Value propositions and barriers to housing

The Threat to Detroit’s Rebound Isn’t Crime or the Economy, It’s the Mortgage Industry

Redlining is alive, well and dangerous in Detroit.

Story by Anna ClarkTwitter

Published on Dec 7, 2015

 

As a young married couple, Steven and Corey Josephson chose to begin their lives together in Detroit. They came from Greeley, Colorado, a city that couldn’t be more different. It was founded as an experimental utopian community; its majority-white population has more than doubled since 1970; and its unemployment rate is lower than the national average, and about half that of Detroit.

But in August 2014, they left. Corey, a theater and English teacher, grew up in Michigan, and Steven found a position in Detroit’s Teach for America program, teaching science to the youngest kids at Coleman A. Young Elementary School.

Along with their beagle, Baley, they moved into a house in northeast Detroit near 8 Mile Road. “We loved the house, we loved the neighbors,” Steven Josephson says. They were renting, but “homes are just so cheap here, it makes more sense to buy.” So they approached their landlord about purchasing the home. At first, everything moved smoothly — but then, Josephson said, the landlord backed out.

Read more here.

Banking and the poor

The Underrated Role of Financial Services in Reducing Poverty

Ethan Geiling and Genevieve Melford, Corporation for Enterprise Development - Posted July 11, 2011

Something as simple as a checking account can be the first step in saving, planning for the future, building credit, and climbing the economic ladder. Unfortunately, basic financial services like checking accounts are out of reach for many low-income American families.

If we’re going to help connect these people to genuine opportunity, now is the time to take some simple but important steps to provide better financial products for low-income Americans.

According to the Federal Deposit Insurance Corporation (FDIC), approximately 8 percent of all American households are unbanked, with neither a checking nor a savings account. Another 18 percent are underbanked, meaning they may have an account but they also rely on non-bank financial services like check cashing and high-interest payday loans.

This financially underserved population of over 30 million households is disproportionally low-income and minority. Forty-three percent of households with a yearly income below $30,000 are either unbanked or underbanked. Nationally, 54 percent of black households and 43 percent of Hispanic households are unbanked or underbanked, compared to only 18 percent of white households.

These households spend an enormous amount of money on financial services for which most Americans pay little to nothing. The average full-time worker without a bank account spends $40,000 over the course of his or her lifetime to turn income into cash.

To read this entire, very challenging report click here.

Ethan Geiling is a policy and research associate at the Corporation for Enterprise Development. Genevieve Melford is director of research at the Corporation for Enterprise Development.

Update from Texas House on Payday Lending legislation

Rev. Gerald Britt, CitySquare's VP of Public Policy and Community Program Development, has been working hard for changes in the payday lending laws in Texas and in Dallas. 

One outcome of his vision and hard work was a visit to CitySquare last Friday by Elizabeth Warren, Assistant to the President and Special Advisor to the Secretary of the Treasury. 

Another result is documented in the press release below that was issued by Texas state Rep. Rafael Anchia and Rep. Marc Veasey on Friday.  The progress is not all that we hoped, but a step in the right direction.  And, the effort is not complete, as the legislation must come to the full House for a vote and work must be done on the Senate side to get a new law. It is important that we express our concerns to our representatives and to our Senators here in Texas about this important issue. 

For Immediate Release:
April 8, 2011

Payday Lending Bills Pass Out of Committee

Bills do not address all concerns with payday lenders, but represent improvement from current law.

AUSTIN -- On Thursday, April 7th, the House Committee on Pensions, Investments, and Financial Services unanimously approved House Bills 2592, 2593, and 2594, by Rep. Vicki Truitt (R-Southlake). These bills create a system of regulations for payday lenders, who currently are subject to very little state oversight.

At the outset of the legislative session, State Rep. Rafael Anchia (D-Dallas) and State Rep. Marc Veasey (D-Fort Worth), who serve on the committee, had hoped for stronger regulation. Both representatives authored or co-authored bills that would have provided for more restrictions on payday lenders. Those bills would have restricted the lenders' ability to roll over past due balances into new loans, charge exorbitant interest rates, and saddle consumers with unexpected debt.

“This bill, although not perfect, brings significant new regulation to an industry that, until now, has been free to operate in Texas with very little oversight,” Rep. Anchia said. He added, "Significantly, the Office of the Consumer Credit Commissioner now has the power to move against the bad actors in the industry on behalf of consumers who look to the state for much-needed protection from predatory lenders."

Despite their preference for stronger legislation, Rep. Anchia and Rep.Veasey voted in favor of the payday lending bills. They feel that the legislation provides as much protection and regulation as possible while ensuring that the bills can obtain the support of the majority of the Legislature. Both representatives believe that the need for regulation of payday lending is too pressing to delay by waiting for more perfect legislation.

“Although I wish that we could pass a bill that would do more to protect consumers, I support this legislation because I believe it is the most we can accomplish this session, and it represents a significant improvement over current law,” Rep. Veasey said.

State Representative Rafael Anchia is currently serving his fourth term in the Texas House. He is the vice-chair of the Pensions, Investments, and Financial Services Committee, and also serves on the Land and Resource Management Committee. Residents of District 103 are encouraged to contact Rep. Anchia at (512) 463-0746.

State Representative Marc Veasey is serving his fourth term in the Texas House. He is a member of the Elections; Pensions, Investments and Financial Services; and Redistricting Committees. Residents of District 95 are encouraged to contact Rep. Veasey at (512) 463-0716.