonio and OpportunityTexas’ tax-time savings project savers accounting for 99% of Texas VITA savers.

5

These accomplishments illustrate the continued importance of VITA and tax-time as an asset-building platform. OpportunityTexas plans to continue to share knowledge and resources to promote tax-time savings, including a guide for credit unions to support and promote local VITA and tax-time savings efforts. We also hope to identify other large-scale strategies to help families build assets during tax-time.

As we approach the 84th Legislature, Texas law continues to discourage, rather than promote, savings. For households on SNAP and TANF, asset limits continue to serve as a barrier for them to save and move up the economic ladder. For example, savings bonds begin to count towards asset limits for program eligibility for SNAP and TANF only one year after purchase even though most families are saving in these vehicles for long-term goals such as college or retirement. We urge policymakers to put asset limit reform on the agenda next legislative session to support household savings and economic mobility.

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Chicago Community Forums on Retirement Security

Posted by lmullany on 11/03/2014

James Povijua

Many people work their whole lives but don’t have enough savings for retirement. In Illinois, over 2.5 million private-sector workers don’t have access to an employment based retirement savings program. This is the primary way most people save for retirement, so without this savings opportunity seniors will over rely on Social Security.

It’s time for a common sense solution to retirement security.

Join an important conversation about the future of retirement in our state. AARP Illinois (supported by community partners, including: IABG, Heartland Alliance, the Shriver Center and the Woodstock Institute) will host state Senator Daniel Biss, other elected officials, and community members from around the state to discuss the Illinois Secure Choice Savings Program (SB 2758).

This crucial legislation could change the way many employees in the state are able to save for retirement. Members of the state assembly are expected to act on the legislation as early as the end of this month.

We hope you can attend one of the following forums in November:

Saturday, November 8, 2014
11:00am - 1:00pm
Rock of Ages Fellowship Hall, Lower Level
1309 Madison Street
Maywood, IL 60153

Tuesday, November 11, 2014
7:00pm - 9:00pm
Trinity United Church of Christ, Village Center
1947 W. 95th St.
Chicago, IL 60628

Saturday, November 15, 2014
11:00am - 1:00pm
New Faith Baptist Church International
25 Central Ave.
Matteson, IL 60443

If you have questions about the events or about the IL Secure Choice Savings Program, contact James Povijua.

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Department of Defense Proposes Expanded Consumer Protections for Servicemembers

Posted by lmullany on 10/28/2014

Carol Ashley
Shriver Center

At the end of September the Department of Defense (DOD) announced proposed changes to the Military Lending Act (MLA) that, if implemented, will expand financial protections for servicemembers and their families. Since its enactment in 2006, the MLA has protected servicemembers and their dependents from ultra high interest rates of over 36 percent on short-term, small dollar loans.

When it originally drafted the MLA, DOD narrowly defined the types of loans covered by the act and excluded credit cards, overdraft loans, military installment loans, and all forms of open-end credit from coverage. In practice this meant that the MLA covered traditional payday loans, car title loans, and refund anticipation loans but allowed companies to tailor loan characteristics to fall just outside the parameters and evade the restrictions.

The DOD has now moved to close these loopholes by expanding the types of loans covered by the 36 percent interest rate cap to these commonly used products and, in doing so, preventing or at least slowing down predatory financial institutions from literally taking money right out of the pockets of our servicemen and women and their families.

The movement to protect servicemembers from cycles of debt caused by high-interest loans gained recognition as the military barred a growing number of servicemembers from duties overseas for financial reasons. Pressure from different military communities across the country motivated the DOD to research predatory lending practices on a national scale. The resulting report, released by the DOD in 2006, documented increased numbers of lender locations around military bases, an online presence catering to military families, and company names implying official military affiliation. It also found that young servicemembers with job security, a steady paycheck, and little financial literacy offered loan companies a low-risk, high-reward target for loans with interest rates as high as triple digits. Lenders even reportedly offered referral rewards for military members as well as threw ‘loan parties.’ The DOD report concluded “predatory lending undermines military readiness, harms the morale of troops and their families, and adds to the cost of fielding an all-volunteer fighting force.” The report led to the inclusion of the MLA (H.R. 5122, Section 670) in the John Warner National Defense Authorization Act of 2007.

Although Congress aimed to strike a balance between protecting servicemembers from burdensome debt and maintaining adequate sources of healthy credit, when it came into effect in 2007 the MLA fell short in scope. The 36 percent interest cap applied specifically to tax refund loans, other loans of less than $2,000 and a term of less than 90 days, and auto loans with a term of less than 180 days. Consequently, lenders began offering payday loans of $2,001 for over 91 days and auto title loans longer than 181 days, a particularly easy transition for online lenders and lenders in states where high cost loans are not prohibited. By only slightly changing loan terms, creditors continued to successfully target servicemembers, trap them in repeat borrowing, exploit the use of allotments, and fail to provide buyers with adequate information for an informed decision.

Under continued pressure in the face of stories of damaging debt accumulated as a result of legal technicalities in the MLA, the DOD has now proposed to expand regulations to ensure military families more complete consumer protections. The proposed 36 percent interest rate cap would apply to all forms of payday loans, vehicle title loans, refund anticipation loans, deposit advance loans, installment loans, unsecured open-end lines of credit, and credit cards. Additionally, the regulations would hold creditors responsible for providing military borrowers with additional disclosures, prohibit creditors from requiring servicemembers to submit to arbitration, and put the burden of determining military status on the creditor instead of the borrower.

Take Action

While it is hoped that these changes will bring needed protections to servicemembers and their families, they leave veterans and civilians unprotected from the same exploitative lending practices. The Consumer Financial Protection Bureau (CFPB), which enforces the MLA, has suggested that the protections of the MLA be extended to veterans and citizens and continues to emphasize financial education as an important component of reform. This past month, IABG, on behalf of its members, joined organizations across the country in sending a letter to the CFPB that encourages a strong rule that will stop the debt trap and end abusive payday, car title and installment loans for all families. You can make your own voice heard by signing our petition to the CFPB today.

MacKenzie Speer, an Americorp VISTA at the Shriver Center, contributed to this blog post.

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