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Congress considers going easy on predatory lenders

The New York Times Editorial Board:

“The payday lending industry is pressing its friends in Congress to repeal rules that shield borrowers from short-term loans that trap them in debt at interest rates of 400 percent or more. The rules were issued last year by the Consumer Financial Protection Bureau in a last gasp of consumer financial protection before President Trump appointed Mick Mulvaney as its new chief.

The new administration is openly hostile to the rules — which become effective in August 2019 — and is clearly looking for ways to undermine them. Meanwhile, bills introduced in both the House and the Senate would repeal the rules outright, opening the door for the return of lending practices that make working-class families poorer.

The payday industry advertises itself as a source of “easy” credit for workers who run short of money before their next paycheck and take out loans that are typically supposed to be repaid within two weeks. But there is nothing “easy” about this arrangement, as the consumer protection bureau showed in a study of more than 12 million loans. Among other things, the research revealed that the industry relies on people who can almost never repay on time, which usually means they borrow over and over again.

Among the study’s findings: Eighty percent of payday loans were rolled over or renewed within two weeks; three out of five loans were made to borrowers who paid more in fees than they borrowed; four out of five borrowers either defaulted or renewed a loan over the course of a year; and one in five payday borrowers — including elderly people on fixed income payments — remained mired in debt for the entire year.

As they press for federal legislation to overturn the rules, the lenders have been lobbying state legislatures to expand their right to issue payday loans for longer than 45 days, loans that would not be covered by the regulations.

The industry spent lavishly in Florida to pass a law that will allow an annual rate of nearly 300 percent on a three-month loan of $1,000, according to an analysis by the Pew Charitable Trusts.

The lenders are blocking bills restricting the industry in other states, including Ohio, where borrowers typically pay an annual rate of 591 percent — the highest payday loan costs in the United States.

Read the full editorial.

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Nate Coffman on In Focus with Mike Kallmeyer

Yesterday, our executive director, Nate Coffman was on In Focus with Mike Kallmeyer to talk about Ohioans for Payday Loan Reform and the statewide citizens initiative to get a ballot measure in November combating predatory lending in Ohio. 

Payday loans in Ohio are the most expensive in the nation, with an astounding typical annual percentage rate (APR) of 591%.

Ten years ago, Ohioans voted by a nearly 2:1 margin to implement reasonable reform to the payday lending industry, but that language had a loophole, which allowed the predatory lending industry to go unchecked in Ohio.

On a federal level, the Consumer Finance Protection Bureau is continuing to drop cases regarding outrageous practices of payday lenders. That is why we need real reform now.

Watch the nearly eight minute video.

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Check out Nate Coffman on The State of Ohio

Check out today’s episode of The State of Ohio with Karen Kasler as they discuss payday lending reform in Ohio. Our own Nate Coffman talks about the statewide citizens initiative alongside Rep. Kyle Koehler (R – Springfield), who was the primary sponsor on the bipartisan HB123 which also seeks to address the unchecked power of predatory lending in Ohio.

Payday loans in Ohio are the most expensive in the nation, with an astounding typical annual percentage rate (APR) of 591%. That is why we need real reform now.

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CDC Impact: Financial Empowerment

Over the last few years, Ohio CDC Association (OCDCA) has been working hard to quantify the impact of CDCs throughout Ohio. We’ve been collecting and analyzing data from our member organizations and are excited to share our findings – especially in digestible bits.

We are pleased to state that, each year, over one million people benefit from the work of Ohio’s CDCs.

This week, we take a look at financial empowerment. Approximately 50% of Ohio CDC Association members offer a financial empowerment program. Through financial empowerment initiatives, CDCs provide education and asset building tools so low and moderate income families can become financially independent, improve credit, reduce debt and foreclosure risk, and contribute to community stability.

Did you know that, in 2016, Ohio CDCs:

  • Invested nearly $6,500,000 in financial empowerment programs to leverage $65,000,000  in assets for low-income Ohioans;
  • Conducted financial empowerment programs which improved the financial well-being of 1 out of every 2 participants;
  • Improved the financial well-being of nearly 35,000 Ohioans.

The many organizations that perform this work do so in a myriad ways.

One way is through the OCDCA Assets Ohio Individual Development Account (IDA) Program. Operated by OCDCA since 1999, IDAs are matched savings accounts for low-to-moderate income individuals to save for a first time home purchase, small business venture, or post-secondary education. The participant savers contribute earned income and receive up to an 8:1 match for their desired asset. While saving, they undergo financial education and asset specific education.

One central Ohio OCDCA member helped Deb in 2016. Deb has two sons and six grandchildren. She is a long-time dedicated Goodwill employee and was approved for a Habitat for Humanity home in 2015. After about six months in the IDA program, Deb saved enough money to reach her goal, and was ready for a down payment in March 2016.

Stories like Deb’s are sprinkled throughout the state thanks in part to the work of Ohio CDCs. Because of the work and programs of CDCs, many individuals and families are finding empowerment and economic prosperity that continues to be a challenge for many Americans.

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Financial Education Training for Trainers

Join us for the Your Money, Your Goals training for trainers curriculum, developed and delivered by OCDCA trainer favorite Inger Guiffrida of the Consumer financial Protection Bureau (CFPB).

The Your Money, Your Goals toolkit helps front line staff and volunteers as they work with consumers to:
• Make spending decisions that can help them reach their financial goals,
• Order and fix credit reports,
• Reduce debt,
• Avoid harmful financial products, and much more!

This day-long training is free with registration and includes a printed copy of the Your Money, Your Goals toolkit.

Register soon as space is limited.

Your Money, Your Goals: Training for Trainers
August 1, 2017  /  9 AM – 5 PM
Chase Bank Building, 6th Floor, Columbus, OH 43215

For more information, please contact Suzanne Parks at (614) 461-6392 ex. 206.

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The Nutz & Boltz of IDAs

Join OCDCA next month as we discuss the nutz & boltz of starting an Individual Development Account (IDA) Program through OCDCA’s Assets Ohio Project. IDAs are matched savings account for low-to-moderate income individuals to save for a first time home purchase, post-secondary education, or small business.

Who Should Attend?

  • Organizations considering or developing an IDA Program
  • Organizations that have an IDA program but have new hires
  • New IDA subsites

Agenda:

  • IDAs as a Strategy for Asset Building: Why and How do IDAs Work
  • The Building Blocks of Program Design
  • Assessing your Community’s Needs: Defining your Target Population
  • Funding Resources and Opportunities Explained
  • IDA Program Management
  • Integration of IDAs into Other Agency Programs

This training will be facilitated by Jerolyn Barbee, former Assets Ohio Program Manager.

Nutz & Boltz of IDAs
June 22, 2017
10 AM – 4 PM
Columbus Metropolitan Library
96 S. Grant Avenue
Room 3A
Columbus, OH 43215
Register Here!

Cost: $35 for OCDCA members, $45 for non-members, OCDCA AmeriCorps VISTAs are free
Lunch is provided.

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DeSoto Bass, Hilltop public housing residents get job help

Big news from Dayton featuring OCDCA member Greater Dayton Premier Management and CareSource Life Services!

Cory Frolik for Dayton Daily News:

Aquanna Quarles last year met with then-Housing and Urban Development Secretary Julián Castro. Quarles has lived in DeSoto Bass since 2007. Quarles, who enrolled in Greater Dayton Premier Management’s self-sufficiency program, was a shift manager and wanted to keep moving up the ladder. Photo by Cornelius Frolik.

A new job center opened this week in the heart of the DeSoto Bass Courts in West Dayton that will assist public housing residents with finding jobs and better-paying work.

Residents of the roughly 500 apartments in the DeSoto Bass and nearby Hilltop Homes public housing developments now have access to an on-site job center that has eight offices for community organizations, a computer lab, kitchen and meeting space.

The center will connect job-seekers with employers, offer work-readiness training and will help residents with job placement and financial literacy services, officials said.

The center just opened, and already 20 residents have signed up for the Jobs-Plus program, and two have already found work, said Jennifer Heapy, CEO of Greater Dayton Premier Management, the local public housing authority.

In September, the secretary of the Department of Housing and Urban Development (HUD) visited the DeSoto Bass Courts housing project to announce it was selected for a $2.4 million grant as part of the federal Jobs-Plus Initiative Program.

Greater Dayton Premier Management was one of only six public housing authorities out of 4,000 nationwide to receive a Jobs-Plus grant award last year. The agency last year also received a $1.5 million federal grant to develop a plan to remake the West Dayton neighborhood around DeSoto Bass.

The job center will help residents learn a trade, obtain a GED, improve their jobs skills and make other gains that help people get their first job or climb the ladder if they are already employed to become more self-sufficient and earn higher wages, Heapy said.

When residents participate in the Jobs-Plus program, they receive incentives so that their rental subsidies do not decrease when their wages rise, officials said. People in Jobs-Plus can get a 100 percent “income disregard” for up to two years.

Jobs-Plus, a four-year grant, will help pull public housing residents out of poverty by permitting them to advance in their jobs and careers to earn more money without having to fear that they will hit a benefits cliff and lose some of their rental subsidies, officials said.

Premier Management has hired a Jobs-Plus coordinator and has partnered with CareSource’s Life Services department to try to help residents obtain jobs that pay living wages, Heapy said.

CareSource offers its members services to help overcome obstacles to employment, including interview and job training, transportation and childcare assistance and budget and financial counseling.

Read the whole article here.

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Detroit Shoreway is ‘ahead of the curve’ when it comes to development

By Jay Miller from Crain’s Cleveland Business:

When the Westown Community Development Corp. set about looking for a development partner for the planned $15 million redo of the long-vacant Variety Theatre on Lorain Avenue, it turned to the Detroit Shoreway Community Development Organization, a neighborhood community development corporation, or CDC.

When community development groups in several struggling neighborhoods on Cleveland’s West Side needed to find a partner to keep those organizations afloat in 2010, the Detroit Shoreway nonprofit was there to unite the groups under its umbrella. In July of that year, Detroit Shoreway opened its Stockyard, Clark-Fulton & Brooklyn Centre Community Development Office, now the Metro West Community Development Office on Fulton Road, with its own managing director.

And when the city of Shaker Heights was looking for a developer to help shape a new housing development along the Blue Line Rapid Transit, it turned to the Detroit Shoreway organization. The result is Transit Village — 33 attached, single-family townhomes along Van Aken Boulevard that will sell for between $275,000 and $350,000.

Reducing the number of CDCs has been encouraged by a number of funders in recent years, and Detroit Shoreway’s approach may be the most successful.

“There are fewer resources around and our industry is evolving,” said Jeff Ramsey, the executive director of Detroit Shoreway. “The model we are creating here is using an organizational infrastructure of successful organizations to deliver grassroots community services.”

That means turning into a profit center the development expertise gained in the neighborhood by developing market-rate and affordable housing, and then the $30 million Gordon Square Arts District that includes the Capitol Theatre, the new Near West Theatre and Cleveland Public Theatre. Assisting places like Shaker Heights and the neighboring Westown, and earning development fees that support other services, like neighborhood housing inspections and workforce development programs, also is critical.

It also has meant merging four CDCs — Brooklyn Centre, Clark-Fulton and Stockyards, in addition to Detroit Shoreway.

Both Detroit Shoreway and its Metro West office, which serves the three outlying neighborhoods, have a managing director, Ramsey said. The two offices share a central staff for services such as human resources and information technology. So what had been four standalone organizations, each with small staffs serving 10,000 to 15,000 resident neighborhoods, is now one organization with a combined staff of 28 serving an area with a population of 40,000 people.

“That’s an example (of merging CDCs) where it has worked really well,” said Bobbie Reichtell, executive director of Campus District Inc., a CDC serving a neighborhood east of downtown. “It’s perfect that (Ramsey) is there because the previous organization was very good at community organizing, but not at development.”

Reichtell, a former senior vice president for programs at Cleveland Neighborhood Progress, an umbrella organization for local CDCs, said Detroit Shoreway’s development expertise will help rebuild the Metro West area, which abuts the upcoming redevelopment of the MetroHealth campus across West 25th Street.

A segment of the nonprofit world that grew out of the late 1960s, community development corporations, or CDCs, were a response to the struggles of urban neighborhoods with aging housing, including the reluctance of banks to make mortgages in minority and changing neighborhoods and the flight to the suburbs.

Initially funded by churches and foundations, CDCs rescued abandoned homes, rehabilitated them and then filled them with families using lease-purchase agreements. When the young U.S. Department of Housing and Urban Development created the Community Development Block Grant (CDBG) program, Cleveland and other cities funneled CDBG money through these community development groups for low-income housing and housing code enforcement services.

At one time, each traditional Cleveland neighborhood, more than 40 of them, had a CDC. But declining populations and waning federal funding have cut that number in half and forced them to find new ways to stay financially solvent.

Now, Detroit Shoreway’s financial statement shows a $10 million operating budget with three equal funding streams: one-third from development fees, like it’s getting from the Variety Theatre and Transit Village; one-third from foundations and donations; and the rest from the CDBG dollars channeled through the city of Cleveland.

“They’ve gotten ahead of the curve,” said Colleen Gilson, vice president of CDC Advancement at Cleveland Neighborhood Progress about Detroit Shoreway. “Why not export their talents? They’ve been so successful at development.”

But like other CDCs, its services are broadening. Now, looking beyond its strength in housing and commercial development, Detroit Shoreway sees its mission, according to Ramsey, as “effective neighboring.” That includes offering programs like financial literacy to help low-income people build wealth, engaging with other neighborhood groups — like the Hispanic groups in the Clark-Fulton area — as well as workforce programs and even a tax preparation service. As Ramsey sees it, every dollar saved by making sure residents take all of their tax deduction, and the preparation fee of an outside preparer, comes back to the neighborhood.

Even if CDCs can’t find ways to merge (two East Side groups failed at it), Gilson sees CDCs combining resources in other ways, such as developing joint marketing programs or doing long-range planning together. So while the Shaker Square Area Development Corp. and the Buckeye Area Development Corp. couldn’t find their way to a merger, Ohio City Inc. and the Tremont West Development Corp., two relatively strong CDCs, are seeking to fund a shared safety coordinator position.

“I think the future is in partnerships and collaborations,” Ramsey said.

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Dollars for your microbusiness development program

OCDCA welcomes current, good standing members to apply for the Ohio Microbusiness Development Program.

To view the application, please visit the microbusiness page on our website.

The purpose of the Ohio Microbusiness Development Program is to provide funding for community development corporations (CDCs) to further develop a local delivery system that encourages microbusiness development, provides low- and moderate-income households with access to capital for business development and self-employment, and creates and retains long-term jobs in the private sector.

The maximum grant award is $50,000. Of this, up to 10% may be used for administrative expenses. The structure of the lending allocation for the microbusiness program has changed. Please refer to the introduction of the funding application, or click here for more information. The application is due by 4:00 pm on September 30, 2016.

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If you have any questions, please do not hesitate to contact David Foust at dfoust@ohiocdc.org or (614) 461-6392 ext. 204.