It’s Time to Reform Debt Buying and Debt Collection

June 6, 2016 Paul Constant

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Last night on Last Week Tonight, John Oliver made television history for the largest giveaway by a TV show, easily surpassing Oprah’s “ You get a car! You get a car! Everybody gets a car! ” moment. The thing that Oliver was giving away was not as sexy as new cars, but it was much more life-changing: he forgave $14 million in medical debt. At twenty minutes, this video is long by internet standards (and it’s riddled with swears so if you’re at work you should put your headphones in) but it’s very worth it. If you don’t have the capacity to watch videos right now, here’s a short recap: American households carry over twelve trillion dollars in debt. Nearly 450 billion of that debt is over ninety days overdue. That 450 billion is likely to be sold for a fraction of the cost by banks and other financial institutions to collection companies, which then often use smarmy methods to try to collect on the debt. Oliver’s show spent $50 to incorporate as a collection company, and within a matter of days, his corporation was offered just shy of $15,000,000 of medical debt information for nine thousand people, which they then bought for less than $60,000. The information consisted of a bare-bones spreadsheet with names, Social Security numbers, and addresses. Ordinarily, that would be the point when the collection company would start shaking down the debtors with continuous phone calls, legal threats, and other, potentially illegal methods (including calling friends, coworkers, and family of the debtors in an effort to publicly shame them) to get some of that money back. Instead, Oliver forgave the debt, thereby breaking Oprah’s record. Obviously, debt collection reform is necessary. Look into the history of debt buying and you’ll see some small efforts to rein in debt buyers, like this, from last year: Under consent orders, Encore Capital Group and Portfolio Recovery Associates will
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Daily Clips: June 6th, 2016

June 6, 2016 Nick Cassella

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Daily Clips

Love him or hate him, Mitch McConnell is a good politician: In his new book (which all sane people should not purchase), “McConnell comes through as a proud politician whose loyalites with the Republican Party more than a conservative ideology…” As you’d expect, “policy takes a backseat to campaign politics and legislative maneuvering throughout the book.” In short, he doesn’t have any core principles and only fights for partisan pleasure. Yellen faces fine balance on Fed rate hike after disappointing May job numbers: US inflation still stubbornly remains below 2 percent. California’s economy continues to prosper: “The high taxes and ubiquitous regulation critics cite when assailing Golden State government are proving no impediment to business and investment.” A Hillary Clinton presidency would have large impacts on women: Yglesias puts forward a highly researched piece on governance that is definitely worth your time. Here’s a strong passage: Women lead different lives than men, and would consequently govern differently if more of them were in office. And the evidence strongly suggests that electing women to high-profile jobs inspires more women to run for and win lower-profile jobs. The presidency isby far the highest-profile job in American politics, meaning a Clinton presidency would likely have a meaningful downstream impact on women’s representation for years to come — with far-reaching ramifications for public policy at both the state and national level. Tweet of the day: That Grover Norquist would endorse a candidate who calls for banning Muslims from the US gives new meaning to the phrase “big tent" — David Frum (@davidfrum) June 5, 2016

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Daily Clips: June 3rd, 2016

June 3, 2016 Nick Cassella

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Daily Clips

The Democratic establishment prevails: So says Molly Ball at the Atlantic. Her argument is very convincing: It’s not just Hillary Clinton. In down-ballot primaries, the candidates favored by left-wing pressure groups have not prevailed, starting with the Maryland Senate race : Progressives backed the firebrand Donna Edwards, and outside groups spent millions on her behalf, but she lost by a 15-point margin to Chris Van Hollen, a member of House Democratic leadership. An establishment nominee, Kate McGinty, also fended off anti-establishment challengers in Pennsylvania. The populist left failed to field serious primary challengers to other establishment-backed Senate candidates, with the result that the Democrats’ general-election slate across the country consists entirely of party-backed career politicians. The US economy just got its worst jobs report in years: Gulp. I wonder if companies are slowing their hiring due to the upcoming election. Or is this a “ desirable consequence of an economy nearing full employment “? Paul Ryan’s endorsement of trump is a sad for America: The principled conservative turns out to have no principles. Who would’ve guessed? Tweet of the day: American democracy with its norms of non-violent debate and peaceful transitions of power is a huge accomplishment. — Timothy B. Lee (@binarybits) June 3, 2016

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Here’s What You Can do to Stop Predatory Payday Lenders

June 2, 2016 Paul Constant

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Payday Loans, Policy

In Kansas City today, the Consumer Financial Protection Bureau—the independent government agency created by Senator Elizabeth Warren in the aftermath of the 2008 financial crisis—announced their new set of rules for payday lenders and other predatory loan operations. These are commonsense rules that no sane person should oppose; they’re guidelines that prevent some of the poorest, most desperate Americans from doing grievous harm to their own finances. One rule, for instance, insists that lenders check to see if a borrower can realistically repay a loan. Imagine if you or I could walk into a bank and get a home loan without even a credit check beforehand. Predatory lenders are currently handing out money to people without ensuring first that they the capacity to pay the loan back within a reasonable amount of time. It sounds counterintuitive, but they obviously do this because their interest rates are so high that they can get people with bad credit histories on the hook for years a time, turning one bad decision into years of monetary gain for lenders. Additionally, lenders won’t be allowed to offer a second loan within 30 days of a previous loan, unless the borrower can prove that their financial situation has significantly improved. Further, lenders won’t be able to offer more than three loans within a few months of each other. It’s a straightforward “waiting period” that allows borrowers to catch their breath and get a sense of their finances before burrowing even deeper into debt. And finally, lenders won’t be able to repeatedly and without permission shake down the bank accounts of their customers, thereby saving consumers from untold millions in overdraft and penalty fees. Under the new rule, lenders will have to contact borrowers with written notice before requesting funds from their bank accounts, and they will be restricted to
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Daily Clips: June 2nd, 2016

June 2, 2016 Nick Cassella

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Daily Clips

Obama “evolves” on Social Security: Barry O saw the rising populist tide brought by Bernie and Trump and decided, “Nah, I’m not going to stand in defiance of that.” How else can you explain Obama’s claim yesterday that Social Security should not be cut, but expanded. Hear his remarks on the topic: OPEC leaves oil production levels unchanged: Yay? EJ Dionne talks GOP and religion: The Washington Post columnist claims that “the sheer force of demography means [religion] will never again enjoy the public influence it once had.” To which I say: about damn time. Tightening US labor market boosts economic growth outlook: New applications for jobless benefits fell, “further boosting the economic outlook for the second quarter.”

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If Overtime Isn’t Good for Your Corporate Culture, Maybe You Should Change the Culture

June 1, 2016 Paul Constant

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Overtime

New York Times journalist Noam Scheiber wrote a piece over the weekend about the increasing overtime threshold. Did he profile one of the many fast food managers who will make more money when the new overtime threshold takes hold? Did he chat with a low-wage worker from New Hampshire who suddenly won’t have to work 13 additional hours a week for absolutely no extra money? Well, no. Instead, he talked with “bosses at publishing houses, glossy magazines, consulting firms, advocacy groups, movie production companies and talent agencies.” For example: “You want to bump into the boss at 8 o’clock at night,” said Dan Reynolds, chief executive of Workman Publishing, the publisher of “What to Expect When You’re Expecting” and many of Sandra Boynton’s children’s books. “I’m interested in how this will affect that,” Mr. Reynolds said. “It’s more of a cultural thing than anything else.” Uh huh. Okay. And what does this “cultural thing” entail, exactly? Workman’s general manager, Jill Salayi, suggested that because the company could not afford to pay overtime to all newly eligible staff members or raise their salaries over the new threshold, it would have to cut back their hours in many cases. “Less will be asked of them,” she argued, “which means they will not receive sufficient career development or see timely advancement and/or promotions.” I don’t know about you, but I’ve heard these same kind of arguments from terrible bosses at terrible jobs when they explained why they couldn’t pay any more even though they were asking me to do more work. They told me that without hard work—by which they meant unpaid work, above and beyond the 40-hours-per-week in the job description—I would never get ahead. This is a classic example of the kind of intimidation tactic that people in power use to keep the masses in line. By
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Daily Clips: June 1st, 2016

June 1, 2016 Nick Cassella

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Daily Clips

Your morbid post of the day: American death rates rises for first time in a decade . Ridiculous headline of the day: Jimmy Carter makes one final push to end racism . Click-bait headline of the day: New polls put Trump down to Clinton by just 2 points. How nervous should Democrats be? Obama’s ex-speech writer outlines liberal incrementalism in column: Such is the path of progress in America — slow, difficult, collective, and always unfinished. It doesn’t come from sudden revolutions or charismatic strongmen. It comes from the quiet, persistent effort of citizens and leaders who are flawed and fallible human beings, but nevertheless press on, believing that for all the days filled with setbacks and disappointments, there will be some days when, to paraphrase the president’s favorite King quote, we have bent the long arc of the moral universe ever slightly toward justice. The MLK metaphor nearly ruins this paragraph. Is it just me or is it so overused?

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