California Eliminates Money Bail

Here’s a good example of removing a structural barrier from the paths of low-income individuals by addressing an exploitative practice at the policy level. Recently Gov. Jerry Brown signed legislation to eliminate cash bail in California. The change aims to treat both rich and poor fairly by eliminating a practice (widespread throughout the country) that often relegates poor individuals to what is essentially a debtor’s prison, separating them from their families and their livelihoods although they represent no threat to society.


‘A Way of Monetizing Poor People’

As new federal regulations have curtailed payday lending, private equity firms — including one headed by former U.S. treasury secretary Timothy Geithner, who in his role in the Obama administration condemned predatory lending — have stepped into the growing field of “consumer installment loans” to offer enticing, but exploitative, alternatives. One firm, Mariner Finance, stands out among its peers for its use of mass-mailed checks, a tactic which preys upon low- to middle-income individuals anxious about financial challenges such as vehicle repairs and hospital bills. Victims face exorbitant interest rates and fees as well as lawsuits when they can’t keep up their payments. You can read more here.

Going Postal to Kill Payday Lenders

With the rising cost of housing and the stagnation of wages, many low-income workers depend on payday loans to make ends meet — at an average annualized interest rate of 390 percent. Now, a Democratic senator has proposed an alternative: low-cost banking through the postal system. It’s an idea that can be implemented without any great administrative difficulties, policy-design challenges or start-up costs, and will benefit not only low-income workers, but also the U.S. Postal Service itself. And there is little reason why it should not have bipartisan support. This is a great example of a policy change that addresses a huge problem for the poor, and it’s legislation we’ll all want to follow. To read all about it, click here.

Listen Now: Employer-Sponsored Small-Dollar Loans

In case you missed it on March 20, here are a link to the webinar recording on Employer-Sponsored Small-Dollar Loans and a link to the slide presentation. Emerge Solutions board president, Stephen MacDonald, is featured from minutes 23-31. Additionally, you can go to the ESSDL webpage to download the Feasibility Study, Implementation Guide and Marketing Templates. The webinar will be repeated on April 26, and you can register by clicking here.