Black Lawmakers Focus on Economic Problems
November 5th, 2007
article from the Post and Courier - November 2, 2007
The state Legislative Black Caucus held its annual retreat Thursday and outlined priorities for 2008. Here are some of the topics discussed:
Mortgage lending disparity: Examine the situation and potential solutions such as legislation requiring data to track possible practices steering blacks toward high-interest loans.
Foreclosures: Educate public about the dangers of subprime loans and potential foreclosures and seek allocations for finance counselors and rescue funds.
Payday lending and banking: Continue to pressure payday lenders to stop predatory practices that trap customers in a cycle of poverty with short-term, high-interest loans while finding other ways to provide the service.
Health care: Continue effort to provide programs that address education and prevention. Also, look at a potential cigarette tax increase to help fund health costs.
Voting: Early polling places, registering 17-year-old high school students, same-day registration and publicly financing elections are among the considerations to get more people out to vote.
Proposed government spending cap: Provide information about the harm that could be caused by tying the hands of government.
WEST COLUMBIA — Stopping foreclosures, halting the cycle of debt perpetuated by payday lenders, ensuring blacks get the same mortgage rates as whites and guaranteeing government has the final say in what money is needed to provide services are among the 2008 legislative priorities for the state’s black lawmakers.
The Legislative Black Caucus on Thursday discussed problems stemming from poverty and those unique to minorities and working poor. The lawmakers set a plan of action, including crafting potential legislation, establishing public- private partnerships and developing ways to raise awareness.
“A lot of the problems have to do with economics in the African-American community,” Rep. David Mack, D-North Charleston, said during the retreat at Brookland Baptist Church. “The old saying in the black community is, when America catches a cold, black folk catch pneumonia. It’s something we have to be very aware of.”
Bernie Mazyck, president of the South Carolina Association of Community Development Corporations, called on the legislators to watch the foreclosure rate. The state ranks in the top five for the number of foreclosures, he said.
The association requested $500,000 from the Legislature to hire 15 financial counselors and $3 million in rescue funds to help those in foreclosure save their homes.
Another way to address the foreclosure rate is by discovering why more blacks than whites in Charleston and North Charleston were identified as having high-interest loans. A recent national survey found the area had the highest disparity in the nation between what whites and minorities pay.
John Ruoff, director of research for South Carolina Fair Share, recommended the lawmakers consider expanding reporting data, including race and credit history, for mortgage loans, and provide more authority to the state Department of Consumer Affairs and regulatory agencies.
Data collection would allow agencies to track whether minorities were being steered into high-interest mortgages, Ruoff said.
Ruoff also detailed concerns associated with payday lenders, which provide small, short-term loans. The companies, however, charge 391 percent in annual interest and trap low-income clients who often get multiple loans to pay back the lender, he said.
At least two lawsuits have been filed in the state by legislators who are working as lawyers in a private capacity. The basis of the lawsuits is that payday lenders do not consider a person’s ability to repay a loan when issuing one, said Rep. Chris Hart, D-Columbia.
Hart said the lawsuit combined with legislation introduced in both the House and Senate to address predatory lending issues should put pressure on the industry.
Larcey Simpson, a graduate student at the University of South Carolina, noted, however, that payday lenders provide a service that is in demand, especially for those who earn less than $20,000 a year and cannot get a bank account.
“What’s the alternative, because I haven’t heard one yet,” she said.
The legislators also heard about the need to provide more health care and the difficulty of doing so when confronted with rising rates. Additionally, they discussed a proposed cap on state spending and a call for local governments to limit spending. Ruoff told the caucus legislators that, for example, with rising health care costs, artificially shrinking government could force cuts in education or infrastructure improvements.
To end the day, the National Black Caucus of States Institute presented the “South Carolina Community Economic Empowerment Forum.” The two-hour presentation provided details about buying power in the black community, the impact of a low credit score and gave the legislators information about how to help educate the public.
Rep. Joe Jefferson, D-Pineville, said the retreat helped the black legislators come together to develop strategies and review accomplishments and goals.
“If we come together as a group and decide on certain issues, we know in numbers there is strength,” he said.
Reach Yvonne M. Wenger at 803-799-9051 or ywenger@postandcourier.com.