NDESPA Letter to Congressional Delegation on Payday Lending CRAs

Senator John Hoeven

338 Russell Senate Office Building

Washington, DC 20510

Senator Heidi Heitkamp

SH-516 Senate Office Building

Washington, DC 20510

Representative Kevin Cramer

1717 Longworth House Office Building

Washington, DC 20515

April 17, 2018

Dear Senator Heitkamp, Senator Hoeven, and Representative Cramer:

The undersigned organizations urge your office to oppose House Joint Resolution 122 sponsored by Representative[s] Ross, Hastings, Graves, Cuellar, Stivers, and Peterson and Senate Joint Resolution 56 sponsored by Senator Graham.  This measure would repeal the Consumer Financial Protection Bureau’s (Consumer Bureau) payday rule, which curbs the ability of payday and car-title lenders to trap consumers in an endless cycle of 380% interest debt in North Dakota. The repeal of the Consumer Bureau’s payday rule would also prohibit the Consumer Bureau from issuing another similar rule in the future to rein in payday loan abuses. It is imperative that Congress oppose any effort to repeal or block the rule’s protections against the payday lending debt trap, which often result in financial ruin.

At its core, the rule is based on the common-sense principle that lenders have a responsibility to determine whether a borrower has the ability to repay their loan without getting stuck in a cycle of unaffordable debt. This principle is particularly important for these high‐cost loans where lenders require the power to seize a borrower’s bank account or car. An ability-to-repay requirement is a sensible and sound approach and a principle that, according to a recent poll of likely voters, more than 70% of Republicans, Independents, and Democrats support.

This rule is the culmination of over five years of stakeholder input and extensive research showing clear evidence of the harm caused by making these loans without regard to ability‐to‐repay. A large body of research has demonstrated that payday and car title loans are structured to create a long-term debt trap that drains consumers’ bank accounts and causes significant financial harm, including delinquency and default, overdraft and non-sufficient funds fees, increased difficulty paying mortgages, rent, and other bills, loss of checking accounts, and bankruptcy. The lack of underwriting for ability-to-repay, high fees, and access to a borrower’s checking account or car title enables lenders to repeatedly flip borrowers from one unaffordable loan to another. A large portion of borrowers eventually default, but often not before paying hundreds or even thousands of dollars in fees.

This is why the payday rule is necessary—to help ensure that lenders cannot trap borrowers—who are typically already significantly financially distressed—in a debt trap that leaves them only worse off. Repealing this rule would leave veterans, seniors, and communities of color at particular risk, because they are often targeted by payday lenders who trap them in unaffordable high-cost loans. 

While 15 states plus the District of Columbia cap state interest rates at 36% or less, which is the most effective protection against the payday lending debt trap, the Consumer Bureau’s rule provides critical protection in the 35 states that still permit these unaffordable debt trap loans.

H.J. Res. 122 and S.J. Res 56, by repealing the Consumer Bureau’s commonsense rule, would give payday lenders a free pass to continue exploiting financially vulnerable Americans. We urge you to stand against predatory lenders by voting against this measure.

Community Action Partnership of North Dakota

Community Action Partnership - Minot Region

Dakota Prairie Community Action Agency

High Plains Fair Housing Center

National Association of Social Workers, North Dakota Chapter

Native American Development Center

ND AFL-CIO

North Dakota Economic Security and Prosperity Alliance

North Dakota Women's Network

Office of Senator Tim Mathern

Sacred Pipe Resource Center

Submitted on Behalf of The North Dakota Economic Security and Prosperity Alliance

Scott Fry

Coalition Facilitator/Senior Program Director

1003 E. Interstate Ave

Suite 7

Bismarck, ND 58503

From Coalition on Human Needs

This week on the blog... Children and the 2018 election April 12 The 2018 election offers a particular opportunity to elevate children's issues that are crucial to society's prosperity and well-being. Five advocacy and policy organizations have collaborated to sponsor Securing America's Future: Children and the 2018 Election to serve as a guide and primer on children's issues that require Congressional action. The nonpartisan educational document describes six core child issues and Congress's role in each. READ MORE » The high cost of child care: Where does the money go? April 11 The reality that child care costs a lot but teachers are underpaid leaves many parents with two big questions: Why does child care cost so much? And, where does the money go? The Center for American Progress decided to address these questions head-on. They developed a website that estimates the monthly cost of high-quality center-based child care in each state and shows exactly where the monthly tuition goes.  READ MORE » Why speaking up on the president's proposed budget matters – an afterschool perspective April 10 Echoing the FY18 budget proposal released last year, the president's FY19 budget again proposes the elimination of the 21st Century Community Learning Centers initiative, which funds local afterschool and summer learning programs in all 50 states. Elimination of these funds for local programs would devastate the 1.7 million children and families who stand to lose access to programs as a result. READ MORE » Trump's immigration policies threaten children and our collective future April 9 Since its beginning, the Trump administration has attacked immigrant communities with a range of misguided proposals and executive orders that undermine civil rights and terrify families. Two new reports issued by the Center for Law and Social Policy (CLASP) examine how the Trump administration's anti-immigrant rhetoric and policy priorities are wreaking havoc in the lives of young children. READ MORE »

From ND AFL-CIO: Weekly Update

Heidi Heitkamp bets big on small-state politics to save her seat FARGO, N.D. — On an unseasonably cold spring day this week, Democratic Sen. Heidi Heitkamp entered a meeting with a group of foster care workers who greeted her with the kind of warm familiarity that she is hoping might help save her job. In this small state's largest city, Heitkamp found plenty of friendly faces — she hugged a former intern, reminisced with a woman whose children were delivered by the senator's physician-husband and chatted with a fan of the local radio show hosted by Heitkamp's brother. How Does Your State Stack Up on Pay Equity for Women? The notion of bringing home 80 cents for every dollar pocketed by a man on a national basis is unsettling enough. But it's even more startling when those lost wages are added up. Overall, it amounts to $10,000 in lost wages a year, says Debra Ness, president of the National Partnership for Women and Families. That chunk of cash could pay for 14 more months of child care, 74 more weeks of groceries and an additional 10 months of rent for the average woman. Wage growth well short of what was promised from tax reform The latest Employment Situation report from the Bureau of Labor Statistics shows weekly employee earnings have grown $75 since tax reform passed, well short of the $4,000 to $9,000 annual increases projected by President Trump and House Speaker Paul Ryan (R-Wis.).   During the three months following passage of the tax bill, the average American saw a $6.21 increase in average weekly earnings. Assuming 12 weeks of work during the three months following passage of the corporate tax cuts, this equates to a $75 increase. Fargo-Moorhead Workers Memorial Day Join the Northern Plains United Labor Council for their annual WORKERS MEMORIAL DAY, Thursday, April 26th at the Fargo-Moorhead Labor Temple (3002 1st Ave North, Fargo, N) 4:30 PM Basic First Aid and CPR Training Provided by local union firefighters. 6:00 PM Workers Memorial Program We remember those who died on the job during the last year in North Dakota and Minnesota. 6:30 PM Dinner Taco bar and refreshments served. Contact Terry Jones at 701-388-0602 for more information Mobile Messaging for North Dakota Workers! We are happy to introduce a new tool in the fight for workers' rights in North Dakota! Text NDLABOR to 235246 to join our new mobile messaging service and stay up-to-date on upcoming actions and events for working people! Support the Restoring Overtime Pay Act The Trump administration has abandoned the Obama administration’s overtime update and the millions of working people who would have seen a pay increase under this rule. Sens. Sherrod Brown (D-Ohio) and Patty Murray (D-Wash.) recently introduced the Restoring Overtime Pay Act, which would put overtime protections back in place for millions of working people. Fill out the form to add your name in support of the Restoring Overtime Pay Act. From NDES

From Pierce County Tribune: Omdahl - $15 minimum wage will stir election

OMDAHL: $15 minimum wage will stir election

April 6, 2018

Lloyd Omdahl , Pierce County Tribune

An initiated measure will be on the ballot this year proposing to move the state minimum wage in three steps from $7.25 to $15 by 2021. Needless to say, the proposal will stir election politics.

Controversial? Michael Saltsman of the Employment Policies Institute is already writing against the proposal with op-ed pieces for North Dakota newspapers.

The Employment Policies Institute has spent its 25 years of existence fighting all and any wage increases across the country with the hackneyed argument that raising the minimum wage will eliminate jobs.

In the North Dakota piece, he argued that a $15 minimum wage is unnecessary because we have jobs that already exceed that minimum. If that were true across the state, no one would be hurt by a wage hike so why is he fighting it?

A flat $15 minimum wage in North Dakota is going to be seen by many as a bridge too far. It may be appropriate in the urban areas but it will run into trouble in the smaller communities where working folks are happy with $7.25, accepting the fact that small town businesses can't handle $15.

What this means is that one statewide minimum wage doesn't fit all. (It never does.)

Jonathan Cowan and Jim Kessler of Third Way, a centrist policy institute, argue against a uniform national minimum wage because the range of living costs varies widely across the country. The same is true about minimum wages at the state level.

Saltsman's argument about jobs sounds more logical than it is. In fact, some studies suggest that the states that have raised their minimum wages have actually generated more employment.

Jared Bernstein, senior fellow at the Center on Budget and Policy Priorities, reports that real pay grew more than twice as fast in states that raised minimum wages and that gains for women were larger because they tend to be underpaid.

More jobs with routine functions are now being lost by conversion to technology, even in the fast food restaurants. This is being done in businesses now paying only the federal minimum wage of $7.25. And it will continue regardless of the minimum wage.

We are telling employees that they can have jobs that pay only poverty wages and if we raise them out of poverty the jobs will disappear. So the only choice is poverty. Doesn't sound like the land of opportunity.

At the federal minimum wage of $7.25, the monthly income is $58 per day, $280 per week and $1,305 a month. This is not a living wage it is supplementary income.

While the federal minimum wage has been a puny $7.25 since 2010, states have been taking the initiative, either by legislation or by a vote of the people. The ballot box has forced higher minimum wages in Arizona, Arkansas, Colorado, Maine and Washington. Going to the people will become more common as long as we stonewall negotiation of wage levels.

The business community has forced this issue into Washington by their destruction of labor unions. Union negotiations would lead to minimum wages suitable for individual classes of businesses rather than having government impose one standard on all businesses.

Management and employees both would be better off if they could sit down and consider what the different North Dakota businesses can afford. Without unions to negotiate, the government will set the wages.

In his op-ed piece, Saltsman proposed the North Dakota citizens not sign the petitions to put the $15 wage proposal on the ballot. As the mouthpiece for some distance organization, it is really none of his business. So North Dakotans should sign the petitions and force a robust public discussion of the issue.

Omdahl is a former lieutenant governor and former political science professor at UND.

From Grand Forks Herald: Commentary: North Dakota workers deserve a fair wage

Commentary: North Dakota workers deserve a fair wage

By Scott Nodland on Apr 5, 2018 at 11:15 a.m.

Michael Saltsman's recent Viewpoint, in the tradition of tobacco executives who said smoking was good for you brings you intentionally bad research and mistaken conclusions, is wrong about the minimum wage and its effects. He has always been wrong and he's paid to be wrong.

In 2013, he promised the collapse of the Minnesota restaurant business via a "devastating" minimum wage increase from $7.25 to $9.38. Minneapolis has moved far beyond Saltsman and recently passed a $15-per-hour minimum wage.

According to Saltman's logic as he's asserted it, all we really need to do is flip our strategy. If we decrease workforce wages, North Dakota would prosper. Accordingly, his theory is hereby dubbed "The Economic Hypothesis of Prosperity through Poverty." It all makes perfect sense: when North Dakota's workforce earns less, North Dakota is better off. Or something. Maybe.

Characterizing "radical" a wage of $31,200 in North Dakota is hyperbole, since $31,000 does not cover basic costs for a single-parent householder's basics, according to M.I.T.'s recently published cost-of-living index for North Dakota.

Comparably, $47,130 (North Dakota's current average wage) must be "stratospherically radical."

We counter-propose radical as living on $15,080 ($7.25/hour) as measured by, well, North Dakota decency. It's subsistence that some actually do survive on working full-time today.

Saltsman cites a critically-flawed Seattle study for argumentative proofs.

The study failed peer review:

1) the study excluded 48 percent of Seattle workers who earned less than $13/hr in mid-2016, the workers most likely to earn close to min wage.

2) The study found that Seattle's minimum wage caused the greatest effects in the least plausible place — high-wage jobs.

3) The study results hinged on a geographic sample size of the loneliest number — one — subjected to an untested, unconventional approach.

4) The study was an outlier; a vast majority of studies demonstrate market elasticity for minimum wage increases.

There's more. While mentioning that specific study might have been politically prudent for his client base, professionally — it should be a little embarrassing.

Saltsman's think tank is motivated by being paid by client groups whose desire is not to see wealth circulate and grow North Dakota's economy but to extract wealth to grow personal and corporate fortunes. Saltsman's think tank business may or may not be helped, but Grand Fork's stagnant economy would be helped by an increase. More money in the pockets of more people is powerful stimulus.

Fear is their weapon, optimism is ours; do not let fear prevail. Workers, not including think tanks, receive significantly less today of what they produce, and North Dakotans know a worker is due his or her wages.

Scott Nodland is chairman of the Fair Wage Act of North Dakota Ballot Initiative.