While Wall Street has been experiencing some volatility, Main Street hasn’t been doing all that great —and it could be getting worse if new debt collection rules are implemented at the federal level.
A recent Gallup poll found that 40% of Americans are struggling to pay their bills or are going deeper into debt. Americans’ optimism has increased, with Gallup pointing to a 27% decrease in those who believe the economy is only fair or poor (74% in 2016 versus 47% in 2019). But the real issue is that in Americans’ personal finances have seen as great an improvement, and a big part of this diminished optimism has to do with debt from medical bills, to credit cards, to mortgage or rent.
But our community has basically always existed in the shadow of the U.S. economy. Data collected from the Federal Reserve of Chicago offers some startling insights about the Black community’s economic plight.
Estimates of Black unemployment suggest that we have endured roughly three times the rate of white unemployment in Marion County from 2013 to 2017. The median income for Black families was below $50,000, while white median income was just under $75,000 during the same time period.
We also find that the Black household poverty rate is more than twice the white household poverty rate in Marion County.
These stark economic numbers are occurring at the same time educational attainment in the Black community, meaning the percent of a population that is 25 years old with a bachelor’s degree or higher, has steadily increased from approximately 15% to just under 20%.
But too many Americans are struggling financially — and specifically with debt.
According to the National Consumer Law Center (NCLC), 34% of Hoosiers are in debt of some kind. But as you might imagine, when we look at people of color we find that 56% of predominantly non-white area Hoosiers have debt of some kind. Median debt for all Hoosiers is around $1,500.
The Urban Institute found that 28% of all Marion County residents had some kind of debt. Their analysis found that white residents have a greater share of auto loan debt (31%) and auto or retail loans (34%) versus non-white Marion County residents who had 24% of the auto loans and 28% of the auto or retail loans based on 2018 statistics.
The issue of debt collection matters not just because a substantial number of Hoosiers including Marion County residents have some debts, and not necessarily because there were 8,348 debt collection complaints made by Hoosiers in 2017 alone. To be fair, with the exception of Kentucky (5,138), our remaining border states had more than double the amount of complaints. But we also know, according to the National Consumer Law Center that nationally areas with 75% to 100% Black populations had a 69% higher rate of debt collection complaints than areas with fewer Black residents (5% or less).
It matters how the debt collectors treat our fellow Hoosiers.
In 2017, about 28% of Hoosiers reported continued contact even after “stop calling” notices were provided, according to NCLC. That year 24% of Hoosiers filed complaints about debt collectors making false representations. Complaints also included failure to identify as a debt collector (10%) and false threats or other unintended acts (5%).
According to the NCLC, the Trump administration’s Consumer Financial Protection Bureau — the agency that is supposed to protect consumers, has basically proposed new debt collection rules that will protect unscrupulous and harassing activities.
The proposed rule CFPB-2019-0022 will allow collectors to call seven times per week per debt. And, allows debt collectors to text and email without written consent by the debtor.
The NCLC argues that the rules protects collection attorneys from having to do a review of admissible evidence before filing a lawsuit. They also argue that the rule changes do not adequately protect consumers from debt that is time-barred from collection because it’s too old. Debt collectors may not even have to provide written notice of the debt if these rules change.
The time to comment has been extended to Sept 18, 2019 and you can have your federal elected official advocate on your behalf or email 2019-NPRM-DebtCollection@cfpb.gov and reference Docket No. CFPB-2019-022 to register your concerns.
What I’m hearing…
The schools have their I-Learn numbers. The state changed the test again from I-STEP Plus to I-Learn. It will be interesting to see how both state and Marion County performance averages look.
Of course, we will be paying special attention to the new I-Learn state test data and what the results looks like for students of color throughout the county.
We cannot hide from the problem — it requires accountability from parents, students, teachers, administrators and policymakers.
Marshawn Wolley is a lecturer, commentator, business owner and civic entrepreneur. Contact him at firstname.lastname@example.org.