Federal payday loan rule: why it is important, and how can you help

6793826885_d3b6befb99_zConnecticut does not have payday loans. This is actually a very good thing, as the experience in other states shows: payday loans more often than not put borrowers in debt spirals that are really hard to break free from. Connecticut consumers save $133 million, every year, on fees thanks to this.

Right now, the Consumer Financial Protection Bureau (CFPB) is considering a new rule that will greatly limit payday lending at the federal level. This is important for two reasons. First, it will ensure that Connecticut will no longer face out-of-state lenders trying to litigate their way in. Second, this might help prevent working families to pay outrageous interest rates in short term loans. Just some examples: the typical APR for a two week loan in Texas is 662%; in Ohio, 677%; California, 460%.

So what can we do?

The CFPB has opened a comment period for their proposed rule – and we need you to speak up against payday lending.  Use this website to submit a comment to the CFPB against payday lending.
It is easy – it will take you less than five minutes. Here is some suggested language:
I am writing to ask you to strengthen your proposed national payday loan rule to rein in abusive high-cost loans. Your proposed payday rule sanctions dangerous levels of triple-digit interest rate loans. Our state does not even legalize these triple-digit interest rate loans and we worry that payday lenders will use your rule to seek a green light to come into our state. We ask that you strengthen the rule to close any loopholes and provide states like ours with additional tools to keep unfair and abusive payday loans out of our state. Families in our state are much better off without these unaffordable, debt trap loans.
These comments make a difference. The CFPB knows that Connecticut does not have payday lending. Reminding them how this helps families in the state is important. Make sure to make your voice heard!

Is there anything else we can do?

Yes! Has your organization spoken up against payday loans? It should! 

The CFPB greatly values comments from advocates and direct service organizations. E-mail us as soon as possible for more details on how, or if you need information, templates or you have any questions.

Poverty and the safety net – and the danger from federal cuts

CAHS and the Coalition on Human needs are releasing a report today on the the new census data, and the potential impact that some upcoming federal cuts can have in low income residents in the state.
  • In Connecticut, 10.8 percent of people were poor in 2014 – roughly the same as in 2013.
  • The child poverty rate also remains stuck, with 14.9 percent of Connecticut children living in poverty in 2014 – roughly the same as in 2013, as well.
Poverty in Connecticut disproportionately affects people of color:EITC cuts
  •  Nearly 21 percent of African Americans and 26.5 percent of Latinos in Connecticut are poor. In contrast, poverty for non-Hispanic whites is 6.1 percent.
  •  Nearly 15 percent of Connecticut children are growing up in poverty, and the statistics are worse for children of color: 30.5 percent of African American children and 33.4 percent of Latino children in Connecticut are poor.
The new Census Bureau findings add to the mounting evidence that programs like low-income tax credits, the Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps), and subsidized housing reduce poverty now and improve children’s chances of gaining economic security in the future.   The Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) lifted 69,000 Connecticut residents, including 35,000 children, out of poverty each year, on average, during 2011 to 2013.
Sequester budget cuts, however, are threatening this safety net:
  • Congress will cut 1,010 existing housing choice vouchers in Connecticut alone, although today 1 in 4 low income renters in the state pay more than half of their income in rent.
  • Cuts to the Earned Income Tax Credit and Child Tax Credit could push146,000 Connecticut residents, including 63,000 children, into or deeper into poverty.
You can find more details on the proposed cuts by downloading the full report here.

Today is EITC awareness day!

Every year, millions of eligible workers miss out on the Earned Income Tax Credit (EITC). money1That’s why the IRS started EITC Awareness Day, a day dedicated to encouraging organizations to bring attention to the EITC and free tax filing assistance. This year, EITC Awareness Day will take place on Friday, January 30.

The EITC is a refundable federal tax benefit for lower- and moderate-come workers that can be worth up to $5,143. To find out how much money a worker might receive, check out this quick EITC estimator.

To claim the credit, one must file a tax return. Free tax filing assistance is available through the IRS sponsored programs VITA (Volunteer Income Tax Assistance) and TCE (Tax Counseling for the Elderly). Click here to find a site in your area.

No sites nearby? There’s another option! MyFreeTaxes allows taxpayers with household income less than $60,000 to file federal and state tax returns online for free. Visit www.myfreetaxes.com to learn more.

Student loans and public service

Last Friday CAHS participated on a round table with Senator Richard Blumenthal and Senator Chris Murphy at the Hartford YWCA. The main topic was student debt, and more specifically, on how student loans hinder the graduate’s capacity to pursue public services careers.

Although there is currently a Federal loan forgiveness program for students pursuing public services jobs, the current rules are clunky and inflexible: an individual is required to remain ten years on these occupations without interruption or face stiff penalties. Both Connecticut US Senators are sponsoring a bill to improve this program. In 2012 the average student finished college with $29,400 in debt.

On Friday’s round table many care givers, non profit advocates, teachers and other public servants shared their stories (you can read some of them here) about struggling with debt and having to postpone major life decisions (having a kid, buying a house, saving for retirement) as they face their loan payments. Pictures from the event after the jump.

Continue reading

When Women Succeed, Families Succeed!

40% of all households depend on women as the sole or primary breadwinner.  Yet, today in Connecticut women are paid 77cents for every dollar paid to a man for the same work. In reality this means that women must donate an average of three months work each year before they begin to be paid equally to their male counterparts. This wage gap is found across all income levels and all levels of educational attainment.  (PCSW Research Brief)

But what does it mean for our economy? Family success

When considering the wage gap, single parent households that are headed by working women face greater barriers to economic security for themselves and for their children.  So what would it mean if women received equal pay? There would be additional money for groceries, child care payments, and rent; equal compensation could make the difference between poverty and economic sustainability for many working mothers. In fact, it is estimated by the Institute for Women’s Policy Research that the very high poverty rate for working single mothers would fall by nearly half, from 28.7 % to 15%.  This in turn will greatly reduce children living in poverty. With fewer families in poverty Connecticut will pay far less for social services, there will be a larger tax base and children will have a greater opportunity to grow up in a healthy and positive environment. The result would be  an economically stronger Connecticut.

What can be done?

During a recent round table discussion at the Permanent Commission on the Status of Women, Senator Blumenthal said the time for equal pay is now.  He along with others in Connecticut’s democratic congressional delegation, including Chris Murphy and Rosa DeLauro, are hoping to gather enough support to pass the Paycheck Fairness Act of 2014. The Paycheck Fairness Act would build upon the Equal Pay Act which of 1963 by addressing some of the loopholes that exist in that legislation.   It would require that:

  • employers rather than employees carry the burden of proof when addressing equal pay issues
  • companies be prohibited from taking retaliatory action against employees who raise concerns about gender-based wage discrimination
  •  penalties be strengthened  for equal pay violations, including both compensatory and punitive damages

Blumenthal believes there is majority support for this bill; however the Senate was unable to gather the 60 votes needed to prevent a filibuster in the Senate.  He is hoping that with additional support and advocacy work, this bill will pass before years end. For more information :

Latinas stuff News Coverage:

 

Update: Will Kids be Getting a “Strong Start”?

On Tuesday we shared news with you about an upcoming committee vote on the “Strong Start for America’s Children Act”, which was being considered in the Senate’s Health, Education, Labor, and Pension Committee. We asked you to join us, and thousands of others on Twitter and Facebook, in asking our Senators to heed the research and invest in young kids.

preschool picture

Yesterday, the committee approved the Strong Start legislation with a vote of 12-10. There were two significant changes made to the legislation prior to voting.

  • First, the bill originally required teachers – in programs that receive funding – to hold a bachelor’s degree, with credentials that demonstrate competence in early education. The change, adopted yesterday, would provide teachers a three-year “grace period” to meet this requirement. This is considered a significant improvement over the original language, which provided no time period for compliance. However, advocates remain concerned that three years will not be enough time for teachers to meet this new mandate.
  • And second, new language allows both states and localities to be recipients of the bill’s preschool development grants. This language could be problematic as many states, including our own, are trying to build strong systems that reach children no matter where they reside. Money being provided directly to towns with the capacity to write strong applications could cause further fragmentation and inequity.

The Center for Law and Social Policy (commonly known as CLASP) has provided a more in-depth look into yesterday’s developments here.

The bill is now likely ready for a vote on the floor of the Senate. We will continue to track this legislation and provide updates as developments arise.

We Support A “Strong Start” – And You Should Too!

Connecticut’s legislative season has drawn to a successful close, and so now we turn our attention to developments on the federal level. Today, we are watching the Senate Health, Education, Labor and Pension (HELP) Committee’s 2PM meeting to debate and amend the“Strong Start for America’s Children Act”. This legislation represents the possibility of a major new federal investment in early care and education; an opportunity Connecticut is well-positioned to take advantage of following the passage of the Office of Early Childhood legislation.

Some of the major components of the “Strong Start” proposal include:

  • Funding for Increased Access to Preschool for Four-Year Olds in Low-Income Families 

The legislation includes a new funding formula that would provide states with a share of $1.3 billion for Fiscal Year 2014 (increasing to almost $9 billion by 2018) for high-quality pre-kindergarten. States are asked to specifically target the money to assist four-year-olds in families with income below 200% of the federal poverty level. States would be asked to provide a modest match in the early years (10% in year one and two, then gradually increasing to 50% in year six), although at least part of that match can be accounted for from dollars already being expended for early education programs.  The legislation empowers state recipients to use the funding for sub-grants to local entities (both school districts and community providers) who are offering high-quality, full-day pre-k experiences. High quality is defined in the bill as a classroom with a teacher with bachelor’s degree, that uses developmentally appropriate curriculum, and that meets all health and safety standards.  Small portions of the funding would also be available for workforce development (including teacher scholarships) and for creating a more robust system of care for infants and toddlers.

  • Funding to Improve Both the Quality and Access to Infant and Toddler Care

The legislation contains $4 billion for the development of Early Head Start-child care partnerships. The goal of these arrangements is to improve infant and toddler care by linking the expertise found in Early Head Start programs with community providers already serving young children. The legislation also states a goal of having Early Head Start serve one in five children living at or below the poverty level; the program currently serves only one in 25.

  • Funding to Infuse Greater Quality into CCDBG (Care4Kids)

The legislation contains two very important updates to this 17-year-old grant program. The first is allocating $100 million to support child care training, licensure, and professional development for early care and education programs who receive CCDBG/Care4Kids funding. The language would also require that states switch to a one-year redetermination period for families found eligible for CCDBG/Care4Kids. Currently the redetermination period is set at 8 months in Connecticut for Care4Kids, though language that passed this legislative session would permit the return to a 6 six-month redetermination period. Frequent redetermination creates great uncertainty for both the families and the providers who rely on these childcare subsidies.

  • Language in Support of Continued Federal Funding for Voluntary, Evidence-Based Home Visitation Programs (though no actual funding is contained within the bill).

StrongStart_20140513

The Senate HELP Committee has organized a “twitter storm” for 2pm while its meeting is being held. This list of sample tweets has been provided to us by our partners at the National Women’s Law Center. We hope those of you with accounts on Facebook and Twitter will join us in showing your support! You can also watch live here –help.senate.gov.

Will the end of low wages bring higher prices?

Krissy Clark, from Marketplace, and Andrew Bouvé, from Slate, have a look at what would happen if Wal Mart raised wages to its workers enough to make it a living wage:


Their conclusion: not a whole lot. Wal Mart would have to raise the hourly wage for its salaried employees to $13.63/hour, for a total cost of $4.8 billion annually. This might sound like a lot of money, and it is, but Wal Mart had a $17 billion profit last year alone, and that´s after spending $15 billion on stock buybacks to make its shareholders happy.

Even without reducing its profits one dime, the reports find that the retail chain would only have to raise prices on its stores by 1.4% to cover the increase in wages.

The video is part of a wonderful series from Marketplace, “The Secret Life of a Food Stamp“, giving an in depth look on how companies like Wal Mart rely on public benefits both to make money and to pay workers low wages. Make sure to have a look.

New Scorecard Shows Troubling Obstacles for Connecticut’s Children of Color

A new report, released this morning by the Annie E. Casey Foundation, finds that while overall Connecticut’s children are doing well compared to national standards, the state’s black and Hispanic children remain far behind in important development measures. CAHS is the Casey Foundation’s KIDS COUNT grantee for Connecticut.

race4results-aecfurlThe KIDS COUNT® policy report, Race for Results: Building a Path to Opportunity for All Children, ranked Connecticut ninth, using a first-of-its-kind index measuring child progress.

The report, which can be viewed here, contains both national and state-level data, and the new Race for Results index has been designed to see how children are progressing on key milestones across racial and ethnic groups. The indicators for the index were chosen based on the goal that all children should grow up in economically successful families, live in supportive communities and meet developmental, health and educational milestones. Examples of the indicators, reported by race, include the percent of babies born at normal birth-weight, the percent of young children enrolled in an early learning program, and the percent of high school students graduating on time. Each state is ranked, from 1 to 50, based on a combined “Race for Results” index score.

Overall, Connecticut ranks 9th in the nation. This high-rank masks the persistent and large disparities between races here in the state. Connecticut’s white children ranked third compared to their peers across the 50 states, just behind New Jersey and Massachusetts. Black children ranked 16 out of 46 states in the index, and Connecticut’s Hispanic children ranked 24 out of 47 states (in some states the population of black and Hispanic children was too small to provide enough data for comparison).

So while the main driver behind our high ranking is from white children doing very well, black and Hispanic children contribute by doing better than one-half to two-thirds of the rest of the country. The good news, however, is tempered when we look internally and compare the scores between white and minority children, to reveal a stark inequality in Connecticut. The differences in scores places Connecticut 39th (out of 46) when comparing white children to black children , and nearly last (46 out of 47) in the difference between white and Hispanic children.

We believe that the findings of this report highlights a troubling reality in the state — that children of color are not receiving the same opportunities as their white peers. We also believe that the findings are a call to action, and that the index underscores the need to invest in high quality early childhood education, workforce development programs, and wrap-around supports for low-income and vulnerable parents.

We have prepared a short document that uses the report’s indicators to compare Connecticut’s children with children nationwide – the chart can be viewed here.

Statement from our Executive Director, Jim Horan, on House and Senate Passage of a Raise to the Minimum Wage (Senate Bill 32)

Hartford, CT – Today, both chambers of the Connecticut General Assembly passed SB 32, a bill which increases the state’s minimum wage to $10.10 by 2017 and provides a meaningful raise to our lowest income families. With these votes, SB 32 is now being transmitted to the Governor, and once signed, the State of Connecticut will have the highest enacted minimum wage in the country. We applaud our state lawmakers for their leadership on this issue, and for providing a strong example to the rest of the country and Congress.

This increase in the minimum wage will directly help 140,000 workers, many who are women with children, move out of poverty. Under Connecticut’s current minimum wage of $8.70, a minimum wage worker working full time, 52 weeks a year, earns only $18,096 a year. The federal poverty level for a family of three (for example a mother, and two children) is $19,790. With the increased minimum wage of $10.10, this same mother will now earn $21,008 a year. This higher wage means greater financial stability for families, reduced need for government safety net programs, and higher earnings for students who are working to pay for college.

We thank Governor Malloy for his leadership on raising the minimum wage to $10.10 and the members of both the House and Senate for passing Senate Bill 32. Connecticut is a leading state in addressing poverty and promoting economic success through progressive policy change, including the state EITC and paid sick days, and now this increase in the minimum wage.

END

The Connecticut Association for Human Services (CAHS) is a nonprofit policy and program organization that promotes family economic security strategies to empower low-income working families to achieve financial independence. Our mission is to end poverty and engage, equip, and empower all families in Connecticut to build a secure future.