Prosperity Indiana's policy team joined faith-based, veterans and consumer advocates as well as a former payday lending client for a press call on the release of the new CFPB rule. Representatives spoke in favor of the rule, but noted that the CFPB did not have the authority to change the cost of payday loans. They called on Indiana lawmakers to take further action to lower the interest rate.
10/6/2017: On October 5, 2017 the Consumer Financial Protection Bureau (CFPB) announced a finalized new rule aimed at reducing predatory lending through regulations that protect consumers from payday debt traps. The CFPB came to its decision after five years of research and outreach to organizations across the country. The rule was first proposed in June of 2016 and Prosperity Indiana subsequently submitted comments to the CFPB after receiving feedback from state and national partners.
The new rule seeks to put in place protections that cover payday, auto title, and balloon pay-day loans. These loans are typically for two to four weeks, and endanger the financial well-being of consumers because of their high interest rates and tendency to be lent to individuals who are not able to pay back the loan in the allotted time. Prosperity Indiana commented in 2016 that:
“Payday lenders already charge Hoosiers rates as high as 382% on a $300, two-week loan. This is especially problematic for low-income households, amongst whom these loans have become pervasive in their use in Indiana. Nationally, the payday lending usage rate is 5.5%, compared to Indiana, which has a significantly higher usage rate of 9%.”
The rule issued by the CFPB includes the following provisions:
Full - payment test: Requirement that lenders must determine if the consumer can afford the loan. Prosperity Indiana commented in 2016 that the full-payment test is the most crucial component of the rule, especially the cooling-off period. The new rule will cap the amount of subsequent loans at 3. Prosperity Indiana previously noted that over 80% of payday loans are followed by repeat loans, and 15% of payday loans are a part of a sequence of loans that is at least ten loans long.
Principal payoff option for short term loans: Allows consumers to take out a loan of up to $500 without the full payment test if the loan allows the borrower to get out of debt in a more efficient way. Debt traps are prevented under this provision by not allowing loans to be distributed to borrowers with outstanding recent short-term loans or balloon payment-loans. The cooling off period still applies.
Debit attempt cutoff: Prosperity Indiana commented in 2016 that withdrawal limits and notification requirements are essential to protect consumers. A debit cutoff will be implemented for loans with an annual percentage rate of over 36 percent. Lenders must give consumers notice before making a debit attempt at an irregular interval or amount after two unsuccessful attempts. This provision will protect consumers from unanticipated payments, or fees incurred from returned payments for insufficient funds.
The new CFPB rule will take effect 21 months after it is published in the Federal Register. Although the current rule does not address all of Prosperity Indiana’s concerns, it is a step in the right direction which will mitigate the burden that predatory loans have on Hoosiers, including the reduction of the $70.6 million in interest payments on payday lending spent in 2011 alone.
If you are interested in viewing Prosperity Indiana’s comments on the then proposed CFPB rule in 2016 please visit: http://iaced.sitepotion.com/2016/10/iaced-submits-comments-on-cfpb-proposed-payday-lending-rule, and https://www.consumerfinance.gov/about-us/newsroom/cfpb-finalizes-rule-stop-payday-debt-traps/ to view the CFPB’s ruling.
Prosperity Indiana is seeking to fill two positions: an AmeriCorps Program Coordinator and a part-time Administrative Assistant.
The AmeriCorps Program Coordinator is responsible for managing all of the program components necessary for carrying out the objectives, policies and procedures of the Indiana Financial Capability Corps program and working with the Training Director to facilitate professional development opportunities for the AmeriCorps members. The position requires statewide travel and reports to the Associate Executive Director.
The position of Administrative Assistant also reports to the Associate Executive Director and supports the Prosperity Indiana staff with tasks that build the capacity of Prosperity Indiana, its members, and partners. The position will provide administrative support for the organization and Prosperity Indiana’s training program. The successful candidate will be customer service-oriented, write well and communicate effectively, and understand bookkeeping. Attention to detail and accuracy are a must in order to successfully juggle and accomplish multiple tasks.
For more details, click to see the full job descriptions:
AMERICORPS PROGRAM COORDINATOR
Interested in joining our team?
E-mail and/or mail resume, cover letter, and references to:
Jessica Love, Associate Executive Director, email@example.comProsperity Indiana
202 East Market Street
Indianapolis, IN 46204
On October 5 and 6, Indianapolis will host the Midwest Asset Building Conference. The Conference will convene asset building coalitions from five states in the Midwest—Indiana, Illinois, Michigan, Minnesota, and Ohio—to learn about the challenges present in the asset building field and work toward identifying viable solutions. Fundamental to each challenge, from the small business credit gap to the pervasiveness of predatory financial practices to the racial wealth divide, is the objective to create and retain wealth.
Wealth creation refers to the process of accumulating assets while wealth retention refers to the ability to maintain ownership of existing assets. Wealth creation and retention are both an individual phenomenon, e.g., an investor purchasing stock, as well as a community phenomenon, e.g., a major employer divesting itself from a community.
A community-level example that has recently gained prominence in political discourse is the loss of manufacturing jobs in the rust-belt. Communities that were once vibrant manufacturing towns have felt the impact of employer divestment. The opioid crisis, which disproportionately affects rust-belt manufacturing communities, is one example of how loss of wealth destabilizes the economic well-being of families, as well as communities’ very social fabric.
The Conference will discuss these structural problems—three of which are the small business credit gap, predatory financial products and practices, and the racial wealth divide.
Small businesses, which feel market swings more acutely than big businesses, are denied credit at a much higher rate. The credit gap is especially pronounced for minority-, women-, and rural-owned businesses—consequently, decreasing their opportunity to build wealth.
Predatory financial products and practices—from student loans to debt collection to payday loans—continue to strip wealth from families, and particularly from communities of color. Sixty percent of payday loan borrowers in Indiana take out a new loan the day they pay off the old loan, which pushes borrowers into a debt trap that impacts the entire state’s economy. In Indiana, payday loans drain an estimated $70 million from the economy each year.
In America, the typical white family holds 16 times more wealth than the typical black family. The racial wealth divide is a consequence of wealth-building policies that were designed to disadvantage people of color. As America moves toward becoming a majority-minority nation, the racial wealth divide worsens the political and economic outcomes for the entire country.
So what’s a community development practitioner to do?
Attend the Midwest Asset Building Conference to find out! We’ll be discussing solutions—both universal and unique to the diverse communities in which we work, including:
· The benefits of the cooperative business model
· Consumer protections and innovations in payday loan alternatives
· Solutions to rectify the inequities implicit in past wealth-building policies
Is your community interested in local food as a tool for prosperity and resilience? Prosperity Indiana is proud to partner with Purdue Extension to sponsor the upcoming Indiana Food Summit on September 25-26 in Indianapolis. This event provides learning, networking and sharing opportunities for the people, communities and organizations working to create an Indiana food system that is more resilient, economically vibrant and diverse.
Prosperity Indiana staff will be participating on two different panel discussions. Kathleen Lara, Policy Director, will be a panelist on Engaging Your Elected Officials: How to tell your story and make it meaningful for our representatives, and Allyson Mitchell, Director of Sustainability, will be participating on the panel entitled Sustainability, Quality of Place, Economic Development and….Local Food?
We hope Prosperity Indiana members will attend this event to learn more about how local food and community economic development are complementary. Register for the event by September 19 at this link.
My name is Matt Watkins, and I recently began my policy internship with Prosperity Indiana. I am currently a Junior at Indiana University-Purdue University Indianapolis (IUPUI) studying Civic Leadership and Policy Studies within the School of Public and Environmental Affairs (SPEA). I pursued an internship with Prosperity Indiana because I share the organizations fundamental belief in the importance of community and I want to contribute to the advancement of policies that promote economic development and upward social mobility. After graduation, I plan to pursue further education and a subsequent career that focuses on public service work that promotes strong communities, as communities are the foundation of our society at large. I am thrilled to work with you and on your behalf alongside Prosperity Indiana staff.
A week into my internship, I had the opportunity to attend the annual meeting for the Indiana Coalition for Human Services (ICHS). Prosperity Indiana is one of 28 ICHS member organizations utilizing the power of their collective impact to empower Hoosiers striving to reach their full potential. I wanted to share a few key updates from that meeting that are particularly important to Prosperity Indiana’s members.
Two speakers were featured at the event. Tamara Fucile, the Director for Government Affairs for the Center on Budget and Policy Priorities, focused on federal budget updates and MaryBeth Musumeci, the Associate Director at the Program on Medicaid, and the Uninsured for the Kaiser Family Foundation, gave a federal Medicaid update.
Center on Budget and Policy Priorities: Key Points of Discussion
Kaiser Family Foundation: Key Points of Discussion
In addition to the presentations, ICHS leaders outlined coalition successes from the past year and previewed the work that lies ahead for 2018. Over the course of the past year, ICHS advanced legislation addressing suicide prevention and increased the number of social workers in Indiana by reforming social work licensing requirements. Additionally, ICHS members, including Prosperity Indiana, were able to prevent a bill that expanded payday lending in Indiana. Legislative priorities for the upcoming legislative session include firearms regulation, defense for parents with children within the Department of Child Services system, nonprofit property tax exemption, and food deserts.
The ICHS annual meeting was a great way for me to become more familiar with the work that Prosperity Indiana and our partners carry out. I was able to see how ICHS leveraged the power of their members to advance policy goals and legislation to improve the lives of Hoosiers throughout the state. I am looking forward to assisting Prosperity Indiana members and our policy team to do just that over the next three months. Please feel free to reach out to me at firstname.lastname@example.org.
Smaller post-industrial cities are taking strategic steps to regenerate by building on downtowns, capitalizing on a unique sense of place, and focusing on workforce development, according to a new report published by the Lincoln Institute of Land Policy in partnership with the Greater Ohio Policy Center.
The report, Revitalizing America’s Smaller Legacy Cities: Strategies for Postindustrial Success from Gary to Lowell, emphasizes how America’s smaller legacy cities – cities located primarily in the Midwest and Northeast with 30,000 to 200,000 residents and traditional economies built around manufacturing – have long been central to building American middle class prosperity.
The Indiana cities of Gary, South Bend, and Muncie are highlighted for their strategies and the opportunities they are pursuing. This report lays out eight strategies that are helping to revitalize small and midsize legacy cities around the country.
These eight strategies include initiatives that organize neighbors and leadership, decide collectively on strategy, and build the capacity to execute. Regular blog readers familiar with the comprehensive community development strategies Prosperity Indiana advocates will recognize key themes in the reports strategies:
Because the opioid crisis has become such an epidemic that it must be tackled from multiple angles by a variety of stakeholders, InsightFormation is conducting a free webinar and tour of its online Opioid Coalition Resource Hub (OCRH), to which it is now providing free access. The OCRH was built using a cloud-based comprehensive strategy map to outline goals, strategies, action steps, and recommended measures for tackling what has now been deemed a national emergency. For more information on the OCRH system and the upcoming webinar being held at 11 am EDT, Tuesday, August 29, click here.
As part of an expanded focus on sustainability initiatives, Prosperity Indiana is a sponsor of the 2nd Annual Climate Leadership Summit, hosted by Earth Charter Indiana on September 13 at the Garfield Park Arts Center in Indianapolis. The full-day event brings together mayors, town managers, and local leadership from across the state to focus on cooperative and independent work towards making Hoosier cities leaders on climate action.
Allyson Mitchell, Director of Sustainability for Prosperity Indiana, will be moderating a panel discussion, titled “Local Energy Solutions for Climate Resilience,” which will highlight energy efficiency and renewable energy solutions for local governments and their residents. We encourage Prosperity Indiana members to invite their local government officials to attend and bring a delegation of leaders to engage in a day of learning and collaboration about climate solutions.
Prosperity Indiana is also partnering with Earth Charter Indiana in their Resilient Indiana Communities campaign to inspire local action towards climate resiliency. The campaign is a collaborative project with and between Indiana communities ready to take on the challenge of climate change and see it as an opportunity for green-sector jobs, infrastructure innovation, local food and energy production, community building, and climate readiness. Allyson is a member of the Resilient Indiana Communities Resource Panel, a collection of Indiana professionals working together to help local communities develop their own unique response to the challenges and opportunities of climate change. If you have questions about the Resource Panel or want to get your community involved in the campaign, email Allyson at email@example.com.
“If their income stops, 44 percent of all households -- and 25 percent of middle-class households -- have less than three months of savings to draw upon without falling into poverty.”
This statistic and other eye-opening facts about the current state of family assets can be found in Strategic Philanthropy - Integrating Investments in Asset Building: A Framework for Impact.
With figures like these, even those who are gainfully employed could find themselves needing nonprofit services or resources in the aftermath of a serious life event, such as a job loss or health crisis. And this number doesn’t even include those already living below the poverty line.
At Prosperity Indiana, through our work managing the Indiana Assets & Opportunity Network, we have found that lack of access to financial planning resources is a major obstacle to achieving financial stability. As such, addressing clients’ financial capabilities – knowledge + skills + resources – and helping them build assets are critical aspects of preventing long-term or future dependence on the services nonprofits provide.
That means: Even organizations that don’t normally discuss asset-building as part of their interactions with clients are seeking out ways to do so – to better address the root causes of their clients’ needs.
Based on this need and with funding received from the Central Indiana Community Foundation, Prosperity Indiana launched a one-year pilot program in Indianapolis. It is a learning cluster of organizations focused on integrating financial capability into their client services. Participants include Coburn Place, Indiana Connected by 25, Dress for Success Indianapolis and Families First.
As part of this pilot program, we are using the model outlined in Prosperity Now’s (formerly CFED) Building Financial Capability: A Planning Guide for Integrating Services. This guide was created to help organizations assess their current programs and available community resources to build clients’ financial capability.
Indiana Financial Capability Corps (IFCC)
The success of the Financial Capability Learning Cluster initiative has sparked the creation of a new and expanded Network program to place AmeriCorps members with organizations interested in integrating financial capability services into their work.
To expand the program in Indianapolis and statewide, Prosperity Indiana is now launching the Indiana Financial Capability Corps (IFCC). Through an AmeriCorps program funded by Serve Indiana, Prosperity Indiana will place 15 full-time IFCC AmeriCorps members with nonprofit organizations for a 10-month term.
Applications for organizations interested in hosting an IFCC member are currently available. The term of service begins Oct. 2 and runs through August of 2018. Interested organizations should download the host-site application here; and to learn more about the expectations for IFCC members, click here.
Whether they already provided some financial education or none prior to joining the cluster, participants have reported that having assistance from Prosperity Indiana to walk through The Guide’s process has changed how they do their work. It has also created new optimism for the financial futures of those they serve. Lora Henderson, Education Coordinator for Families First, said the program has been valuable to broaden her knowledge of financial products and resources available to her clients and enabling her to network with other organizations who provide financial capability services.
“Financial literacy education will help our dads learn that their attitudes and behaviors around money and finances are learned behaviors wrapped in emotional spending,” Henderson said. “Having this opportunity with Prosperity Indiana will allow our dads to learn how to effectively manage their financial obligations, which will strengthen. This supports our mission to create healthier communities by strengthening families and individuals through life challenges and changes.”
Candice Brisson, Program Manager for Dress for Success Indianapolis’ Professional Women’s Group, said the integration process is increasing her organization’s internal capacity to help clients address financial stability, which ultimately impacts their career success.
“As a result of analyzing financial capability services and providers with the Indiana Assets & Opportunity Network learning cluster, Dress for Success Indianapolis is able to expand the in-house resources it will be able to offer clients and to expand its network of partner agencies,” Brisson said.
“A need for increased financial capability and education are consistently identified as the top two factors holding back our clients from achieving upward economic mobility. Financial stability is also a huge factor in employment stability. Being able to provide better resources to women taking our financial literacy class and those seeking individual financial coaching, counseling, and products will increase their chances of achieving the self-sufficiency they seek.”
Jessica Love is the associate executive director for Prosperity Indiana and works with the executive director to provide team leadership for staff. She is responsible for developing and managing organizational systems for Prosperity Indiana to ensure effective management and control. She also provides one-on-one technical assistance to Prosperity Indiana members, informed by her media and grants management background. With 15 years experience in the nonprofit sector, Love’s consulting work focuses primarily on resource development and creating processes and tools for effective management and program compliance.
This summer saw key budget bills moving through the appropriations process in the House and the Senate. The House Appropriations Committee has moved forward bills pertaining to the Departments of Housing and Urban Development, Agriculture, Treasury and the Small Business Administration, and Labor and Health and Human Services. Similarly, the Senate has started moving bills, including their proposal for the Department of Housing and Urban Development.
We have previously covered the Administration’s budget proposals, initial House and Senate hearings, and what they mean for critical community development programs on our blog. Those posts can be found by clicking the links below:
· President's Budget Proposal Would Eliminate Funding for Critical Community Programs
· Here We Go Again ... President's Budget Begins Fiscal Year 2018 Federal Funding Process
· Sec. Carson Defends Administration’s Deep Cuts to Housing Programs in Testimony
Now we are focused on the steps ahead. Prosperity Indiana’s policy team has examined agency budget justifications and these congressional proposals to highlight programs that are critical to our members to help inform our advocacy response. The comprehensive budget chart will be updated as figures are released.
Following the August recess, Congress will reconvene and have to move forward with a continuing resolution, or a stop-gap funding measure, to prevent a federal budget shutdown before the Sept. 30 deadline. That will merely extend current funding levels, so they will also continue to work on passing their broad FY18 proposals or budget resolution. Given that there is currently no agreement on spending caps, getting both chambers to come to an agreement on these proposals appears to be a tall order.
If/when they can pass that resolution, Congress can move forward with budget reconciliation. That simply means they can negotiate bills and pass them without a filibuster in the Senate. This is key as many Republicans have expressed that they could use this process to enact key tax reform measures without confronting filibuster rules. Funding bills circulated so far include dramatic cuts or the elimination of essential federal programs such as SNAP, TANF, child care, LIHEAP, CDBG/HOME, and AFI to name just a few. While the Senate and the House restored some of the funding targeted in President Trump’s proposal, there are still cuts that would be devastating to Hoosiers struggling to make ends meet and organizations throughout the state working hard to build strong communities.
Please stay tuned to our blog/alerts for key updates and action alerts as we will be activating our members ahead of Congressional budget action. We need your voice!