Feature

First New York, Now Virginia: Why Cities Are Pushing Back on the Handouts to HQ2

The bidding war Amazon incited over its second headquarters did not go as planned.

Instead of culminating in a celebration of the internet retail giant’s corporate citizenship, the yearlong search for HQ2, as it became known, turned into a PR disaster. First, activists and local politicians in New York City raised enough ire about their state’s $3 billion deal for a half-share of HQ2 that Amazon ultimately backed out.

Now activists in Northern Virginia, where Amazon decided to put the other half of its new headquarters, are also hoping to derail the company’s best-laid plans, or at the very least bring some much-needed attention to exactly what is being given away – all three quarters of a billion dollars of it –  to a mammoth company in the name of economic development.

“We’ve been door-knocking mostly in neighborhoods that are low-income neighborhoods, or immigrant as well,” said Danny Cendejas, an organizer with La Collectiva, which is part of a coalition called “For Us, Not Amazon” that is critical of Virginia’s deal with the company. “It ranges from people not knowing Amazon is coming here to not knowing about the incentives that are being offered, to not knowing the effects of Amazon coming here.”

A consistent critique of the Amazon deal, in fact, is that the company hasn’t engaged with the community. “There was not a lot of information being given out, was the sense that we got,” agreed Maha Hilal, co-director of the Justice for Muslims Collective, which is also part of the “For Us, Not Amazon” coalition. But of the people who were aware Amazon was coming, Hilal said, there were some major concerns.

“There is the issue of incentives. With the city granting Amazon incentives, [the residents] are basically paying their taxes to Amazon,” she said. “And the fear of displacement was a big concern. Even though it’s Crystal City where they’re slated to come, it’s going to impact many communities.”

On Saturday, Arlington County’s board will vote on a $23 million package of local tax incentives for Amazon, which would be in addition to the up to $750 million it will receive in incentives from Virginia at the state level. That’s on top of a favorable tax deal already offered to tech companies that relocate to Arlington’s “Technology Opportunity Zone.” Crucially, the proposed deal with Arlington did not include any pledge by the company to pay living wages or put money into affordable housing funds. Instead, Amazon simply has to meet office space occupancy goals.

Meanwhile, a recent study by the New Virginia Majority found that the new Amazon facility in Virginia will displace some 6,000 people, mostly from working-class families, as well as drive up housing costs and exacerbate existing traffic congestion woes.

“This issue with Amazon HQ2 coming here, it will disproportionately affect middle- and low-income people in many ways, in the short and long term. That’s just a fact,” said Julius Spain, president of the Arlington branch of the NAACP. “We have to be cognizant of the low-income communities who may be driven out. They can’t afford to live in a quote ‘revitalized neighborhood.’” The For Us, Not Amazon coalition has asked the Arlington board to formally delay its vote, but as of this writing, that seems unlikely.

So why does this happen? How does one of the richest companies on Earth talk a state and county into giving it hundreds of millions of dollars? Because it can, and politicians pay.

This is how big corporations operate in modern-day America: They pit cities and states against one another in a battle to see who can dish out the most tax breaks, incentives, land grants, and other giveaways to an already-mammoth money-making organization. Companies hold their workforces for ransom and threaten to effectively kill them off by moving somewhere else, and lawmakers cave and pay up. And almost no one follows up in subsequent years to see if anyone’s promises have been kept, perpetuating the cycle.

Estimates for how much state and local governments spend annually on corporate tax incentives vary, but everyone agrees it’s in the tens of billions of dollars annually. And that’s likely an undercount, because navigating subsidies requires keeping tabs on thousands upon thousands of government agencies, offices, and officials, many of whom don’t do an adequate job of tracking what they’re handing out, or intentionally hide their subsidies entirely. A 2017 survey found half of the nation’s 50 biggest cities and counties didn’t even disclose the names of incentive recipients.

Plenty of research has been done on the efficacy of corporate tax incentives, and the consensus is that they don’t have real economic effects. As the researcher Timothy Bartik put it in a 2017 analysis: “Incentives do not have a large correlation with a state’s current or past unemployment or income levels or with future economic growth.”

There are many reasons the effect is so minimal, but one of the big ones is that tax incentives wind up “incentivizing” moves that companies would have made even if they hadn’t received a dime, with companies creating or destroying jobs based on the same considerations that fostered the move, not any particular tax break.

Take the case of Toyota. The car-maker received $40 million from the Lone Star State to consolidate three offices from around the country into one headquarters in the Dallas suburbs in 2013. It was the largest corporate tax break Texas had dealt out in a decade. And Toyota said afterward that the move would have made sense for the company even if those public dollars weren’t on the table.

“That wasn’t one of the major reasons [in] deciding to go to Texas,” Toyota spokesperson Amanda Rice told the Houston Chronicle in the spring of 2014, referring to the subsidies. Instead, “company representatives referenced a host of other factors, including geography, time zone and quality of life.” Yet the company received a $40 million windfall anyway.

This exact critique applies to Amazon and HQ2. After receiving data from hundreds of cities, and spending months picking over the particulars of 20 “finalists,” the company wound up choosing the nation’s capital and the world capital of finance. There are good reasons for it to have an expanded presence in both places that have nothing to do with tax rates. It’s possible it even had them in mind from the very beginning.

In fact, if taxes were the overriding concern, Amazon would have gone to Newark, New Jersey, or Montgomery County, Maryland, both of which offered it much more money than did Virginia and New York.

Given the evidence, why do corporate tax incentives continue to be a plague on state and local budgets?

Because, for a lawmaker, the appearance of doing something to bring in jobs makes for good headlines,  and the cost can always be punted to the next person.

“Politicians really do need to get re-elected, so there really is a political value to issuing press releases and cutting ribbons and passing along the cost to your next three successors,” said Greg LeRoy, director of Good Jobs First, an organization that tracks corporate tax subsidies.

There’s also a collective action problem when it comes to specific subsidies: The company in pursuit of them has every interest in doing whatever it takes to secure its bounty, while opponents have diffuse interests, and may not be particularly harmed by any one deal in a way that necessitates mass resistance. Since the subsidies are bad for the public at large in the aggregate, but beneficial for one interest group in the specifically, organizing to fight back is made difficult.

Political scientist Nathan Jensen, currently at the University of Texas–Austin, has looked specifically at corporate tax incentives and found that their use has an explicit political benefit. “A governor reaps more reward for new investment in his or her state if his or her administration offered tax incentives,” he and three colleagues wrote in a 2013 study that looked at governors and whether their support was bolstered by the use of tax incentives to bring in new businesses. “In fact, a governor will be rewarded for offering tax incentives even if it does not succeed in luring the intended investment.”

And this is true not only at the state level. “In a study of local governments, we learned more about official use of business incentives for electoral gain. We found that directly elected mayors, as opposed to appointed city managers, offered larger incentives and engaged in much weaker oversight of business incentive programs. Elected mayors offered more money and conducted fewer and less rigorous cost-benefit analyses to investigate whether the incentives were economically useful,” Jensen wrote in 2016.  Electoral accountability really wasn’t anything of the sort.

Another factor playing into the politics of incentives is that Americans are starting fewer businesses than they used to. In the 2010s, new business start-ups activity hit rock bottom as the country emerged from the Great Recession, but that was only the culmination of a trend that has been occurring since the 1970s.  There are a lot of theories as to why this decline in America’s entrepreneurial spirit has occurred, including that it’s a result of the decrease in robust anti-trust enforcement, but it’s a certainty that it’s happening. And fewer new businesses means fewer ribbon-cutting opportunities for lawmakers, so they’re all fighting viciously over what’s left.

That effect is apparent even now, as New York Mayor Bill de Blasio and Gov. Andrew Cuomo, along with other New York lawmakers, are still trying to cajole Amazon into re-reversing its HQ2 decision. But for now, New York stands out as a rare victory for activists against the corporate greed machine.

“That was a victory for all communities of color, for all immigrant communities and low-income communities that are fighting daily against the threat of displacement,” said Cendejas. “Deals for economic growth shouldn’t be done on the backs of low-income communities and communities of color.”

“I’m happy that something happened up there in New York, where the people spoke and Amazon listened and they left,” Spain said. “That gave me some motivation to say, ‘listen, the same thing can happen in Arlington.’ Anything’s possible.”

This piece was adapted from “The Billionaire Boondoggle: How Politicians Let Corporations and Bigwigs Steal Our Money and Jobs” by Pat Garofalo, out now from Thomas Dunne Books.

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Feature

Including Disabled Parents Is Key to Universal Child Care

Last week, Sen. Patty Murray (D-WA) and Rep. Bobby Scott (D-VA) introduced the Child Care for Working Families Act, which is intended to improve affordability, access, and quality for child care in the United States. Along with a proposal being floated by Sen. Elizabeth Warren (D-MA), it’s opening up a much-needed conversation about child care in America that will hopefully extend far beyond this legislation.

One of the most exciting elements of the bill is its explicit callouts of disability, acknowledging the fact that 17 percent of children in America have disabilities and need child care too — but can face barriers to inclusion.

The United States is facing a dual problem of scarcity and unaffordability when it comes to child care. 83 percent of parents with children under age five report difficulty locating affordable child care of sufficient quality in their area. Challenges with paying for child care or finding a suitable provider are pulling parents out of the workforce or leading some people to reconsider parenting altogether.

Common threads in Warren’s Universal Child Care and Murray and Scott’s Early Learning Act and the Child Care for Working Families Act include increasing compensation for child care providers; making child care free or low-cost, depending on income; and investing in quality improvements across the board. But Murray and Scott’s bill is comprehensive and inclusive: It extends services beyond child care centers and into homes and communities, addresses care from birth through age 13 for all children and up to age 18 for disabled children, and invests in full-day, full-year programming to accommodate parents with varying schedules and those who need child care services in the summer.

The disability inclusion in Murray and Scott’s bill — which includes funding for activities such as making sure facilities getting government money are accessible and providing training to staff so they can better serve disabled kids and their parents — builds on the work of the Americans with Disabilities Act and the Individuals with Disabilities Education Act. It positions such funding as a routine part of meeting quality standards — something society tends to view as “special treatment” or a “burden.” Everyone in America deserves access to child care that meets the needs of their children, and that includes disabled children, who can be excluded by inaccessible facilities, poorly trained staff, and other barriers.

As long as child care is under discussion, though, it is worth addressing the fact that disability isn’t an issue limited to children and while these bills are an excellent start, we should also be looking to the future. Disabled children grow up and build families of their own ­— 6.2 percent of parents are disabled, and disability is more common in black and brown parents — and those families, in turn, will need access to child care. Sometimes that means care for disabled children of disabled adults, and sometimes it’s care for nondisabled children of disabled adults.

“You really need [child care providers] to be on your team,” explained Dr. Kara Ayers, Associate Director at the University of Cincinnati Center for Excellence in Developmental Disabilities. Ayers is the co-founder of the Disabled Parenting Project, which studies the experiences of parents with disabilities. As part of her research, she said she sees issues like inaccessible restrooms and “just one step” entrances — doorways where a single step is all that lies between wheelchair users and entry — are common at the facilities she visits.

Mandated reporters, people legally required to report possible abuse and neglect to the authorities, may have limited experience with disabled parents. Attitudes about disability may lead mandated reporters to be concerned about disabled parents’ capability. This is an issue with doctors, social workers, and teachers, and Dr. Ayers has found that it can appear in child care as well, an issue that raises personal concerns. “If I come in and these people are weirded out,” Ayers added, “one person could decide my daughter is not safe with me and one call could start that process.”

Comprehensive access to child care must be inclusive of disabled parents.

Ayers speaks to a looming worry in the disability community: In every state, it is legal to weigh parental disability when making determinations about whether to remove a child from a home, on the argument that the parent must be “unfit.” According to a 2012 National Council on Disability study, removal rates climb as high as 80 percent in cases of intellectually disabled or mentally ill parents involved in custody fights.

Disabled parents, said Ayers, worry about admitting that they need help or having to explain that services and supports are not a good fit for them, and that hooks directly into the child care conversation — if disabled people are nervous about communicating their needs, it’s challenging to make necessary recommendations.

Comprehensive access to child care, whether accomplished legislatively or through rulemaking, must be inclusive of disabled parents. For example, funds for increasing accessibility could also be used for continuing education classes to familiarize child care providers with the disability community. For disabled parents, adaptive parenting classes –  which teach people how to navigate parenting with a disability with tips on topics like handling a baby while using a wheelchair and using braille-embossed flashcards to teach sighted children to read – could be made more readily available for expecting or newly-disabled parents through expanded funding.

Likewise, parenting equipment should be made more readily available and affordable through existing systems that already connect disabled people with adaptive tools that help them lead independent lives, such as independent living centers, community programs for new parents of all ability levels, Medicaid, and occupational therapy programs.

The United States should also consider what constitutes “activities of daily living,” the tasks that personal assistants can provide for their clients, currently defined by the Centers for Medicare and Medicaid Services using a model followed by many private insurance providers. The agency’s current definition includes things such as toileting, preparing meals, cleaning, and a wide range of other activities — but most parents would argue they should include parenting, too.

A government-funded personal care assistant “cannot do anything for child care,” said Keith Jones, president of Soul Touchin’ experiences, a community empowerment and policy advocacy group. Jones learned to change diapers with his feet as a new parent worried about being deemed unfit, and commented that it’s ludicrous to ask a personal assistant to “just ignore” a child who clearly needs attention.

As it stands now, Ayers explained, aides may not be allowed to help disabled parents, depending on the terms of their contract. If a baby is crying for attention, they can’t pick them up for a cuddle. If a parent needs help getting a child into a high chair for a meal, they can’t ask their aide for an assist. Explicitly including parenting as an ADL, says Ayers, could help disabled parents and kids alike — and it’s possible to have safeguards for those worried about parents abusing their aides as child care providers.  A regulatory change initiated by CMS could be the most effective way to address this shortcoming.

The growing understanding that child care must be a part of progressive movements is heartening to see, and it’s encouraging that lawmakers like Murray and Scott are exploring disability issues as they develop new policy. Including disability from the start in ambitious proposals like these makes it easier to build on them, creating more equity and justice for the disability community.

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Analysis

The Sprint T-Mobile Merger Could Mean Higher Cell Phone Bills for Low-Income Americans

Sprint and T-Mobile want to turn the big four in America’s wireless market into the big three, merging into a “New T-Mobile.” The two telecom giants tried to pull off the same move in 2014, until regulators made it clear the deal would be blocked to avoid further consolidation in an already heavily concentrated market.

Sensing a Trump-selected Federal Communications Commission Chair would be more open to creating corporate behemoths, and with the threat of “falling behind” on 5G wireless technology in hand, the two firms are taking another crack at the deal. A decision from the FCC is expected sometime this year. (In an attempt to ensure a better result this time, T-Mobile has taken to spending a lot of money at the Trump hotel in D.C.)

The average American is at no less risk from the merger this time around, but if it’s approved the fallout will hit low-income Americans especially hard.

In the words of the economists hired by T-Mobile and Sprint to defend the merger, low-income individuals “more heavily rely on their smartphone for their communications and media consumption,” and therefore will have little choice but to swallow any price increases following the merger. Commenting on the potential impact on low-income individuals at a recent hearing, Phillip Berenbroick of Public Knowledge said the combined firm “will have the power and incentives to raise prices on consumers who are reliant on that connection and have nowhere else to go.”

This is especially concerning given T-Mobile and Sprint’s customers are more likely to be black, Hispanic, and low-income when compared to AT&T or Verizon. In a sense, T-Mobile’s economists were saying the quiet part loud: the “New T-Mobile” would have the ability to raise prices, and knows that they have a vulnerable group of consumers who would be forced to absorb those increases.

Almost all mergers come with worries about whether the merged corporation will increase prices — a concern that is increasingly supported by empirical analysis. Fewer competitors means consumers have fewer alternatives when their provider decides to throw an extra zero on the end of their bill. What’s more, competitors in concentrated markets tend to get cozier with each other, and thus less likely to compete on price in the first place.

Evidence from Austria, the Netherlands and Canada show that the move from four to three firms in the wireless space can lead to drastically higher prices. In Austria, smartphone consumers saw their phone bills rise 50 to 90 percent following the 2012 “four-to-three” merger of H3G Austria and Orange Austria.

The thrust of T-Mobile and Sprint’s argument for the merger is that less is more: They claim that the number of choices for a wireless provider isn’t going down from four to three, but actually going up from two to three. In their telling, T-Mobile and Sprint are the underdogs up against Verizon and AT&T, which hold a combined 70 percent of the wireless market.

But there is a real threat of reduced choice and increased prices that low-income Americans would disproportionately bear.

Although they are smaller players in the overall wireless market, T-Mobile and Sprint play an outsized role in the way many low-income Americans access telecommunications services. The combined firm would hold a 59 percent share of the prepaid wireless market, comprised mainly of low-income Americans unable to qualify for the credit checks required for postpaid plans. This kind of market share would reduce competitive options for the 97 million consumers who depend on prepaid plans and give the “New T-Mobile” immense power in setting prices across the market.

There is currently vigorous price competition for prepaid customers between T-Mobile and Sprint, which would evaporate as soon as the merger was approved. In evaluating the potential harms of the merger, economists submitting comments to the Federal Communications Commission estimated “New T-Mobile” could raise prepaid prices by as much as 15 percent.

A wireless telecommunications market comprised of three giants would be disastrous for low-income consumers.

Beyond their reliance on prepaid wireless plans, low-income individuals are also more likely to rely solely on wireless service for internet. T-Mobile’s hired economists noted that “consumers with higher incomes may be more likely to offload to wi-fi or to consume media … through a broadband connection,” but low-income consumers are more likely to be “cord-cutters,” who are unable to afford multiple modes of connectivity. In 2018, Pew research found that low-income Americans were three times as likely as high-income Americans to own a smartphone while having no home internet connection.

This suggests that while higher-income consumers would be able to shift the type of internet they are using if prices rise, low-income consumers will not have the same option.

The merger is also a threat to the Lifeline Program, which provides access to phone service for nearly 13-million low-income households. Originally introduced in 1985, Lifeline was dramatically expanded and updated during the Obama administration to reflect the importance of wireless connectivity for low-income households. Crucially, Lifeline depends on the willingness of participating carriers to offer the discounted service, which is subsidized by telecom user fees.

As it stands, Sprint is one of the only remaining widespread wireless providers for Lifeline; T-Mobile only offers the program in nine states and Puerto Rico. If the combined entity decides to follow T-Mobile’s lead in its approach to the program, its availability and relevance to low-income Americans could be seriously compromised.

Despite claims to the contrary, the proposed merger of T-Mobile and Sprint has no less potential to be damaging to American consumers than in 2014, when regulators made it clear that such a deal would not be allowed. Evidence suggests a wireless telecommunications market comprised of three giants would be disastrous for low-income consumers at a time when wireless connectivity is increasingly critical for everyday life. An increased phone bill is not simply an inconvenience, but a major barrier to their ability to connect with the world.

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First Person

I Couldn’t Spend Money Like My Classmates. So I Tried To Eat Like Them.

The biggest culture shock I ever experienced was not when I moved from the U.S. to the U.K., but when I moved from the South to Southern California. I was not prepared for the food and everything I didn’t realize it would represent when it came to race, class, and fatphobia — and how much that had permeated my own thinking in ways I never realized.

My earliest memories of food are complex. I remember the rush of adrenaline and the pound of my heartbeat as I yanked daffodils from their cool flowerbeds nestled to the side of what looked like an abandoned house. Selling them to houses on another street, sliding scale, I could afford more than just my standard free lunch when my texture sensitivities made everything available impossible to eat. It also meant not spending an afternoon pushing the “Coin Return” buttons on the vending machines in the recreation center, a less embarrassing way of begging for change.

I remember clearly the free breakfast I had each morning, usually Cinnamon Toast Crunch with chocolate milk out of a small plastic bowl. The vegetables I grew up eating were in cans due to the cost, boiled and buttered because I was Southern.

Food became a symbol of love in certain family rituals, such as the fried bacon, cheese biscuits, eggs, and grits that would line the table every Sunday morning at my great-grandmother’s house. I sought after Lunchables and Hershey bars like Fendi bags. Over-processed foods that are now described as “cheap” were luxuries. Salad was iceberg lettuce that had no flavor until you covered it with ranch dressing.

But then the family I knew fractured, split, and drifted apart, and at 15 I moved to San Diego, California and immediately noticed more than just my usual sense of otherness.

The people talked different. There were no seasons. I was made fun of for saying “y’all” and began to curb the strength of what I thought was a weak Southern accent in comparison to my family. The city I moved to was very wealthy. I found this out awkwardly when I went to a classmate’s house to complete a project on existentialism (ironic) and their pool house was as big as the small apartment I lived in. I had always assumed that because I had a computer, I was “middle class” and this city taught me otherwise.

But the most striking difference? The color of the vegetables that were nothing like the bland, boring isles of pale green that I grew up around, where the fanciest thing about the aisles was the automatic water mister. The vegetables in San Diego had real color. And they crunched when you bit into them.

I, at first, found this repulsive. But my Virgoean craving for self-improvement pushed me to accept the challenge. But food was and is never just food. It is always symbolic.

As I was surrounded by very thin people who did things like “cleanses” and very wealthy classmates who complained they got the wrong color Hummer for Christmas, meanings began to shift. Fried chicken livers no longer represented a quirky side of my Southern upbringing, the way I know haggis is connected to Scotland. Instead they were inextricably linked to poor, fat, uneducated white people.

Society links fatness to ignorance and stupidity.

Society links fatness to ignorance and stupidity. The comic image of the white poor, the people I came from, is always fat and eating “unhealthy” foods with the same voracity that they hate gays or illegal immigrants. I didn’t want to be one of them. I couldn’t spend like my classmates, so I instead tried to eat like them. Kale represented cleanliness, in both mind and body, and I wanted to fill the gap I shoved between myself and my Southern heritage with Jamba Juices. My intimate connection to poverty grew more and more obvious, like a pox mark, and I thought the best way to shed this image was to shed pounds.

I viewed fat and grease in foods as pathogens of a poor, white and ignorant outlook that would infect me if I consumed them. That’s when my obsession with becoming healthier to disassociate myself from the poverty and fatness of my background in the same way I now masked my Southern accent in class became just that: an actual obsession. It’s a lot easier to motivate yourself to diet obsessively if you believe it will lead you to a better mind as well as a better body. And when people believe that being poor and fat goes hand-in-hand with being a racist, you’re even more motivated to do an extra crunch.

Weight is a perfect poison for anxiety because the results are never immediate and simply avoiding eating altogether is not a lifelong, sustainable option. I used to count the number of chews — 20 — I took with each bite to make sure that I never choked. Now I counted every single possible calorie. In the process, food and life became joyless.

I can’t tell you when my moment of clarity came and, in truth, I still struggle to shed the idea that thinness represents health. Perhaps it was realizing when my now more academic way of speaking made people read me as “nicer” than others. The jokes white liberals make about “hillbilly” incest and inbreeding right in front of me because they assume I’m one of them feel like daggers in my back.

There are and probably will continue to be a lot of poor, fat, racist white people. There are also thin, wealthy, white racist people. When I stopped distancing myself from the trappings — namely food — of Southern culture, I realized that being poor has given me an understanding of life and the way the world works that no amount of kombucha will give a Goop fanatic. And that those white people who draw fat white people as racist and ignorant are dissociating themselves from their own white supremacy. They are not actually addressing anti-Blackness as they continue to ignore the systemic causes of poverty.

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First Person

I Paid 118 Percent on a Payday Loan. The Administration Is Canceling Efforts to Rein Them In.

There was a moment in my life where it felt as if everything that could go wrong went wrong — and all at the same time.

I had just started a new job. My household went from two incomes to just one, and we were definitely starting to feel it. The mortgage was due, all of the regular household bills and responsibilities were still there, and my son still needed money to cover school and sports expenses.

I managed to use the remainder of my savings to pay everything, but I was still $500 short for my mortgage payment. I was stressed out, trying my best to make ends meet and keep some normalcy in my son’s life. I knew I had a paycheck coming, but it would not arrive in time to avoid all of the late fees and the credit hit for being 30 days late on my mortgage.

I reached out to my bank to see if I could get a small loan and was denied due to not having a high enough credit score. I had one credit card with a very small limit, but it was pretty much maxed out, so I couldn’t take out a cash advance.

I also didn’t want to borrow money from my friends and family because that would be admitting all was not well in my household. Also, I had no desire to answer the many questions that would come if I asked to borrow that much money.

While driving my mom to one of her doctor’s appointments, I saw a large green sign that seemed to be the answer to my problems: Fast cash now, no credit checks, walk out with up to $500 today.

It seemed worth exploring so I went in and asked what was needed. I was told all I needed was an active checking account, a copy of my bank statement, and proof of employment. I could get all those things with no problems.

After retrieving the necessary items, I went back, filled out the application, signed on the dotted line, and walked out of the door with $500 cash in my hand about 30 minutes later.

I felt as though my problems had been solved. I had the amount necessary to finish covering that month’s necessary expenses. I had a paycheck coming and I would be able to cover the payment on the loan. Crisis over, right?

That feeling lasted all of two weeks. I quickly realized that although I had a paycheck coming, my household’s financial situation was the same. We were still solely depending on my income, and the amount of our bills covering essentials hadn’t changed. So not only did I still have to continue paying for those things, now I had a loan payment to cover as well.

I had actually added to the expense pile.

Recently, the Consumer Financial Protection Bureau — which is supposed to be the nation’s consumer watchdog — proposed removing a rule that would require lenders of payday, car title, and other high-cost installment loans to verify the borrower’s ability to pay back the loan. This is something every other lending institution does, engaging in credit checks, verifying income, and assessing if the borrower can actually pay. My experience, and those of others I’ve spoken with, shows why such a rule is so key.

When my paycheck hit the bank, the payday loan people were right there to take their cut. I managed what was left of my check and paid my bills. I needed to get this loan paid as soon as possible.

In order to pay the loan back quickly and not fall behind any of my regular expenses, I picked up a temporary second job. This meant less time at home being an engaged parent to my son, and I constantly felt tired and drained. I feel as though I missed a chunk of my and my son’s life working seven days a week and only being at home to sleep.

Granted, I could have gotten a second loan or rolled the first loan over, meaning paying an additional fee to delay paying back the original loan. I did not consider this option because it would not solve the problem. If the first loan was causing a strain on my finances, I definitely didn’t need to add to the debt. I just wanted to be done with it as quickly as possible.

Fortunately, I paid back my loan before the due date to avoid the additional interest and fees. I avoided the devastation that many others have experienced as the result of taking out these loans.

Doing the math, I discovered that I paid approximately 118 percent on that $500 loan.

In the 2018 election, Colorado passed Proposition 111, which put a 36 percent cap on the amount of interest and fees that payday lenders can charge borrowers. While working on the campaign for Proposition 111, I talked with others who had taken out multiple payday loans to assist with covering living expenses. In 2016, Colorado payday loan customers paid an average interest rate of 129 percent, costing them $119 in interest and fees. Nationally, more than 75 percent of payday loan fees come from borrowers who use 10 or more loans per year.

Doing the math, I discovered that I paid approximately 118 percent on that $500 loan. Had I realized that the interest and fees added to this amount, I would not have taken out this loan. I would have tried to negotiate and make payment arrangements, especially because my situation was temporary.

Most of the people I spoke with during the campaign were not able to pay their loans back and the results were devastating: Closed bank accounts because payday lenders continue to run checks through the account many times, resulting in ridiculous overdraft fees. Embarrassing collection calls to places of employment and family. Damage to credit scores. Garnishment of wages. The end result for many was filing for bankruptcy in order to stop the bleeding.

Many may think that payday lenders are offering assistance to those who cannot obtain financial assistance through traditional means such as bank loans, credit card cash advances, asking employers for pay advances, or loans from friends and family. In reality, these loans are predatory in nature. Payday lenders work to exploit hard-working people at their most vulnerable moments.

The CFPB’s provisions were established to protect borrowers from the harmful practices of payday lenders. Many people are living paycheck to paycheck, not because they can’t manage their money properly or are living an extravagant lifestyle, but because they simply had a temporary setback or an unplanned emergency. Seeking out a loan or financial assistance to get a moment of relief should not end in financial disaster.

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