Arise and partner groups urge Jones, Shelby to support Senate Farm Bill without harmful changes

Nearly 1 in 8 Americans, including nearly 900,000 Alabamians, depend on SNAP to help them keep food on the table. And each year, SNAP contributes $1.3 billion to Alabama’s economy, spent in more than 5,000 Alabama stores. Standing in stark contrast to the House Farm Bill, which could terminate or reduce benefits for more than 2 million people, the Senate Farm Bill reauthorizes SNAP, strengthens the program’s operational integrity, and expands existing pilot employment and training programs so that additional states can test promising avenues to work for unemployed and low-wage SNAP participants.

Arise has joined with the Alabama Food Bank Association, the Alabama Rivers Alliance, the Alabama Sustainable Agriculture Network and Greater Birmingham Ministries to urge U.S. Sens. Doug Jones and Richard Shelby to vote for the 2018 Senate Farm Bill and oppose any harmful amendments that would weaken access to food assistance, clean water or support from sustainable agriculture. Click here to read our full joint letter to Jones and Shelby.

Payday lending reform: Ending a debt trap in Alabama

Payday loans allow borrowers with a bank account to use a check dated in the future (usually two weeks later) as collateral for a cash loan. To qualify, all a person needs is proof of income (a pay stub or verification of government benefits). Research shows the payday lending business model is designed to keep borrowers in debt. Borrowers who receive five or more loans a year account for the large majority of payday lenders’ business, according to research by the Center for Responsible Lending.

Each $100 borrowed through a payday loan in Alabama carries a “loan origination fee” of up to $17.50, and those charges occur with every renewal of the loan. With a 14-day loan period, this works out to an annual percentage rate (APR) of 456 percent. Loans that a customer cannot pay off entirely on the due date are rolled over, with no wait required for the first rollover and only a 24-hour wait required before the second. At triple-digit annual interest rates, even a short-term payoff for a payday loan can take a big bite out of a borrower’s bank account.

Struggling Alabamians are common targets of payday lenders. Payday lenders are located disproportionately in low-income neighborhoods, especially ones with large black or Hispanic populations. Lenders often target seniors, people without a high school education, and families who are likely to be living from paycheck to paycheck. This fact sheet by policy director Jim Carnes and policy analyst Dev Wakeley highlights the pitfalls of payday loans in Alabama and offers policy solutions to address them.

Proposed new SNAP work requirements would harm struggling families across Alabama

Congress is considering legislation that would impose harsh work requirements on participants in the Supplemental Nutrition Assistance Program (SNAP). SNAP, also known as food stamps, is part of the U.S. Farm Bill that must be reauthorized by Sept. 30, 2018. The version of the Farm Bill that has passed the House Agriculture Committee contains harmful and unworkable work requirements that would cut off food assistance to as many as 2 million people.

Most SNAP participants without a disability will be subject to harsh new work requirements.

  • Every SNAP participant who does not have a disability and is not taking care of a child under age 6 would either have to work or participate in a work program for a minimum of 20 hours a week.
  • This requirement would apply to non-disabled participants between ages 18 and 59.

Participants fall through the cracks when work requirements are put on safety net programs.

  • People receiving other assistance that requires work (like TANF) often lose assistance because of missed appointments, lost paperwork or confusion, not because they refused to work.
  • SNAP participants also could lose assistance because an employer cut their hours or because they missed work due to illness or a family emergency.

People who can’t comply with the limits would lose SNAP benefits for a year or more.

  • A person who couldn’t comply would lose his or her SNAP benefits for between one year and three years depending on the number of violations.
  • The only way a failure to comply could be cured would be to work for a full month before reapplying for SNAP or to be exempted from the work requirement due to disability or another reason.

Funding for states to run work programs would be totally inadequate.

  • States would be expected to set up complicated and costly systems to track participants’ compliance with work requirements and to sanction people who don’t comply.
  • Funding given to states to provide work opportunities would be totally inadequate for real job training – possibly as low as $30 per month per recipient.
  • Both participants and state SNAP agencies will be set up to fail under this proposed law.

These work requirements are unnecessary and counterproductive.

  • Most SNAP participants who can work already do, either while receiving SNAP or in the year immediately before or after using SNAP to get through a period of unemployment.
  • Most SNAP participants who don’t work can’t work because of employment barriers like bad health, lack of child care or the need to care for an older relative.

Call your U.S. Representative and U.S. Senators Richard Shelby and Doug Jones at 202-224-3121 and ask them to oppose new SNAP limits that would harm struggling Alabama families.

Click here for a PDF version of this fact sheet.

Why SNAP and the Farm Bill matter to Alabama

The Farm Bill is a federal law that funds and governs many food and agricultural programs. It must be renewed about every five years and is up for reauthorization now. The largest program in it is the Supplemental Nutrition Assistance Program (SNAP). SNAP provides vital food assistance to people with very low incomes. It also plays an important role in supporting farmers, which is why it is included in the Farm Bill.

The latest proposed Farm Bill includes harmful SNAP cuts. On April 12, 2018, U.S. Rep. Mike Conaway, R-Texas, chairman of the House Agriculture Committee, released his proposed 2018 Farm Bill. It would increase hunger by taking food assistance away from many struggling Americans, including children in working families.

Arise believes we have a shared responsibility to keep our neighbors from going hungry. SNAP should support families and help create jobs and increase wages, not punish people who already have very low incomes. Efforts to cut SNAP when the Farm Bill is reauthorized will put hungry families and rural communities at risk.

Alabama congressmen have an important role to play in reauthorization of the Farm Bill. U.S. Rep. Mike Rogers is a member of the House Agriculture Committee that approved Conaway’s proposal on April 18, 2018, and will continue to play a role as the Farm Bill moves through Congress. U.S. Sen. Doug Jones is an important member of a bipartisan group of Senate moderates. And U.S. Sen. Richard Shelby is the new chairman of the powerful Senate Appropriations Committee. As our members of Congress consider the 2018 Farm Bill, they should ensure SNAP stays robust to help small farmers, boost the retail economy and keep food on the tables of struggling Alabama families.

Click here to read policy analyst Carol Gundlach’s fact sheet for more on how SNAP works, how SNAP and its participants contribute to the economy, and how proposed new SNAP limits would hurt Alabama.

SB 55: Allowing ALEA to issue hardship driving permits makes sense for Alabama

Update: SB 55 is now law! Gov. Kay Ivey signed the bill on March 22, following votes in the Alabama House (95-1) and Senate (26-1) to pass a conference committee version of the bill on March 15. Earlier, the House voted 88-5 for a similar version on March 1, while the Senate voted 26-1 for its own version on Feb. 1.

Suspending driver’s licenses hurts thousands of Alabamians every year. One of the greatest obstacles to employment is the lack of a driver’s license. Thousands of people in Alabama have their driver’s licenses suspended every year for convictions unrelated to driving.

These Alabamians risk losing their jobs in a nation where 90 percent of us need to drive to work. And the challenges go further: Mothers with suspended licenses cannot go buy groceries, drive to the doctor, or drop their children off at school. People undergoing addiction treatment cannot legally drive to see their sponsors to get help in preventing a relapse.

SB 55, sponsored by Sen. Clyde Chambliss, R-Prattville, would go a long way toward fixing these problems by allowing people who have had their licenses suspended or revoked, but who still need to drive, to drive on a limited basis. These Alabamians could obtain a hardship driver’s license by demonstrating to the satisfaction of the Alabama Law Enforcement Agency (ALEA) that they are not a risk to public safety and cannot obtain other reasonable transportation.

This bill would allow people who need to take their children to school, go to the doctor, or help family members see a doctor to do so without breaking the law. SB 55 is a reasonable, common-sense response to a problem that hurts thousands of Alabamians every year.

BOTTOM LINE: SB 55 would remove unnecessary obstacles to essential participation in society for people who need to drive to work, go to the grocery store and attend to other everyday tasks. Allowing ALEA to issue limited driver’s licenses makes sense and would help tens of thousands of people throughout Alabama.

Click here to read a PDF version of this fact sheet.

By Dev Wakeley, policy analyst. Posted March 1, 2018. Last updated March 22, 2018.

30 days to pay: A simple but important step forward on payday lending reform in Alabama

Alabama borrowers pay interest rates of up to 456 percent a year on payday loans. These high-cost loans trap many struggling Alabamians in a debt cycle that deepens poverty and hurts the state’s economy.

SB 138, sponsored by Sen. Arthur Orr, R-Decatur, would extend the time that payday borrowers have to repay to 30 days, up from as few as 10 days now. This one step would reduce the maximum annual percentage rate (APR) on payday loans in Alabama from 456 percent to about 220 percent. This bill would ease financial pressure on Alabamians who are struggling to make ends meet, giving them more money to take care of basic needs.

The 30-days-to-pay bill would help borrowers and preserve access to credit. Lengthening the repayment period for payday loans would:

  • Boost Alabama’s economy by reducing the amount of fees (more than $100 million last year alone) taken out of our communities every year to benefit primarily out-of-state corporations.
  • Bring payday loan repayment periods in line with repayment schedules for other loans and monthly bills, such as mortgages, rent, car loans, student loans, credit cards and utility bills.
  • Grant needed relief to tens of thousands of working Alabamians and allow them to use their hard-earned money to better their own lives.

BOTTOM LINE: Exorbitant interest rates on payday loans are devastating for families and communities across Alabama. SB 138 would take a simple, important step to reduce the damage from these high-cost loans. That would be good for consumers, good for the state’s economy and good for Alabama.

Click here to read a PDF version of this fact sheet.

Last updated Feb. 2, 2018.

Criminal justice debt: A modern-day debtors' prison

It is illegal to jail a person in the United States simply because he or she owes money. But Alabama has no set process for courts to determine if a defendant can afford to pay fees and fines. And despite a prohibition on “debtors’ prisons,” thousands of Alabamians are at risk of going to jail or are driven further into poverty because they can’t afford to pay costs attached to the criminal justice system.

This fact sheet by Arise policy analyst Carol Gundlach explains how soaring criminal justice debt hurts families and communities across Alabama and considers a range of possible solutions to this multifaceted problem.

New SNAP limits would hurt struggling families

SB 139, sponsored by Sen. Arthur Orr, R-Decatur, would reduce Alabama’s flexibility in the administration of SNAP (the Supplemental Nutrition Assistance Program). These changes would make it more difficult for otherwise eligible households to receive benefits. Some specific examples:

  • Alabama has taken advantage of a federal option that allows elderly SNAP recipients to get food assistance even if they have cash resources, such as savings for health care or funeral costs.     SB 139 would deny help to seniors who have been able to save money for such critical needs.
  • SB 139 could cut food assistance to some families who need more than one car to get to work, school, errands and doctor’s visits. Alabama already counts the value of cash and other “liquid” resources in determining the SNAP eligibility of households without seniors. Our state has elected, however, not to count the value of automobiles or other non-liquid resources in determining SNAP eligibility. This helps recipients in households where more than one person has a car, because otherwise, some of the cash value of a second car could be treated as an asset. Reinstating the resource limits, as SB 139 would do, could make some families choose between essential transportation and food. Other families, including seniors or people with disabilities, could be denied SNAP because they own an old trailer or inherited a small plot of land on which they do not live.
  • SB 139 would deny food assistance to someone who does not “cooperate” with child support. This would require DHR to spend tens of millions for additional child support administration and could put applicants who are victims of domestic violence or child abuse at greater risk.

Alabama’s SNAP enrollment has declined, and it has one of the lowest error and fraud rates of any program in the country. SNAP is highly responsive to economic trends. As the state’s economy improves, the number of people on SNAP has declined by 7 percent since 2013. Alabama’s rate of SNAP errors resulting in overpayments (including mistakes by recipients or DHR workers) was only 1.26 percent in 2014, the most recent year for which data are available.

SB 139 would hurt children, seniors, and people with disabilities. In Alabama, 71 percent of SNAP families had a child in the household. Research has found that children who had access to food assistance in early childhood and whose mothers had access during pregnancy had better health and educational outcomes as adults than children who didn’t have access. Nearly one in five SNAP families have a person who is elderly or disabled. And 40 percent of all SNAP recipients live in families with at least one working member.

Federally funded assistance programs are important to Alabama’s economy. SNAP benefits contribute nearly $2.5 billion in economic activity to local Alabama communities and support as many as 23,000 jobs. Many grocery stores in Alabama rely on SNAP receipts to remain in the black and stay open for everyone in their community.

Click here to read a PDF version of this fact sheet.

By Carol Gundlach, policy analyst. Posted Jan. 23, 2018.

SB 284 offers Alabama consumers protections from high-cost loans and moves lending reform forward

Most states have laws against usury, or excessive interest. Alabama’s Small Loan Act of 1959 caps the interest rate on traditional small, short-term loans at 3 percent a month, or an annual percentage rate (APR) of 36 percent. But more recent laws covering payday and auto title lenders allow APRs many times higher than that. For payday loans, the interest rates can go as high as 456 percent a year. Today, 20 states either have banned high-cost payday lending or strictly regulated the practice. (Click here for a PDF version of this bill overview.)

Alabama lawmakers have granted exceptions for certain products, including payday and auto title loans, claiming these are emergency loans for those who can’t get conventional credit. These high-interest loans take as much as $100 million annually in fees from vulnerable Alabamians, trapping many borrowers in a debt cycle that exacerbates poverty and hurts the state’s economy. More than 54 percent of payday borrowers pay more in fees than the original loan amount, a state database shows.

SB 284, co-sponsored by Sens. Arthur Orr, R-Decatur, and Rodger Smitherman, D-Birmingham, would strengthen consumer protections while preserving the availability of “emergency” payday loans. The bill would:

  • Allow 30-day (rather than 14-day) payday loans at the existing fee, reducing the APR to 213 percent while limiting borrowers to four loans in a 12-month period.
  • Protect consumers by creating a seven-day “cooling-off” period between payday loans to eliminate rapid re-borrowing at high interest rates.
  • Create an “off-ramp” by automatically converting unpaid loans to a three-month installment loan with equal payments at a 3 percent monthly interest rate.
  • Allow Small Loan Act lenders to continue charging a 10 percent non-refundable “upfront” fee on small loans, while prohibiting such fees on rollovers.
  • Cap interest rates at 60 percent APR for all loans of more than $2,000 to guard against higher-cost online “payday”-type installment or revolving credit loans.
  • Remove auto title loans from the Alabama Pawnshop Act and allow them under other consumer credit laws.

BOTTOM LINE: SB 284 would protect consumers and make loans more affordable while preserving small, short-term credit options for Alabamians.

Posted March 23, 2017.

A higher minimum wage would help Alabama families make ends meet and strengthen our state's economy

Too many hard-working Alabamians aren’t paid enough to get ahead. Alabama ranks in the bottom third of states for average hourly wages. Around 77,000 Alabamians earn wages at or below the $7.25 per hour minimum established by the federal government in 2009, and another 394,000 earn less than $10 an hour. In the absence of a state minimum wage, Birmingham in 2015 set its own minimum wage of $10.10 per hour, for implementation by mid-2017. However, the Alabama Legislature overruled, or pre-empted, that measure in 2016 with a state law that prohibits local governments from mandating a minimum wage and other employment practices. (Click here for a PDF version of this overview.)

The “pre-emption law” underscores the need for Alabama to create a state minimum wage. Forty-five other states have their own minimum wage law, and 29 of them have state minimum wages that exceed the federal level. HB 26, sponsored by Rep. Juandalynn Givan, D-Birmingham, proposes to:

  • Establish an Alabama minimum wage at $10 per hour.
  • Adjust the minimum wage every three years to reflect increases in the Consumer Price Index.
  • Require that wages for tipped employees be at least 30 percent of the federal or state minimum wage, whichever is greater.
  • Require that employers ensure tipped employees’ combined wages and tips equal the minimum wage.

The benefits would be widespread. The Alabama Minimum Wage Act would:

  • Raise incomes for the 471,000 Alabamians who now earn less than $10 an hour, and likely prompt raises for many others who earn slightly above that amount.
  • Reduce income inequality by lifting thousands of Alabama families out of poverty.
  • Increase consumer spending, boosting state and local economies and tax revenues.
  • Make sure wage protections keep pace with inflation.

BOTTOM LINE: By setting a state minimum wage of $10 per hour, Alabama would help hundreds of thousands of families make ends meet, boost consumer spending and strengthen our state’s economy.

Posted Feb. 8, 2017.

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