CPD IN THE NEWS

Payday lending has come under attack in recent years for exploiting low-income borrowers and trapping them in a cycle of debt. The problem has grown to such an extent that last month, the Consumer Financial Protection Bureau proposed new rules to rein in the most egregious abuses by payday lenders.

Yet payday lenders are not alone in profiting from the struggles of low-income communities with deceptive loans that, all too often, send people into crushing debt. In fact, such targeting has grown common among industries ranging from student loan providers to mortgage lenders.

For decades, redlining denied black people and other communities of color access to mortgages, bank accounts and other important services. Today, black and brown women are similarly being “pinklined” with lending schemes that deny them the opportunity for a better life.

A recent report underlines the toll these practices have taken on women of color. Among other alarming statistics, the report shows that 6 out of 10 payday loan customers are women, that black women were 256 percent more likely than their white male counterparts to receive a subprime loan, and that women of color are stuck paying off student debt for far longer than men. It also shows that aggressive lending practices from payday lending to subprime mortgages have grown dramatically in recent years.

In Los Angeles, debt is a dark cloud looming over the lives of thousands of low-income women all over the city.

Barbara took over the mortgage for her family’s home in South Central Los Angeles in 1988. She had a good job working for Hughes Aircraft until she was injured on the job in 1999 and took an early retirement. To better care for an aging mother living with her, she took out a subprime loan for a bathroom renovation.

The interest rate on the new loan steadily climbed, until she could barely afford to make monthly payments. She took out credit cards just to stay afloat, burying her under an even higher mountain of debt. To survive, she asked her brother to move in, while her son also helped out with the bills.

Numerous studies have shown that borrowers with strong credit — especially black women and Latinas — were steered toward subprime loans even when they could qualify for those with lower rates.

Women of color pay a massive price for such recklessness. The stress of dealing with debt hurts women in a variety of ways.

Alexandra, a former military officer, lost her partner, the father to her daughter, after a protracted struggle with ballooning subprime loan payments. The credit card debt she needed to take out as a result threatened her health, leaving her with hair loss, neck pain and sleep deprivation. She eventually needed to file for bankruptcy to settle the debt.

Women of color are vulnerable to dubious lenders because structural racism and sexism already puts far too many women in economically vulnerable positions. The low-wage workforce is dominated by women, and the gender pay gap is significantly worse for women of color. Many women of color are forced to take out loans just to survive or to try to improve their desperate situations.

Predatory lending practices, and other corporate practices that deny communities opportunities and exploit the most economically vulnerable, have been allowed to proliferate for far too long. The Consumer Financial Protection Bureau began taking action on payday and car title loans last month, but more needs to be done.

Regulators must ensure all lending takes into account the borrower’s ability to repay, and that lenders do not disproportionately target and attempt to profit off of the least protected.

The payday lending rules acted on last month are a step in the right direction but don’t go nearly far enough. We have a lot of work ahead of us to ensure black and Latina women are not exploited by the 21st century version of redlining.

Marbre Stahly-Butts is deputy director of Racial Justice at the Center for Popular Democracy, of which Alliance of Californians for Community Empowerment is an affiliate.

By Marbre Stahly-Butts 

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Chicago Mayor Rahm Emanuel announced the formation of a police accountability task force Tuesday. 

In a Monday press release, the mayor said the five-member body — which he will appoint, and which will be advised by former Massachusetts governor Deval Patrick — "will review the system of accountability, oversight and training that is currently in place for Chicago's police officers," according to the Chicago Tribune.

"The shooting of Laquan McDonald requires more than just words," Emanuel said in a statement. "It requires that we act."

The announcement came one week after a Cook County judge compelled the city to release video footage of the Oct. 2014 killing of 17-year-old Laquan McDonald, which was captured on a patrol car dash camera but kept under wraps for 13 months. 

McDonald's killer, Officer Jason Van Dyke, shot the teenager 16 times in front of multiple witnesses but was charged with first-degree murder only last week. The sluggish circumstances of the release have since drawn accusations of an administrative cover-up. Van Dyke was released from jail Monday after posting ten percent of his $150,000 bail. 

Mayor Emanuel also fired Chicago Police Superintendent Garry McCarthy on Tuesday, in response to calls from the public and some officials to have him removed. Meanwhile, the video's release has set off a week of protests in Chicago, as questions remain regarding next steps.

Jason Van Dyke is the first Chicago police officer to be charged with first-degree murder for an on-duty incident in 35 years, a fact that has elicited doubt Emanuel's task force will yield substantive results.

"Our first thought is that this [task force] can't be a substitute for what's really needed here, which is a full-scale federal investigation of the Chicago Police Department with subpoena power," Ed Yohnka, Director of Communications and Public Policy at the ACLU of Illinois, told Mic. "Whatever this task force does, what we've witnessed in this and other instances is a fundamental breakdown in the ability of police to protect the public, and the public's faith in CPD."

Others echoed Yohnka's skepticism. "Appointing a committee to look into an issue is a tried-and-true tactic elected officials long have employed to buy time and breathing room when faced with a scandal or crisis," wrotethe Chicago Tribune. "[It] gives Emanuel something else to talk to reporters and the public about other than the ... video."

Indeed, it's unclear how effective police accountability task forces in other cities have been. An Inspectors General was appointed in Los Angeles, New York City and New Orleans have uncovered systemic abuses and identified problems that shoddy or nonexistent data collection had rendered invisible over the past decade. Seattle has a 15-member community police commission, appointed by the mayor, to review oversight and accountability processes. 

However, "there is no clear evidence that these oversight bodies alone are effective in obtaining meaningful reforms," according to a Justice in Policing report and toolkit from the Center for Popular Democracy and PolicyLink, both policy advocacy organizations.

Yohnka suggested to Mic that a more tried route to change in Chicago would require a U.S. Department of Justice investigation. "That confidence needs to be restored, that someone in power is actively looking into this," he said. "But it's systemic. This issue pervades multiple superintendents and multiple people in terms of leadership in the department. It requires a systemic approach to accountability, transparency and how law enforcement operates."

One such DOJ examination of the Ferguson, Missouri, Police Department published in March laid bare a hotbed of racist law enforcement practices that yielded reform suggestions amidst a national conversation around racism and policing. This is not a unique phenomenon. According to the Washington Post, the DOJ has launched 67 investigations into police departments across the U.S. over the past decade, 24 of which were closed without reform agreements, and just 26 of which resulted in "binding agreements tracked by monitors."

Results have been mixed. The long-term effect of these agreements are not tracked by the DOJ, making it hard to tell if they actually work. 

"We don't tend to evaluate .?.?. after we have left," Vanita Gupta, principal deputy assistant attorney general of the department's civil rights division, told the Post. "There's a limit to how much we can .?.?. remain engaged with a particular jurisdiction given our limited re­sources."

This leaves little precedent for a positive outcome in Chicago — a city with a staggering recent history of police abuse. Over the past decade, the city has spent $500 million on legal costs and settlements stemming from law enforcement misconduct, including $5 million paid out to Laquan McDonald's family in April. 

That same month, Chicago set up a $5.5 million fund to compensate victims of former-CPD Commander John Burge, who tortured and sexually abused more than 100 mostly black arrestees during his tenure with the department. The case of Dante Servin, an off-duty officer who fired into a crowd and killed 22-year-old Rekia Boyd in 2012, was also dismissed in April because state's attorney Anita Alvarez — whose office has a history of questionable conduct — charged him with a crime the judge deemed too  severe for what he did.

The McDonald case has also been plagued by scandal, including allegations that police officers tampered with surveillance tape that captured the shooting from a nearby Burger King, resulting in 86 minutes of footage gone missing.

Some have suggested the mere appearance of police accountability can have positive effects, lending legitimacy to law enforcement bodies that had formerly lost the trust of their communities. But in the case of Chicago, it may be too late for that. 

"The reality is, we're kind of past the point of cosmetics here," said Ed Yohnka. "There's been this fundamental breakdown in terms of trust. Whether we're talking the Burge incidents or the millions of dollars in payouts to victims, there really needs to be a much broader look at what is going on."

Source: Mic

The veepstakes oppo war has begun.

With Bernie Sanders’ durability exciting progressives at their potential to shape the Democratic race, a coalition of groups — many of them backers of the Vermont senator — are launching a preemptive strike against Housing and Urban Development Secretary Julián Castro, aimed at disqualifying him from consideration to be Hillary Clinton’s running mate.

Tuesday morning, the group emailed petitions to several million people attacking Castro on the relatively obscure issue of his handling of mortgage sales and launching a website with an unsubtle address: DontSellOurHomesToWallStreet.org.

They’re just as open with their political aims: to publicly discredit Castro as a progressive, latching onto the mortgage issue to seed enough suspicion to keep him off Clinton’s shortlist.

“It’s a situation where the Clinton campaign wants Castro to be a major asset to her chances of winning the White House, and unless he changes his position related to foreclosures and loans, he’ll be a toxic asset to the Clinton campaign,” said Matt Nelson, the managing director for Presente.org, the nation’s largest Latino organizing group that focuses on social justice.

“All year, we’ve seen the candidates tripping over themselves to show how tough they’ll be on Wall Street,” said Kurt Walters, the campaign manager for Root Strikers, a 501(c4) group of Demand Progress and its 2 million affiliated activists, who is planning to deliver the petitions to Castro’s office when they’re ready. “Then to turn around and take a step backwards on that exact question, and put someone who has been doing the exact opposite — I think it would be tough for a lot of people who care about Wall Street accountability to get excited about that pick.”

By the coalition’s calculations, HUD under Castro has sold 98 percent of the long-delinquent mortgages it acquired through a program aimed at preventing foreclosures to Wall Street banks under Castro’s watch, without anywhere near the number of needed strings attached. (HUD says that figure is way off.) And Nelson and Walters say that for a politician who’s aiming to be considered the vice presidential prospect for both progressives and minorities, Castro has done too much to help private equity firms like Blackstone, instead of black and Latino communities.

“If Secretary Castro fails to create significant momentum in terms of stopping the sale of mortgages to Wall Street, then I do think it disqualifies him. But there’s time left on the clock,” said Jonathan Westin, the director of New York Communities for Change, which was formed out of the remains of the community activist group ACORN. “I think a lot of the progressive movement would not be in support of a Castro ticket if he fails to make traction here.”

The 41-year-old Castro is seen by many as the perfect balance to Clinton — younger and Latino, with a history as mayor of San Antonio and now two years in the Obama administration, handsome and with a 2012 convention keynote speech that immediately made him a rising star to watch in the party. And people close to him say he’s a proven progressive across the board.

“Castro has a strong record at HUD fighting on behalf of progressive issues including protecting those with criminal records, standing up for LGBT rights and advocating for more inclusive communities through affirmatively furthering fair housing,” said one person close to the secretary.

But Maurice Weeks, an Atlanta-based organizer who works on housing justice in communities of color for the Center for Popular Democracy/CPD Action, said that Castro’s lack of action at HUD is breeding more gentrification and suffering in a way that should make blacks and Latinos pay attention.

“What I wouldn’t be excited about is any candidate, not just Julián, who is looking to further some of these practices,” Weeks said.

At issue is the Distressed Asset Stabilization Program, started in 2010 to allow mortgages going toward foreclosure to be sold to what HUD calls “qualified bidders and encourages them to work with borrowers to help bring the loan out of default.”

The progressives attacking Castro say they believe the mortgages should be sold instead to nonprofits and other institutions that would care more about the communities involved. What Castro’s done, they say, has essentially amounted to a fire sale for Wall Street firms.

Rep. Raúl Grijalva (D-Ariz.), co-chairman of the Congressional Progressive Caucus and one of Sanders’ few endorsers in Congress, complained about the program to Castro last week in a letter obtained by Politico.

“Your own Distressed Asset Stabilization Program, which was designed to help right the wrongs of the meltdown years, has been selling homes that once belonged to the families I’ve spoken with at rock-bottom prices to the Wall Street entities that created this situation in the first place,” Grijalva wrote.

HUD says that Castro has continued to meet with advocates, in the hopes of improving the policy, and points to several changes that have been made — including those that have increased the number of mortgages sold to nonprofits. An official pointed to changes made a year ago that, among other things, now require servicers buying loans to delay foreclosure for a year.

“Providing an option for homeowners to remain in their homes is one of the reasons the DASP program was created” said a HUD spokesperson. “We’ve received feedback from stakeholders which has led us to make a number of important changes to the program including the creation of nonprofit-only pools and delaying foreclosure for a year. Additionally, we are still evaluating further enhancements to the program to meet our core mission.”

But that’s not enough for the groups joining the coalition to attack Castro. Those include the Alliance of Californians for Community Empowerment (ACCE) Action, American Family Voices, Color of Change, Courage Campaign, CPD Action, Daily Kos, MoveOn, New York Communities for Change, Other 98%, Presente, RootsAction, Rootstrikers and the Working Families Party.

With the exception of the Working Families Party, which is backing Sanders, the groups have not formally endorsed a candidate in the presidential primaries.

Most conversations about Clinton’s prospective pick center on Castro and Sen. Tim Kaine (D-Va.), and the secretary’s ambitions to be the vice presidential nominee are well known.

But among progressives, so are the suspicions about his bona fides. The red banner across the website proclaiming “TELL HUD SECRETARY JULIAN CASTRO: STOP SELLING OUR NEIGHBORHOODS TO WALL STREET!” amounts to the opening salvo in doing something about it.

“There’s a lot of hope around him,” said Brandi Collins, campaign director for the 1.2-million member Color of Change, who said she was one of the people excited by the possibilities opened up by his keynote speech.

Collins said this complaint about Castro’s leadership is reflective of a whole range of issues her organization has had with what members say is the secretary’s closeness to Wall Street and lack of attention to black and brown communities.

“If he’s not showing up for our communities while the cameras aren’t there, we don’t know that he’ll show up when he’s on his way to the White House,” Collins said.

According to Julia Gordon, formerly at the Center for American Progress and currently an executive vice president at the National Community Stabilization Trust, the coalition may have a point — if only because it is taking advantage of opaque accounting at HUD. Gordon said she’s met often with HUD about these issues but hasn’t seen the kind of progress she’d like or evidence that the program matches the claims that officials make.

“We know it’s been good for investors. According to HUD, it’s been good for the fund, although the level of detail that they release to account for it is minimal. We really don’t know how good it’s been for the homeowners, and that’s where this wave of protests is coming from,” Gordon said.

Laurie Goodman, the director of the Housing Finance Policy Center at the Urban Institute, said that the people who are attacking Castro for selling the loans to Wall Street are misinterpreting the pragmatic realities about what’s in play.

The mortgages in question tend to be delinquent for over two years, she said, and getting them out of HUD with its limited resources and tools to deal with them is a positive step for homeowners. Only big banks can take on mortgages like that, she argued, making the nonprofit issue moot.

“The only way to help these borrowers is to sell the loans. You don’t have any other buyers big enough in size,” she said. “Even if you wanted to do something different, you couldn’t.”

Within that, though, Goodman credited HUD under Castro for making “some really big improvements.”

Not nearly enough, according to Gordon.

“Both HUD and [the Federal Housing Finance Agency] have let down communities by not focusing on what they want the buyer to do with these,” Gordon said, arguing that they’ve been focused instead on offloading the debt. “They’re just like, ‘Get it away from me.’”

The idea that Castro would be the first Latino on a national ticket means something, Nelson said, though he argued that this only adds to the burden for the secretary to show leadership on the mortgage issue in the way progressives want at this moment of added attention to their concerns.

Nelson said that at Presente, they think of it like a parable — it doesn’t make it any better to be hurt if the hurt is coming from one of their own.

There are two trees in a forest, Nelson said, and they see an ax coming to chop them down. “Don’t worry,” says one tree to the other, “the handle’s one of us.”

“Basically,” Nelson said, “we’re fighting to make sure Castro isn’t the handle.”

By EDWARD-ISAAC DOVERE

Source

When the Federal Reserve considers raising interest rates on July 28—and then again every six weeks after—MyAsia Reid, of Philadelphia, will be paying close attention. Despite holding a bachelor’s degree in computer science, completing a series of related internships, and presenting original research across the country, Reid could not find a job in her field and, instead, pieces together a nine-hour-per-week tutoring job and a 20-hour-per-week cosmetology gig. The 25-year-old knows that an interest-rate hike will hurt her chances of finding the kinds of jobs for which she has trained, and earning the wage increase she so desperately needs.

A Fed decision to raise interest rates, expected sometime this year, amounts to a vote of confidence in the economy—a declaration that we have achieved the robust recovery we need. “We are close to where we want to be, and we now think that the economy cannot only tolerate but needs higher interest rates,” the chairwoman of the Federal Reserve, Janet Yellen, told Congress during a July 15 policy briefing.

But for many millions of Americans, the recovery has yet to arrive, and for them, a rate hike will be disastrous. It will put the brakes on an economy still trudging toward stability; stall progress on unemployment, especially for African-Americans; and slow wage growth even more for the vast majority of American workers.

The general argument for raising interest rates is that it will prevent wage costs from pushing up inflation. However, there is no data suggesting price instability; nor is there any indication that wages have risen enough to spur such inflation. For the overwhelming majority of American workers, wages have stagnated or even dropped over the past 35 years, even as CEOs have seen their compensation grow 937 percent. During the same period, wage gaps between white workers and workers of color have increased, and black unemployment is at the level of white unemployment at the height of the Great Recession. Meanwhile, the labor-force participation rate is less than 63 percent, the lowest in nearly four decades, suggesting that many Americans have simply given up looking for work.

Yellen has herself often urged the Fed to look at the broadest possible employment picture. Yet, during her recent congressional testimony, shedownplayed the Fed’s ability to address racial disparities, saying that the central bank does not “have the tools to be able to address the structure of unemployment across groups” and that “there isn’t anything directly that the Federal Reserve can do” about it. She cited, rightly, a range of other factors, including disparate educational attainment and skill levels, that contribute to economic and social disparities between racial groups. But she also glossed over the importance of the economic environment in shaping workers’ unequal chances.

One defining metric in shaping workers’ chances is the unemployment rate. A high unemployment rate facilitates racial discrimination. When there are too many qualified job candidates for every job, employers can arbitrarily limit their labor pool based on unnecessary educational requirements, irrelevant credit or background checks, or straightforward bias. A tight labor market, by contrast, makes it much harder for employers to succumb to prejudices and overlook qualified workers simply because of bias. When the number of job seekers matches the number of job vacancies, African-Americans, Latinos, women, gays and lesbians, injured veterans, and formerly incarcerated workers finally get their due in the workforce.

The late 1990s, when unemployment was at about 4 percent, bear out this thesis. During that rosier era, black unemployment was 7.6 percent, and the ratio of black family income to white family income rose substantially.

As the guardian of monetary policy, the Federal Reserve has a number of tools for encouraging a tight labor market, and one of those tools is to keep interest rates low. By keeping rates low, the Fed creates a hospitable environment for job growth by lowering the borrowing costs for consumer and business spending—including hiring new workers. By contrast, raising rates deliberately suppresses spending by consumers and businesses. In the process, it slows job growth, holds down wages, and unnecessarily maintains racial disparities.

With so many workers still struggling, there is no need to cut off this recovery prematurely. Inflation remains below the Fed’s already-low 2 percent target, unemployment and underemployment are too high, and wage growth and labor-force participation are too low. In fact, the Fed should be doing everything within its power to keep nudging the recovery forward for the workers still caught in the slipstream of the Great Recession.

The Federal Reserve should not raise interest rates this week, nor when it meets again six weeks after that. It should not raise rates at all in 2015. Doing so would cause tremendous harm to the aspirations and lives of tens of millions of working families, and would disproportionately hurt African-Americans.

MyAsia Reid knows the difference that a full-employment economy can make. She is ready to participate in the economic recovery. And she will be watching as the Fed decides whether to hold to a strategy of strengthening the recovery or pursue a new strategy that jeopardizes her chances and her community.

Source: The Nation