This week I will be presenting a bill in the Commerce and Consumer Protection Committee that would curb payday lending abuse in Minnesota. A payday loan is an expensive product that tends to trap borrowers into an endless cycle and a downward spiral of debt. Under a payday loan, a consumer borrows money against his or her next paycheck by either writing a post-dated check for the amount of the loan plus the fees, permits the payday lender to debit the borrower’s account on the day the paycheck is direct deposited, or access a line of credit provided by the payday lender,
Payday lending has exploded in Minnesota. Since statistics were first reported in 1999, more than 1,000,000 payday loans have been made by payday lenders in this state (and countless more over the internet).
While the industry purports to discourage long-term lending, according to one former manager at a national payday lender who became a whistleblower because he was troubled by the industry’s business model, “We train our sales staff to keep customers dependent, to make sure they keep re-borrowing…forever, if possible.”
According to the Center for Responsible Lending, the average number of loans per borrower per year is nine. Moreover, 90% of borrowers take five or more per year, 61% of borrowers take 12 or more per year, and 24% of borrowers take 21 or more per year.
The legislation that I am introducing would require that, after three consecutive payday loans in any six-month period, the fourth loan automatically converts into an installment payment loan. This bill does not eliminate the business of payday loan companies. There may be instances where emergencies arise and consumers legitimately need access to short term easy loans. This bill, hopefully, would allow borrowers to escape the debt trap in a manner that makes economic sense.
Imagine a community that gives its citizens more choices about where they live and how they get around. Instead of policies that promote urban sprawl, how about a community that encourages more compact development, saving infrastructure costs and accessibility. Why not consider a town built around jobs, schools, and services supporting walking and biking in daily life, reducing obesity and other health risks.
This past week in the Energy committee I heard a bill introduced by Senator Scott Dibble (SF 657) which recommends “improved land use planning and development strategies as an essential step to ensure that we protect our natural resources and quality of life.” The bill is based on a recommendation by the Minnesota Climate Change Advisory (MCCAG) in its final report.
Employees, residents, and students in cities like Northfield want commuter rail or transportation that makes sense. That means transportation options that include proximity to housing, jobs, and schools connected with bike trails, footpaths, and pedestrian friendly routes. Development is springing up around current light rail and commuter rail projects. Sensible communities allow resident to drive less – saving more on gas, parking, and automobile purchases and repairs.
Among other things, the proposal creates incentives for metro and greater Minnesota communities to implement land use planning practices that would achieve global warming reduction goals. It would require both the Met Council and MnDOT to plan for pollution reduction and a transportation system to help achieve these goals as well as preserve more farmland and open spaces.
Building sensible communities makes sense if it indeed helps lower costs, offers more transit choices, promotes healthy lifestyles, and protects Minnesota’s great outdoors for future generations by reducing global warming and air pollution. Cities, in cooperation with Counties and state government, should pursue these types of policies as they consider long range planning.
The Mayor of Elysian was overhead leaving one of the many town meetings held in District 25 over the weekend, “That was kind of fun.” I couldn’t agree more. It is not every Saturday that local citizens get a chance to gather to discuss the issues of the day. We discussed a variety of issues and I was impressed with the level of discussion, the interest and knowledge of the participants and the respectful tone of the meetings….even when participants took opposing views. So what did the citizens of District 25 bring to the table?
Two weeks ago, I visited Waterville, Elysian, LeCenter and Cleveland. Last Saturday, I held town meetings in Belle Plaine, LeSueur, Montgomery, and New Prague. Foremost on everyone’s mind was the budget deficit and the economy. Several expressed concerns about proposed cuts and the long term effects of such cuts. Specifically, cuts to Local Government Aid, Education, and Health and Human Services seemed to garner the most attention. Most agreed that cuts will be necessary and as we move forward, prioritizing and determining the level of cuts will need to be decided. But other residents said that Minnesota may need to look at new sources of revenue to maintain basic government services and ensure a quality of life we have come to expect in Minnesota.
Several constituents in the New Prague and Belle Plaine area have concerns about the CapX2020 project. CapX2020 is a joint initiative of 11 transmission-owning utilities in Minnesota and the surrounding region to expand the electric transmission grid. The transmission lines will be built in phases and several residents have concerns about the line’s route and the impact this project will have on their lives. Representative David Bly and I have introduced legislation to address some of their concerns.
Casinos, Unemployment, Nuclear power, parks and trails, pensions, and the Minnesota Health Plan were part of the agenda in several of the towns. The Green Acres legislation in 2008 also garnered much discussion. I am a co-author on a bill in the legislature that would repeal many of those changes to make sure farmland is valued for tax purposes on its agricultural value, rather than its future development potential or highest and best use value.
Many citizens shared their real life experiences at these meetings. They have expertise in farming, health care, local government, energy, education, and the environment. Dropping two fishing lines in the lake may not seem like a big deal to many, but a proposed law on that very matter prompted one resident fisherman to voice his opposition. I was happy to listen. And if this comes up for a vote on the floor of the Senate, I will consider myself a more informed legislator. Thank you, constituents, for sharing your thoughts and concerns these past few weekends. That was kind of fun.
Last night I attended the deployment ceremony of the 34th Red Bulls Infantry Division, over 1000 Minnesota soldiers who will be heading to Iraq after initial training in Washington State. Paula Geisler, city administrator in Green Isle, asked if I would attend. She was there last night saying good-bye to her daughter who will be leaving this Friday for a one year mission in the southern provinces of Iraq. The Red Bulls will be in charge of leadership, command, control, and in-depth analysis for a 16,000 person multinational Division, and will have direct partnership with more than 40,000 Iraqi Security Forces.
In a moving ceremony, family, friends, community leaders and our citizen soldiers listened intently to a range of speakers, including Major General Rick Nash and the Minnesota Commander–in-Chief Tim Pawlenty. More than a few tears were shed in Roy Wilkins auditorium as music and patriotic messages completed the hour long ceremony.
The ceremony was followed by a steak dinner, thanks to the many restaurants, businesses, and volunteers in the Twin Cities area. It was the largest single seating meal ever served in St. Paul…a fitting send-off for our heroes and their loved ones.
Thank you soldiers. Thank you for serving this state and this country. Thanks for your support for freedom… here and around the world. A lot of people are behind you…not just the 6000 people who attended last night. The nation is behind you and eternally grateful for the personal and professional sacrifices you make for us. We are proud of you. We look forward to each and everyone returning to St. Paul. There’s another steak dinner waiting for you.
Sitting in the the Education Committee last week, we heard from the Legislative Auditor and the Minnesota Dept. of Education about the Governor’s initiative to expand the Q-Comp program. The findings, among other things, concluded that Q Comp’s effect on student achievement could not be adequately measured using existing data. I couldn’t help think about one of the lessons I teach in Social Psychology…. the overjustification effect.
The overjustification effect occurs when an external incentive such as money or prizes decreases a person’s intrinsic motivation to perform a task. According to self-perception theory, people pay more attention to the incentive, and less attention to the enjoyment and satisfaction that they receive from performing the activity. The overall effect is a shift in motivation to extrinsic factors and the undermining of pre-existing intrinsic motivation.
Here is a simple example. A number of young boys in the neighborhood often played in the front yard of the elderly gentleman who lived next door. The boys were loud and raucous and were frequently yelled at by the old man to “get out of the yard!” One day the man told the boys he would pay each of them 50 cents if they would play in his yard every day. The boys thought it a great idea and they returned louder and more boisterous than ever. In less than a week, however, the boys stopped coming around. One day the man asked one of the boys who happened by, “Why don’t you come to my yard to play anymore?” The boy looked at him sideways and asked,”Why would we do that for only 50 cents?”
I know of few teachers who have entered the profession because of pay. Teachers are truly motivated within. An additional $2000 per year is hardly the magic carrot that will automatically increase student performance, given the fact that most of the teachers and schools are already are doing whatever they can, given their resources, to find ways to help students succeed.
Would the proposed Q-Comp dollars that the governor keeps pushing be better spent on investments in early childhood? Would the money be better spent for remediation and after school programs? Would lower class sizes or electives that keep students connected to school be a wiser investment? Maybe we should spend less money on testing?
Don’t get me wrong. I think teachers are underpaid as a profession. But if the Governor is trying to close the achievement gap, his focus is misguided. Teacher quality is not the problem. For every opening, we often see over 200 applicants. It is not hard to find the best and brightest of our profession. Minnesota should invest in education, but let’s be smart with that investment and not throw money at a program with unproven questionable results.
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