ACLU Sues Washington County for Operating a Debtors Prison

In many states, if you are convicted of a crime you will be charged a fee for the cost of prosecution (and sometimes defense). Then, after you have served your time, you can be tossed in jail again if you don’t pay those fees.

Charging criminal defendants for the cost of prosecuting them makes a certain kind of sense. The problem is that many criminal defendants can’t afford those fees, so the end result is debtors prison. It is unjust, and the ACLU is looking to make an example of Benton County, Washington. It’s not a random choice. “[L]ast year, an NPR analysis of jail records found that about 1 out of every 4 people in jail for a misdemeanor offense was there because he failed to pay court fines and fees.”

That’s insane. A quarter of the people in jail for a misdemeanor in Benton County are there because they didn’t pay court fees! Sounds like the ACLU lawsuit was long overdue, if anything.

CFPB May Eliminate Mandatory Binding Arbitration

Mandatory binding arbitration sucks, but most of us have agreed to it in numerous consumer contracts, especially with banks, credit card companies, payday lenders, etc. What mandatory binding arbitration means is that if you try to sue your credit card company for, say, reordering transactions to maximize overdraft fees, the company can pull you out of court and force you into private arbitration with no option to certify a class action.

It’s a rotten deal, and the Consumer Financial Protection Bureau is reportedly considering a ban on mandatory binding arbitration provisions in at least some consumer contracts.

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The Healthy Cost of Coffee

Most Americans drink about three cups of coffee per day. As they should. After all, the health benefits of drinking about two cups a day are pretty well-established at this point.

Still, it doesn’t hurt to be aware of how coffee affects your budget. Here’s how different ways of getting coffee add up over the course of a month, or about 90 cups:

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Poverty and Planning for the Future

That’s from an article in the New Republic citing this study (and others) on the influence of poverty on planning for the future. It reminds me another article, this one from the Washington Post, about structured settlement purchasing. People will sell years of payments from a lawsuit settlement for an up-front lump payment. It’s nearly always a rip-off, but there is a kind of logic to it. What good is $1,000/month five years from now when you can’t even drive yourself to work right now?

I helped a client once who lost his license because he was pulled over and didn’t have insurance, which he couldn’t afford. He was still driving because he fixed cars for a living, and he needed to be able to transport parts. So he kept getting tickets, and he is probably in jail by now just for trying to earn a living. Why couldn’t he just wait until he could get another license? Because he needed to work to pay his rent, and anyway he still wouldn’t be able to afford insurance. Why didn’t he take the bus? Try transporting an engine block on a bus. What else could he do?

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Debtors’ Prison in New Hampshire

That image comes from this report (pdf) by the ACLU-New Hampshire, and it’s pretty much the definition of debtors’ prison right there.

The courts will say they are just trying to enforce their judgments, of course. And that’s technically true. It’s also effectively the criminalization of poverty — debtors’ prison — and it needs to stop.

(h/t Huffington Post & Southern Poverty Law Center)

Payday America Pays for Influence at the Minnesota Legislature

From the Star Tribune:

Brad Rixmann, chief executive of Burnsville-based Payday America, is a giant on the payday lending scene, operating the largest such business in the state. He also is a major player in Minnesota politics, having doled out nearly $550,000 in state campaign donations over the last decade.

As Rixmann’s contributions have grown, so has his business, aided by state law that allows him to charge triple-digit interest rates on loans that can go up to $1,000. His customers pay an average of 277 percent interest, sometimes borrowing repeatedly against their next paycheck.

15 states have banned payday lending, which more often traps borrowers in a cycle of debt than helps them deal with emergencies as intended.

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I just disabled comments on this website. I figure I should take a moment to explain why.

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Why You Shouldn’t Buy a House

Lots of good reasons to reconsider buying a home in this Business Insider post by James Altucher. Including this interesting bit of background information:

Lets spell out very clearly why the myth of homeownership became religion in the United States. Its because corporations didn’t want their employees to have many job choices. So they encouraged them to own homes. So they can’t move away and get new jobs.

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FCC Says Robotexts Are Also Subject to Do Not Call Lists

“FCC Strengthens Consumer Protections
Against Unwanted Calls and Texts”
(pdf) [FCC] (h/t InsideCounsel)

Working Full Time Won’t Put a Roof Over Your Head

Even in states with higher-than-the-federal minimum wage, you will still need overtime or a second job to afford a one-bedroom apartment. Your best bet is in South Dakota, it turns out, where just 49 hours a week at minimum wage will get you a one-bedroom apartment. You’ll need to work longer hours if you plan to eat, of course.

There are (at least) two ways to interpret this report:

  1. There aren’t enough affordable rental units.
  2. The minimum wage is (way) too low.

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