First Person

Prison Visitation Was Nearly Impossible for My Kids. Then COVID-19 Hit.

In 2016, I was assigned to the state penitentiary in Walla Walla — six hours away by car from where my children live. I told the caseworker all about them and their mothers, and asked if there was any way I could be sent to a closer facility to increase the chances of them being able to visit. It wasn’t about me, I explained, but for my girls.

He didn’t laugh. He didn’t rationalize why it was necessary to send me so far away, even though there were plenty of prisons on this side of the state. He didn’t tell me that the mental health of my daughters wasn’t worth protecting. I might as well have been invisible, he was so dismissive of my distress, as he said, “Your file says you’re incarcerated for armed robbery, Mr. Moore. Tell me, did you rob old people, too?”

My ten-year-old daughter is not doing well in school. Remote learning due to COVID-19 restrictions has failed to hold her attention, and she’s teetering dangerously close to having to repeat the fourth grade. I’ve been there. One year, I was only passed with an “incomplete” because I’d caused enough trouble that the school wanted me out as quickly as possible. I’m pretty sure I could help my little girl if I was around, but I’m not. I haven’t held her since she was four, because for the past seven years, I’ve been the property of Washington’s Department of Corrections (DOC).

Even before the pandemic, trying to arrange a visit was a nightmare. Her mother would have to go to the DOC’s webpage and fill out the tedious application. She would have to submit one for herself as well (minors aren’t permitted to visit their incarcerated parents without a guardian — or somebody approved by their guardian — present). That means she would also have to request to be removed from her incarcerated cousin’s visiting list, since an individual can only be on one prisoner’s list at a time in Washington state. That process alone would take three months to accomplish.

She would have to scan a copy of a completed and notarized consent form and send it along with the application. She would have to do that part at somebody else’s house, as she doesn’t have a scanner of her own. She and I didn’t exactly part on good terms, and this is a lot of work and embarrassment to endure, so she made a deal with my daughter: Get your grades up, and you can visit your dad.

My 16-year-old wants to be a journalist when she grows up, and she’s growing up fast. Her mother is poor and I’m not much help from prison. So my teenager, sensing she’s going to need savings for impending adulthood, works at a pizza shop rather than focusing on her education. I’ve offered to help her start getting published in order to build a portfolio that could potentially earn her a scholarship someday, but she’s too preoccupied with work and high school to even go through the process, let alone think about her long-term future.

Then there’s my young ones on the opposite side of the world, in London. Visiting has always been available to them, but the expense does not permit their traveling so far to see me. A flight for one is costly enough without having to multiply it by four.

So many holidays and birthdays have passed.

Before COVID lockdowns, prisoners could receive visits three days a week. Bulky guards would march between tables with their chests out, watching for any physical contact beyond the touch of a hand between the parents. No touching shoulders. No brushing faces. No kisses or hugs, beyond a brief embrace and peck at the beginning and end of the visit. The tables were placed so close together that free movement for children was not always an option. There was a small play area with toys and video games, but it wasn’t designed for parents wishing to spend time with their spouses as well as their kids.

As soon as COVID-19 began to reach American prisons, it got much worse. Guards weren’t mandated to wear masks until the outbreak they’d introduced into our home led to a riot. Though the vaccine is finally available to anybody who wants it, some guards are refusing to take it. Meanwhile, visits — along with all religious, educational, and self-help programming — were canceled.

More than a year after Governor Inslee declared a state of emergency, visitation finally reopened. Initially, visits were permitted once a month, for an hour at a time, for two people. I heard from my neighbors that the visit was non-contact through a plexiglass box with holes drilled about knee high. Visitors had to sit on chairs, and they bent their waists like they were about to dive as they yelled to be heard above the chatter. Children under 16 were not allowed to attend.

On August 15, 18 months after the pandemic hit the United States, three hour contact visitation for up to three guests finally resumed. The age restriction was lifted, and families all over the state breathed a sigh of relief.

I expected complaints to still fill the air as, after all, visitation would still not be what it had been. Masks were now necessary, and meals could no longer be shared. I guess most of us were just so relieved to have contact visits again that we accepted what we felt would do us and our children some good.

Upon reflection, we know that so many holidays and birthdays have passed and although it’s been a long time since we’ve seen the faces of our young, we haven’t forgotten them. Despite DOC’s actions, we are more eager than ever to see them again. It’s been too long.



Unemployment Benefits Aren’t Creating a Labor Shortage, They’re Building Worker Power

As businesses have begun opening back up, we have been subjected to increasing hand-wringing from business owners, particularly restaurants and similar service-based workplaces, who insist they are facing a labor shortage. The argument, according to some, is that unemployment benefits are too generous and are discouraging work, leaving employers unable to hire workers. Thankfully, these stories are being rebutted by workers, journalists, and analysts armed with a combination of personal experience and hard data. As expert after expert picks apart the flaws in employers’ arguments, though, it has become clear that what employers are worried about isn’t a labor shortage at all: It’s a power shift.

For years, employers had access to a labor force where workers were so desperate that they’d take any job offer. The combination of poverty-level minimum wages, historically low unionization rates, at-will employment, worker misclassification, a battered safety net, a lack of paid time off or employer-sponsored benefits, and a host of other policies and practices have firmly tilted the scales toward employers, allowing for pervasive exploitation and abuse, particularly for the nearly 3 in 4 Americans living paycheck to paycheck even before the pandemic.

The situation is more dire after a job loss. Recently laid-off workers are likely to have almost no safety cushion — more than half of consumers had $3,000 or less in their checking and savings accounts combined in 2019. They may also have no access to unemployment benefits — just 28 percent of eligible unemployed workers in 2019 actually received benefits. That makes workers desperate for any job, no matter how terrible, that can help them scrape by. During a recession with mass layoffs, when millions are facing that same desperation, businesses have all the power to offer unsafe jobs in places like crowded meatpacking plants and bustling restaurant kitchens to overqualified applicants with meager compensation, unless the government intervenes.

Unemployment insurance, especially the enhanced benefits during the pandemic, gives workers breathing room. The benefits aren’t enough for people to live large — even with the extra $300 a week, unemployment benefits will fall noticeably short for a modest family budget in every county in the country. Benefits just let workers be slightly less desperate, alleviating the pressure to take unsafe jobs — many of which are especially dangerous during a pandemic — that pay poverty wages. Instead, they can hold out a bit longer for better-paying jobs that match their skills, education, experience, and interests.

One dishwasher, Jeremy, told journalist Eion Higgins that “the stimulus and unemployment benefits have definitely helped me be more picky about what jobs I’ll take since I don’t have to take anything I can get in order to cover rent and groceries.” Another, Alan, reported that “I have a degree in forestry and since I’m currently relatively financially secure I can take more time to find a job in the field that I actually want to work in.” A third, Owen, said “I left because having some time off to think and plan helped focus my desire to be paid better and treated better… I expect to make at least double and finally have nights and weekends off. Hopefully I’ll be treated with a little more dignity but I know that’s not always the case.”

This is very different than saying unemployment benefits are discouraging work in general. Studies of unemployment insurance have shown that laid-off workers who receive benefits search harder for jobs, receive better paying offers, and take roles that better match their education level. Specifically during the pandemic, several studies have looked at the $600 enhanced benefits and found that they had little to no effect on employment or job search. It’s hard to see how the current $300 boost would be any different.

Few workers even had access to unemployment insurance in the first place.

Despite what many businesses, commentators, and lawmakers are trying to claim, the data is continuing to prove that unemployment insurance isn’t standing in the way of hiring. Though overall job growth in April was disappointing, the leisure and hospitality sector — where most of the cries of labor shortage from employers are coming from — actually accelerated job growth with 206,000 new hires in March and 366,000 in April. In total, 430,000 people joined the labor force (meaning they weren’t searching for work before but now are), but that growth came entirely from men while women actually left the labor force on net in April, suggesting that this has more to do with a continued lack of child care. States with higher unemployment benefit levels, as well as low-wage sectors where benefits are more often higher than previous income, have actually seen faster job growth, indicating that unemployment insurance isn’t the cause of slow hiring.

In reality, few workers even had access to unemployment insurance in the first place. From April 2020 to January 2021, only 18 percent of unemployed people had received unemployment benefits in the last two weeks at any one time. It’s been even worse for Black (13 percent) and Asian (11 percent) workers and those without a college degree (12 percent), all of whom are overrepresented in low-wage industries like leisure and hospitality. Undocumented immigrants are also totally excluded from unemployment insurance, yet they are 10 percent of restaurant workers nationwide and almost 40 percent in cities like New York and Los Angeles. We saw the consequences of this early in the pandemic when meatpacking plants convinced the government to declare them essential, allowing them to call their employees back into work and leading to large COVID outbreaks among their workforces, disproportionately made up of immigrants and people of color, and in communities where the plants are located.

Even so, employers have managed to complain loudly enough about the possibility that they may have lost a hint of power that sympathetic legislators are rushing to accommodate them. As of mid-May, in 16 states and counting, Republican governors had announced their plans to block all of their residents from receiving their rightful federal unemployment benefits, citing anecdotes of businesses struggling to hire at their current wages as justification. Ending those benefits before the jobs are there and while millions are still losing their jobs each month will take billions of dollars — over $10 billion from almost 2 million unemployed workers by one estimate — out of the economy in those states, even if some of those people cut off find work, and will effectively slow the recovery through decreased spending.

If there was a labor shortage, employers have common sense options to make themselves more competitive: They could raise wages to livable levels, as many businesses have found success doing, or pressure their lawmaker friends to support vaccination efforts and fund safe and affordable child care. Instead, some businesses are relying on half measures, such as offering one-time signing bonuses specifically because they know those are insignificant when compared to what a worker would earn long-term from permanently higher wages. Many others are simply pushing the same narrative they have fallen back on for more than a century — through the New Deal, the Great Society, welfare reform, and the Great Recession — by claiming workers who dare demand more are lazy and ungrateful. It’s not a coincidence that the same people shouting to end unemployment benefits now are also opposing the Raise the Wage Act, the PRO Act, and other measures that might materially improve the lives and build the power of workers.

This power struggle has made its way to the president’s desk. In a White House speech on Monday, President Biden said, “Anyone collecting unemployment who is offered a suitable job must take the job or lose their unemployment benefits.” (Emphasis added.) Now the government has to decide who gets to define “suitable.” Businesses would like it to mean the pre-COVID status quo: low wages, inconsistent hours, minimal (if any) benefits, and limited protections. Workers want it to mean that jobs are safe and offer a decent quality of life — including livable wages, manageable hours, and accommodations for caregiving and quality of life.

The Biden administration has taken some positive steps in defining a good job for federal contractors, setting a $15 minimum wage, raising standards, and strengthening anti-discrimination protections. It’s vital that the administration continue to support all workers in the face of overwhelming employer power. There’s no shortage of ways to do so: They can push to improve the unemployment insurance system through federalization or establishing minimum standards and automatic stabilizers, like those proposed in the Wyden-Bennet reform bill; pass the Raise the Wage Act to raise the minimum wage to $15 and eliminate subminimum wages; implement better regulations and enforcement to prevent wage theft, overtime abuse, misclassification, and OSHA safety violations, among other abuses; pass the PRO Act to ensure workers can exercise their right to come together in unions; and so much more.

We can’t continue to give employers all the power in the labor market. President Biden and other lawmakers must make it clear that now is the time to stand with workers and give them some say in their own working conditions and livelihoods.



Graduation Is Coming. The Jobs Aren’t.

As the estimated four million college graduates of the class of 2021 prepare to enter post-graduate life, they will face a job market that has lost 8.4 million jobs between February 2020 and March 2021. Despite their newly-earned credentials, the most recent batch of college students are uniquely disadvantaged in the coronavirus job market. They are trying to start careers at a moment when jobs are scarce, and they are not eligible for unemployment benefits since they technically have not lost a job.

Kofi Assabil, a member of the class of 2020 from University of Colorado Boulder, knows the grim job market all too well. Assabil started his job search in January 2020, months prior to his graduation. But when the pandemic reached the United States and everything went remote, he started to worry. “I realized that things were going to be harder. I was going on LinkedIn and Indeed…calling a few connections every two weeks to see if they had any opportunities,” but “even with internships, it was tough.” Along with several of his roommates, Assabil opted to wait out the labor market crunch in graduate school instead.

The most recent estimates from Georgetown University indicate that approximately 70 percent of college students work part or full-time during their studies, suggesting 30 percent of new grads — up to 1.2 million recent college students — may be ineligible for unemployment once they graduate, unless they have proof of a rescinded job offer.

As a result, this generation of college graduates is struggling to find work. Coupled with a lack of government support and mounting student debt, personal financial conditions are proving difficult for many. According to the most recent data, among the 69 percent of college students that took out loans in 2019, the average debt upon graduation was $29,900, although numbers are higher for students of color. While Congress placed a temporary moratorium on payments for federal loans, there is still $137 billion in outstanding private student loan debt that is unaffected by the moratorium. Those bills are coming due, whether recent grads are ready for them or not. For the 22 percent of college undergraduates who are also parents, the financial burden is only heightened by the need to care for dependents.

The combination of insufficient economic opportunity and inaccessible unemployment benefits could have serious long-term implications. Elaine Weiss, an analyst from the National Academy of Social Insurance, believes that this will push new college graduates into lower paying jobs, since they cannot afford to wait for an offer that provides a higher wage.

According to a UCLA study, individuals who graduate college during a recession can expect between 10 to 20 percent lower lifetime earnings compared with their peers. According to the Federal Reserve, 40.3 percent of recent college graduates are underemployed. Further, this effect has become more amplified over time, as successive graduating classes experience higher and higher post-college unemployment rates.

The imperative of stronger unemployment insurance only becomes more important.

One potential solution for new grads is a jobseekers’ allowance that could support them while they look for work. The allowance, which could partially replace foregone wages, would allow recipients to support themselves while they continue to look for work. Australia has a similar program dedicated specifically to providing financial assistance to youth and student job seekers with monthly benefit levels ranging from $1,153 to $1,924, depending on financial and family circumstances. While it’s no windfall, a benefit of that size would help cover a large portion of living expenses for many Americans. Other countries, such as Sweden, provide $1,101 per month, while also providing public child care and a child allowance for any families with children under the age of 16.

The results of these stronger unemployment programs have been well documented. One study from Georgetown University found that during the Great Recession, the enhanced unemployment insurance increased workers’ wages by 2.6 percent, with greater benefits for women, people of color, and people with lower educational attainment. This suggests that unemployment insurance programs help facilitate the job search process, allowing workers more time to find a job aligned with their skills.

With another college class soon to graduate into a still-weak labor market, the imperative of stronger unemployment insurance only becomes more important. While the passage of the American Rescue Plan is welcome news for the American economy, the bill failed to include unemployment protections specifically targeted at recent college graduates. The U.S. should take note of the work done by other nations to provide adequate financial stability for recent graduates as they enter the labor market. History tells us that the failure to do so will have lifelong impacts for college graduates.



The Fight for Fair Pay Must Include Independent Contractors

When President Biden announced his $1.9 trillion stimulus plan in January, he included a provision to raise the federal minimum wage to $15 an hour and eliminate the subminimum wage for those who work for tips and people with disabilities. He listed his arguments in favor of it: a minimum wage that hasn’t been raised since 2009, the ever-increasing cost of living, and the global pandemic. But one other reason stood out: “Florida just passed it,” Biden said. “The rest of the country is ready to move as well.”

In November, Florida joined a long list of cities and states that have increased their minimum wage above the federal level of $7.25. Sixty-one percent of Floridians voted to raise the minimum wage to $15 an hour, a move that will bring more than 1 million residents out of poverty. However, the amendment left out a crucial group: the state’s 2 million independent contractors, who don’t fall under federal minimum wage regulations. For decades, Florida’s lack of protections for these workers has led to widespread misclassification and wage theft. Even as the state passes some of its most progressive wage legislation in decades, its exploitative independent contractor system threatens to undermine its endeavors and points to broader weak spots nationally.

Around 10 percent of the state’s population, or 2 million people, work as independent contractors — 40 percent more than the national average. Under the independent contractor framework, employers aren’t required to meet Fair Labor Standards Act requirements for minimum wage or unemployment insurance, or provide benefits. This is appealing to employers — benefits account for up to 30 percent of a worker’s salary, so employers can cut costs by reclassifying their workers as independent contractors. Offloading payroll taxes, which employers aren’t required to pay on behalf of contractors, save employers an additional 8 percent.

In theory, an independent contractor is paid for performing a specific role or completing a project. The payer can only determine the result of the project, not when or how a contractor completes the work. But because labelling workers as independent contractors saves employers so much money, workers are occasionally “misclassified,” or classified as independent contractors when they should be an employee.

While exact numbers of how many workers are misclassified are difficult to obtain, studies are very clear about misclassification’s results: Contractors in several low-wage industries earn less than their salaried peers. In construction, a field particularly prone to misclassification, independent contractors can make half as much as their counterparts on payroll.

Floridians are uniquely vulnerable to employment misclassification. Florida’s service-dependent economy has made it a particularly easy target for gig work companies, according to Alexis Davis, an analyst at the Florida Policy Institute. Roughly 1.3 million of Florida’s independent contractors are “employed” by gig work companies. Gig workers in Florida also belong to some of the state’s most at-risk groups. These workers are disproportionately people of color and 1 out of every 3 is an immigrant. Seniors, attracted by the flexibility and the need to augment their Social Security payments, also make up a large part of the state’s gig workers.

Sherri Wheeler Cliburn, 56, has been driving for Instacart since the delivery app launched in Sarasota four years ago. Like many gig workers, she was attracted to the flexible schedule and good pay that the app initially offered, which allowed her to spend time on tour with her son, who is a musician. But as the app grew in popularity, Instacart began to lower payouts across the board, forcing workers to rely on customers’ tips. And although Instacart sets a default tip for orders, Cliburn says customers will often file fake complaints to get out of paying tips, or even paying for the order at all. This leads to workers getting deactivated from the platform while the company sorts out the case.

“It could take anywhere from five to eight weeks for somebody from Instacart to get back with you,” says Cliburn. “Meanwhile, you’re deactivated. You’ve lost your income.”

I just said, screw it, because they don't care here.

Several other workers gave similar accounts to TalkPoverty from working with Uber, Lyft, and other gig platforms. While they appreciate the autonomy that the independent contractor framework grants them, when pay disputes emerge, they find themselves powerless in the face of the companies they work for. Ben E., who drives for Uber in the Tampa area, says that there were multiple occasions where Uber docked his pay without explanation, leading to a long process of negotiations with the company. Uber has not responded to a request for comment as of publication.

State law makes these abuses particularly hard to fight. Normally, a state’s Department of Labor would provide protection from misclassification and other labor abuses for workers, and handle concerns like minimum wage complaints. However, Florida’s Department of Labor was dismantled in the early 2000s by then-Governor Jeb Bush. Today, Florida is one of seven states with no minimum wage investigators.

In 2017, following a $750,000 lobbying campaign by Uber, the state legislature passed a bill that set a statewide regulations for ride-hailing apps. While the bill included limited regulations on insurance, its main goal was to preempt local legislation in Miami-Dade that would have put rideshare apps on the same regulatory field as taxi services. The bill also included provisions that doubled down on classifying drivers as independent contractors.

Cliburn felt this first-hand when she tried to file a complaint about Instacart’s delays and pay reductions, though she didn’t have misclassification in mind. She contacted the state, which told her that she would have to provide a slew of paperwork that proved her case. As Cliburn struggled to navigate through the process, it became apparent that the state had little incentive to assist her and that they viewed her complaint as a burden to be avoided. Cliburn says she struggled to get in contact with the state and that, when she did, they provided little-to-no support for filing her request. “Eventually I just said, screw it, because they don’t care here. I know other states do care about their workers but in Florida, they just don’t care,” Cliburn says.

While the future of federal minimum wage legislation remains uncertain, it’s clear that the current framework fails to address the needs of the large and growing gig worker contingent. That’s not to say there isn’t hope for this next challenge in worker rights. Several states and cities, including New York and Illinois, have passed additional protections for gig workers. In Seattle, drivers working for ride-hailing apps are now eligible for the city’s minimum wage and dispute resolution protections. And California’s landmark AB 5 would have reclassified many of the state’s gig workers as employees, giving them access to minimum wage regulations and unemployment. While the gains made by the law were undone by a ballot measure funded by Uber and other gig apps, the framework created by the bill could serve as a basis for similar legislation on a federal level.

What’s more, the Biden administration has also signaled that it is willing to take a tougher stance on misclassification, suggesting that meaningful change may be within sight.



Congress Has a Chance to Overturn Trump’s Rent-A-Bank Rule

In November 2019 — before quarantine, social distancing, and a year straight of unemployment insurance claims higher than the worst week of the Great Recession, back when the idea of paying millions of dollars for GIFs seemed unimaginable — the Trump administration’s Office of the Comptroller of the Currency (OCC) quietly introduced a new banking rule to circumvent dozens of state laws designed to protect low-income people from exploitation. The “rent-a-bank” or “fake lender” rule, as it’s being called, allows non-bank lenders (such as payday loan lenders) to launder their loans through nationally chartered banks in order to get around state interest rate limits. This rule, which went into effect in December 2020, upends almost two centuries of U.S. banking law and could trap millions in debt, unless Congress acts soon to overturn it.

Usually, people associate predatory lending with payday loans. And it’s common knowledge exactly how awful payday loans are: 12 million people84 percent of whom have family income under $40,000 — are subject to annual percentage rates (APRs) around 400 percent to borrow just a few hundred dollars. These rates trap borrowers in long debt cycles of constant loan renewals. The typical payday loan consumer will spend almost 200 days — more than half the year — in debt, and two-thirds will renew at least seven times, meaning they ultimately pay more in interest and fees than the original amount they borrowed.

Recently, however, there’s been a significant shift from payday loans to slightly bigger, slightly longer term installment loans. While payday loans are mostly under $500 with two-week terms, installment loans generally range from $500 to $2,000 (though they can reach $10,000 or higher) and offer terms of 6 months to 2 years or longer, with APRs around 100 percent to 200 percent. This shift happened quickly: One of the biggest predatory lenders, Enova International, made 98 percent of its revenue in 2009 from payday loans, but in 2019 only 10 percent came from payday loans compared to 43 percent from installment loans. Although the interest rates are slightly lower than payday loans, and consumers have longer to repay them, installment loans are actually more likely to trap people in dangerous debt cycles because they target the same low-income people but require a much bigger principal to be paid back.

There has been bipartisan legislation to curtail both types of predatory lending. Congress enacted the Military Lending Act in 2006 and expanded it in 2015 to protect service members — 44 percent of whom received a payday loan in 2017, compared to 7 percent of the total population. The bill capped rates on most consumer loans at 36 percent APR for active duty members, their spouses, and their dependents. Meanwhile, 18 states and DC, red and blue alike, have strong rate caps on payday loans that are extremely popular. (Illinois’s House of Representatives actually approved their payday rate cap unanimously, and Nebraska passed theirs with 83 percent ballot approval.) In addition, the vast majority of states have rate caps on at least some installment loans. Forty-five states and D.C. set interest for $500 6-month loans at a median APR of 38.5 percent; 42 states and D.C. set interest caps on $2,000 2-year loans at a median APR of 32 percent.

Predatory lenders want to circumvent these state laws to charge obscene interest rates on Americans everywhere, and the Trump administration was more than happy to draft a new rule that makes that possible. The rent-a-bank rule works as follows: The consumer applies for a loan with the non-bank “fake lender” like Ace Cash Express or OppLoans, which processes that application and sends it to an actual bank. The bank sends money to the consumer and then sells the loan back to the fake lender in exchange for some of the profit. Finally, the consumer pays back their loan to the non-bank lender. The consumer only ever interacts with the “fake lender,” but since the bank technically originated the loan and isn’t subject to the same state interest rate restrictions as non-bank lenders, the fake lender doesn’t have to abide by the rate cap anymore either.

Predatory lenders have been trying to use this rent-a-bank scheme to evade fake lender and anti-usury laws as far back as the early 1800s, but courts and federal regulators have always found it to be illegal. Until the Trump administration reversed course and implemented the new rent-a-bank rule. Now, 42 states and DC currently have at least one predatory lender using a rent-a-bank scheme, and another five have high-cost installment lenders that lend directly to consumers.

A $2,000 2-year installment loan would cost $7,960 in fees.

The costs of this rule to individual people and families will be enormous. In a state like Iowa, where rates are capped at 36 percent for both $500 6-month loans and $2,000 2-year loans, a $500 6-month installment loan from Check ‘N Go that a borrower is able to fully pay after the first term would cost $90 in fees at the 36 percent APR.  But under the new rule, Check ‘N Go is able to charge 199 percent APR on the same loan, which would cost $497.50 just in fees. Similarly, a $2,000 2-year installment loan repaid after just one term would cost $1,440 in fees at a 36 percent APR but $7,960 in fees at 199 percent APR.

And this example is assuming that borrowers are able to pay off the loans when they’re due, instead of renewing them, which is much more common. After six renewals, that 2-year installment loan at a 199 percent APR will cost $47,760 in fees.

This isn’t just a hypothetical exercise. About 19 percent of the 53 million adults in the US with household incomes under $40,000 will take out a payday loan sometime during the year, and most will end up renewing so many times that they pay more in fees than the principal they originally borrowed. If that percent holds across the states, as many as 4 million adults every year will take out a payday loan in a state where anti-predatory lending laws are being undermined by the rent-a-bank rule.

To add insult to injury, while these non-bank lenders profit by preying on millions of desperate Americans, they’re also demanding special support from the government during the pandemic. When the Paycheck Protection Program (PPP) was created in March 2020 as part of the CARES Act, payday lenders and their ilk were initially excluded. The lenders threw a tantrum, suing the government for inclusion and convincing a number of lawmakers from both parties — who happen to have received 6 times more in campaign contributions from the payday industry than those not involved — to write a letter urging the Trump administration to provide them with PPP funds, which it ultimately did.

At least 35 payday loan and debt collection companies received between $9 billion and $23 billion in PPP loans

As of July 2020, at least 35 payday loan and debt collection companies and their subsidiaries had received between $9 billion and $23 billion in PPP loans. Meanwhile, they continued to charge low-income consumers 400 percent APR on short-term loans amidst a financial crisis. Some even had the audacity to market “COVID-19 Financial Relief” and “Emergency Funding Relief” loans at 800 percent APR early in the recession. One company, Opportunity Financial — which operated under the name OppLoans but recently rebranded as OppFi — lends directly in 10 states and uses a rent-a-bank scheme in 33 other states to lend at 160 percent APR. OppFi has received 46 complaints to the Consumer Financial Protection Bureau (CFPB) for their payday lending practices since 2011 and is currently being investigated for potentially violating the Military Lending Act, but last year they took a PPP loan of $6,354,000. Another predatory lender, CashCall, has received a staggering 565 complaints to the CFPB and was successfully sued in separate cases by the CFPB and DC for using a rent-a-bank scheme to charge illegally high interest rates, but still received a PPP loan of $788,600.

The good news is that there are some easy fixes to this problem. In an ideal world, we would have a national 36 percent rate cap that applies to everyone. At 36 percent APR, consumer loans would still be pretty costly but wouldn’t be at predatory usury levels. The bipartisan Veterans and Consumers Fair Credit Act introduced by Representatives Jesús “Chuy” Garcia (D-IL) and Glenn Grothman (R-WI) in November of 2019, and which is expected to be reintroduced this legislative session, would extend the Military Lending Act’s 36 percent cap to all consumers. This would be overwhelmingly popular with the American public, polling at 70 percent among all voters with no less than 60 percent support in any state and with a majority of those opposed saying that 36 percent is still too high. However, given the makeup of the Senate, this legislation is unlikely to pass, and certainly not quickly.

Waiting for a new comptroller of the currency to be appointed by President Biden and then issue a new rule reversing the rent-a-bank rule will also take some time and could face a threat from lawsuits in a very conservative federal judiciary. In the meantime, millions of low-income consumers will be robbed of billions of dollars in fees from exploitative interest rates.

The much faster and easier solution to the rent-a-bank problem is for Congress to simply use the Congressional Review Act (CRA) to overturn the rule. This option is time-limited, though; Congress has just 60 legislative days after a rule is implemented to pass CRA legislation. Thankfully, Representative Garcia (D-IL) and Senator Chris Van Hollen (D-MD) and Senator Sherrod Brown (D-OH) took the first step on Thursday March 25 and introduced the necessary CRA legislation to repeal the rent-a-bank rule.

The resolution now needs to pass both the House and Senate and get signed by President Biden soon, likely sometime in May, to prevent millions of low-income people every year from being even further exploited and trapped in debt by predatory lenders.