My Turn: Self-Driving Cars Must Not Leave the Rest of Us Behind

CalMatters
By Alvaro Sanchez and Susan Shaheen

Starry-eyed predictions aside, critical issues are missing from the discussion about how self-driving cars will revolutionize  transportation.

Low-income Californians cannot lift themselves out of poverty if they lack reliable transportation. Without it, they cannot gain access to jobs, education and other opportunities.

Too often, transportation decisions prioritize the movement of personal vehicles that are often out of reach of low-income households. We must break this cycle.

Available figures consistently show that lower-income Americans spend a higher percentage of their income on transportation than the wealthy do, and a Harvard study found that a lengthy commute impairs a person’s ability to escape poverty.

People who drive increasingly get stuck in traffic. No wonder many people see the coming age of driverless cars as just the sort of magic bullet that will solve these problems. They are wrong.

Self-driving vehicles won’t fix these problems. The problem is not one of technology. Rather, the problem stems from a failure to prioritize people over cars.

Many supposed transportation revolutions, from buses and streetcars, to interstate highways and Uber, have led to increased segregation and growing wealth gaps between the rich and the poor.

Self-driving technology could exacerbate entrenched social and environmental problems, if we don’t make deliberate policy choices, especially for marginalized groups.

We can easily imagine a dystopian scenario in which people with money purchase personal self-driving cars, while the rest of us are mired in congested streets, with reduced mobility as public transit gets short-changed due to ridership loss.

We could have a society of transportation haves and have-nots even worse than what we see today: The affluent few whisked around effortlessly in self-driving cars, while the less well-off struggle to get around.

Unregulated, we could see a driverless car future that increases inequality, as high-income people become the natural early adopters, with companies catering to them and leaving poor people and people with disabilities behind.

Further contributing to the wealth inequality associated with the deployment of self-driving vehicles is the potential job loss associated with automation. Our research shows this will particularly impact African-Americans and Latinos, who hold a high percentage of transportation-related jobs.

So how do we make this technological revolution work for all Californians?

  • We must seize this opportunity to create a transportation system that is rooted in people and promotes vibrant, healthy, and clean places for people to live, work, and play—places that prioritize  the movement of people over the movement of cars.

When The Greenlining Institute reviewed the issues in depth, we found that part of the answer lies in what some call FAVES–fleets of automated vehicles that are electric and shared–if governments guide their development with smart policies designed to meet the needs of all users, including marginalized populations.

  • Second, equity must be a central focus in the research, development, and deployment of fleets of automated vehicles that are electric and shared, and other forms of driverless vehicles to ensure that these emerging mobility services meet the needs of all marginalized groups.

Money saved by having driverless trains and buses can be used to lower fares for low-income riders and improve service. We might also require fleet operators to not limit their services to high-profit areas but also provide mobility in rural communities and low-income neighborhoods.

We could also mitigate job loss associated with automation by guaranteeing a just transition for impacted workers, with training programs that have real jobs at their conclusion and a strong social safety net for people who can’t find new employment.

And we should consider requiring fair labor standards for the new jobs this emerging industry will create, in addition to prioritizing the hiring of marginalized populations.

  • Third, we must embrace mobility equity. Automated vehicle technology should support and contribute to creating a just and fair transportation system that provides mobility options for underserved populations, reduced pollution, and enhances economic opportunities.

With focused policy interventions, we can create a clean transportation system that works for all, bridging the divide between rich and poor rather than worsening it. A transportation revolution is arriving. This is one time we can’t be asleep at the wheel.


Alvaro Sanchez is environmental equity director at The Greenlining Institute, alvaros@greenlining.org. Susan Shaheen is an adjunct professor in Civil and Environmental Engineering at UC Berkeley and is co-director of the Transportation Sustainability Research Center, sshaheen@berkeley.edu.

Why Don’t We Riot Over Wealth Inequality?

Common Dreams
By Alvaro Sanchez

Tell people their gas taxes are going up and they will riot, literally.  Tell people that 62 individuals hold the same amount of wealth as the 3.7 billion people who make up the poorest half of the world’s population and we don’t blink an eye. Okay, maybe we do a hard blink but we certainly don’t riot. Or perhaps gas tax riots are actually severe wealth inequality riots in disguise?

France has been embroiled in mass and violent protests to proposed diesel and gas tax increases that have forced France’s government to suspend its plans to increase taxes and to also immediately freeze prices on electricity and home heating fuel. The proposed taxes, meant to curb climate change by weaning motorists off petroleum products and to generate funding for renewable energy projects, were received negatively by several sectors of the French population. Their message carried out by the “gilets jaunes” (yellow vest) movement resulted in violent protests in Paris and caused four deaths.

A number of U.S. publications chimed in on the French protests claiming they show a Global Carbon Tax Revolt, claiming that people from Washington to Ontario to France are saying no to taxing carbon. But what they conveniently portray as a revolt on carbon taxes (which happens to match their ideological opposition to climate action) I see as a sign of frustration and impotence over massive wealth inequality.

Let me explain.

Wealth inequality has widened all over the world, leaving many people struggling who previously enjoyed more secure prosperity. In the U.S. and France the cost of living continues to increase while wages and earnings stagnate for most. At the same time the top earners seem to accumulate all the wealth: in 2017 Oxfam reported that the top one percent secured 82 percent of all wealth while the bottom 3.7 billion who make up the poorest of the world saw no increase in their wealth. Favorable tax policies for the rich in the U.S. and France’s recently approved budget show signs of exacerbating wealth inequality in those countries, leaving people with scarce resources contributing greater amounts of their income to basic necessities like housing, food, health care, education, and transportation. And when government needs to step in to rescue someone from economic collapse, it seems to only bail out corporations like banks, automakers, and utilities.  Regular citizens do not seem to enjoy the same level of concern from decision makers about our economic well being.

But why do people riot over gas taxes and not massive wealth inequality? Because we feel the economic pain from a gas tax increase more intensely and immediately than structural systems that help a very small set of people to accumulate wealth. All people can understand a gas tax increase.  Very few people can explain the income ramifications from the 2017 tax reform approved in the U.S., the largest tax reform of last 31 years.

In my opinion, the French gas tax riots stem from the same place as growing resentment towards immigrants globally, increased scrutiny over social welfare and entitlements, and growing right wing populist movements: scarcity. People wouldn’t riot over a gas tax if they could afford it. Instead, people in France are rioting and some media outlets in the U.S. blame it on the French elite supposedly pushing their climate agenda on the people. They are wrong.

My proof is California. In the world’s fifth largest economy, residents of California have made it abundantly clear that we want our state government to act on climate.  We’ve been pricing carbon since 2013, collecting over $8 billion from polluters to invest in our state to fight climate change.  In our most recent election we also soundly defeated an effort to repeal a gas tax approved by the California legislature in 2017, which has invested almost $10 billion to improve the state transportation infrastructure. And there is no sign of our residents slowing down our ambition and urgency to combat climate change, having recently approved an effort to generate 100% renewable energy by 2045.

And while all these actions are good news for climate policy and California, there are warning signs from France’s gas tax riots. California has not been able to address our own income inequality challenges, and while our residents continue to support ambitious government action to fight climate change we have to be very intentional about implementing strategies that fight poverty and pollution at the same time. In fact, we are not pricing carbon nearly high enough to ramp down our use of fossil fuels; so if we want California residents to continue to support our fight against climate change we must address income inequality.  We must do this not so people can afford to pay higher taxes on fossil fuels but so that people can afford to live, work, play, learn, and prosper in a world that is healthy, resilient, equitable and thriving. Meaning a world free of fossil fuels.

Commentary: Health Care Merger a Poison Pill for Patients

ArcaMax
By Anthony Galace

Big corporations often tout their mergers as promoting efficiency and helping consumers, but too often the public ends up with fewer choices and higher prices. That seems likely to happen again with the latest health care megamerger.

CVS Health and Aetna Inc. recently finalized a $70 million merger, combining one of the nation’s largest pharmacy chains with one of its largest insurers. The companies promise a new and innovative form of health care, with cheaper medication and shorter wait times.

But even though the deal has won approval from the U.S. Justice Department and 28 state regulators, physicians, patients, economists, and advocates aren’t buying it. The American Medical Association, American Antitrust Institute and leading economists across the country warn that this merger will do nothing to curb rising prescription drug costs, stagnating health coverage rates or deteriorating quality of care. In fact, they say it may worsen health care disparities between disadvantaged communities and more affluent populations.

CVS’s newfound power could significantly reduce competition by driving independent pharmacies out of business and forcing other large pharmacy chains to consolidate – driving up prices and increasing premiums and out-of-pocket costs for seniors and low-income patients. Furthermore, this merger will likely force patients with health coverage through Aetna to purchase their medication from a CVS pharmacy, taking away their right to choose.

Earlier this year, testifying before the California Department of Insurance, CVS claimed that its acquisition of Aetna would result in “efficiencies” (read: savings/profits) worth $750 million per year, allegedly by streamlining administrative expenses and negotiating better prices with pharmaceutical companies.

But when asked at the hearing I attended whether these savings would be passed along to patients, CVS was mum. The company’s rep also could not say how it planned to make medication more accessible to low-income and underserved communities, especially those located far from a hospital or clinic. We also asked whether they would expand their contracting with minority-owned businesses, diversify their governing board and senior executives, and add stores in low-income neighborhoods. Their response: Ask us after our merger.

In 2016, the U.S. Department of Justice under the Obama administration blocked two high profile health insurance mega-mergers – between Aetna (yes, the same one) and Humana, and Anthem and Cigna. Both would have obliterated competition in insurance, giving patients and providers across the country little choice but to accept their prices and payments. These mergers would have likely priced many low-income Americans out of health coverage.

In retaliation for blocking their merger, Aetna pulled out of the Affordable Care Act exchanges entirely, abandoning thousands of patients.

Now they expect us to believe they’ll do better. Color us skeptical.

All this comes on the heels of another recently approved merger between another large pharmacy chain and health insurer – Express Scripts and Cigna. Given the growing trend of consolidation among health care companies, expect these companies to continue to sell the same old story that has never come true: Give us more power, and we’ll be better, we promise. Advocates and regulators shouldn’t buy such promises.

 

My Pacoima Community and Speaking Out Against Environmental Racism

Small Business Exchange Online
By Denise Garcia

I come from a community — Pacoima, California —  and a family where love, humor, and culture ensure my people’s survival. Mine is a family of home-cooked enchiladas, loud and long-lasting dance fiestas, and unconditional love. We turn to our values to sustain our lives, even as low-income migrants and first-generation folks. Though all odds are against low-income people of color, we resist and survive in the face of environmental racism and other obstacles. Surviving is the only way we know how to live since the power of place has shaped our lived outcomes, for good and for worse.

My beautiful Pacoima roots my passion and diligence in the work I do as an advocate fighting environmental racism. Growing up, Pacoima had long hot summers filled with water balloon fights and Sunday mornings con mi familia en la casa de mi abuelito, Rosalio, comiendo menudo y pan dulce. My brothers, friends, and I played ball in the park religiously and ate elotes, raspados, y paletas from local vendors. Pacoima, covered with vibrant murals under the many highways, intrigued my imagination and sparked my creativity. Pacoima holds a collection of my earliest and most enjoyable memories of my childhood, family, and culture.

Although most of my memories of my hometown are positive, Pacoima was not as beautiful as my mind painted it to be. While in college, I learned about environmental racism & injustice and realized the abundance of pollutants concentrated in my hometown. The traffic pollution, industrial sites, and landfillserode my community with harmful and dangerous toxins, which negatively impact all forms of life. While in college, I learned Pacoima was redlined because there were too many black and brown folks and was identified as undesirable, resulting in a segregated ghetto. Similarly to other low-income, redlined, and marginalized communities of color, Pacoima lacks investment in public schools, public parks, and job opportunities. Climate change will exacerbate these inequities, leaving the rich richer and the poor poorer in all capacities.

Rather than just surviving, communities like Pacoima, need to thrive. To overcome systematic hardships like the environmental racism I grew up with, community members must use their voices to amplify the change we need in order to flourish. And I cannot expect a positive change for my community unless I am also willing to change, grow, and transform. White supremacy and capitalism systematically impact people of color, and yet, we are still here! This type of resiliency and strength gives me the courage to embark on new journeys, which led me to pursue this year-long Fellowship with The Greenlining Institute.

Pacoima, CaliforniaDuring my Fellowship, I hope to gain the confidence and strength to use my voice in a way that creates positive change that my community and so many other similar communities need. I recognize I have missed many opportunities because I chose to stay silent. Now I want to courageously articulate my thoughts and represent communities like mine to ensure they are prioritized and considered in political decisions.

Communities like Pacoima and hundreds of others impacted by environmental racism need more activators who speak out against injustice, advocate for change and empower the community through education. My voice holds an infinite amount of power, but I often put myself on mute when I get afraid or feel intimidated. This fear of speaking out derives from the guilt and pressure of being a 1st-generation college graduate. I feel immense pressure to be successful and perceived as intelligent to prove to my family that their sacrifices and hard work were worth it. This exacerbates my silence because I’m afraid of making mistakes or saying the wrong things. This year, I will embrace my mistakes, learn from them and continue to grow. I hope to see myself transform into a confident and outspoken womxn and bring this power of voice back to my community.

“You are seen, heard, and valued here” are the words imprinted into my memory from the first day of orientation at The Greenlining Institute. I can trust this organization when staff say they value my personal narrative, experience, and potential. With this growing trust, I am ready to see my #ChangeFromWithin and to see how my #PacoimaBeautiful can also transform.

Denise Garcia is Greenlining’s Environmental Equity Fellow. Follow her on Twitter.

Over the next year we’re continuing our #ChangeFromWithin blog series with posts from our newest cohort of Fellows. They will explore their own personal transformation, #ChangeFromWithin, and what that means for leadership development. You can read Patrick Brown’s introduction to the series here. Here at Greenlining’s Leadership Academy, we’ve been on a journey. We invite you to join us.

Congress Should Pursue Shared Prosperity

Santa Maria Times
By Ky-Nam Miller

The Democrats have taken back the House of Representatives in what feels like a clear rejection of the false promises and bigotry of the Trump administration. But now, they must go beyond anti-Trump rhetoric and push bold ideas to advance opportunity and prosperity for the vast majority of Americans being left behind by the policies of Washington, D.C., and Wall Street.

In our $19 trillion economy, a well-connected few have done spectacularly well, while more and more working Americans struggle to make ends meet. Democrats must chart a real path to prosperity that can replace failed, trickle-down economics – one that invests in and uplifts Americans on the margins and breaks down barriers to opportunities.

House leaders should announce a bold agenda for their first 100 days. They can start by aggressively pushing for two bills introduced in the Senate earlier this year that have gone nowhere under Republican leadership: the “LIFT the Middle Class Act” from Sen. Kamala Harris, Democrat of California, and the “American Housing and Economic Mobility Act” from Sen. Elizabeth Warren, Democrat of Massachusetts. Both would help ordinary Americans who got little or nothing from the GOP’s massive tax cuts for corporations and the wealthy.

Harris’ bill would provide a refundable tax credit of up to $6,000 for low-income and middle-class Americans, bringing some balance into a tax system that has become grotesquely skewed toward the wealthy. Warren’s deficit-neutral measure would address our growing housing crisis by building or rehabilitating 3.2 million housing units; assisting first-time homebuyers living in low-income, formerly redlined neighborhoods; and investing $2 billion in long-overdue support for buyers whose home equity was obliterated in the 2008 crash.

Warren’s bill also takes initial steps toward strengthening the Community Reinvestment Act, a little-known but important law that dates from the late 1970s. The law, written to fight redlining – the practice whereby the federal government joined with banks and other institutions to deny mortgage loans to people of color – needs an update to deal with changes in the financial industry. Redlining, though technically illegal, never completely went away.

These proposals represent a good start, but Congress could and should go even farther. We need a Community Reinvestment Act for the 21st century that harnesses the tech economy to invest in opportunity in every American community.

By giving a fair shake to all and opening doorways to opportunity for those who have the least, we can build prosperity for all of us – not just the 400 billionaires who now own more wealth than the bottom 64 percent of Americans.

It’s true that none of these proposals will become law quickly, so long as the GOP controls the Senate and the White House. But no important change comes quickly. We can start building a better, fairer America, and Democrats now have a chance to lead the way.

The Dems Have Taken Back the House, Now Here’s What They Should Do

400 billionaires now own more wealth than the bottom 64% of Americans. Let’s do something about that.
The Progressive
by Kỳ-Nam Kwon Miller

The Democrats have taken back the House of Representatives in what feels like a clear rejection of the false promises and bigotry of the Trump administration. But now, they must go beyond anti-Trump rhetoric and push bold ideas to advance opportunity and prosperity for the vast majority of Americans being left behind by the policies of Washington, D.C., and Wall Street.

In our $19 trillion economy, a well-connected few have done spectacularly well, while more and more working Americans struggle to make ends meet. Democrats must chart a real path to prosperity that can replace failed, trickle-down economics – one that invests in and uplifts Americans on the margins and breaks down barriers to opportunities.

House leaders should announce a bold agenda for their first 100 days. They can start by aggressively pushing for two bills introduced in the Senate earlier this year that have gone nowhere under Republican leadership: the “LIFT the Middle Class Act” from Sen. Kamala Harris, Democrat of California, and the “American Housing and Economic Mobility Act” from Sen. Elizabeth Warren, Democrat of Massachusetts. Both would help ordinary Americans who got little or nothing from the GOP’s massive tax cuts for corporations and the wealthy.

Harris’ bill would provide a refundable tax credit of up to $6,000 for low-income and middle-class Americans, bringing some balance into a tax system that has become grotesquely skewed toward the wealthy. Warren’s deficit-neutral measure would address our growing housing crisis by building or rehabilitating 3.2 million housing units; assisting first-time homebuyers living in low-income, formerly redlined neighborhoods; and investing $2 billion in long-overdue support for buyers whose home equity was obliterated in the 2008 crash.

Warren’s bill also takes initial steps toward strengthening the Community Reinvestment Act, a little-known but important law that dates from the late 1970s. The law, written to fight redlining – the practice whereby the federal government joined with banks and other institutions to deny mortgage loans to people of color – needs an update to deal with changes in the financial industry. Redlining, though technically illegal, never completely went away.

These proposals represent a good start, but Congress could and should go even farther. We need a Community Reinvestment Act for the 21st century that harnesses the tech economy to invest in opportunity in every American community.

By giving a fair shake to all and opening doorways to opportunity for those who have the least, we can build prosperity for all of us – not just the 400 billionaires who now own more wealth than the bottom 64 percent of Americans.

It’s true that none of these proposals will become law quickly, so long as the GOP controls the Senate and the White House. But no important change comes quickly. We can start building a better, fairer America, and Democrats now have a chance to lead the way.

This column was written for the Progressive Media Project, affiliated with The Progressive magazine, and distributed by Tribune News Service.

Narrative Justice: A Daughter of Black Immigrants Reflects

Small Business Exchange Online
By Asia Alman

I am of a history of cross-border movements that no right-wing political administration can contain. My folks are the kind of loud, and Black, and women dreamers who everyday disrupt U.S. binaries of “Black” and “immigrant” by being both at the same time: Black immigrants. Growing up in Brooklyn, New York, my mother taught me to never forget her island of Trinidad and Tobago. Because of my family’s love for home, I carry my heritage into all that I do.

As a Health Equity Fellow in the Greenlining Leadership Academy, I am encouraged every day to seek #ChangefromWithin by bringing the fullness of my identity into my work. My experience as the daughter of Caribbean Black immigrants is essential to my developing racial equity framework. At Greenlining, we believe that our narratives are our strongest asset. We know that we have all we need to survive and that when race is no longer a barrier for communities of color, we will thrive.

I first learned of the Leadership Academy last year, while conducting oral history interviews with Senegalese women seeking asylum in Brazil. At the time I was completing a Thomas J. Watson Foundation Fellowship. As a Watson Fellow, I received a $30,000 grant to invest in my passion for uplifting the experiences of Black women and other women of color in spaces where our voices are often marginalized.

Watson allowed me to expand my U.S. based research on the hardships that Black American and undocuBlack women and girls face to a global scale. During my Watson year, I conducted an international oral history project focused on the narratives of African and Caribbean immigrant women in China, Dominican Republic, Brazil, and London for whom pathways to citizenship are blocked. I also traveled to Jamaica and worked with organizations that supported recently deported Jamaicans who were returning from the U.S. and the U.K.

In each interview, Black immigrant women stated the conditions that limited their access to a healthy life. At the same time, these Black immigrants were plotting ways to overcome the obstacles they faced.

These women articulated their experience with ease.

They knew what they needed.

Leadership Development: #ChangeFromWithin

Yet anti-Black stigma, high costs, and citizenship status requirements barred them from accessing quality healthcare. Many of the same barriers stop Black people and other communities of color in the U.S. from accessing healthcare.

I am charged by the weight of Black immigrant women’s narratives to make access to a healthy life available to all. I believe in the strength of women of color whose collective actions can shatter glass ceilings and push us to believe in the impossible. Think of Alexandria Ocasio-Cortez. Alexandria is a Latina woman from the Bronx who, in her first campaign, recently defeated a congressman who held his position for 12 years.

I trust the narratives of black immigrants and of women of color to lead me as I identify the obstacles that stop girls and women of color from achieving their goals. I am dedicated to girls like us. I am dedicated to creating pathways for us to achieve what we define as success.

Asia Alman is Greenlining’s Health Equity Fellow. Follow her on Twitter.

Over the next year we’re continuing our #ChangeFromWithin blog series with posts from our newest cohort of Fellows. They will explore their own personal transformation, #ChangeFromWithin, and what that means for leadership development. You can read Patrick Brown’s introduction to the series here. Here at Greenlining’s Leadership Academy, we’ve been on a journey. We invite you to join us.

New Administration Should Focus on Consumer Protection

Capitol Weekly
By Sharon Velasquez

According to the U.S. Department of Commerce, California today ranks as the 5th largest economy in the world, surpassing the United Kingdom. To flourish, great economies like California’s need consumer protections and oversight of financial markets. California has one single state agency charged with both, the Department of Business Oversight

Given the Trump administration’s rollback of consumer protections and enforcement at the federal level and California’s influence in shaping national policy, the DBO is essential in protecting California’s consumers.

Despite its crucial role, DBO remains one of the least known agencies in the entire country. With over 360,000 lenders and 40 million consumers under its purview, California would only benefit if the DBO had more support and resources to fund its work.

To our future governor, consumer advocates respectfully request that you prioritize consumer protections and the DBO to ensure financial prosperity for all Californians.

So, what exactly is the DBO, who does it regulate and why is it important?

What is known today as the Department of Business Oversight (DBO) came to life in 2013 when Gov. Jerry Brown merged the state Department of Corporations and the Department of Financial Institutions. He combined these 100-year-old departments to increase efficiency and cost effectiveness; to honor their original missions both became divisions within the DBO.

The DBO is led by Commissioner Jan Owen, appointed by the governor and approved by the state Senate.

All consumers, but especially consumers of color, need a vigilant consumer watchdog in order to fully and fairly participate in California’s prosperous economy.

For instance, studies show that people of color still face redlining in the mortgage market, racism in small business lending, credit card redlining, and other barriers to credit. At a time when the Trump administration has scaled back federal fair lending enforcement and investigations into predatory practices. California needs to stand strong in advancing a sound and inclusive economy.

The DBO staff of 641 has oversight of over 360,000 lenders and 40 million consumers, with a budget of about $90 million per year.  In its consumer protection capacity, the DBO oversees, and regulates institutions including banks, credit unions, savings associations, trust companies, securities brokers and dealers, and commercial and consumer lenders such as mortgage lenders, payday, and online lenders  — commonly referred to as financial technology, or FinTech, lenders.

The DBO’s oversight of FinTech is particularly important because the federal government has failed to issue responsible regulations that ensure transparency and address algorithmic redlining, among other harmful business practices. Algorithmic redlining can be defined as the systemic denial of products and services by machines replicating the biases of their human creators. Instead, the federal government has given FinTech companies the option of an OCC charter that circumvents state-level consumer protections.

This doesn’t mean that all online lenders are bad. For instance, several publicly endorsed and even informed the Small Business Borrowers’ Bill of Rights and were leaders in passing SB 1235, the nation’s first small business truth-in-lending law, through the California legislature.

More industry leadership is needed, DBO regulation and oversight remain necessary to shed light on lending practices across the industry. To quote Justice Louis Brandeis, “Sunlight is said to be the best disinfectant; electric light the most efficient policeman.”

In terms of consumer protection, the DBO ranks second in importance only to California’s attorney general.  In similar fashion to the federal consumer watchdog, the Consumer Financial Protection Bureau (now being gutted by the Trump administration), the DBO provides financial education and alerts to consumers, as well as a complaint database where consumers can report harmful financial practices so these can be investigated. As a mini-CFPB, the DBO also pursues enforcement actions against abusive lenders.

How can our next governor support the DBO? By taking the lead on increasing the DBO’s budget, increasing enforcement resources, supporting the hiring of more analysts and investigators, investing in DBO staff, providing the technology for the DBO to evaluate FinTech algorithms, bolstering the DBO’s regulatory power, and amending the California Financial Code to clarify the DBO’s mission as a consumer protector.

The Trump Administration has made its disinterest in consumer protection clear. CFPB Acting Director Mick Mulvaney has openly expressed that he will move the CFPB less aggressively in enforcement matters and will leave matters to the state regulators and attorneys general. Now more than ever, working families look towards their state leadership to step in and protect consumers when the federal government can’t or won’t.

OCC Should Improve CRA, Not Gut It

American Banker
By Orson Aguilar and Kat Taylor

With little outreach to redlined communities still left behind by Wall Street, the Trump administration recently proposed changes to the Community Reinvestment Act, a law that was intended to fix the problems caused by redlining. But these changes could further marginalize our most underserved communities.

Redlining is not ancient history. Recent investigations by Reveal show that it never completely went away, and these historically underserved areas continue to fall behind in racial and economic-equity indicators. We know a lot about why this is happening: Financial institutions continue closing branches at a rapid rate, home lending to low-income borrowers and people of color lags behind their share of the population, small businesses in these communities struggle to access affordable capital and few resources are being put toward affordable housing development.

Like many laws, CRA could be improved. But it has been an important antidote to redlining and played a critical role in increasing access to fair credit for all. And now we as advocates and bankers serving the public interest have the opportunity to make it better, with the Office of the Comptroller of the Currency’s advance notice of proposed rulemaking.

There are three areas that raise particular concern regarding the needs of communities of color and low-income communities. We believe we can work together with the OCC to create solutions.

First, the OCC suggests combining the existing three-pronged CRA exam that grades banks on their lending, investments and services into a single metric: a ratio of a bank’s community investments divided by the bank’s assets. This single calculation would lump all of a bank’s CRA-eligible activity together. This one-size-fits-all approach may be simpler but could de-incentivize banks from making meaningful investments in particularly underserved communities and from responding to the specific, local needs of assessment areas.

In the real world, one-size-fits-all often fits no one.

The OCC also raises questions about expanding the definition of CRA-qualifying activity to include services that banks provide but that don’t address the lending needs of historically redlined communities. Giving banks CRA credit for services they already provide — such as financial education, technical assistance to small businesses or apprenticeship programs — decreases resources they should be allocating toward traditional CRA activities. Banks should increase the dollar amount of community investments in things like broadband expansion, affordable housing, accessible mortgage products for low- to moderate-income borrowers and small-business loans — and the law should encourage this, not undercut it.

A third piece of the notice seeks to redefine assessment areas. This is a direct response to pressure from banks who want CRA credit for investments they make outside of their assessment areas, relieving them of the commitment to serve their community. While the changing banking industry and emergence of fintech highlight the need to expand CRA oversight beyond physical branches — which are critical to meet the credit needs of low- and moderate-income communities and communities of color — we still need to keep the focus on low-income individuals. This issue is complex because we also know that banks make good loans outside of CRA assessment areas (which is why it is important to look at the actual loan itself, what it is doing and who it is for — not only where the loan is made). The goal here should be to give banks credit for good community development loans outside of their assessment areas, but not to incentivize them to make this a priority.

CRA must be improved. It could and should be adjusted to provide increased transparency and quantitative measures, but not at the expense of greater bank accountability. This is particularly salient for underserved communities in non-metropolitan areas, such as neighborhoods in California’s Central Valley, where branch closures and low levels of lending to people of color and low-income communities have made households susceptible to predatory lenders. In some areas, nonbanks have actually become the leading lenders.

As it stands, CRA has a major shortcoming: Redlining is based on race, yet this critical anti-redlining law has no racial lens. You simply cannot adequately remedy decades of race-based disinvestment without using race-based criteria. The law could also focus more specifically on lending to low- and moderate-income borrowers, not just geographical territories. And ratings should take into account activities that harm low- and moderate-income borrowers and communities of color.

The notice from the OCC represents a crucial opportunity. Both community advocates and banks can and should weigh in to help build a stronger, more effective CRA and resist changes that would dilute it. An updated regulatory framework must account for structural inequalities the law was meant to address, something that does not require a trade-off with modernizing the regulatory regime. And we need not just carrots but a real stick in the form of penalties when banks and other financial institutions neglect their responsibilities or engage in discriminatory or criminal activity.

While much in the OCC’s initial draft raises concerns, there is an opportunity to take a good but incomplete law and make it better. Improvements to the CRA can only emerge from a process based on genuine engagement with the communities most impacted by our unbalanced economy, and the OCC’s effort falls short.

This Bill Could Make Predatory Lending Worse. Gov. Brown Must Veto It

Sacramento Bee
By Orson Aguilar

Legislators had a chance to protect Californians from predatory lenders, but instead sent a special-interest bill to the governor that threatens to expand the damage.

Gov. Jerry Brown should veto Assembly Bill 237 promptly.

AB 237 expands the use of unlicensed and unregulated brokers, called “finders,” who are allowed to operate under the Small Dollar Pilot Program, which is aimed at helping people repair or build credit with loans for small amounts.

The bill expands the program from loans of $2,500 up to $7,500 and allows for using finders for these larger loans. It has been pushed by just one company, INSIKT, whose business model relies on finders.

But finders have not worked out as originally hoped. Legislators originally thought finders would be credit unions or community banks that refer borrowers to the pilot loan program if they do not qualify for a lower cost loan.

In fact, most finders are check cashing stores, grocery stores and even payday lenders. We worry that through these finders, payday lenders can sell borrowers loans that carry triple-digit interest rates. These sorts of loans do not help people build credit. Instead they trap people in a cycle of debt.

The sponsor of this bill could offer lower-cost loans today just by using licensed brokers instead of unlicensed finders, but has chosen not to.

Instead of AB 237, California should catch up with 28 other states and set an interest rate cap for loans above $2,500.

More than 100 civil rights and faith-based organizations across the state rallied behind AB 2500, a bill to limit interest rates at 36 percent for loans from $2,500 to $5,000. The payday lending industry spent more than $1.5 million lobbying against this bill,and it failed to get through the Assembly, essentially kicking this issue down the road for the second time in two years. The predatory lenders won.

For years, Californians most hurt by predatory lending have asked the Legislature to rein in high-cost, abusive loans. And every year the same thing happens: Legislators side with predatory lenders.

If AB 237 becomes law, it will only benefit Wall Street hedge funds making loans under a pilot program that has insufficient protections against abuse. The governor should veto this bad bill, and next year legislators should get to work on real reforms.