What’s going on inside Inglewood City Hall: Predatory Lending
Is Inglewood Mayor James Butts a Republican? In 2009 the Obama Administration implemented a rule to stave off predatory lenders that was due to begin on January 16, 2018, however the Trump Administration suspended that rule indefinitely. The Consumer Financial Protection Bureau (CFPB) crafted a long-awaited rule on payday lending that had the support of the delegates in the CA Democratic Party. Inglewood area Rep. Maxine Waters, Ranking Member of the CFPB committee has condemned payday lending, yet employees in her district, working for the city of Inglewood are being offered payday loans at a rate of 24% via payroll deduction.
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Just in time for Christmas, the city of Inglewood’s Human Resources department began emailing city employees to take advantage of payday loans ranging from $500-$5,000 dollars via an easy deduction on their bi-weekly paycheck.
The flyer features the city seal alongside BMG Inc., a Florida based company, who is billed as the “#1 Choice in Emergency Loans”. BMG Inc. specifically targets government employees, who have a demonstrated ability to repay and not default.
According to Amy Traub of the think tank Demos, responded to the actions of the Trump Administration saying “many advocates are worried that it’s the beginning of a larger effort to undo the CFPB’s successful work of protecting consumers.” The payday-lending sector has historically preyed on poor, “underbanked” communities, marketing short-term loans at astronomically high interest rates. Payday loans trade on exploitative debt schemes, as borrowers spiral into a deepening cycle of repeated over-borrowing and financial crisis. Historically, the industry has disproportionately targeted consumers who are extremely poor, black, recently divorced or separated, and renting their housing.
L. David Patterson, Investment Advisor, shared with 2UrbanGirls payday loans have their place, like most financial products but can also serve a purpose by being a valuable resource.
“However, I think their interest rates are excessive. They have somehow found a way to be exempt from Usury laws,” said Patterson.
“My real concern about pay-day loans, as well as check cashing places,is they seem to target the poor, the unbanked, and exploit their lack of knowledge, access, and tough situation. The poor and working class ends up paying more in fees and interests then those with more money and i am sure these companies also do business in middle-income neighborhoods. However they do seem to be in great abundance in working class neighborhoods. There should be an investment in financial education and banking resources so the poor, the working class, won’t have to depend on payday loans and check cashing places to get by especially in areas like Los Angeles where the median income is about $55k and The avg 2 bedroom is $2200/Mo,” explained Patterson.
Inglewood employees are also fighting the sharp increases in rent due to the revitalization to the city yet property owners currently pay the city a flat rate of $20 per residential rental unit in annual business taxes. With no rent control, owners can increase rent however much they want yet their contribution towards taxes remains unchanged, which leaves little to invest in the residents quality of life.
Patterson cited a popular program in San Francisco “Bank On” which encourages and is designed to keep persons from becoming a victim of predatory lending. The program has since gone national through a partnership with the National League of Cities and the James Irvine Foundation.
Although Inglewood City Hall features an ATM provided by Kinetca Federal Credit Union, after the mysterious collapse of the Inglewood Employees Credit Union, who also provided loans to employees via payroll deductions and still managed to fail, is not listed as a participant of the Bank On program.
Within three months of BMG’s initial offering, they have now crossed the pearly gates and can camp out in the employee lounge and prey on employees in person. Is this the kind of prosperity Mayor Butts is promoting to city employees- more debt?
More importantly, why is the Inglewood mayor going against the great work our Inglewood congresswoman is doing to keep Inglewood constituents out of debt especially the way she continues to support Inglewood by ensuring there is continued funding for the residential sound proof installation? Homes initially forbidden to be included in the program, like Carlton Square, are preparing to get new windows just in time for the mayor’s re-election.
Should Inglewood residents re-elect the “Black” Donald Trump in November?
