New Policy Brief Explores Why Hoosiers are Complaining about Debt Collection

Debt Collection Tops the Complaint List

Debt collection is a top complaint category for Hoosiers at both the Federal Trade Commission and the Consumer Financial Protection Bureau.

An estimated one in three Hoosier borrowers has a debt in collections. The results of having a debt in collections can be devastating: it can damage a consumer’s credit, involve the courts, and result in wage garnishment or the seizure of property.

Given the high stakes and the frequency with which Hoosiers complain to both the Consumer Financial Protection Bureau and the Federal Trade Commission about debt collection, we felt it was important to take a close look at this process and make recommendations for improving the accuracy, transparency, and fairness of debt collection in Indiana.

The Institute’s new policy brief highlights the following:

  • Consumer debt has reached an all-time high in the U.S. at $13.21 trillion. Hoosier debt per capita is also at an all-time high, with student loans accounting for an increasing share of that debt. 
  • About one in three Hoosier borrowers has a debt in collection
  • Hoosiers complain most frequently about attempts to collect debts not owed, suggesting notice and documentation requirements should be strengthened, particularly before the courts enter a default judgment or wages are garnished.
  • Hoosiers also complain frequently about communication tactics. Indiana should explore extending the protections under the Federal Fair Debt Collection Act to original creditors, a protection other states have made available to consumers.
  • An estimated one in ten Hoosier employees is having his or her wages garnished. Indiana’s protections for individuals experiencing wage garnishment and levy are among the weakest in the country.  

The brief is available on the Institute’s website. Our policy briefs and research reports help to inform our yearly legislative policy agenda.

Have a debt collection story to share? Contact us!
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Thursday, July 26, 2018

The Top 1 percent in Indiana earn 17.3 times more than the bottom 99 percent of Hoosiers

By Andrew Bradley, Senior Policy Analyst

In The new gilded age: Income inequality in the U.S. by state, metropolitan area, and county, a new paper published by EPI for the Economic Analysis and Research Network (EARN), Mark Price and Estelle Sommeiller detail the incomes of the top 1 percent and the bottom 99 percent by state, metropolitan area, and county.
“Rising inequality affects virtually every part of Indiana, not just large urban areas or financial centers,” said Andrew Bradley, Senior Policy Analyst for the Indiana Institute for Working Families, Indiana’s EARN member organization. “It’s also a persistent problem throughout the country—in big cities and small towns, in all 50 states. While the economy continues to recover, federal and state policymakers should make it a top priority to grow the incomes of working people while ensuring Indiana’s economy serves the lives of all Hoosiers, not the narrow interests of corporate profits and the gilded few."

Price and Sommeiller lay out the average incomes of the top 1 percent, the income required to be in the top 1 percent, and the gap between the top 1 percent and the bottom 99 percent in every county and state as well as in 916 metropolitan areas. The authors found that in 2015, the top 1 percent took home 22.03 percent of all income across the U.S., while the top 1 percent took home 14.9 percent of all income in Indiana.

A series of accompanying fact sheets detail income inequality by state. Key findings include:
• The top 1 percent earned 17.3 times more than the bottom 99 percent in Indiana—making Indiana the 39th most unequal in the country.
• The average annual income of the top 1 percent in Indiana was $804,275. To be in the top 1 percent in Indiana, one would have to earn $316,756.
• Inequality grew sharply in the post-war years in Indiana. From 1945 to 1973, the top 1 percent captured 5.7 percent of overall income growth in Indiana. But since 1973, the top 1 percent has captured 72.4 percent of Indiana’s income growth.
• Inequality has grown more in Indiana than in the Midwest or the United States over the past 45 years. From 1973 to 2015, the top 1 percent have captured 72.4 percent of Indiana’s total income growth, compared to 71.5 percent for the Midwest and 65.4 percent for the U.S. That left the bottom 99 percent of Hoosiers with just 27.6 percent share of income growth, compared to 28.5 percent in the Midwest and 34.6 across the U.S.
• The most unequal metro area in Indiana is Warsaw, where the top 1 percent makes an average of $1,353,969, 27.3 times more than the bottom 99%, who make an average of $49,675. The most unequal county in Indiana is Dubois County, where the top 1 percent makes an average of $1,664,967, 30.2 times more than the bottom 99%, who make an average of $55,196.

Thursday, July 19, 2018

World Refugee Day 2018 and Beyond

The Indiana Institute for Working Families supports all working families who are striving toward a better life for themselves and their children. Policy choices matter. The administration’s recently-enacted "zero tolerance" policy relating to immigration at the southern border is unacceptable and one that can be changed. Families belong together.

Policies are choices that reflect our values. At the Institute, we are centering families in many ways, from work on paid family and medical leave to advocacy on the Supplemental Nutrition Assistance Program (SNAP, formerly food stamps) to promoting access to high-wage job training. We have contacted our lawmakers about this policy choice and we will continue to speak out publicly whenever families are harmed.


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Wednesday, June 20th is World Refugee Day. It is a day to celebrate the strength and courage of the millions of men, women, and children who flee violence in search of safety. It is a day for governments to recognize their global responsibility in helping displaced people. Let us take this day to look at the positive impact refugees have on Indiana. 

Under U.S. law, a refugee is a person who demonstrates that they were persecuted or fear persecution due to race, religion, nationality, political opinion, or membership in a particular special group. Though US federal immigration policy is being discussed on cable news, in Congress and the White House, and around water coolers everywhere, refugees seem to be a population within this conversation who get lost among the headlines. In the midst of this conversation, the Fiscal Policy Institute (FPI) released a report on refugee resettlement, trying to answer the question, “What are the experiences of businesses that hire refugees?” 

FPI used interviews with employers of refugees in four different areas of the country that have differing economic and political situations as well as ranges of immigration experiences. They supplemented that data with American Community Survey (ACS) and Worldwide Refugee Processing System (WRAPS) data, and interviews with refugees, refugee resettlement staff, members of the community, and other service providers. For the most part, they found that the similarities, not the differences, between refugees and non-refugee employees are what employers focused on.

There were two main findings of the study:
1) Refugees tend to stay with the same employer for longer than other hires;
2) Once employers create a positive relationship with the first few refugees, it opens the door for the recruitment of others.

Employers found that there was a mutual adjustment period with refugees, but once those workers had adapted to the expectations and the work environment had adapted to the refugees, refugee employees had lower turnover in 73 percent of respondent cases. The positive reputations employers developed in refugee communities allowed them access to potential employees. Furthermore, when placement agencies saw that refugees were thriving at a company, they would send their clients there. “Once the firm has made whatever adjustment may be necessary and has proven to provide good opportunities for refugees, a channel opens up between the refugee community and the company that makes recruitment significantly easier” according to the FPI report.

According to Exodus Refugee Immigration, 50 percent of refugees resettled in Indianapolis are Chin, Karen, Karenni, and other ethnic minorities from Burma. The city also resettles Congolese and Syrian refugees, as well as small numbers of refugees of Iraqi, Eritrean, Somali, Bhutanese, Chinese, Afghani, Cuban, and other national descent. FPI reports that Indianapolis ranks in the top 30 metro areas for refugee placement over the past decade, although 2017 saw only 646 refugees resettled, a 69 percent decrease from the 2,100 refugees resettled in 2016. This decrease, seen after the current administration paused immigration and then lowered caps on refugees entering the US, is disappointing for those seeking asylum and Hoosier communities who benefit from the presence of diversity. 
Source: Fiscal Policy Institute analysis of WRAPS data

As the conversation around immigration and allowing refugees into the country and Indiana, in particular, continues, we should remember that beyond being humans in need, refugees are employees companies want and need. Both a city’s culture and economy can benefit from seeking refugee placements.



Monday, June 18, 2018

Guest Blog Post: Don’t Raise Taxes on Low Income Hoosiers!


Image Credit: CTViewpoints
By David Sklar
Assistant Director with the Indianapolis Jewish Community Relations Council and Chair of the Indiana Coalition for Human Services Public Policy Committee  

The General Assembly is about to green-light a measure that will cut credits and raise taxes on low income working families by $5 million by 2027, but it doesn’t have to be that way. The Earned Income Tax Credit (EITC) is a widely utilized, and extremely successful, tax benefit for low income individuals that was originally created in the 1970’s and then expanded during President Ronald Reagan’s tax reform efforts of the late 1980’s.  In Indiana, working families with children that have annual incomes below about $40,320 to $54,884 (depending on marital status and the number of dependent children) are eligible for both a federal and state EITC.  The state credit is simply the amount equal to 9% of their federal credit.  That percentage is set statutorily by the General Assembly, and while the state credit is a percentage of the federal credit, the credits themselves are not officially coupled (this is important and you’ll see why below). 

The reason the EITC is so successful is that it is fully refundable.  This means that the credit, which incentivizes work, can wipe out a family’s tax liability, and if any credit remains will be provided to the taxpayer in the form of a tax return.  This extra money in a family’s pocket is often used for emergency expenditures, school supplies, household needs, etc., which can be the difference between making it and falling off a fiscal cliff for low income Hoosiers.  Nearly one hundred percent of the dollars refunded to eligible families are pumped back into our local economy, and the program itself has been supported by leaders of both parties including President Obama and Speaker Paul Ryan who together supported an expansion of the program as part of our economic recovery from the Great Recession.

Unfortunately, Hoosiers who use the program are on the verge of seeing a huge tax increase with the recent passage of the federal tax bill, combined with the passage of House Bill 1316 during the special session of the General Assembly this week.  Tucked into the federal legislation was a new way of calculating cost of living adjustments for the federal EITC. This new method, called Chained CPI, will constrain these adjustments so that they grow at a far slower rate than normal inflation.  Among the various provisions of HB 1316, which was drafted in large part to protect some of Indiana’s biggest and most important companies from seeing large increases in their state tax liabilities as we reconcile our tax code with the federal legislation passed by Congress earlier this year, is a provision that will require Indiana to coincide with the use of Chained CPI.  The end result of both the federal and state legislation will be a large tax increase on low income Hoosiers who claim the EITC.  The Institute on Taxation and Economic Policy (ITEP) projects that in 2019 recipients will lose $12 million in federal EITC and $700,000 in state EITC returns.  The burden on Hoosiers continues to grow exponentially and by 2027 they are projected to lose at least $86 million federally and $5 million more from the state EITC.  Although the state and federal governments view any EITC expenditures not received by taxpayers as savings, make no mistake, it is a tax increase on low income working Hoosiers, and a big one at that.  $91 million big.    

But there are other options that Indiana isn’t considering. Because Indiana’s credit is not officially coupled with the federal credit, as mentioned previously, we do not have to utilize this new method of calculation for the State’s EITC.  Federally, low income working Hoosiers are already projected to lose tens of millions of dollars.  There is little we can do about that unless we can convince Congress to amend or repeal its most recent tax legislation.  But, we can do something locally with regards to the state EITC. Another $5 million out of the pockets of low income working Hoosiers, and local economies, is real money that cannot be ignored.  Unfortunately we at the Indiana Coalition for Human Services were not able to convince lawmakers to remove this provision from HB 1316, but it is our hope that we can work with them over the summer and fall to find a solution to this problem, just as Indiana’s largest employers were able to find solutions to their tax liability problems in this legislation.  We believe there are a number of options that are worthy of consideration, and we look forward to the opportunity to make our case.      
          



Friday, May 11, 2018

When #INLegis picks summer study topics, will working families make the cut?

Legislative Council to Announce Interim Study Topics

During the legislative session, lawmakers advanced a number of potential areas for further study through bills and resolutions. Next Tuesday, May 15th, the Legislative Council will select topics for what is commonly referred to as “summer study.” These longer, more in-depth sessions allow legislators the time needed to explore pressing problems and their potential policy solutions. Often, they result in bill proposals for the following legislative session.

With so many topics to choose from, the members of Legislative Council will need to be selective. As we saw last summer, important topics like paid family and medical leave won’t be assigned unless lawmakers hear from constituents.

Here’s how to ensure that topics addressing the needs of working families make the final cut:

In the list below, we highlight some of the topics lawmakers suggested this session that would shine a spotlight on the needs of working families. Is there one (or more) you feel strongly about? Contact the members of the Legislative Council and let them know. Is one of your lawmakers a member of the Council? Be sure to tell them you are a constituent! As you are crafting your message, be sure to tell them which topic(s) you want to be assigned to an interim study committee and why it matters to Hoosier families and communities.


   Study topics, champions, and why the issue matters to working families:


  • PAID FAMILY AND MEDICAL LEAVE (TALLIAN K) Why it matters: Family and medical leave provides time off from work to welcome a newborn or newly adopted family member, care for an ill or dying loved one, or tending to one’s own serious medical needs. Unfortunately, many families do not have paid time off during these important leaves, and many employers struggle to afford to provide larger stretches of leave. Other states have created programs to make paid leave available and affordable, and Indiana should explore these solutions.
  • WORKFORCE FUNDING AND PROGRAMS (HUSTON T) Why it matters: The legislation passed so far to reorganize the state’s workforce programs has done little to reduce the barriers for low-income working adults to enter education and training programs. Studying whether the state should submit a 'Combined' WIOA plan to align the state's workforce programs across agencies would help unlock resources for supportive services for working adults such as transportation and child care.
  • MENTAL HEALTH ACCESS (KIRCHHOFER C) Why it matters: Particularly focused on the opioid crisis, this suggested topic would urge the legislative council to study the impact that opioid treatment programs have on the neighborhoods and communities in the immediate area of the opioid treatment programs.
  • BROADBAND GRANTS AND HIGH SPEED INTERNET SERVICE (OBER D) Why it matters: Some families and communities lack access to internet service. This topic would produce a report on this and other issues to the interim study committee on energy, utilities, and telecommunications before October 1, 2018.
  • NUTRITIONAL ASSISTANCE (VANNATTER H) Why it matters: This topic would enable the legislature to more closely study eligibility verification and monitoring, identity authentication, and work requirements for participation in the federal Supplemental Nutrition Assistance Program and Medicaid program.
  • STUDY OF PHARMACY DESERTS (BROWN C) Why it matters: This would provide a more solid grasp on what pharmacy deserts look like in rural and urban areas of Indiana and potential solutions.
  • EDUCATION MATTERS (BEHNING R) Why it matters: This study would encourage the General Assembly to look at the adequacy of career counseling to students.
  • WORKER'S COMPENSATION (FORD J) Why it matters: This study would look at the possibility of increasing the benefit schedules for worker's compensation and occupational diseases compensation.


Legislative Council Members:

Rep Brian Bosma | 317-232-9677 | H88@iga.in.gov |@Brian_Bosma
Sen. David Long | 317-232-9416 | Senator.Long@iga.in.gov | @INSenateGOP
Sen. Rodric Bray | 317-234-9426 | Senator.Bray@iga.in.gov | @bray_rodric
Sen. Jean Breaux | 317-232-9534 | S34@iga.in.gov | @SenJeanBreaux
Sen. Susan Glick | 317-232-9493 | Senator.Glick@iga.in.gov | @INSenateGOP
Sen. Randall Head | 317-232-9488 | Senator.Head@iga.in.gov | @Randy_Head
Sen. Timothy Lanane | 317-232-9427 | S25@iga.in.gov | @TimLanane
Sen. James Merritt | 317-232-9533 | Senator.Merritt@iga.in.gov | @Jim_Merritt
Sen. Karen Tallian | 317-232-9847 | S4@iga.in.gov | @SenKarenTallian
Rep. John Bartlett | 317-232-9987 | H95@iga.in.gov | @inhsedems
Rep. Timothy Brown | 317-232-9651 | H41@iga.in.gov | @tbrownmdrep
Rep. Terry Goodin | 317-232-9794 | H66@iga.in.gov | @terry_goodin
Rep. Linda Lawson | 317-232-0243 | H1@iga.in.gov | @inhsedems
Rep. Matt Lehman | 317-232-9677 | H79@iga.in.gov | @INHouseGOP
Rep. Kathy Richardson | 317-234-9380 | H29@iga.in.gov | @repkathykr
Rep. Gregory Steuerwald | 317-232-9833 | H40@iga.in.gov | @INHouseGOP

ACT TODAY - Farm Bill Will Result in SNAP Cuts


Friend of the Institute,

The House Committee on Agriculture passed a bill that will affect how federal hunger-fighting operates for years to come. It introduces HUGE cuts to important programs like the Supplemental Nutrition Assistance Program (SNAP, formerly food stamps) which last year helped feed 672,000 Hoosiers. 

Cuts will come partly from a change in work requirements for segments of the SNAP population. Cuts are unacceptable. Your member of Congress needs to hear from you today: Stop this bill now.

Most of the people on benefits who can work, are working. Due to the nature of low wage work, work requirements put beneficiaries in a difficult position. If you can get enough hours to meet the work requirements, you may make just enough money to lose benefits, but not enough to support your family; on the flip side, not meeting them leads to the total loss of the benefit. 

Programs like SNAP and Medicaid should not be subject to work requirements; food and adequate health care are basic necessities that should be available to our citizens when they fall on hard times or have barriers to employment.


Better ways to support work include:
  • Increasing benefits and reducing unintended benefit cliffs
  • Providing voluntary and meaningful job readiness services
  • Providing voluntary and meaningful adult basic education, skills training/industry credentials, and/or higher education.

Warm regards,

Jessica Fraser
Executive Director, Indiana Institute for Working Families


Tuesday, April 24, 2018

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