The Shriver Brief : Poverty Law Commentary & Insights : Sargent Shriver National Center on Poverty Law : Affordable Housing, Healthcare Reform

This post is part of a weekly “Did You Know” blog series that highlights important, but not well known features of the health reform law about prevention, wellness, and personal responsibility for our health.   

Did you know that, in an HHS ruling last week, the Obama administration reaffirmed the Affordable Care Act’s commitment to improving the health and well-being of America’s women?

If you’ve been tuning in to our weekly “Did You Know” blog series on preventive health and the Affordable Care Act, you might remember that last summer the U.S. Department of Health and Human Services (HHS) required health insurance companies to cover a set of women’s preventive health services without charging a co-payment (effective August 2012). The comprehensive set of free women’s preventive health services recommended by the Institute of Medicine includes, among many other necessary services, Food and Drug Administration-approved contraceptives, or birth control. This issue affects millions of Americans. There are approximately 43 million sexually active women who do not want to become pregnant in the United States; 89% of them use contraception. 

Last summer’s interim rule allowed certain nonprofit religious employers offering health insurance to their employees to qualify for a religious exemption and therefore be able to decide for themselves whether or not to cover contraceptive services in their employer-sponsored coverage. This religious exemption was narrowly defined, pertaining only to those religious institutions that employ and serve people of the same religious beliefs, like churches or synagogues. The exemption did not include religiously affiliated institutions, like hospitals and schools. When HHS asked for public comment on this part of the rule, it received an outpouring of input from groups supporting the narrow exception and groups wanting it expanded.

On Friday of last week, HHS announced its final ruling on this issue, concluding that the narrow definition of the religious exemption will stand. Religious places of worship like churches will be exempt from the rule, but institutions with religious affiliations like hospitals and schools will not. This means, for example, that churches will not have to cover contraceptive health for their employees, but religiously affiliated hospitals will have to offer that coverage to their doctors, nurses, and other employees. The only change to the rule from last August is the decision to give employers who don’t currently offer contraceptives in their employer-sponsored health coverage because of a religious belief an extra year (until 2013) to comply with the mandate. The Secretary of HHS, Kathleen Sebelius, said that she believes this proposal “strikes the appropriate balance between respecting religious freedom and increasing access to important preventive services.”

This blog post was coauthored by Rachel Gielau.

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Families must be able to save money in order to achieve self-sufficiency and prosper. Unfortunately, the federal government often forgets this common-sense principal. 

Many public benefits programs—like cash welfare or Medicaid—limit eligibility to those with few or no assets. If a family has assets over the state’s limit, it must “spend down” longer term savings in order to receive what is often short-term public assistance. These asset limits are a relic of entitlement policies that no longer exist, since cash welfare programs now focus on quickly moving families to self-sufficiency rather than allowing them to receive benefits indefinitely. In other words, although personal savings and assets are precisely the kind of resources that allow families to move off—and stay off—public benefit programs, asset limits actually discourage anyone receiving public benefits from saving for the future.

States have full discretion in setting or eliminating asset limits for Temporary Assistance to Needy Families (TANF), Medicaid, and the State Children’s Health Insurance Program (SCHIP). They also have some flexibility to address asset limits for the Supplemental Nutrition Assistance Program (SNAP, formerly known as Food Stamps). Several states have eliminated asset limits in TANF, Medicaid and SCHIP, and 38 states have eliminated asset tests in SNAP.

Pennsylvania is one of these states. In 2008, when the recession hit and unemployment soared, it dropped asset limits in its SNAP program. Unfortunately, Pennsylvania’s Department of Public Works (DPW) recently announced that it wants to reinstate these tests. Under the proposal, individuals under 60 could have no more than $2,000 in assets, and individuals over 60 could have no more than $3,250, not including retirement accounts and homes. This is devastating news for the state’s 850,000 families currently receiving SNAP benefits. It would also be a blow to Pennsylvania’s economy since research shows that every $1 in SNAP benefits generates $1.73 in economic activity.

This proposed policy reversal is highly unusual because the trend among states has been to eliminate asset tests. So what is different about Pennsylvania? According to Anne Bale, a spokesperson for the DPW, Pennsylvania residents have complained about fraud and abuse in the SNAP program. DPW’s hope is that reinstituting asset limits would eliminate this waste, without requiring the state to spend money on fraud detection and prosecution. However, the state recently won an award for running the most efficient state SNAP program and has one of the lowest rates of SNAP fraud in the nation: 1/10 of 1%. Moreover, the state would not really save any money since it’s likely that more caseworkers would need to be hired and all caseworkers would need to receive training on the new limits and how to apply them. Added to the cost of software to computers, asset limits and the extra workload of understaffed offices, any cost savings would be slim. It would be a no-win situation: both bad for the state’s economy and bad for people trying to escape poverty’s cycle.

This proposed policy sends entirely the wrong message: Do not pull yourself up out of poverty; rather remain in the cycle of poverty, dependent on government benefits. It’s simply bad public policy to require people to spend all their assets in order to ensure a meal on the table then tell them that they need to save and become self-sufficient!

It time to do away with asset limits once and for all. Grab your fork and tell Pennsylvania and other states to stop sticking it public benefit recipients.

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It’s that time of year again; W-2s are showing up in mailboxes across the country signaling people to start preparing to file their 2012 taxes. Like in years past, tax preparers are already bombarding the public with reminders about the impending tax season. Unlike previous years, however, there are a number of big changes in this year’s tax landscape.

First and foremost, 2012 is likely the last year for refund anticipation loans (RALs). As discussed in previous blogs, RALs are short-term, high-interest-rate bank loans sold through tax preparation sites, such as H&R Block or Jackson Hewitt. Although marketed as “instant refunds,” RALs are actually extremely high-cost bank loans that last 7-14 days until the actual Internal Revenue Service (IRS) refund repays the loan. All fees are deducted from the final RAL amount issued to the taxpayer. If, however, the RAL customer does not receive the expected tax return amount as calculated by the tax preparer, he or she is liable to the lender for the difference. By one estimate, consumers paid approximately $833 million in RAL fees in 2006 and $740 million in 2007.

The allure of RALs is that they provide taxpayers an immediate advance on their anticipated tax refunds. Yet, most taxpayers could have their refund in two weeks or less if they file electronically on their own. Fortunately, after this 2011 tax season, RALs will no longer be offered. In December of last year the Federal Deposit Insurance Corporation (FDIC) entered into a settlement agreement with Kentucky-based Republic Bankcorp Inc., the last bank in the country providing funding for RALs for tax preparation companies, which will prohibit the bank from continuing to fund them after this year.

While the demise of RALs was slow and painful, Jackson Hewitt, the sole tax preparer that will be offering RALs this tax season, is making sure that RALs have one last party on their way out. Jackson Hewitt’s flashy TV commercials ads are trying to turn tax time into party time. In particular, Jackson Hewitt, as the only player in the market, is trying to capitalize on this last tax season as much as possible. In addition to its traditional tax preparation and RAL services, Jackson Hewitt is also partnering with Wal-Mart. Wal-Mart recently entered the banking game by providing check cashing services and also began offering a prepaid card, the MoneyCard. Through its partnership with Jackson Hewitt, it will also provide so-called “free” tax preparation.

Over 3,000 Wal-Mart’s will offer free 1040 EZ assisted filing, and customers will be given their tax refunds in the form of Wal-Mart cash cards.  Most people, however, cannot use the 1040 EZ form. The 1040 EZ form does not cover anyone who wants to itemize deductions (usually homeowners) or anyone claiming student loan interest, health care credits, the earned income tax credit (EITC), child tax credits (CTC), or retirement credits. Because a 1040 EZ filing cannot be used in connection with refunds, households that use the 1040 EZ form to have their taxes prepared for free will be forgoing things like the EITC, which is the largest anti-poverty program in the United States. If a household elects to claim the credit, then Wal-Mart’s tax preparation service will not actually be free. 

Additionally, even for those that do have their taxes prepared for free, the cards on which their refunds are paid come with hidden fees. Fees for Wal-Mart’s Cash Card include $2 to withdraw cash from an ATM, $1 to check the balance, and $3 if $1,000 isn’t added to the card in a given month.

Tax time is a critical time helping for low- and middle-income families to save. Tax filers who are eligible for EITC, CTC, and other credits can receive free tax preparation by going to a Volunteer Income Tax Assistance (VITA) site and getting their tax refunds for free. Additionally, VITA sites will help these households file electronically thereby allowing them to receive their refunds within days without having to rely on predatory products such as RALs. With such savings, low- and middle-income families can open bank accounts, possibly through a Bank On program, which provides low-income families with low-cost accounts at mainstream banks and financial institutions, thereby launching them onto the path of long-term financial stability.

So yes, tax time can be party time, but just don’t invite Jackson Hewitt to the party.

This blog post was coauthored by Alison Terkel.

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The Affordable Care Act (ACA) has friends in high places, and they are letting the world know it. “Amicus Curiae” means “friend of the court” and is the name for a person or group who is not officially the plaintiff or defendant in a lawsuit, but who has good reason to be concerned about the case and offers an opinion based on special experience or expertise to the court regarding the case. Now pending in the Supreme Court is a case challenging the validity of portions of the ACA. Friends of the court are now submitting “amicus curia” briefs to the Supreme Court defending the ACA.

One important friend on the ACA’s side is Illinois Attorney General Lisa Madigan. Recently, she and twelve other attorneys general filed briefs before the Supreme Court arguing that the individual mandate is constitutional as a valid exercise of the constitution’s Commerce Clause. The opponents have argued that the ACA’s “individual mandate” (imposing a tax penalty on anyone who remains uninsured after the ACA is implemented) is beyond the scope of Congress’s power to act under the Commerce Clause. As one of the amici notes, "The healthcare industry takes up at least one-sixth of our economy. If anything is interstate commerce, it's healthcare.”

We say “thanks” to these Attorneys General, including our own Lisa Madigan, for supporting this monumental legislation—they are truly looking out for all of their constituents.

However, it’s not just lawyers who are lining up to support the ACA. Many friends of the law have significant medical expertise, including the American Academy of Pediatrics, the American Nurses Association, the American Cancer Association, and the American Diabetes Association. Other amici are familiar with the intricacies of running health systems, including the American Hospital Association and the Catholic Health Association of the United States, as well as the National Association of Children’s Hospitals. Other friends include Nobel Prize winning economists, the AARP, small business groups and numerous academics. The Shriver Center has joined as “amicus curiae” in two briefs in support of the ACA: one led by the National Women’s Law Center pointing out the tremendous positive impact of the law on women’s health; and the other led by the National Health Law Program that defends the Act’s Medicaid expansion as a valid exercise of congressional authority.

Having experts support the ACA in the Supreme Court is important, but it is also important that everyone who will be affected by this law take a stand in support of it. This law will affect all Americans—whether it is by providing affordable coverage, allowing young adults to stay on their parents insurance, or any of the myriad other benefits the law offers. Share this information with people—research shows many people don’t know how the ACA can help them. Let your friends, neighbors and co-workers in on the good news.  .
 

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The Social Security program has done wonders to alleviate poverty among the elderly. A report recently released by the National Institute of Health looks at one of America’s growing populations, people aged 90 years or older—who they are, where they live, and their economic security. This age group is expanding to be a larger proportion of both the elderly population (age 65 and over) and the total U.S. population. While the 90-and-over population is overwhelmingly white (88.1%), the report shows that this group’s poverty rates are consistent with statistics for the total U.S. population—that women and people of color are more likely to be living in poverty.

Of the entire population of 1.9 million Americans aged 90 and over, the poverty rate was 14.5% in the years 2006-08. Among those living in poverty, over 80% were women, a disproportionately higher share of the 90+ population. Because women in this age group outnumber men 3 to 1, this makes them a very significant population. Like women in general, poverty rates for the “oldest old” were higher for elderly people of color: nearly a fourth of African-Americans 90 and over were living in poverty, with similar rates for Hispanics. The economic security and life quality of the “oldest old” population is significant because they are growing as a group; the report estimated that the number of Americans 90 and over will quadruple by the mid-century. Illinois is among the top 10 states that have the highest population of people 90+ at 78,800.

Because so many of those in the 90-and-over group are at an increased risk to be poor, an effective economic safety net must be in place to prevent or alleviate poverty among this fragile population. While some politicians and others have advocated cutting programs such as Medicare and Social Security in order to reduce the federal deficit; these two vital programs are relied on by millions of older Americans, and especially those aged 90 and over. More than 98% of elderly 90 and over received Medicare coverage, and receipt of Social Security benefits is also nearly universal—for over 90% of the 90+ population Social Security made up almost half of their income. Major cuts to these programs would result in an increase to the already high number of those 90 and over living in poverty.

A recent report released by the U.S. Census Bureau on poverty in America suggests that poverty rates among the general population of elderly (those aged 65 and up) are rising as well. The report compares the “official” poverty rates and the new Supplemental Poverty Measure (SPM) to determine who is considered poor or low-income. The SPM goes beyond the “official” poverty measurement (which is focused primarily on disposable income before taxes) and takes into account essential expenses such as variation in health care costs—a cost that is substantial for aging seniors. The report stated that in 2010 nearly 1 in 6 individuals 65 and older were living in poverty; this is almost double the rate measured by traditional poverty standards.

Many older or retirement-age Americans are worried about their economic situations in their later years. A report released by the AARP Public Policy Institute surveyed Americans 50 and over about their economic expectations for their old age. The majority of those surveyed lacked confidence in their economic situation as they continue to age. Nearly half of the participants expected their standard of living to decrease as they get older. The majority (57%) stated that they were not confident in their ability to finance a comfortable life through their retirement. As a greater proportion of our population reaches old age and the elderly live longer, there must be strong support of government programs and policies that address the needs of this growing population and do so much to alleviate poverty.

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This post is part of a weekly “Did You Know” blog series that highlights important, but not well known features of the health reform law about prevention, wellness, and personal responsibility for our health. 

January is National Cervical Cancer Health Awareness month. One goal this month is to bring awareness to the preventative role that routine Pap tests play. The American Cancer Society states that Pap tests can actually prevent the disease and that early detection allows for more successful treatment, making it a matter of life and death for some women. Unfortunately, this does not bring peace of mind to the millions of uninsured women who lack access to primary care doctors and OB-GYNs.

Almost 1 in 5, or 19 million women in America reported being uninsured in 2010; more than 17 million, almost 1 in 6, fell victim to poverty. These women are your neighbors, your co-workers, your loved ones and your community members, and they are at a heightened risk of developing serious illnesses like cervical cancer simply because they cannot afford basic and necessary preventive health care. Dr. Martin Luther King Jr., whose legacy we recently celebrated, once said, “Of all the forms of injustice, inequality in health care is the most shocking and inhumane.” This is an injustice that the Affordable Care Act—commonly referred to as “Obamacare”—is working diligently to fix.

In 2014, the Affordable Care Act will expand the Medicaid program to cover all Americans living at or below 133% of the federal poverty level ($14,483.70 a year for a single person). This expansion will bring comprehensive health care, including primary care providers, to an estimated 16 million people nationwide. Here in Illinois, 700,000 people, including many low-income women will gain access to basic and effective preventive health services like routine Pap tests.

The Affordable Care Act recognizes that the cost of insurance policies and medical bills are not just problems for those living in poverty; they are also significant sources of stress for middle-class families. Fortunately, in 2014, the health reform law will provide tax credits and cost-sharing subsidies for individuals and families living below 400 percent of the federal poverty level ($89,400 for a family of four) to offset the cost of obtaining health coverage and maintaining a healthy lifestyle. This kind of financial relief is estimated to make a huge impact on women’s access to health care and greatly decrease the number of women who are uninsured or “underinsured” (women who have health insurance but don’t get medical care because they cannot afford their policies’ big deductibles or co-payments or because the services they need are not covered by their policies).

A 2009 study reported that seven out of ten women are uninsured or underinsured, have trouble paying for medical bills, or avoid seeking health care because of the cost. With record breaking numbers of women living in poverty and the fact that women have historically been charged higher premiums than men simply for being women—a discriminatory practice that health reform has banned—this should come as no surprise. Women need access to basic preventive health care now in order to prevent life-threatening diseases like cervical cancer in the future. That’s why, right now, the Affordable Care Act is helping insured women gain access to affordable health care by mandating that insurance companies provide preventive services free of cost-sharing to anybody with a new or “non-grandfathered” plan. Furthermore, in August of this year, a significant number of women’s preventive health services, including annual well-woman visits and Food and Drug Administration-approved contraceptives, will be free of co-payment for women who have insurance policies that are considered to be “non-grandfathered” status.

Finally, health reform is effectively eliminating barriers between women and OB-GYNs by banning the old, status-quo requirement that women must get a referral from a primary care physician before seeing a gynecologist. This consumer protection has been in effect since the fall of 2010 so women all over the United States are already finding it easier and more affordable to get the necessary preventive care they need as a result of health reform.

On behalf of women everywhere, thank you, Affordable Care Act, for increasing access to affordable health care and for helping women stay ahead of cervical cancer.

For information on what the government is already doing to help women prevent cervical cancer, check out the National Breast and Cervical Cancer Detection Program online. This program provides access to free breast and cervical cancer screening and treatment for millions of uninsured women.

 Also, see the American Cancer Society for in-depth information on what cervical cancer is, the risks and treatment options, as well as support.  

Interested in an in-person presentation on how health reform is rolling out in Illinois and what it means for individuals? Are you a direct service provider or advocate for vulnerable populations and interested in how the Affordable Care Act will impact the population you serve? Rachel Gielau, health policy expert at the Shriver Center, is giving free in-person presentations to Illinois audiences on how health reform is affecting individual and families in Illinois. Contact Rachel Gielau at 312-368-1154 to set up a presentation for your organization!

This blog post was coauthored by Rachel Gielau.

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The Girl Scouts of America turn 100 this year, and to celebrate they are rolling out not only a new lemon-flavored cookie, but new badges. Thirteen of these new badges reward learning about financial topics such as saving and investing, philanthropy, budgeting, and earning good credit. The Girl Scouts’ three million members will be getting a leg up on becoming financially savvy, something not always taught in school.

The Girl Scouts will not only learn valuable life lessons about money, but will put these lessons to use in tangible ways. Before earning the “Financing My Dreams” badge, the girls must first meet with a real estate broker to see if their dream job will pay enough for their dream house. The real estate brokers become mentors, teaching the Girl Scouts the importance of credit in the home loan process, interest rates, and why you should put 20% down on a home. After the Scouts master these skills, they take their dream home and compare it to actual homes listed on the market in their communities and, with the brokers’ assistance, decide how to achieve their dreams. Once this is accomplished the Girl Scout receives her badge as a reminder of the road she must take to get her dream job and home. 

As Claire Mysko, author of “You’re Amazing! A No-Pressure Guide to Being Your Best Self,” said, teaching financial literacy to young girls is the key to building the confidence they will need to have financial freedom and healthy relationships. But don’t worry boys, the Boy Scouts also offer financial literacy badges including “Personal Management,” which teaches comparison shopping and stock market research.

All children should receive a financial education, regardless of whether they are Boy Scouts or Girl Scouts. Schools should be mandated to provide financial education courses so that future generations grow up knowledgeable about money, able to make informed decisions, and able to be financially independent. In 2010, the Treasury Department issued Financial Education Core Competencies to establish a consistent baseline for financial education. It is up to each state to decide how to implement these core competencies, including whether existing classes meet them and if students will be tested and/or minimum requirements imposed for graduation. Currently only 13 states require high school students to take a personal finance course before graduation and only 9 require testing. A study conducted by the National Endowment for Financial Education (NEFE) in 2009 looked at students from 15 colleges in states with differing financial education policies. The students from states that required a financial education course had the highest reported financial knowledge and were more likely to display positive financial actions, including being more likely to save, more likely to pay off credit cards in full each month, and less likely to max out credit cards and be compulsive buyers. 

All states should require financial education courses in school beginning in grammar school. In the meantime, Scouts are taking matters into their own hands. Boy Scouts and Girl Scouts will be learning critical financial lessons that are not available in many American schools and that will help them grow into fiscally confident adults. And of course, by selling delicious cookies, Girl Scouts will be earning that “Entrepreneurship” badge as well.

Watch a video about the Girl Scouts new financial literacy badges on CNN’s website.

This blog post was coauthored by Alison Terkel.

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In November 2010, more than 70 percent of voters in Oklahoma approved the “Save Our State” Amendment to the Oklahoma Constitution. That amendment “saved the state” by prohibiting Oklahoma state court judges from considering “the legal precepts of other nations or cultures . . . [s]pecifically, . . . international law or Sharia Law.” The ballot defined Sharia for voters as “Islamic law . . . based on two principal sources, the Koran and the teaching of Mohammed.”

The amendment was immediately challenged in federal court on First Amendment grounds. The plaintiff in the case was Muneer Awad, an American citizen, a Muslim, and the executive director of the Oklahoma Chapter of the Council on American-Islamic Relations. The U.S. District Court for the Western District of Oklahoma issued a preliminary injunction that blocked the Oklahoma State Board of Elections from certifying the results of the vote on the amendment. This decision prevented the amendment from going into effect.

Last week, the U.S. Court of Appeals for the Tenth Circuit upheld that injunction, agreeing with the lower court that Awad is likely to win his First Amendment challenge to the anti-Sharia amendment. The case now goes back to the lower court for further proceedings.

As explained by Professor Martha F. Davis and Emily Abraham in last fall’s human rights issue of Clearinghouse Review: Journal of Poverty Law and Policy, the Oklahoma amendment was merely the most extreme example of a recent wave of state initiatives against Sharia and transnational law (defined as foreign or international law). In the past two years, more than twenty states considered such legislation. At least six of those state proposals specifically targeted Sharia.

Davis and Abraham’s article, “Oklahoma’s Anti-Sharia and Other Antitransnational Proposals: A Backgrounder for Domestic Human Rights Advocates,” puts these state legislative efforts in a larger perspective. They explain that transnational law has a long, nonthreatening history in state courts. For example, state courts sometimes review claims implicating an international law such as the Hague Convention on the Civil Aspects of International Child Abduction. Occasionally a state case will involve foreign standing and treaty compliance. More generally, state courts may look to transnational law for insight or ideas. Oklahoma’s constitutional amendment would have forbidden all of these legitimate considerations of transnational law.

But what about Sharia? Sharia is broad and applies to topics as diverse as business, contracts, and social issues. Davis and Abraham explain that a written agreement could declare Sharia to be the law of the contract, causing a judge to need to consider Sharia to resolve any legal questions about its meaning. Likewise, child custody or divorce agreements may implicate Sharia. Awad himself asserted that the Oklahoma amendment would prevent a court from probating his will because it contains references to Sharia. Rather than posing a threat to Oklahoma law, these potential uses of Sharia fall within the long tradition of state courts' legitimately considering transnational law in the application of their own state laws.

The Clearinghouse Review special issue on human rights explored how legal advocates may incorporate international human rights ideas into their domestic poverty law practice. Notions such as a human right to housing, health care, or food offer a useful framework for public interest lawyers and can bolster their advocacy. In some states, antitransnational law efforts may have a chilling effect on judges’ receptiveness to this framework, but if the Tenth Circuit’s opinion is any guide, most judges will understand that international and comparative law play an appropriate and important role in our domestic courts.

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As we ring the 2012 New Year we can say goodbye and good riddance to Refund Anticipation Loans (RALs). RALs are short-term, high-interest-rate bank loans sold through tax preparation sites. The allure of RALs was that they provided taxpayers an immediate advance on their anticipated tax refunds. However, customers are often not aware of the usuriously high interest rates and hidden fees associated with the loan. Triple digit interest rates ranging from 50% for a $10,000 RAL to 500% for a $300 RAL are not unheard of.

A report released by the U.S. Department of the Treasury confirmed what consumer advocates have known all along: the primary markets for RALs are impoverished communities. RALs are concentrated in the country’s poorest areas, with 46.8 percent of RALs in only 10 percent of the nation’s zip codes. The majority of RAL users can be classified as “working poor,” with median adjusted gross income for RAL users at less than $20,000.

But now RALs are dead. In December of last year the Federal Deposit Insurance Corporation entered into a settlement agreement with Kentucky based Republic Bankcorp Inc. that will prohibit the bank from continuing to fund RALs. The demise of RALs was slow and painful. Over the last several years, federal banking regulators and the Internal Revenue Service (IRS), recognizing the danger and negative impact of RALs, slowly but surely began to prohibiting the practice of selling RALs.

As early as 2008, the IRS and the U.S. Treasury Department issued an advance notice of proposed rulemaking regarding the marketing of RALs. Although no final rules were issued at that time, in January 2010 the IRS announced it was creating a Task Force to study RALs.  

In February 2010 the Office of the Comptroller of the Currency (OCC) issued new guidance on the delivery of RALs. In addition to this new guidance, both the OCC and the Federal Deposit Insurance Corporation issued cease and desist orders to banks funding RALs. In August 2010 the IRS announced that starting with the 2010 tax filing season it would no longer provide tax preparers with the mechanism they had been using to underwrite RALs. This so-called “debt indicator” tool gave tax preparers an indication of whether a client would have any portion of his/her refund offset for delinquent tax or other debts including unpaid child support or delinquent student loans. Preparers used this indication to decide whether or not to offer a customer a RAL as an incentive to immediately pay for the fees of tax preparation and get cash in hand. Since refunds can generally be received within 10 days of filing electronically, the IRS decided that there was no longer a need for the debt indicator or RALS. As IRS Commissioner Doug Shulman explained at the time: “Refund Anticipation Loans are often targeted at lower-income taxpayers. With e-file and direct deposit, these taxpayers now have other ways to quickly access their cash.” Then in October 2010, the Office of Thrift Supervision (OTS) issued a supervisory directive to Iowa-based MetaBank Financial stating that the bank was guilty of engaging in unfair and deceptive practices through its funding of Jackson Hewitt’s RAL products and requiring it to obtain written approval before entering into any new third-party relationship agreements. 

Shortly thereafter, in January 2011, the OCC prohibited H&R Block’s financial partner, HSBC Bank, from funding any RALs whatsoever, thereby ensuring that H&R Block, could not offer RALs. The year prior, H&R Block’s main competitor, Jackson Hewitt, lost its main RAL partner when Santa Barbara Bank & Trust was ordered by banking regulators to exit the RAL market. That left Jackson Hewitt scrambling to find another banking partner. In December 2010, just as H&R Block was forced to leave the RAL market Jackson Hewitt reached agreement with Republic Bank & Trust Co., a unit of Republic Bancorp Inc. to back some, but not all, of its RAL program for the 2011 tax season. Yet, in the midst of the 2011 tax season, the Federal Deposit Insurance Corporation ordered Republic Bank to stop providing RALs.

As soon as the Federal Deposit Insurance Corporation (FDIC) issued the cease and desist order to Republic Bank, the only two other banks funding RALS, fearing similar actions against themselves, announced that they would leave the RAL market. Since Republic charged on average $90 for a $1,500 RAL and earned over $44 million, or 69% of its net income, from providing loans to Jackson Hewitt and Liberty Tax in 2010, it quickly appealed the FDIC’s decision and the case resulted in the recently announced settlement agreement. Pursuant to the settlement agreement, Republic Bank while pay a fine of $900,000, but more importantly it must leave the RAL market by the 2013 tax season. In the meantime, federal regulators will closely monitor Republic’s tax-refund business. 

The death of RALs is a great achievement for consumer advocates and provides needed protection for low-income families. Yet, tax preparers are likely to begin marketing an alternative product, Refund Anticipation Checks (RAC), a less risky but still costly product to the consumer, instead. An RAC is a temporary bank account set up by a tax preparer on behalf of a taxpayer into which the IRS direct deposits a refund check. Consumers access that money through a check or prepaid card. When the money is gone, the account closes automatically. Consumers typically pay about $30 to set up the one-time use account. If they opt to get a paper check, they could end up paying a check-cashing fee, too. In 2009, about 12.9 million filers got refunds via an RAC, but this number is likely to increase now that RALs are gone.

Through generally cheaper than a RAL, enrolling in an RAC program doesn't make a lot of financial sense, either. Consumers would be wiser and save money by preparing their taxes themselves or going to an IRS Volunteer Income Tax Assistance (VITA) site and having their taxes prepared for free. The IRS Volunteer Income Tax Assistance Program (VITA) and the Tax Counseling for the Elderly (TCE) Programs offer free tax help for low- and moderate-income taxpayers. Trained VITA site volunteers also help those who are eligible receive the Earned Income Tax Credit (EITC), Child Tax Credit (CTC), or credit for the elderly and disabled. Taxpayers should then open a low-cost or free checking and saving accounts with a BankOn affiliated bank so they can opt in for a direct deposit of their tax refund. VITA sites begin to open at the end of January, so begin preparing for tax season early to receive a tax refund for free.

Although RALs are dead, and no one will be at their funeral, consumers must remain vigilant and continue to avoid costly products at tax time.

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This post is part of a weekly "Did You Know?" blog series that highlights important, but not well known, features of the health reform law about prevention, wellness, and personal responsibility for our health.

Did you know that the Affordable Care Act is upping the ante on breast cancer awareness and prevention efforts?

According to breastcancer.org, about one in eight U.S. women (just under 12%) will develop invasive breast cancer over the course of their lifetimes. In 2011 alone, it was estimated that nearly 230,000 women were diagnosed with some form of the disease, and tens of thousands of women lost their lives to it. Breast cancer is the second most common type of cancer in women and one of the most deadly cancers among our mothers, sisters, and grandmothers. But it doesn’t have to be. Raising awareness about breast cancer, educating women about effective preventive health practices and increasing access to doctors and routine mammograms can reduce the cost, hardship, and lives lost to this all-too-common form of cancer. And this is precisely what the Affordable Care Act is doing for women all across the country.

The Affordable Care Act (ACA) authorizes the Centers for Disease Control and Prevention (CDC) to award grants to fund breast cancer education and awareness campaigns across the country. The Act also directs the Secretary of Health and Human Services, along with the CDC, to establish an advisory committee on breast cancer and to launch a breast cancer awareness and education campaign, targeting young women with information about prevention and early detection. The law also authorizes the CDC to conduct research to better understand the disease, as well as the most effective prevention and awareness-raising efforts.

The CDC states that mammograms can detect breast cancer up to three years before it can be felt. And according to Health and Human Services, 3,700 lives would be saved every year if 90 percent of women 40 years old and up received routine breast cancer screenings. It is no secret that educating women about the importance and effectiveness of early detection is crucial to reducing the prevalence and mortality rates of breast cancer. 

However, this isn’t just an awareness issue. Especially in today’s economy, the financial cost of a routine mammogram—let alone making a visit to the doctor—is high enough to deter women from getting their necessary check-ups. The Affordable Care Act works to solve this problem for many American women. The health reform law is making women’s preventive health care affordable by requiring health insurance companies to cover certain preventive health services, like routine mammograms, free of co-pay for individuals with new or “non-grandfathered” plans. This means that any woman with a health insurance plan that is new or has changed significantly since March 23, 2010, can receive necessary routine mammograms without having to pay any money out of pocket for the procedure. Yearly well-woman check-ups will soon be free, too, giving women a chance to speak to their doctors about their health without worrying about their bank accounts.

The Affordable Care Act, referred to in the media by “Obamacare”, is also making strides for women who currently battling breast cancer and those who are survivors. Thanks to “Obamacare’s” many new consumer protections, insurance companies are no longer able to place lifetime limits on insurance policies, and in 2014, they will no longer be able to place annual limits on coverage, meaning people everywhere can rest easy knowing that the health insurance they pay for will be there for them when they need it most. Also in 2014, insurance companies will no longer be able to discriminate against anybody for having a pre-existing condition, like breast cancer, which means that women will no longer be denied coverage or charged a higher rate because they’ve fallen victim to cancer.

Breast cancer affects women and men of all races and ethnicities, but did you know that African American women are at a greater risk than any other race of dying from breast cancer in America? Find information on how the Affordable Care Act is working to reduce health disparities like this one across the country online.

For information on what you can do to stay ahead of breast cancer and on top of your health, visit the American Cancer Society online. For more in-depth information about breast cancer, like risks, treatments, and support, visit the National Breast Cancer Foundation website.

This post was coauthored by Rachel Gielau.

Interested in an in-person presentation on how health reform is rolling out in Illinois and what it means for individuals? Are you a direct service provider or advocate for vulnerable populations and interested in how the Affordable Care Act will impact the population you serve? Rachel Gielau, health policy expert at the Shriver Center, is giving free in-person presentations to Illinois audiences on how health reform is affecting individual and families in Illinois. Contact Rachel Gielau at 312-368-1154 to set up a presentation for your organization!

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The Department of Justice (DOJ) ended 2011 with a bang, reaching an enormous $335 million fair-lending settlement with Countrywide Financial Corporation and its subsidiaries. The record-setting settlement secures relief for more than 200,000 African American and Hispanic borrowers who were more often steered into subprime mortgage loans or were charged higher fees than were white borrowers with similar credit profiles. The proposed consent order of December 21 resolves DOJ’s claims that Countrywide’s lending practices during the housing boom of 2004–2008 violated both the Fair Housing Act and the Equal Credit Opportunity Act.

The Equal Credit Opportunity Act (ECOA) prohibits discrimination in every phase of a credit transaction such as a mortgage loan. When creditors discriminate on the basis of race, ethnicity, marital status, or another protected class, they subject themselves to civil liability for actual and punitive damages. Private citizens can bring ECOA claims, as can several authorized government agencies such as the Department of Justice and the new Consumer Financial Protection Bureau. ECOA has been on the books since 1974, but its enforcement has been minimal. The foreclosure crisis and its disproportionate impact on minority groups, however, have renewed public interest in fair-lending laws such as ECOA—and given DOJ’s landmark discrimination settlement, this revived focus has come none-too-soon.

ECOA is valuable for more than just compensating victims of discriminatory lending, as was accomplished by DOJ. Many people who were unfairly steered into subprime mortgages ultimately found themselves facing foreclosure. In the current issue of Clearinghouse Review: Journal of Poverty Law and Policy, Jennifer D. Newton and Tamara St. Hilaire of Florida Legal Services explain how advocates can use ECOA to challenge and prevent such foreclosures. The authors explain that borrowers, depending on where they live, may file a lawsuit under ECOA to prevent a foreclosure or, if a foreclosure case is already underway, may countersue under ECOA or use it as a defense against the foreclosure action. Plaintiffs may prove discrimination with direct evidence of discriminatory intent. Most courts also allow plaintiffs to meet their burden of proof with circumstantial evidence of disparate treatment or impact.

When courts allow disparate impact claims under ECOA, they look to fair housing discrimination cases for guidance. The U.S. Supreme Court will also be looking at disparate impact claims under the Fair Housing Act (FHA) later this year when it decides Magner v. Gallagher, which is scheduled for oral argument on February 29. Specifically, the Court will decide whether disparate impact claims are cognizable at all under FHA and, if so, how they should be analyzed. The outcome of Magner will likely affect how courts view disparate impact claims brought under ECOA as well.

In the meantime, the Justice Department will be appointing an independent administrator to identify victims of Countrywide’s discriminatory lending who are entitled to compensation as a result of the settlement. Those who believe they were discriminated against by Countrywide and have questions about the settlement may contact the Department at countrywide.settlement@usdoj.gov. 

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What a difference a year makes. Last January the House Republicans and a handful of Democrats were pushing to redefine rape in order to further restrict access to abortions.  The Hyde Amendment, the federal law that restricts the use of government funds to pay for abortions, exempts pregnancies resulting from rape or incest (and pregnancies that could endanger the life of the woman). The “Protect Life Act” (HR 358) and its companion bill the “No Taxpayer Funding for Abortion Act” (HR 3), each contained a provision that would have rewritten the Hyde Amendment to drastically limit the definitions of rape and incest—the rape exemption would have been limited to “forcible rape,” excluding such crimes as statutory rape and cases in which the woman was drugged, and incest would have been limited to cases in which the woman was a minor. (It should be noted that this legislation would restrict access to abortions in ways beyond redefining rape and incest, and the restrictions would not be limited to government-funded abortions.)

“Forcible rape” is not defined in the federal criminal code, nor was it defined in the legislation. A likely result would be that no pregnancies would be covered by this rape exemption. Under public pressure, the bills were amended, and they passed the House without redefining rape or incest. The bills are currently pending in the Senate. Narrowing the definition of rape, for whatever purpose, belittles the seriousness of the crime and the suffering of its victims.

In contrast, last Friday the U.S. Department of Justice announced that the definition of rape would be expanded to better reflect what rape is and who its victims are. The revisions to the Uniform Crime Report’s definition of rape will make reporting of the crime more accurate and provide a better understanding of its effects on victims. The definition is used by the FBI to collect information from local law enforcement agencies about reported rapes, and the new definition is more in sync with most state rape statutes.

The new definition of rape is: “The penetration, no matter how slight, of the vagina or anus with any body part or object, or oral penetration by a sex organ of another person, without the consent of the victim.”

This definition includes victims and perpetrators of any gender, goes beyond vaginal penetration, and encompasses instances where the victim is incapable of giving consent, including due to the influence of drugs or alcohol or because of age, and does not require physical resistance to demonstrate lack of consent. The old definition used by the Department of Justice was so inadequate that it did not include many of the alleged sex crimes of former Penn State football coach Jerry Sandusky, or rape facilitated by “date rape” drugs, which make victims weak and confused, or even causes them to pass out, so that they cannot refuse sex or defend themselves.

Rape is a serious crime that often has life-long consequences for its victims—negatively impacting their physical, mental, social, and economic well-being—and may include pregnancies that need to be terminated. The definition of rape should not be toyed with for political ends such as further restricting the constitutional right to an abortion. The new Department of Justice definition of rape recognizes conduct that will not result in pregnancy, and therefore, not add to the need for federally funded, or any, abortions. However, whether or not a rape results in a pregnancy should not limit how it is defined in law. The Justice Department’s expanded definition of rape is a positive step in recognizing all of its victims and the brutality of the crime, and in holding perpetrators accountable. Anything else belittles the crime and its victims.

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The Consumer Financial Protection Bureau (CFPB) opened its doors in July of 2011 and after a pro-longed partisan political battle, it finally has a director.  After Republican Senators made it clear they would continue to block Richard Cordray’s nomination, or anyone else’s, until their demands to restructure the CFPB to make it less powerful were met, President Obama, in a speech on Wednesday in Cleveland with former Ohio Attorney General Richard Cordray by his side, publicly confirmed Cordray’s appointment during Congress’ recess.

Although it is very likely that Cordray’s recess confirmation will be challenged, it is clear that President Obama had both the legal authority and moral obligation to make this appointment. Recess appointments are not new, but some legislators are claiming that Cordray’s appointment exceeded the President’s executive powers since Congress was technically in a pro forma session. Both houses of Congress can hold pro forma sessions at which no formal business is expected to be conducted. Such sessions are usually held to fulfill the Constitution’s requirement "that neither chamber can adjourn for more than three days without the consent of the other." Over time pro forma sessions have also been used to prevent the presidents from making recess appointments. Yet, such recess appointments have occurred in the past. In 1903, when the first session of the 58th Congress ended, President Theodore Roosevelt made over 160 recess appointments during a recess that lasted only a fraction of a day. Similarly, President Truman twice made recess appointments during recesses that lasted just a handful of days. Additionally, the 11th Circuit Court of Appeals, the highest court to consider the question of when recess appointments can be made, considered whether a George W. Bush appointee to the 11th Circuit was invalid because it occurred during a very short legislative break and held that the Constitution, on its face, does not establish a minimum time that an authorized break in the Senate must last to give legal force to the President’s appointment power under the Recess Appointments Clause.

            Cordray is also not the first controversial figure to be appointed through a recess appointment. Some familiar names – Thurgood Marshall, Earl Warren, and William Brennan – were all, at one time or another, recess appointments.  In 1961, President John F. Kennedy appointed Thurgood Marshall to the 2nd Circuit Court of Appeals – he was finally confirmed by the Senate the following year by a vote of 54-16. President Dwight Eisenhower appointed three judges to the Supreme Court during recesses; including, Warren, Brennan and Potter Stewart. Nor has President Obama overused his powers. Obama has only made a total of 28 recess appointments, compared to:

• George W. Bush who made 171 recess appointments
•  Bill Clinton who made 139 recess appointments
• George H.W. Bush who made 77 recess appointments
•  Ronald Reagan who made 243 over his eight years
  
  

Challenging Cordray’s appointment means that once again Congress is not listening to its constituents, nor looking out for their financial well-being. According to a recent AARP and Center for Responsible Lending poll, 74 % of all respondents (including 73% Independents and 68% Republicans) responded affirmatively that they support having a single agency with the mission of protecting consumers from financial companies. 

Unfortunately even before Cordray’s nomination, some legislators weren’t listening. Forty-four Republican senators sent the President a letter stating that they refused to vote for anyone to become the Director unless they got what they want --- restructuring of the CFPB to make it less powerful. Specifically, they demanded that instead of a single director there should be a board overseeing the CFPB, that the CFPB should be subject to the Congressional appropriations process, and that prudential financial regulators, who oversee the safety and soundness of financial institutions, be given the right to veto any regulations issued by the CFPB.  These are the same restrictions that conservatives had originally wanted in the Dodd-Frank Wall Street Reform and Consumer Protection Act but were unable to get passed. By making its funding contingent on appropriations and putting veto powers on its regulations, the CFPB would essentially have little operating funding and little authority.

After forty-four senators blocked Cordray’s nomination in September and again in December, and not because of his qualifications (in fact, several Senators indicated that Cordray’s qualifications were good), the White House decided to exercise its legal powers and not let Americans’ financial futures hang in the balance. As President Obama stated in his Cleveland speech, “every day that [Cordray] waited to be confirmed was another day when millions of Americans [were] left unprotected. 

Although the CFPB has been working hard since it launched in July, without a director, the CFPB could not "exercise its full power" since it could not enforce laws against “non-bank financial institutions such as pay day lenders” and other members of the predatory fringe financial markets. Now that Cordray has been confirmed, through a perfectly legal recess appointment, the CFPB can fully protect American’s financial futures.

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Coauthored by Rachel Gielau

Did You Know that the Affordable Care Act requires employers to provide a designated breastfeeding station and allowbreak time for women to breastfeed or pump during the workday? 

That’s right! Employers with at least 50 employees must allow for reasonable break times during the workday for working mothers to nurse or pump, and must also provide a breastfeeding station other than the bathroom. According to the law, working mothers must have access to these breastfeeding accommodations for one year after their child is born. 

This is a wonderful achievement for women’s rights and women’s health, not to mention the health of our nation’s children who benefit immensely from being breastfed during infancy. Breastfeeding gives children a kickstart to preventing chronic illnesses like asthma, lower respiratory infections, type 2 diabetes, and obesity, and building healthy immune systems. And it’s great for mothers too. Breastfeeding is linked to a lower risk of women developing breast & ovarian cancer, type 2 diabetes, and postpartum depression. By preventing short and long term health complications for mother and child, this healthy practice is also good for the economy, business, and the environment, and it saves families money too! Recent research shows that the United States could save an aggregate of 13 billion dollars per year if 90 percent of our nation’s mothers breastfed their newborns for the first 6 months due to reduced medical expenses. It is also been shown that women and their partners miss fewer work days due to sick children when their babies are breastfed during infancy, which fosters productivity in the workplace. Breastfeeding also avoids the environmental cost and waste associated with producing and using formula and plastic bottles.

In this effort to ensure that our nation’s women have the tools they need to successfully breastfeed their newborns, the Affordable Care Act is working to break down barriers for women in the doctor’s office. Starting in August of this year, women with non-grandfathered health insurance plans will be able to receive breastfeeding support and counseling, and access to breastfeeding supplies without having to pay money out-of-pocket. This is part of the excellent list of women’s preventive health services that were passed down by HHS last summer. 

Learn even more about the Affordable Care Act’s many achievements for women’s health online. For breastfeeding support and helpful resources, go here.

As we wrap up this holiday season, thank you, Affordable Care Act,for being an advocate for the health and wellbeing of our nation’s women and children.

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