New Site for Housers

Housers is moving on up.  From now on, your favorite news and comments on banking issues will be arriving at

Bank Talk.

That is http://banktalk.org
Bank Talk will feature the same mix of news as Housers.

Richard Florida should visit North Dakota

Guess what country has the nation’s best economy?  Did you guess North Dakota?  Well, then you might be right.  Sure, it is hard to exactly define best, or to pick a measure that captures the entirety of “good.”

Still, North Dakota excels.  It has a budget surplus.  Imagine that! It has an unemployment rate of just 4 percent.  In the last year, its state GDP grew 7.3 percent.

Still, it lacks a high quotient of baristas.  Its probably among the worst states in the US to get an espresso or a machiatto.  Its a good place, though, to get a 49 cent cup of coffee (watery) at a gas station outside of Fargo.

That’s interesting, but its also something of a challenge to Richard Florida’s ongoing idea of the resilience of creative economies.  Florida doesn’t go so far as to say that more baristas will lead to more jobs, but then again, he doesn’t go too far from that suggestion, either.

It made sense when our best economies were in California and New York, paced simultaneously by high tech and high finance.  Today, our economy is changing.  Agriculture and raw resources seem to be more stable.

Prepaid Debit Cards need Attention from Someone

Prepaid debit cards are a nightmare.

If you have ever looked into one of these cards, you will be shocked to see just how bad they are.  Short of payday loans, it is hard to imagine a more predatory product.  Oh wait, there are those guys in the track suits from North Jersey.  They have a loan product that they would like to offer you.  Its a hard call between that and a prepaid debit card.

Remember, these are not loans.  That may be why they have so little protection.  They work when the consumer loads them a new deposit.

Sometimes, the vendor will charge a fee just for making a deposit.  That fee is often as high as $30 for the first $100 deposit!

Then there are weekly or monthly “service fees.” Sometimes, these are as little as $0.75 per week.  Other times, though, they are up to $5.  The BabyPhat Rushcard is “affordable!” It offers activation fees of just$19.95, “so that you don’t have to pay a monthly fee!”

The BankFreedom Card offers a $9.95 monthly fee and and a $4.95 fee to “cashload” the card.  I asked Kelly, the chat agent, to explain cash load.  She said “click here to take advantage of this deal.” I asked again.  She said “Bankfreedom is easy to use…forget about stamps!”  I asked her, “where is the Schumer Box, to honor the Truth In Lending Act.”  She said, “One million ATMs accept your BankFreedom Mastercard!”

Actually, I didn’t expect a Schumer Box.  These aren’t loans.  They are just deposits that are accessible through a card.  So, although they don’t come with any consumer lending protections, they still ought to be relatively free of fees because its almost entirely electronic.

The banks avoid these products.  Instead, the cards are offered by a bunch of never-heard-of-fly-by-night companies.  True, they partner with MasterCard and Visa, but they are themselves a mystery.

Cheers: The Helping Families Save Their Homes Act

Yesterday, President Obama signed the Helping Families Save Their Homes Act into law.  What a relief!

There are two main features to this law:

First, it protects renters.  Renters have been one of the groups getting the collateral damage from the foreclosure crisis.  When an investor owner can’t pay his mortgage, he has to turn the home over.  In most cases, that means that the renters need to move on, as well.

Second, it includes a disclosure rule that requires companies buying mortgages on the secondary market to inform borrowers about who now owns their mortgage.

I have talked with so many people who are not sure who owns their mortgage.  I would say that this is a hard thing to understand.  I have tried to explain it numerous reporters.  Many are confused by the idea of a service and an investor on top of an original lender, possibly working with a wholesaler through a mortgage broker.

Definitely my broadcast news reporters couldn’t grasp it.

There are some other good features, too: a two percent cap on origination fees, and a “net tangible benefit” to borrowers during a refinancing.

The ABA and their bankers are a hard group to bargain with.  They have a lot of friends, particularly on the Financial Services Committee.  So, in a way, getting any kind of new law is great.  That said, this law is sort of misleading, because it does not come with the appropriate penalties for financial institutions who break its terms.

That’s because “curing” the problem does not require a systemic fix, but only a solution for the particular borrower.

What can Green Jobs do for the Poor?

Some people have pointed to a disconnect between low-income populations and environmentalism.

I have a friend who always reminds me that brownfields efforts often mask gentrification. She sees other problems: in those defining moments in budget battles at legislatures across the country, left-leaning groups often end up competing against each other for a finite sum of political power. Do we fund open space, or do we redress inequality in schools?

This plays out in a lot of ways.  In the United States, it has much to do with priorities in African-American communities: people care first and foremost about achieving financial security.  When environmental concerns emerge (environmental justice), they are often the product of partnerships driven by both whites and African-Americans.  Climate change in Bangladesh threatens the entire nation’s very existence.  The rise of sea level portend the possibility that the entire country could soon be under water.

Too, there is a recognition among many developing nations that escaping from poverty is a struggle that will fail or succeed within the constraints of fuel choices. Many third-world countries only have wood, charcoal, or coal to burn – nuclear power, solar, or wind are abstractions.

What ties these examples of resistance is that in both cases, it is low-income people who would pay the most for new investment in a greener economy.  It might even be thought of as a regressive form of taxation.

Alternatively, consider how environmental emergencies often impact communities differently.  The Ninth Ward in New Orleans has still not been redeveloped after Katrina.  Some say its not about the response, but about the a priori long-term inequalities in housing and neighborhood type that systematically sort minorities inot more vulnerable locations.  It’s not about need, perhaps, so much as it is about wealth, according to authors Donna Shai.  Those homes burning in Santa Barbara are going to get more funding, and they will be rehabilitated, before we are done with restoring the low-income neighborhoods gutted by outlash surrounding the beating of Rodney King.

Van Jones, a leader in Green Jobs, is working to reverse this very dynamic by finding ways for employment policy to collaborate with the new green movement. He’s going against a long-term problem.  Too many proponents of environmentalism come from the same well-off and largely white background.

People who meet Jones come away with a sense of resilience against any obstacle.  Still, many profess some doubts about his ideas.  Robert Stavins summed it up:

“Let’s say I want to have a dinner party. It’s important that I cook dinner, and I’d also like to take a shower before the guests arrive. You might think, Well, it would be really efficient for me to cook dinner in the shower. But it turns out that if I try that I’m not going to get very clean and it’s not going to be a very good dinner.”

Right now, Jones is the Green Jobs Czar in the Obama administration.  Its hard to know what that means, but it certainly is a platform to realize change.

Those efforts are laudible, and I support them.  Then again, the context of the distribution of wealth in this world reminds us of the fissure between environmentalism and class.  We know we need to worry about our environment.  We know that our future economy will be fundamentally thwarted without natural resources. We have one billion hungry people in this world – today.  For many of them, it is not pollution that undermines life, but about finding any way out of crushing poverty.