Thursday, April 14, 2011

Yes, AGAIN! Why is CitySquare Taking on Predatory Lending?

Why is CitySquare's public policy focus been on payday and auto-title lenders? And why do I write so much about it lately?

CitySquare administers HPRP funds in the Dallas. HPRP is an acronym for 'Homeless Prevention and Rapid Rehousing Program'. It is federal money that is a part of the American Recovery and Reinvestment Act (ARRA) or stimulus funding, designed to give aid to households at risk of homelessness because of the recession. It is a means tested program, that helps those facing eviction because they have fallen behind on mortgages because the economy or those who cannot pay their utilities. Those who work with that program, began reporting that nearly 40% of those coming for assistance, were in debt because they of these short dollar, short term loans.

CitySquare, along with the United Way of Greater Dallas and the Jewish Community Relations Council and formed what we call the 'Anti-Poverty Coalition'. We decided, as a focus to support the United Ways goal of getting 250,000 people out of poverty in Dallas by the year 2020. To do so, we called together community based and faith-based non-profits from across the city. Organizations like, the Urban League, AARP, the Dallas Baptist Association, Consumer Credit Counseling Services, nearly 20 in all. When we began to put together an agenda by looking at areas where our organizations were working that we could possibly form partnerships and not duplicate efforts. We found that almost all of us were working with families in crippling debt because of payday loans and coming to our agencies for help. A couple of groups had come to our meeting fresh from meetings with city officials asking them to help find a way to help these households.

It wasn't hard to find out what the common area was...

Not long after that, we (CitySquare) was contacted by the Center for Responsible Lending, which was working nationally on the issue and wondering if we could provide them with help in this area. Soon after, we were contacted by the Christian Life Commission, which was working on the state level to get the loophole in state law closed that allowed these businesses to operate as 'credit service organizations'. Not long after that, I decided to read a book that had been recommended to me by a publisher, 'Broke USA' by Gary Rivlin. And finally, my daughter came home one evening from a meeting at Friendship West Baptist Church, in which they, Concord Baptist Church, Inspirational Body of Christ and Antioch Fellowship Baptist Church came together in a joint community meeting because of complaints about the proliferation of payday loan stores in our neighborhood - nearly 20 along on a nearby major business thoroughfare.

Seldom do I have to be hit over the head...

CitySquare's public policy focus is determined by two things: what are we learning in our programs and what reflects our organization's values. In this case they merged. We believe that the working class and the poor ought not to be easy prey for people simply because 'there is a demand', 'there is a market', 'they provide jobs' or 'there is a need'. We also believe that if there is a systemic issue that needs to be addressed, people caught in dire circumstances ought to have someone to stand and advocate with them. CitySquare is determined to do more than just serve people in their poverty, but to address issues in ways that remove barriers to get them out of poverty. This is one of those issues.

I've heard it all over the past several months of research and action: 'people ought to know better', 'these people should save for their difficult times', 'they ought to investigate for themselves'. For me, this falls in the category of 'true but useless' information. We all ought have smoke alarms. We all ought to have a written diagram of safe routes out of the house when a fire occurs. We ought to all have fire drills in our homes to make sure that our plan works. Some of us do. Most of us don't. But we all need the fire department.

All of us ought to be great financial managers for our families. We ought to have savings accounts. We ought to know about APRs (Annual Percentage Rates), and how they figure into the loans. Most of us don't. We buy cars and even houses with one thing in mind: can I afford the monthly payments. This is not just the poor and ignorant. This includes teachers, salaried workers, homeowners and single parents and married couples. This includes church members and civic minded individuals. They all should be financially literate, but they, like the rest of us all need protection from predators.

We live in an era when business and the market are no longer servants - they've become masters. And we must rebel against this master. We must know that business is not only to enrich stockholders or business owners. Business should contribute to the well being of the communities in which they are located. These businesses don't. And we should say so. CitySquare will continue to say so.

Yesterday, we went before Dallas' city council with our allies. We challenged the council to enact the strongest possible zoning ordinance to locally regulate these businesses. We are now working with our allies to gather at least 5000 signatures in the next couple of months to show the public support we have for this ordinance. If you agree with CitySquare's values and live in Dallas, we hope you sign up. Because, whether or not you've ever taken out a payday loan the proliferation of these businesses impact your quality of life, the image of your community and that of your family and neighbors.

We think this is a worthwhile engagement. We hope you agree and can join us!

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