Pew Study Finds Colorado Has Lowest Payday Loan Costs

The Pew Charitable Trusts has found that Colorado has the lowest cost to borrowers for payday loans among all the 36 states that allow these loans. Pew calculated the average charges and the annual percentage rate (APR) that payday lenders charged for a $300 loan taken out for five months, the national average for loan amount and length of loan.

At $172 and 129 percent APR, Colorado’s loans were the cheapest of all 36 states.

This compares to Texas, the state with the highest fees, where borrowers pay, on average, $701 and 454 percent APR.

In Texas and the other states with higher rate caps, payday lending companies charge borrowers far more for the same $300 loan than in states with lower rate caps. Pew’s research shows that credit is not constrained in states with lower rate caps. Researchers specifically point out that in Colorado, after reforms passed to lower rates and extend the length of payday loans, about half of the payday loans stores closed. But now each remaining store is serving 80 percent more customers and borrowers’ access to credit is “virtually unchanged.”

We are proud of the role the Bell played in advocating for the reforms to payday loans enacted in 2010.  A previous Pew analysis found that Colorado borrowers are saving about $40 million per year as a result of the changes in the law.

Income Inequality Surges in Colorado, According to New Report

(This is a release sent out today by the Bell Policy Center, Colorado Center on Law and Policy and Colorado Fiscal Institute.)

The gap between the wealthiest Coloradans and everyone else turned into a chasm following the Great Recession, according to a report released today. In that time, Colorado's top 1 percent accounted for all of the state's growth in income, while the other 99 percent saw a decline in income.

The report, The Increasingly Unequal States of America, is published by the Economic Policy Institute. EPI’s Colorado partners include the Bell Policy Center, the Colorado Center on Law and Policy and the Colorado Fiscal Institute.

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Pew Report Sees Colorado’s Payday Reforms as Model for U.S.

(Promoted by Colorado Pols)

Last week, the Pew Charitable Trusts singled out Colorado’s payday lending law as a very effective reform that could serve as a national model.

In a new report, Payday Lending in America: Policy Solutions, Pew determined that Colorado’s “new” payday loans are more affordable for borrowers, resulting in significant savings and the elimination of the constant churning of loans that trapped many borrowers in a cycle of debt.

The Bell Policy Center actively worked for several years to reform payday loans and was one of the leaders of the coalition that successfully pushed through legislation in 2010 (HB10-1351).  The reforms reduced the fees on payday loans, extended the payback period to a minimum of six months, authorized installment payments, allowed early repayment without penalty and required all fees to be refunded on a pro-rated basis depending on how long the loan was outstanding.

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2012 Payday Lending Fees $59 million Lower Than Under Old Law

(Successful, hard-won reform – Promoted by Colorado Pols)

The latest numbers on payday lending in Colorado are in, and they show that consumers continue to benefit from reforms enacted in 2010.

In 2012, payday borrowers paid $36 million in fees for about 441,000 loans, according to the latest annual report from the Colorado Attorney General’s Office. That’s about $59 million less than they paid for 1.6 million loans in 2009, the last full year before reforms took effect. (Press release here.)

The average actual annual percentage rate on the loans in 2012 was 129.4 percent compared to 318.5 percent in 2009.

Colorado’s reforms established a six-month minimum loan term on payday loans, allowed them to be paid off early and changed the fees allowed on loans.  It also required lenders to refund a portion of the fees if the loans were paid off early, based on the amount of time the loan was outstanding.

Critics said these reforms would put payday lenders out of business. However, the data shows that with 287 locations, these loans are still widely available in Colorado. 

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66,000 Colorado Workers to Get Boost as Minimum Wage Jumps 14Вў

( – promoted by Colorado Pols)



On Jan. 1, Colorado and nine other states will increase their minimum wage, providing a boost in income for nearly 1 million low-wage workers.

In Colorado, the 14¢ increase, to $7.78 per hour, will benefit 66,000 workers, according to the Economic Policy Institute (EPI). For employees who work full time, the increase means an additional $300 for the year.

Those earning less than the new minimum (57,000 workers) will get a raise in their pay. The increase also helps workers whose pay is slightly above the minimum wage (9,000) as their employers adjust pay scales to reflect the increase. In total, Colorado workers will see an increase in pay of $17.6 million during the year, which will have a spending impact of $11.2 million on the state’s gross domestic product, according to EPI.  

Colorado voters approved Amendment 42 in 2006, which increased the minimum wage from $5.15 per hour to $6.85 and required that it be adjusted each year — up or down — based on the rate of inflation in Colorado. Inflation increased by 1.8 percent between July 2011 and June 2012, according to the Boulder-Denver-Greeley Consumer Price Index. In 2010, the wage dropped 4¢ because of negative inflation during the Great Recession; last year, it increased by 28¢.

“Because our minimum wage keeps pace with inflation, hard-working Coloradans can buy the same value of goods and services in 2013 as they did in 2007,” said Rich Jones, director of policy and research at the Bell Policy Center. “Maintaining the buying power of low-wage workers boosts the state’s economy, which benefits all of us.”

The demographic profile of Colorado’s minimum-wage workers shows that most are adults working full-time. Almost seven out of ten are aged 20 or older, and three out of four work 20 hours a week or more. About six out of ten are women. In terms of race, whites make up 55 percent of minimum wage workers and 29 percent are Hispanic. Minimum-wage workers account for 3 percent of Colorado’s workforce.

The other states that adjust their minimum wage based on inflation are Arizona, Florida, Missouri, Montana, Ohio, Oregon, Vermont and Washington. Rhode Island will join the group on Jan. 1. Nine other states and the District of Columbia have minimum wage rates set above the federal level of $7.25.

Because the federal minimum wage is not tied to inflation, it loses buying power in most years. If Congress does not act, it is projected to lose 20 percent of its real value in the next 10 years. The federal minimum wage would now be $10.58 if it had kept pace with the cost of living since its peak of purchasing power in 1968.

A wide range of studies conducted over the past 18 years have found that raising the minimum wage is an effective way to boost the income of low-wage workers without hurting employment.

Other facts about the minimum wage:

   • 66 percent of low-wage employees work for large companies, not small businesses.

   • More than 70 percent of the largest low-wage employers have fully recovered from the recession and are enjoying strong profits.

   • 58 percent of the jobs created in the post-recession recovery have been in low-wage occupations.

   • The shift toward low-wage jobs is a 30-year trend that has been accelerating.

(Sources: National Employment Law Project and the Center for Economic and Policy Research)

Consumers Saved $99 million in 2011 Under Payday Lending Reforms

(And they’ve stopped spamming us, too – promoted by Colorado Pols)



$99 million.

That’s how much Colorado consumers saved in 2011 thanks to changes in the state’s payday lending law, according to data in a report released Monday by Attorney General John Suthers.

The report shows the impact of the first full year of reforms, which were a major achievement of the 2010 legislative session. A key feature of the reforms is a minimum six-month term for payday loans, which gives borrowers an opportunity to pay them off without rollovers.

According to data in Suthers’ report, consumers saved an average of $223.90 per loan on 444,333 loans, for a total savings of $99.5 million. The report says that about 77 percent of loans were paid in full before their maturity date.  

The report also shows that the number of loans dropped almost 60 percent, from 1.1 million in 2010 to 444,333 in 2011; the dollar amount of those loans fell from $409 million to $167 million.

The numbers show that consumers had an easier time of managing the loans. In 2010, about a third of all loans were refinanced or rolled over, resulting in additional fees. In 2011, after the reforms, there were none.

“The attorney general’s report shows that 2010′s reforms are helping hard-working Colorado families. They are saving money, which will help meet basic needs, and this money will stay in the community,” said Rich Jones, the Bell’s director of policy and research, who worked on the reforms as part of Coloradans for Payday Lending Reform.

Here is a comparison of costs and fees after reforms, according to the attorney general, and costs and fees under the previous law:

Actual fees for 2011 (from AG’s report)

Origination fee           $40.37

Actual interest           $31.56

Monthly maintenance fee   $50.84

Total loan costs          $122.77

Cost under old law (from AG’s press release)

Number of loans (average 104-day borrowing period)   5.78

Cost per loan (average finance charge)   $60

Total loan costs (5.78 x $60)   $346.67

Savings under the new law

Savings per loan      $223.90

Total payday loans    444,333

Total statewide savings $99,484,678

Bell Policy Center challenges notion that Prop 103 will harm economic growth

(Right back at ya, Victor Mitchell – promoted by Colorado Pols)



The Bell Policy Center today is releasing a report that reviews research on tax increases and their impact on job growth and economic development. Proposition 103, the only statewide ballot initiative, would raise taxes, returning income and sales tax rates to levels that existed in 1999. The revenue raised would help counteract deep cuts to the state’s education system.

Opponents have said Proposition 103 will cost Colorado jobs and frequently have misquoted statistics from a report commissioned by one opposition group.

The Bell Policy Center’s report reviews that report, along with another produced by opponents, and summarizes academic research on taxes and economic growth. It also presents data on the effects of tax increases enacted by other states.

In brief, the research shows:

• While tax increases tend to slow job growth, increases in state spending are likely to increase job growth.

• Several studies suggest that the increased number of jobs related to additional state spending would exceed the losses due to tax increases.

• At a minimum, it is likely that the effect of higher state spending and the tax increases in Proposition 103 will cancel each other out. The decline in job growth driven by tax increases will likely offset the increase in job growth created through additional education spending.

• Continued cuts in education spending will cost Colorado jobs.

• Further cuts in education will likely hurt the quality of our workforce, making Colorado less attractive to businesses and individuals looking to relocate.

In terms of attracting businesses — and jobs — to Colorado, while taxes matter, other factors, including the cost and quality of labor, quality of public services, proximity to markets and access to suppliers, are more important for businesses making location decisions.

Over the long term, investments in education that result in a better-educated and higher-skilled workforce will make Colorado more attractive to businesses and help drive our economic growth.

Bell Policy Center Releases Summary of Research on Paid Sick Leave

( – promoted by Colorado Pols)



The Bell Policy Center has released a study on existing research on paid-sick-leave laws. Bell researchers reviewed a range of studies and reports as well as data from San Francisco and Washington, D.C., the two cities with the most experience with such laws.

Key findings concerning public health include:

• More than four in 10 private-sector workers in Denver lack paid sick leave. The total number is approximately 107,000.

• Workers who lack paid sick leave are more likely to come to work sick, send their children to school while sick, recover more slowly from illnesses, and rely on expensive visits to emergency rooms than are workers with sick leave. The net effects are higher rates of infection and increased health care costs.

• During the H1N1 pandemic in 2009, despite the strong advice from health officials that infected people should stay home, up to 8 million Americans still went to work while infected. That meant 8 million more people were helping to spread a serious disease.

Key findings concerning the effects on employers and jobs include:

• The maximum direct cost of this law for a business with less than 10 employees is likely to be a one-time increase in base compensation expenses of 2 percent, assuming all employees exhaust all their paid sick leave. Data from San Francisco show that employees on average do not use all their sick leave, meaning the actual direct costs are more likely to be around 1.2 percent.

• There is strong evidence that paid sick leave increases overall productivity and reduces turnover rates, resulting in average savings to employers that exceed the average costs of the law. Workers who work while sick on average cost employers more than those who stay home to recuperate.

• More than 70 percent of San Francisco employers who responded to a survey reported no negative effects on profitability from the paid-sick-leave law. A small number reported finding ways to mitigate increased costs (including converting vacation leave to sick leave or delaying bonuses or wage increases).

• U.S. Bureau of Labor Statistics data from the Washington, D.C., and San Francisco metropolitan areas show both cities’ job markets were actually stronger compared to surrounding counties in the years after sick paid leave was implemented than they were in the years before implementation.

Based on the research, the Bell Policy Center is endorsing Initiative 300 and urges Denver residents to vote “yes” on Nov. 1.

AG Report Shows Payday Reforms Working, Saving Borrowers Millions

(But what effect have payday lending reforms had on blog spam? The people want to know! – promoted by ProgressiveCowgirl)



A recent report by the Colorado Attorney General’s Office on payday lending provides strong evidence that reforms enacted by the legislature in 2010 are working.

Data for the last five months of the year — the period the reforms were in effect — suggest borrowers are paying much lower effective interest rates and are largely avoiding the cycle of debt that trapped many of them under the previous rules. The result is that low-income borrowers as a whole are saving tens of millions of dollars a year — money that now will stay in the community and help families meet basic needs.

Data in the report clearly show that the 2010 reforms have reduced the cost and annual percentage rate (APR) for payday loans. It also shows that, on average, consumers are paying $61 to borrow $368 for 64 days. This results in an APR per loan of 95 percent. While still expensive, this is a vast improvement over the old loans, which had an average APR of 326 percent.

The report, issued last week, also shows that by blocking legislation last session that would have eliminated the requirement that finance charges be pro-rated when loans are paid off early, lawmakers saved borrowers an average of about $40 per loan, for an estimated total of $22.6 million in consumer savings.

The report is a compilation of data submitted by all the payday lenders in the state and covers the period Jan. 1-Dec. 31, 2010. Because reforms adopted during the 2010 legislative session took effect on August 11, 2010, the attorney general reports data both pre- and post-August 11.

The report shows that before the reforms went into effect, the average payday customer borrowed $369 for 18 days and paid $60 per loan, resulting in an average APR of 326 percent.

After August 11, the amount borrowed remained about the same, at $368, but other aspects changed dramatically. The attorney general reports that average contracted finance charges, including interest and maintenance fees, totaled $229, with an average term of 187 days. This results in a contracted average APR of 186 percent.

The contracted fees and APR are based on the minimum six-month loan term set by law.

However, borrowers are paying off the loans sooner than contracted — after 64 days, on average. Because all finance charges are refunded on a pro-rated basis and maintenance fees can be charged only every full month after the first month, the average actual cost per loan is $61, resulting in an average actual APR of 95 percent.

Under the previous law, consumers would have paid $60 every 18 days, for a total of $240, to borrow $368 for 64 days. The reforms cut these costs by 74 percent and provide borrowers with some breathing room to save enough money to pay off the loans.

If the finance charges were not refundable — a change the payday lenders and their legislative allies wanted to enact last session — the average cost to borrowers would total $100 and the average APR would be 157 percent.  

Dig Into Colorado’s Budget, One Bite at a Time

(Promoting for the resources–checked the budget tool kit fact sheet and it cites its sources solidly, it’s an easy overview if you want one (and agree with the conclusions) or a starting point to research if you don’t agree and/or want to dig deeper. – promoted by ProgressiveCowgirl)



We’d be the first to admit that the state budget is complicated and can get confusing. And we know it inside out.

But the basics aren’t that hard, especially when you take them a bite at a time.

That’s what we’ve been doing with a series of Plain Talk emails, which follow the release of our budget video (done in collaboration with ProgressNow Colorado) and a companion tool kit.

Our goal is to get Coloradans talking about the state budget.

We think the budget has structural problems and that Colorado has tied itself in fiscal knots. But we don’t want Coloradans to take our word for it. They need to learn the basics and start talking, because in our state, it’s voters, not lawmakers, who make major spending decisions.

That’s where the video, tool kit and now the emails come in. They share the same look and feel, and we employ a crusty ol’ general to embody our General Fund and guide the discussion. Hokey? Perhaps, but nobody said we couldn’t have some fun with this.

Check out our first two emails. The inaugural email is an introduction to the General Fund. The second is about how the General Fund, over the past decade, has been shrinking in purchasing power and in relation to other growth measures.

If you’d like to receive the emails, sign up on our home page. If you’d like more information about the video tool kit or presentations, email us at PlainTalk@bellpolicy.org.

Video Companion Has Tools to Get Us Talking About State Budget

( – promoted by Colorado Pols)



Recently, the Bell Policy Center released Colorado’s Budget: In Plain Talk, a video that explains the basics of the state budget and introduces Coloradans to our state’s fiscal challenges.

Now the Bell is back with a tool kit that goes along with the video.

We encourage Coloradans to use these tools — individually or to help lead informed discussions in groups large and small. We want to spark a conversation, and the tools offer a starting point.

It’s important that Coloradans have these critical conversations, because in our state, voters, not lawmakers, are responsible for key fiscal decisions.

The video and the tools start with the basics of the budget and break down information into easy-to-manage pieces. Here’s what you will find in the tool kit:

A Video Companion — Follows the narrative of the video and adds further information with simple charts and descriptions. For presentations, the companion goes step by step through information in the video to help lead a discussion. It also has useful discussion questions and FAQs to add to the conversation.

Companion PowerPoint — Presents charts, discussion questions and options from the Video Companion in a form that can be projected for an audience.

Presentation handouts — Two-page summary, FAQs and discussion items in one package so they can be easily distributed.

The Pols crowd keeps up with budget matters, but we think even Polsters will find the tool kit useful. “A Video Companion” walks through the budget and our fiscal challenges and makes it easy to find facts and figures. Check it out

New Video Aims to Spark Conversation on State Budget

( – promoted by Colorado Pols)



Colorado’s budget. It’s about time for some adult conversation.

After three years of cutbacks, cutting funds for K-12 and higher education, closing state parks and a prison, more people than ever are asking questions about state finances and our fiscal challenges.

Seems like the perfect time for video offering a simple (maybe even entertaining) overview of Colorado’s budget …

… And that’s the thinking behind Colorado’s Budget: In Plain Talk, produced by the Bell Policy Center and ProgressNow Colorado. It’s a six-minute video that uses broad strokes to paint a picture of how the state gets and spends its money.

We think that’s what Coloradans are hungry for right now — a basic understanding of the budget. That’s the first step. After that, conversations can start.

Those conversations are important. In Colorado, it is voters, not legislators, who make the major decisions about taxes and fiscal policy. Our state constitution requires it.

So, we invite Coloradans to watch Colorado’s Budget: In Plain Talk, and then, let the conversations begin.

And there is another tool out there for learning about the budget, where we are as a state and where we could be headed —  www.boomorbustcolorado.com. The site offers more detailed information about a variety of issues affected by the state’s fiscal problems. Check it out.

We don’t need no stinkin’ ‘fix’ on payday loans

(And stop spamming us! – promoted by Colorado Pols)



Memo to legislators: Last year’s payday lending reforms are working. They’re not broken. No need to fix them.

It’s worth mentioning because payday lenders are back at the Capitol, looking to undo last year’s work with a “technical fix.”

The showdown is Thursday morning, when HB 1290 will go before the Senate Local Government and Energy Committee.

Last year, the Colorado legislature reformed payday lending in Colorado. It was one of the major achievements of the 2010 session, and borrowers are better off today because lawmakers cast an important vote for consumer protection.

This year’s bill, introduced on behalf of the payday lending industry, proposes a “technical fix,” but there’s nothing technical about it. The intent is to remove a central provision in last year’s reforms.

This so-called fix would make the origination fee on loans non-refundable. Currently, all the fees are refunded on a pro-rated basis if a loan is paid off early. Under the proposed change, the lenders keep the full origination fee no matter when the loan was paid off. This would increase the cost of a loan paid off in 30 days by $50 and boost the APR from 86 percent to 289 percent.

The proposed change would provide a strong financial incentive for lenders to churn loans by enticing borrowers to pay off one loan so that a new one, with a new round of fees, can take its place. This would be a step backward for consumer protection in Colorado – a return of the debt trap.

The current reforms were fully implemented in the fall, and we have only limited data on their  effects. However, preliminary feedback from borrowers indicate that the loans are more affordable.

This change in law helped consumers without driving the payday lending industry out of Colorado. There are about 350 payday lenders operating in Colorado. In fact, the chief executive of EZ Pawn, a publicly traded payday lender with 40 stores in Colorado, summarized the impact of last year’s reforms for investors by saying: “We’re about two and a half months into that product and we are frankly happy, very happy with what is going on there. Our loan balances are where we expected them to be and our bad debt is actually slightly better than where we expected it to be.”

We think that says it all: No fix needed.

State’s undocumented immigrants help drive state’s economy, pay tax share

(That “pop” was Kevin Lundberg’s head exploding – promoted by Colorado Pols)



New research shows that undocumented immigrants in Colorado are a significant contributor to the state’s economy and that undocumented immigrants contribute as much in sales, property and income taxes as they cost in K-12 education and other mandated services.

The population of undocumented immigrants in Colorado has declined in recent years, tracking the downturn in the economy, but the debate over immigration has only grown more heated. Some of the heat generated in that debate comes from claims that undocumented immigrants take jobs and overburden state resources.

Research conducted by the Bell Policy Center and the Colorado Center on Law and Policy finds that:

• Undocumented immigrants account for 5 percent of the state’s workforce and 3 percent of state personal income, and these workers produce 7 percent of Colorado’s economic output, according to Undocumented immigrant workers in Colorado play an important role in the state’s economy, by the Colorado Center on Law and Policy.

• Economic activity generated by undocumented immigrant households accounts for an additional 91,000 jobs statewide, $4.7 billion in personal income and $15 billion in industry output.

• Undocumented immigrants paid an estimated $167.5 million in income, property and sales taxes in 2010, which covered the cost of K-12 education, emergency medical care and jail and prison incarceration, according Colorado’s undocumented workers: What they pay, what they cost in taxes, by the Bell Policy Center. The cost of those federally mandated services is $166.6 million.

The Bell Policy Center conducted similar research in 2006 and found undocumented immigrant households paid $159 million to $194 million in total taxes, while the cost for mandated services was about $225 million. Since 2006, the average income of undocumented households has risen, generating more tax dollars for the state. Also, the number of undocumented immigrants, especially the number of school-age children, has declined in the past five years.

“This analysis clearly shows that claims that undocumented immigrants are the cause of our budget problems are way off base,” said Rich Jones, director of policy and research at the Bell Policy Center. “They are not eligible for and do not receive most government services. In fact, they pay enough in taxes to cover the costs of providing federally mandated services to them.”

“Labor by undocumented immigrants ripples through all parts of Colorado’s economy,” said Alec Harris, a policy analyst for the Colorado Center on Law and Policy. “Like all groups of workers, undocumented immigrant workers spend their earnings, which supports local businesses, enabling those companies to hire more workers. It’s a positive cycle that stimulates the state’s economy.”

Other findings:

• In Colorado, for every job held by an undocumented immigrant, 0.8 jobs are created.

• Undocumented immigrants work mostly in construction, services, leisure and hospitality and manufacturing.

• Colorado had an estimated 15,763 undocumented students between 5 and 17 years old; funding for them represents less than 2 percent of total state and local K-12 spending.

• Colorado spent $26.5 million to provide emergency medical care to non-citizens in 2010-11 (not all of whom were undocumented immigrants). That total represents just over 0.5 percent of the state budget for health care.

• The net cost of holding undocumented immigrants in jails and prisons in Colorado was $32.5 million in 2009, or about 4.2 percent of the state budget for prisons.

• Undocumented immigrants live in our communities, and like all Colorado consumers pay sales taxes on the goods they buy.  In 2010, this amounted to $114.6 million.

• Undocumented immigrants also paid $30.9 million in property taxes, mostly as part of their rent payments.

• Undocumented immigrants have $30.9 million in income taxes withheld from paychecks.

Just When You Thought It Was Safe … Payday Lenders Are Back

(Not on our watch, payday lending spammers – promoted by Colorado Pols)



Payday lenders are trooping back to the General Assembly, lining up lobbyists and scheming to put the bite back into payday loans.

It was only last year that Colorado legislators came together to reform payday lending, and it was hailed as one of the signature achievements of the 2010 session. Lawmakers  produced a workable, common-sense solution — the costs are still high, but people have a reasonable chance of paying loans back on time.

But all those excessive, damaging fees paid by repeat borrowers add up — about $80 million a year before the reforms. That’s a lot of money to leave on the table.

Never mind that the reforms are working and that borrowers are having an easier time paying off their loans.

The industry is coming back with a “technical amendment,” but there is nothing technical about it. This new bill would gut last year’s reforms by making the origination fees non-refundable. This almost surely would increase costs and could turn the loans back into repeat products that can be churned. Once again, there would be a financial incentive for lenders to trap borrowers in a cycle of debt.

A year later, this should be an easy one for lawmakers. It’s straight-up consumer protection, and if the Great Recession has taught us anything, it should be that trapping borrowers  with easy credit and dangerous loans is bad for people and the economy.

The reforms have been in place since August 31 (and fully implemented only in November), and consumers say they can manage the six-month payback period. And note that the industry didn’t dry up and blow away. In fact, the CEO of EZ Pawn, one of the national chains, told investors, “We are frankly happy, very happy with what is going on” in Colorado.

So, why undo last year’s reforms? It’s been only a few months, after all, and the effects are positive and good for Colorado.

It can’t be just about the money, can it? Not hurting people, not stripping wealth from low-income communities, making the economy stronger for all of us — that has to count for something, doesn’t it?