Latest news with #MichaelS.Williamson
Forbes
16-04-2025
- Business
- Forbes
The High Price Of Poverty: How Financial Penalties Trap Low-Income Americans
The Role of Banking Access in Reducing Poverty, Why It's Expensive to Be Poor in America, Addressing Systemic Barriers to Economic Opportunity For many of us, the financial system is a lifeline — offering tools for saving, investing and building wealth. But for millions of low-income Americans, it's often a trap, riddled with fees and predatory practices that make it incredibly expensive to simply survive. The data is clear: it is expensive to be poor. GAITHERSBURG, MD FEB 12: A customer leaves a payday loan store on Frederick Rd. in Gaithersburg, ... More Maryland. The check cashing and payday loan services industry has thousands of branch offices all over the U.S. There are more payday lenders in the U.S. than McDonald's restaurants. There are various companies that offer payday loans for recurring expenses, unexpected expenses and paycheck cashing. The stores tend to be in urban and/or lower income areas. (Photo by Michael S. Williamson/The Washington Post via Getty Images) Consider the unbanked. In my home state of Mississippi, a staggering 11.1% of residents don't have a bank account; with Louisiana at 8.1%, forcing residents of these states to rely on alternative financial services. The divide between economic levels is stark — nationally, 17% of adults earning below $25,000 are unbanked, compared to a mere 1% of those earning between $50,000 and $99,999. Without a bank account, people are vulnerable to predatory fees from payday lenders and lack access to basic financial tools like checking and retirement planning. Overdraft fees are another prime example. While regulations were passed to cap these fees at $5 instead of the typical $35, leaders of the House Financial Services Committee want to repeal the measure. Doing so will cost the 23 million households who have been hit with overdraft fees $5 billion a year. The crisis of unbanked individuals is particularly dire in Southern states like Mississippi, which has the highest concentration of payday lenders per capita in the nation. These lenders, often located in low-income or non-white communities, offer short-term loans with sky-high interest rates. Mississippi borrowers can encounter annual percentage rates (APRs) up to an astounding 572%. For example, a two-week loan of $300 can accrue $329.25 in fees if renewed four times, totaling $629.25 to repay the principal and fees. Even those with access to credit cards are feeling the pinch. U.S. credit card debt reached a record $1.17 trillion in the third quarter of last year, up from $770 billion in Q1 2021. This surge is partly due to higher interest rates and inflation, disproportionately affecting low-income individuals who may rely more on credit. Credit card defaults have risen to the highest level since 2010, with lenders writing off $46 billion in delinquent debt in the first nine months of 2024, a 50% increase from the previous year. This troubling trend highlights the financial strain on consumers, especially those who make the least, as they have the highest ratio of credit card debt to income. The cycle of poverty, perpetuated by predatory financial practices, doesn't just harm individuals; it undermines the economic vitality of entire communities. When a significant portion of the population is trapped paying exorbitant fees and interest rates, their disposable income shrinks dramatically. This lack of spending power directly impacts local small businesses and entrepreneurs, who rely on consumer demand to survive. With less money circulating in the community, these businesses struggle to grow, innovate, and create jobs, ultimately hindering economic development and perpetuating a cycle of limited opportunity for both residents and business owners. Addressing the systemic financial burdens on low-income Americans is not just about improving individual financial circumstances; it's an essential strategy for fostering a thriving and inclusive economy that benefits everyone. The good news is that these problems are solvable. Here are a few policy changes that could make a real difference: So far, solutions have primarily been state-based. But the SAFE Lending Act proposed last year in Congress would provide federal protections to consumers against payday lenders with a focus on combatting the rise in online payday loans, a market predicted to grow substantially in the coming years given how fast approvals are and a younger demographic utilizing them. Two of the SAFE Act's sponsors, Senator Jeff Merkley and Representative Suzanne Bonamici, hail from Oregon, one of the first states in the country to pass anti-paday lending legislation. Research found that in just four years, Oregon residents saved $165 million in loan fees thanks to the limits imposed by lawmakers. Meanwhile, new research shows that in the 30 states without payday lending limits, residents pay more than $2.4 billion in fees a year. This massive sum of money would be put to far better use as savings during these uncertain economic times, or spent at local merchants to bolster the community's economy. It's time to recognize that financial hardship is not simply a matter of individual responsibility. It's a systemic issue that requires bold policy solutions. By leveling the playing field, we can create a system that ensures everyone has access to the benefits of financial planning.
Washington Post
24-02-2025
- Health
- Washington Post
How to reverse an opioid overdose
Narcan is a medication that can save someone's life by reversing the effects of an opioid overdose. (Michael S. Williamson/The Washington Post) In recent years naloxone, a medication that reverses opioid overdoses, has become more widely available in the United States. Narcan, a nasal spray version of naloxone, became available without prescription in pharmacies in 2023. That means more people can help reverse overdoses. Despite showing signs of decline, the number of people dying nationwide from overdoses eclipsed 100,000 annually from 2020 to 2023, according to national health data. Host Elahe Izadi talks with producer Elana Gordon about the lifesaving effects of the medication. They walk through the steps of how to use Narcan and what it feels like to experience an opioid overdose reversal. Today's show was produced by Ariel Plotnick. It was edited by Lucy Perkins with help from Alison MacAdam and mixed by Sam Bair. Download The Post's step-by-step guide for how to administer the naloxone nasal spray here. Subscribe to The Washington Post here.
