Once again, Sen. Arthur Orr, R-Decatur, will join forces with left-leaning organizations to impose more regulations on payday lending in the upcoming legislative session.
While the Trump Administration over the last three years has taken giant steps toward rolling back Obama-era regulations, Orr is taking a page from Democrat senators and presidential hopefuls, Bernie Sanders and Elizabeth Warren, to promote legislation that will place greater burden on businesses, endanger Alabama’s free-market economy and drive small loan borrowers to unregulated online lending sources.
Beyond denying consumers direct access to readily available small loans at stores where they regularly do business, Orr’s legislation will also endanger some of those businesses’ very existence resulting in a loss of jobs.
Job growth, available credit and protection for individuals and business has been a hallmark of the Trump presidency, but Orr and his supporters would turn back the clock on those accomplishments.
Orr’s efforts are said to be aimed at protecting consumers from predatory lenders. Speaking of his 30 days to pay bill in 2019, he said not only would the legislation give people longer to pay off their debt it would, “lowers the APR in excess to 450 percent, down to a little over 200 percent.”
But the type of loans Orr is talking about don’t charge an annual percentage rate.
According to the Alabama State Banking Department, payday lenders do not charge an APR but a flat fee of $17.50 per $100 borrowed. The average loan in 2019, according to the latest report from the banking department, was $348, which is consistent with the historic average loan amount. The average fee is just under $60.
Orr and those who support his legislation casually throw around words like “APR,” “predatory lending” and “price-gouging,” while falsely claiming that payday lenders charge up to 456 percent APR. Such inflammatory rhetoric is used to incites those who don’t understand how the industry works.
Deferred presentment loans are high risk and generally used by those who have immediate needs but less than excellent credit.
“People do not turn to payday lenders because they temporarily misplaced their American Express Platinum cards,” writes Kevin D. Williamson in National Review. “Borrowers turn to payday lenders because those are, as the borrowers calculate, their best alternative — maybe their best bad alternative, but their best alternative nonetheless.”
Orr and others who claim to be protecting Alabamians from payday lenders seem to think that borrowers are ignorant of the fees they pay for these temporary short-term loans, but they are not.
A survey conducted by Pollfish for lendedu.com found that 82.00 percent of payday loan borrowers looked at the fees before taking out a loan, while 18.00 percent did not.
“All that silly talk about ‘predatory’ lenders is little more than rhetorical cover for the patronizing insistence that poor people are too stupid or dysfunctional to make their own financial decisions,” writes Williamson.
The report by the banking department shows that August is the most active month for those seeking short-term loans, which coincides with “Back to School,” which shows that these borrowers are not exercising poor financial behavior but using available resources to meet an essential need for their children.
Five years ago, lawmakers passed legislation to drive rouge lenders from the state and establish a database to keep a check on payday lending. A recent report from the state’s banking department shows the Legislature’s commonsense approach to regulating payday loans is working.
Before the establishment of the unified state database, there were more than 1,150 deferred presentment locations statewide today; there are approximately 600 lenders.
The deferred presentment industry, as it is called, is highly regulated by the Alabama Department of Banking, with regular audits and violators punished for any misrepresentation or mishandling of loans.
In 2019, Orr said, “The legislation I carry is not to put the payday lenders out of business. It’s not to ban the product. But it is to give the borrower a little more time to repay the loan.” But his legislation will have a job-killing effect on some of the state’s lenders.
Industry leaders say some stores could close if Orr’s legislation passes. There are currently around 1,800 Alabamians directly employed at payday facilities across the state.
Alabama spends tens of millions on recruiting a few hundred jobs from out of state companies with the passage of Orr’s bill; jobs would be lost, undercutting the growth Alabama is currently experiencing.
Orr and his partners for the last several years have targeted payday lenders claiming they charge outrageous fees but not once has Orr or his allies taken on big banks.
“These banks drain billions of dollars annually from their customers through abusive overdraft fee practices, severely harming poor Americans and working-class families living paycheck to paycheck,” said CRL Senior Researcher Peter Smith, who authored the 2017 report. “Instead of serving families fairly, these banks are driving their customers deeper in a hole and often out of the banking system altogether.”
Also, Orr and his allies never talk about the staggering profits credit card issuers reap from fees or their enticements to borrow.
“Credit card companies rely on our foolishness to make money,” writes John Schmoll. “They’re counting on their cardholders to let self-control and wise spending go by the wayside.”
The two most abundant revenue streams for traditional credit cards are fees and interest, which produced a combined $178 billion in revenue for credit-card companies in 2018, according to estimates from the industry consulting firm R.K. Hamme, as cited by Alex Morrell in Business insider.
Somehow, Orr and the left-leaning groups that support him never mention the fees, interest-rates, and overdrafts used by big banks to make money.
As Williamson writes, “But in the long term, we are going to have to answer the question of just how patronizing we intend to be toward people with low incomes and modest means.”
Warren is the mother of the Consumer Financial Protection Bureau which has worked to dismantle small lending institutions through its ubiquitous powers. CFPB has been a main target of Trump’s deregulation efforts.
Both Sanders and Warren have made attacks on financial institutions a part of their presidential agenda which is aimed at wealth redistribution. This, too, is anathema to President Trump’s supporters. That Orr embraces similar regulatory acts is foreign to most Alabama Republicans.
Will the Alabama Legislature, let the free market determine loan values, or will the Warrens of the world with their ideologically driven regulators like Orr decide markets?
Orr’s legislation will soon appear before the Senate Banking and Insurance Committee chaired by Sen. Shay Shelnutt, R-Trussville.
The question before Shelnutt and other Republicans on the committee is, will they side with President Trump and his push to stop job-killing-nanny state regulations, or will they join with the Sanders-Warren faction of the Democratic Party to regulate every action of Alabama’s citizens?
Likely Republican primary voters reject Poarch Creeks “winning” plan
A survey of likely Republican primary voters obtained by APR shows that a majority do not support giving the Poarch Band of Creek Indians a monopoly over gaming in the state despite the tribe’s promise of a billion dollars.
Over the last several months, PCI has orchestrated a massive media blitz to convince Alabamians that they have a winning plan for the state’s future in exchange for a Tribal-State compact and exclusive rights to Vegas-style casino gaming.
The survey commissioned by the Republican House and Senate caucuses and conducted by CYGNAL, a highly respected Republican polling firm, found that only 34.1 percent of likely Republican primary voters are buying what the tribe is selling. On the contrary, nearly 50 percent of Republicans oppose the plan, with almost 40 percent voicing strong opposition.
Of those surveyed, females are against the plan by nearly 50 percent, with men weighing-in at almost 60 percent unfavorable to PCI’s proposal.
Perhaps most significant is that PCI’s monopoly plan was widely rejected in areas where the tribe already operates casinos. In the Mobile area, nearest Windcreek Atmore, over half of Republicans see a monopoly unfavorably. The same is true in the Montgomery area, where PCI has two gaming facilities.
Not a single big city surveyed in the state held a favorable view of PCI’s plan with Birmingham and Huntsville rejecting the tribal monopoly by almost 50 percent.
Very conservative, somewhat conservative and moderate voters didn’t view the plan as positive.
Ninety-one percent of respondents said they defiantly would be voting in the upcoming Republican primary on March 3.
PCI has lavished money on media outlets throughout the state, garnering favorable coverage, especially on talk radio and internet outlets. The tribe has also spent freely on Republican lawmakers.
Perhaps some good news for PCI is that Republican primary voters believe that state legislators are more likely to represent special interests above the interests of their constituents.
PCI lobbyists continue to push the tribe’s agenda at the State House in defiance of Gov. Kay Ivey’s call for no action on gaming until her study group returns its findings.
The survey found that Ivey enjoys a 76.3 percent favorability rating among likely Republican primary voters.
ADECA names Elaine J. Fincannon as new deputy director
Alabama Department of Economic and Community Affairs Director Kenneth Boswell announced on Thursday that Elaine J. Fincannon has been appointed as the agency’s deputy director.
Fincannon most recently served as Senior Vice President for Investor Relations for the Business Council of Alabama. She worked with BCA for over 25 years as part of its senior team, working with a diverse range of business leaders and CEOs of Alabama’s largest employers. During that time, she also served as BCA’s liaison to Alabama’s trade associations and to the more than 100 chambers of commerce throughout the state. She also served on the President’s Committee and Corporate Partners Committee for the Alabama Automotive Manufacturer’s Association and was a part of the Alabama Aerospace Industry Association’s membership committee.
“Elaine Fincannon’s extensive knowledge and experience with the public and private sector in our state made her an ideal choice to be ADECA’s new deputy director, and I am pleased that she has decided to bring those talents to the agency,” ADECA Director Kenneth Boswell said. “Elaine is mission-focused, forward-thinking and detailed-oriented, which are the exact skills needed to serve as deputy director of ADECA. She and I will work closely together to continue supporting Gov. Ivey’s mission of improving the lives of all Alabamians.”
Fincannon is an active member of the community, serving as a member of the Montgomery Area Chamber of Commerce, the Junior League of Montgomery, the Montgomery Humane Society, Auburn University Montgomery Alumni Association and other volunteer efforts. She also served as a member of the American Society of Association Executives and was an officer of the Association of State Chamber Professionals. She has a bachelor’s degree of science from AUM and was honored with a Distinguished Chamber Professional Award in 2019 by the Chamber of Commerce Association of Alabama.
Fincannon joins ADECA with a focus on working with Boswell to meet the agency’s mission to strengthen and support local communities.
“It is an honor to join ADECA during this time, and I am grateful to Director Boswell and Gov. Ivey for this appointment,” Fincannon said. “I plan to work diligently to serve the people of Alabama to the absolute best of my ability.”
Alabama Workforce Council delivers annual report touting improved career pathways
The Alabama Workforce Council (AWC) recently delivered its Annual Report to Gov. Kay Ivey and members of the legislature. The report highlights the many and varied workforce successes from 2019. It also outlines policy recommendations to further solidify Alabama as a leader in workforce development and push the state closer to Ivey’s goal of adding 500,000 credentialed workers to the state’s workforce by 2025.
Gov. Ivey acknowledged the recent progress stating, “the continued efforts of the AWC and the various state agency partners in transforming our workforce are substantial. Significant work has been accomplished to ensure all Alabamians have a strong start and strong finish. We will continue to bolster our state’s economy through dynamic workforce development solutions to help us reach our ambitious goal.”
The AWC, formed in 2015, was created as an employer-led, statewide effort to understand the structure, function, organization and perception of the Alabama workforce system. The goal of the AWC is to facilitate collaboration between government and industry to help Alabama develop a sustainable workforce that is competitive on a global scale.
“This report details the tremendous efforts of the dedicated AWC members and their partners who have greatly contributed to the progress of building a highly-skilled workforce.” noted Tim McCartney, Chairman of the AWC. “To meet ever-growing job needs of an expanding economy, we have put forth recommendations to bring working-age Alabamians sitting on the sidelines back into the workforce to address our low workforce participation rate.”
Included among the many highlights from the report are:
- Created the Alabama Office of Apprenticeship to support apprenticeships and work-based learning statewide.
- Established the Alabama Committee on Credentialing & Career Pathways (ACCCP) to identify credentials of value that align with in-demand career pathways across Alabama.
- Furthered foundational work toward cross-agency outcome sharing through the Alabama Terminal on Linking and Analyzing Statistics (ATLAS).
- Commissioned statewide surveys to better understand the characteristics, and potential barriers, of the priority population groups (during record-low unemployment) identified as likely to enter or re-enter the state’s workforce.
- Provided technical assistance, support staff and grant writing services to a cohort of over 30 nonprofits from across the state enabling them to expand services and directly connect more Alabamians to training and economic opportunity. Services helped cohort members secure over $6.4 million in grant money through various out-of-state grant programs.
- Identified and evaluated 17 population segments of potential workers and determined the likelihood of adding members of those respective population segments into the workforce. Within this process, issues affecting the state’s labor participation rate were also detailed.
Vice-Chair of the AWC Sandra Koblas of Austal USA commented, “the energy around workforce development in Alabama right now is incredibly exciting. We are working together with businesses, nonprofits and agency partners to reduce barriers, increase opportunities and grow the state’s overall economy.”
The full report can be viewed here.
To learn more about the Alabama Workforce Council please visit: www.alabamaworks.com/alabama-workforce-council
Shelby announces $733,150 ARC POWER Grant for Opportunity Alabama
U.S. Senator Richard Shelby, R-Ala., Wednesday announced that Opportunity Alabama, Inc., a nonprofit initiative in Birmingham, Alabama, is the recipient of a $733,150 Appalachian Regional Commission (ARC) POWER grant. This grant will fund the Creating Opportunity for Alabama (COAL) Initiative.
“ARC’s decision to award this funding to Opportunity Alabama will help significantly boost private investment and business development throughout our state’s coal-impacted communities,” said Senator Shelby. “I am proud this nonprofit initiative is working to help our local communities understand and capitalize on Opportunity Zones. These federal funds will facilitate an improved quality of life in Appalachian Alabama, creating hundreds of jobs and dozens of new businesses.”
“Opportunity Zones, and the private investment they incentivize, are helping uplift communities throughout the Appalachian Region,” said ARC Federal Co-Chairman Tim Thomas. “Opportunity Alabama is working to ensure communities understand and are able to capitalize on this program to improve Appalachian Alabama, and this POWER investment will have a big impact on that mission.”
The project will create an investment funding and business development ecosystem targeted to the federally designated Opportunity Zones in 36 coal-impacted counties in Alabama. As a result of the ARC grant, Opportunity Alabama will work with a team of local, state, and national partners in a three-phased approach. The first phase will work on building a local capacity to effectively prepare for and attract Opportunity Zone investments, focusing particularly on rural communities. The second phase will create a pipeline of investment opportunities to attract substantial private investment by facilitating demand studies, environmental assessments, and construction cost estimates. The third and final phase will focus on developing and implementing an impact-investment data collection and analysis process to make it easier for investors to deploy their capital.
This project will yield 250 new jobs, create 25 new businesses, and leverage $100 million in private investment. In addition to the federal grant provided for the project, Alabama Power and the Alabama Power Foundation are expected to provide private financial support.
Opportunity Alabama is a nonprofit initiative dedicated to connecting investors with investable assets in Alabama’s Opportunity Zones.
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