Wednesday, July 30, 2008

Thursday in The Star

Check out these stories in Thursday's Star.

We've got a chart showing some of the stats on the upcoming Woodstock 5K.

The Anniston area has had significantly more rain so far this year than at the same time last year, though rainfall is still below normal according to an official at the National Weather Service in Birmingham. Mike Faulk will have this story.

A recent study says AIDS is still on the rise in the Southeast, while it declines in much of the counrty. Advocates fighting the disease say their effort suffers from a lack of attention and government resources. Hannah Dame will have this story.

Tuesday, July 29, 2008

Wednesday in The Star

Coming Wednesday in The Star:

The Meals of Mercy program, housed at The Bridge at the First United Methodist Church in Anniston and the Anniston Soup Bowl say they're seeing increased demand. What about other progams that feed the hungry? Alex Scarborough-Anderson takes a look at this issue.

George Smith has a profile of O.A. Gardner, who served as the first principal of Walter Wellborn High School. Now 98, he still stays busy.

Dan Whisenhunt got a look at some of the finanical documents which were presented to the Oxford City Council recently. He'll have a story about what they contain.

Friday, July 18, 2008

This weekend in The Star

Check out The Anniston Star for these stories:

On Saturday:

Nick Cenegy follows up on any new developments in Wednesday's bank robbery.

An Anniston contingent traveled this week to a lead-contaminated Idaho town seeking ideas about how Anniston can monitor its own environmentally remediated properties in the future. Megan Nichols has this story.

On Sunday:

John Fleming profiles Josh Segall, the Democratic challenger in the race to represent Alabama's Third Congressional District.

The FBI says bank robberies are on the rise in Alabama, while decreasing nationwide. Nick Cenegy will have this story.

JSU hosted a workshop to train high school students as mentors for their classmates when school resumes. Dan Whisenhunt has this story.

On Monday:

Teachers get fresh training in the math, science and technology initiative that education leaders hope will lead to improvements in students' skills and better test scores. Dan will have this story.

Alex Scarborough-Anderson will cover former Crimson Tide star Siran Stacy's visit to Meadowbrook Baptist Church.

Thursday, July 17, 2008

Friday in The Star

Check out Friday's Star for these stories:

We'll have a follow-up on the bank robbery and kidnapping, looking for any new developments. The FBI has named one suspect they are looking for and Wachovia Bank is offering a $10,000 reward for information.

A new study by the Justice Department suggests as many as three in every 100 inmates at jails across the country are victims of sexual violence, a problem local law enforcement agencies say they must remain vigilant to combat. Graham Milldrum has this story.

Graham will also have a story on the Dixie Youth Baseball state tourney. Local organizers are taking the personal approach to being good hosts. They're identifying local families to pair with those visiting from around the state.

Regional Medical Center holds its annual cancer survivors celebration. Alex Scarborough-Anderson will be there and will have a story on the event which draws hundreds of cancer survivors.

Wednesday, July 16, 2008

Thursday in The Star

Check out Thursday's Anniston Star for these stories:

Police are seeking two men who allegedly robbed an Anniston bank, then kidnapped two women from a Lenlock home, forcing the women to drive the suspects to Gadsden, where they let the women go. Nick Cenegy will have this story and Megan Nichols will have a story looking at reaction from the neighborhood.

Andy Johns will have a list on the folks who are running in municipal elections in the surrounding counties.

The housing-renovation volunteer charity group makes its annual visit to town with about 300 volunteers. Megan will have this story.

Dan Whisenhunt looks at the Dixie Youth Baseball tournament beginning this weekend in Anniston. The tournament is expected to lots of kids and their families to town, filling hotels and the field at McClellan.

Monday, July 14, 2008

Tuesday in The Star

Check out Tuesday's Star for these stories:

With the rising cost of gas, are auto repair shops seeing more repairs to older cars? Graham Milldrum takes a look at this issue.

Nick Cenegy has a roundup of upcoming court trials.

The JSU Board of Trustees met and announced $1 million in cuts because of budget issues. Dan Whisenhunt has this story.

Anniston got more than two inches of rain on Sunday. That's good news as we're in the midst of a drought. Andy Johns will have this story.

Thursday, July 10, 2008

Friday in The Star

Check out Friday's Anniston Star for these stories:

Developers are planning a professional office park in Alexandria, to house doctors, dentists, accountants and perhaps a bank branch. How does this fit into the development already occuring along 431 in this growing community? Nick Cenegy has this story.

Alex Scarborough-Anderson takes a look at the Calhoun County drug rehab center and its success rate. They say they have seen a good success rate: very few graduates of the prorgam have resurfaced in the justice system with drug problems.

We've got the results of the Anniston City Council's evaluation of the city manager. Megan Nichols will let you know what they had to say.

Wednesday, July 09, 2008

Thursday in The Star

Oxford Mayor Leon Smith said he will charge City Council members $2 per page for financial reports. Does he have the authority to do that? What does state law say? Dan Whisenhunt has this story.

Hannah Dame looks into another bad side of the home foreclosure trends: pets abandoned by their owners along with their homes. Are our shelters - already full - filling up with animals like these?

The former owner of an Oxford insurance company is out on bond after his July 2 arrest on 14 counts of theft. A co-defendant, also indicted in the case, has not yet been arrested. Nick Cenegy has this story.

Megan Nichols will have this story: The JPA has planned for several years to construct a road that would connect the Eastern Parkway to Alabama 21 via Iron Mountain Road. JPA Vice-Chairman and Anniston Mayor Chip Howell said work on the road could begin as early as next year

Tuesday, July 08, 2008

Wednesday in The Star

Check out these stories in Wednesday's Anniston Star:

On the heels of the contested family court judge election, Nick Cenegy takes a look at the rules surrounding candidates who file contribution reports late.

JSU has announced the contractor who will take over its child development center at McClellan. Dan Whisenhunt has this story.

The Fight Back Express was in town, spreading its message of the need for increased funding in the fight against cancer. Graham Milldrum has this story.

George Smith has a profile of A.G. Baggett.

Monday, July 07, 2008

From a reader in Massachusetts

Like most daily newspapers, The Star receives feedback and comments from its readers on a consistent basis. It's part of the lifeblood of any good publication.

Recently, The Star received a letter to the editor from a former Calhoun County resident who now lives in Massachusetts. His desire was to tell young residents of Hobson City and other parts of the county that getting an education and working hard was critical to their futures.

Here's his letter, which we printed last week:

To Calhoun County's youth: Keep the American dream alive

I was born in Hobson City and attended Calhoun County Training School, receiving an excellent education. My places of employment were both in Anniston and Oxford. Prior to retirement as a clinical social worker, I was a drug and alcoholism counselor for district court programs, hospitals and residential mental health programs.

I served four years in the U.S. Navy and was also employed as a federal civil service employee with the U.S. Department of Justice in Washington, D.C.

This letter is to encourage the youth of Anniston, Oxford and Hobson City and nearby areas to devote the full measure to their education and service to the country, and they, too, will enjoy keeping "The American Dream" alive.

Now at age 72 1/2, I am so very, very proud of the early education that I received that gave me the greatest foundation to become a productive citizen.

Levi M. Wright
Worcester, Mass.

And here's the letter we received from Mr. Wright today:

To whom it may concern:

This brief note is to thank the staff at The Anniston Star for printing my letter so promptly. Today I received three very positive telephone calls from citizens in Hobson City.

I shall remain forever grateful,

Levi M. Wright

Thursday, July 03, 2008

Center for Responsible Lending responds to critics of predatory series

Leslie Parrish, a senior researcher from the Center for Responsible Lending, responds to the previous post outlining complaints from a pro-indsustry group, Borrow Smart Alabama.

Payday lenders can no longer market their worst products to military families because the Department of Defense went to Congress and asked for the 36% interest rate cap, testifying that payday lending was the worst financial problem for their troops in a hundred years and that it was affecting our nation's readiness for war.
In 2006, the Military Lending Act (MLA) limiting interest rates on small loans to 36% annual interest for active duty military members and their families was passed by Congress and signed into law by President Bush. This law took effect October 1, 2007.
The MLA was introduced out of concern by the Department of Defense that servicemembers were being targeted by payday lenders and other financial predators lining bases. The Defense Department was especially worried about servicemembers losing their security clearances because of the high level of indebtedness to these lenders, and its effects on troop deployments in Iraq and Afghanistan.
The Wall Street Journal published an article on high-cost lenders preying on elderly populations earlier this year. As a result of this and other concerns, the Social Security Administration recently held a comment period to address the extent to which Social Security benefits were being taken to repay these loans. In addition, the House Ways and Means Committee held a hearing yesterday on this subject.
The industry says that payday loans are not "conducive" to people on fixed incomes, but that doesn’t stop them from marketing them. The debt trap is particularly hard for those on a fixed income to escape, because they can't work another job or extra hours to pay off their payday debt.
In North Carolina, a 69-year-old man had been in an Advance America loan for five years - it was a loan of about $300 flipped repeatedly first on every payday for his job as a warehouse worker and then once a month when he received his Social Security benefits. He paid over $5,000 in fees for this loan and was referred to the Center for Responsible Lending by his bankruptcy attorney.
We compiled demographic information reported by the industry and state regulators on payday borrowers and found that payday borrowers are more likely to be:
- below median income, with a significant portion of borrowers earning less than $25,000
-African-American or Latino

Further, payday lenders advertise themselves as helping folks who have nowhere else to turn and a lack of other options. They defend their high fees by noting that their borrowers cannot get conventional credit.

You say (via CRL): Short term lenders are "allowed to charge the equivalent of 456 percent interest."
Under the Truth in Lending Act, the Federal Reserve requires an annual percentage rate (APR) to be disclosed on loans of any term—whether for one day or 100 years. The goal of this law is to allow consumers to more readily compare loans of differing terms to determine which best suits their needs. For example, using APR, a consumer can see the price differences between a two week payday loan, six month installment loan, or an open-ended credit card cash advance on an "apples to apples basis." Under federal law, payday loans must carry an APR disclosure.
As Borrow Smart Alabama notes, payday loans can be for terms of 10 to 31 days in this state, with the term generally depending whether the borrower is paid once or twice a month. Nationally, the average payday loan is for two weeks. APRs for a 10, 14, and 31 day loan term are calculated below. CRL’s calculation of APR is consistent with how this measure is described in federal law and in payday lending applications.
APR on a loan with a $17.50 fee per $100 borrowed, by loan term

10 day term (min. loan term) 639%
14 day term (typical loan term) 456%
31 day term (max. loan term) 206%

Unfortunately, because overdraft fees are not considered an extension of credit, and therefore not covered under the Truth in Lending Act, banks do not have to disclose an APR for this service. We are in favor of having an APR disclosure apply to this product as well, as we believe that this is also an extension of credit.

Background on CRL and Self-Help Credit UnionThe Center for Responsible Lending is a nonprofit, nonpartisan research and policy organization dedicated to protecting homeownership and family wealth by working to eliminate abusive financial practices. CRL is affiliated with Self-Help, one of the nation's largest community development financial institutions.
Since 1980, Self-Help has helped over 60,000 borrowers buy homes, build small businesses, and strengthen communities in North Carolina and around the country. Self-Help was recognized as one of twelve high-impact U.S. nonprofits in the book Forces for Good, along with other organizations such as Habitat for Humanity, The Heritage Foundation, Teach for America, National Council of La Raza and YouthBuild USA.
Self-Help has never offered payday loans and does not benefit from CRL’s advocacy work in this area. Contrary to payday lending industry charges, Self-Help cannot profit from the shutdown of payday lending in states such as Georgia, Arkansas, New Hampshire, Oregon, West Virginia, Pennsylvania, Ohio, etc…not only does Self-Help not offer payday loans, it does not make consumer loans in any of these states. In addition, Self-Help does not engage in high-cost overdraft loan programs of which the payday loan industry and CRL are critical.
The Center for Responsible Lending’s research is well-respected. The Federal Reserve Board notes that "CRL has produced ground-breaking research on the subprime mortgage market and has been a key advocate for state and federal protections that reasonably balance consumer interests with the goal of increasing sustainable homeownership with affordable loans."

A typical borrower pays back $793 in fees and interest to a payday lending, all
for the privilege of receiving $325 in cash

The payday industry has misled the public and policymakers about the nature of their product since it was conceived. The two-week loan is a myth, payday loans are closed and re-opened repeatedly even in states where immediate renewals are illegal.

Looking at state regulator data (including that supplied by Veritec Inc, which contracts with select states to collect data), we found that: (1) the average payday borrower took out nine loans every year; (2) the average loan size was $325 and (3) the average fee for this size of loan was $52.

While most states ban a direct renewal of payday loans, in which a borrower pays a fee to extend the loan out another two weeks, lenders routinely circumvent this law by what are called "back-to-back" transactions. With this type of transaction, the borrower pays back the loan and its fee and then—often before they even leave the store—they re-borrow the same amount from the lender. While this is not technically a renewal, it serves the same purpose for both the borrower and the lender.

Looking at data from Veritec, we found that most payday lending operates in this manner. A borrower pays back the loan, then takes out another within the same pay period, and often at their first opportunity, as evidenced in reports from Oklahoma and Florida. Back-to-back transactions are not providing borrowers with new credit; instead, they are a clever way to rollover a loan without falling under the legal definition of a renewal.

If an initial $325 loan with a $52 fee is taken and then renewed 8 times (a total of nine loans), then the borrower would pay back $793 ($325 in principal and $468 in fees).

Other research on the benefits/costs to payday lending
Donald Morgan, a staffer at the New York Federal Reserve, has drafted two working papers dealing with payday lending over the past few years. Neither has been published, nor are their findings endorsed by the Federal Reserve. The report finding North Carolina and Georgia residents bounced more checks, filed complaints with the FTC more often, and filed for bankruptcy more after payday lenders left has significant methodological problems. For example, the authors note that bankruptcy rates increased in Georgia after payday lenders left relative to the national average. However, other factors such as unemployment, divorce, or health care coverage which differ between states. The returned check data used to report increases for Georgia and North Carolina after payday lending was banned includes not only these two states, but also returned checks from Alabama, Louisiana, South Carolina, southern Mississippi, and Tennessee—states where payday lending is legal. The authors did not separate out Georgia and North Carolina-specific data from these others states which allow payday lending.

Overall, because payday borrowers make up a small portion of the overall population, it is somewhat dubious to expect large shifts in statewide data such as bankruptcy or bounced check rates if one particular credit option is removed.

Other research that looks at the experiences of actual payday borrowers yields far different results. Two economists—Paige Skiba of Vanderbilt and Jeremy Tobacman of Oxford—were granted access to several years of payday borrower data from one of the nation’s largest lenders. They found that taking out payday loans increased the chances of bankruptcy among borrowers, as compared to similarly-situated households who did not take a payday loan. In addition, the North Carolina Banking Commissioner asked UNC to do a study of the effects of the payday lending ban in that state. Researchers at UNC found that residents—including former payday borrowers—were glad that these loans were no longer available.
"[T]his problem with predatory lending, with payday lending, is the most serious single financial problem that we have encountered in [one] hundred years." Admiral Charles Abbot, Pres., Navy-Marine Corps Relief Society at the Senate Banking Committee hearing on Pentagon’s report on predatory lending, Sept. 14, 2006

Industry responds to predatory series

We've heard plenty of reaction to The Star's weeklong series on predatory lending.

A spokeswoman from Borrow Smart Alabama, an industry group, contacted the newspaper early last week.
She wrote a lengthy response to the first installment. Above this post is a post with the response from the Center for Responsible Lending (CRL), a predatory lending watchdog.

From Robin Oliver of Borrow Smart Alabama:
You say: "Their prey tends to be the working poor, the military, seniors, those on fixed incomes, without access to conventional credit."
The truth: The average payday loan customer is 39 years old with an average income of $41,000. Lenders do not “prey” on customers at all, and our loans are not typically conducive to seniors or to people on fixed incomes. Furthermore, following a federal law passed in 2007, short term lenders do not lend to people in the military or their families at all. Prior to the passing of this law, they made up an insignificant portion of our customers in Alabama. Last but not least, most of our customers have access to traditional loans and/or credit cards but choose not to use them because they prefer a small, short term loan to meet their needs. For proof, see the testimonials of some of our real customers at

You say (via CRL): Short term lenders are "allowed to charge the equivalent of 456 percent interest."
This interest rate is calculated by taking the fee associated with a two-week loan and multiplying that amount by 26 periods in a year. However, in the state of Alabama, a loan can only be renewed once. So, this calculation is extremely off base. Further, the state allows for loans of up to 31 days, which significantly reduces your quoted APR rate. So, these are short term loans typically of two weeks to a month. Applying an annual rate for a short-term loan is quite misleading. Bank overdraft fees, which often exceed $30, or credit card overdraft fees are not described with an APR rate and neither should a short-term payday loan. By any measurement, a $100 a payday loan in Alabama is much less expensive than a bounced check, or a credit card overdraft fee or less than paying $50 to $60 to have utilities restored because of a missed payment. Our customers know this. That is one reason why they choose short-term lending options like a payday loan over the more expensive alternatives. By the way, it should also be stated that the Center for Responsible Lending, which devised this calculation, is funded by a large credit union and a competitor of the short term lending industry. That should be disclosed.

You say (via CRL): "A typical borrower pays back $793 in fees and interest to a payday lending, all for the privilege of receiving $325 in cash."
This is an outright lie on the part for the Center for Responsible Lending. The maximum amount a borrower would pay for a $325 loan is $ $56.88. The State of Alabama does not allow more than one extension on a cash advance and the fee associated with the loan cannot exceed 17.5% percent. Veritec Solutions LLC, the company which supplied the data for the original Center for Responsible Lending report that included this figure, has said in a white paper analysis that CRL misinterpreted the data in order to generate flawed conclusions.

You say: "Short term lenders post revenue of about $6 billion a year."
Compare that to annual revenue of about $480 billion for commercial banks, $84 billion for savings banks and $36 billion for credit unions.

You say: "North Carolina, for example, capped interest rates at 36 percent, becoming one of the 12 states to essentially outlaw payday lending’s excessive fees and interest. Georgia similarly restricts it. … the CRL found that residents saved an estimated $1.4 billion in fees every year."
An independent report issued by the Federal Reserve late in 2007 concluded that consumers in NC and GA “do not seem better off since their states outlawed payday credit.” The report indicates that residents did not save money but ended up paying the anticipated savings and more to banks in overdraft charges and late charges to credit cards. Check it out online at

Robin Oliver
Director of Communications
Borrow Smart Alabama

The CRL's response is on the post above.

Tuesday, July 01, 2008

Wednesday in The Star

You can find these stories in Wednesday's Anniston Star:

Nick Cenegy advances the state Republican party's executive committee hearing regarding Ray Bryan and the circuit court judge election.

Vacant lots have taken the place of dilapidated structures all over Anniston, as the city has ramped up its nuisance demolition program. Megan Nichols has this story.

A Georgia Kia auto plant will use metal pallets and racks to be made by a Korean company in Wedowee. Andy Johns has this story.