March 2019 Newsletter
RAISE Texas News
Why the CFPB Proposal to Gut Essential Provisions on Payday and Auto Title Loans Hurts Texas
On February 6, the Consumer Financial Protection Bureau (CFPB) Director, Kathy Kraninger, removed the essential protections from the payday and auto title loan rule that was finalized in November 2017 after five years of in-depth research. Why do these provisions matter so much to Texas? Because Texas has some of the highest rates and worst protections for payday and auto title loans in the country! Texans pay on average an annual percentage rate on these loans ranging from 200% to over 500% APR. From 2012-2017, Texans paid $9.2 billion in fees alone for these high-cost loans.
The CFPB ruling was written to help protect people from these harmful lending practices but the new rule has stripped out these important principles:
- Requiring lenders to first assess a borrower’s ability to repay before offering unaffordable, short-term credit.
- Limiting the number of loans that can be extended to borrowers over the course of a year in order to help them pay down their loans without taking on more debt.
These changes initiated a 90-day comment period to allow us to voice concerns! They need to hear from YOU. As a Prosperity Now Community Champion for Texas, we are asking that you help Texans by taking a moment to call or email your Congressional representative and ask them to hold the CFPB accountable to consumers and oppose the changes to the rule! Our partner, Prosperity Now has made it very easy to contact your Congressional representative by phone or email, and even provides a script. Please join us as we advocate against the CFPB proposal to weaken and change the 2017 payday and auto title loan rule.
Time to Track Important Asset Building Bills in Texas
Texas’ 86th Legislative Session began on January 8, 2019. RAISE Texas and its partners will be closely monitoring bills that will affect the asset-building field in Texas. We have a list of bills on our Texas Legislation Page in case you want to follow the bills through each step of the session. Feel free to reach out to us if you have any questions about this year’s session. The deadline for the unrestricted filing of bills and joint resolutions is tomorrow, March 8, 2019.
Three-Part Data Series on the Rising College Debt in TexasThe Center for Public Policy Priorities has a new three-part data series offering fact-driven policy solutions to ensure all Texans can reach their full potential. With the cost of post-secondary education in Texas increasing at an alarming rate, learn more about the challenges that students face in the new series “Degrees of Debt: What to do About the Rising College Debt in Texas”.
Report on Portable Non-Employer Retirement Benefits
The Aspen Institute Financial Security Program and Common Wealth released a report, Portable Non-Employer Retirement Benefits: An Approach to Expanding Coverage for a 21st Century Workforce, proposing the expansion of portable non-employer retirement benefits. This approach uses retirement arrangements that are workplace-based but not tied to a single employer or job. With 55 million Americans without access to a workplace retirement plan, and almost six in 10 Americans lacking a retirement account, this report offers an approach for broad-based retirement security despite the changing nature of work. Click here to read the entire report.
Blog Post Details the Gender Wealth Gap
A recent Squared Away Blog posting detailed the gender wealth gap. Explaining what we already know that women earn 80 cents for every dollar that a man earns, but what many don’t look at is the women’s wealth gap. The wealth gap for women is even greater than the pay gap with women having only 32 cents of net worth for every dollar for men. Click here for more information on the wealth gap.
Study Finds Children of College Graduates Are Richer
The Federal Reserve Bank of St. Louis released its findings on how family household stability is impacted by college graduation. A family headed by a college graduate has over twice the income and over five times the wealth than that of a family headed by a nongraduate. Graduation trends have been increasing but one surprising factor that impact college graduation is parents’ education. The study finds that: 71 percent of head of households follow in their parents’ educational footsteps; both a family head’s education and that of his or her parents affect how much income and wealth a family has; and, nongraduates have higher income and wealth when at least one of the household head’s parents is a college graduate. Click here to review the entire study.
New Report Shows Financial Struggles of Low-to-Moderate Income Older Americans
The Center for Financial Services Innovation and AARP Foundation released a report, Redesigning the Financial Roadmap for the LMI 50+ Segment, on the financial health of low- to moderate-income Americans over age 50. The report finds that 83 percent report financial stress caused by financial challenges they face including a lack of savings, large amounts of debt, family obligations, and an inability to retire. Find the report here.