September 28, 2010
CONSUMER PROTECTIONS: Major victory for payday customers
Advance America, the country’s largest payday lender, has agreed to pay $18.75 million to more than 140,000 North Carolina consumers under a proposed settlement agreement.
In 2004, attorneys from the NC Justice Center, Public Justice and the Financial Protection Law Center of Wilmington filed a class action lawsuit against Advance America, accusing it of charging illegal fees and interest rates. North Carolina law caps interest rates for short-term loans at 36%, but payday loans like the ones Advance America offered typically require triple-digit interest rates.
Advance America no longer does business in North Carolina, but this settlement will cover customers from 118 branch office that once operated in the state. Class action cases against four other payday lending companies are still pending. Hopefully, this agreement will serve as a model for future settlements to provide North Carolina consumers with long-due restitution.
EMPLOYMENT: Help us convince Sen. Hagan to save NC jobs
While many government programs create private-sector jobs, it’s hard to find a more direct cause-and-effect example than the TANF Emergency Contingency Fund, created as part of the 2009 Recovery Act. The fund provided $5 billion to help states subsidize private-sector jobs and to provide workers with supports like child care. Here in North Carolina, that money went to child care subsidies ($23.6 million), More at Four ($30.5 million), Work First family assistance ($9.7 million) and subsidized jobs ($11.4 million).
The TANF Emergency Fund expires this Thursday if Congress does not extend it. A long list of North Carolina organizations, which includes the Justice Center, is encouraging Senator Kay Hagan to support the extension of the fund. We hope she will get the message that ending these programs will cost jobs, remove much-needed income from local economies, adversely affect local businesses, and make it impossible for many low-income parents to cover basic expenses.
PUBLIC EDUCATION: Schools get smaller percentage of lottery funds
The North Carolina Education Lottery has steadily chipped away at the cut of money that goes to education, an investigation by NC Policy Watch finds. The share of total revenue that educational programs get has dropped to 29 percent, pushing aside a formula etched in state law that calls for 35 cents out of every dollar to benefit North Carolina students. That formula change meant a difference of nearly $80 million last year that might have gone to the college scholarships, early education, school construction and classroom reduction programs that the lottery helps fund. The steady drop in percentage happened after legislators inserted a loophole in state law telling lottery officials to hit their 35-percent mark "to the extent practicable."
The lottery, with its tempting pot of revenues, could find itself a target as state leaders face a projected budget shortfall of $3.3 billion this year. Governor Perdue, through a spokeswoman, said it's too early to say whether the lottery would be off-limits or if some revenue would go to ease the strain on the state's General Fund. Alice Garland, the NC Education Lottery's acting director, said making next year's sales goals of $1.47 billion will be difficult and may mean further reducing the 30-percent cut education programs are slated to receive.
This investigation is the first in a series of "Policy Watch Investigates" stories by investigative reporter Sarah Ovaska. Stay tuned for more!
HEALTH REFORM: North Carolinians are already seeing the benefits
If you want to know how the new health reform law is affecting people in North Carolina, just ask Robin Eastridge of Wilkesboro. The law creates a new federal high risk pool for people who have trouble affording other insurance, and Robin is one of those people. A simple viral infection put health insurance out of reach for her, but the high-risk pool changed everything.