Bronx Weekend News Roundup, Monday, April 18

Welcome back to the program, ladies and gentleman of the Bronx and beyond. Just a reminder, today is the official deadline to file your taxes. So, get it done or risk the wrath of the IRS.

Weather: High of around 60 today with clouds obscuring the sun as the day goes on. A strong chance of rain tonight through Wednesday.

Story of the Day: Bronx Cops on the Hot Seat
Yesterday, the Post unveiled its "exclusive" look into the NYPD ticket-fixing scandal that apparently is almost exclusively focused on Bronx police officers. The report claims 400 cops, most of them from the Bronx's 12 precincts, could face internal disciplinary action and two dozen officers, many of them union delegates, could face criminal charges. The investigation began in 2008 after a Bronx cop suspected of selling drugs was heard on a wire tap asking another cop, a union rep, for help fixing a summons. The investigation ballooned from there. Today, the Times delves into the matter, quoting several unnamed "law enforcement officials" and a couple of named lawyers who say ticket fixing has been around since ticket issuing began and that the matter should be handled within the department. It's unclear when the Bronx District Attorney's office will complete its grand jury investigation, while an Internal Affairs Bureau probe continues.

Quick Hits:
Victor Toro, a South Bronx activist who face deportation back to his native Chile where he was tortured in the late 1970s, remains outspoken even as the U.S. government is intent on removing him from the Mott Haven area he now calls home.

New Schools Chancellor Dennis Walcott, who officially starts his new job today, spoke at Harvest Fields Community Church in Westchester Square yesterday and assured teachers: "You will never, ever hear me say  a bad thing about you," according to the Daily News. But he also said he would go through with Bloomberg's plan to cut 4,000 teachers and fight to end their seniority protections.

Three Bronx teens were injured, one critically, while driving a mini van along Bruckner Boulevard early Saturday morning.

Boxing is coming back to the Loew's Paradise Theater.

A new study found that tax filers in several low-income zip codes in the Bronx and Brooklyn saw more than a million dollars of their refund money go to high-interest "refund anticipation loans." Jumelia Abrahamson (her name is misspelled in the article [and was again misspelled in this post earlier, but is now, finally, corrected]), who works for University Neighborhood Housing Program, a Bronx-based nonprofit that offers free tax prep precisely because they want filers to keep more of their refunds, said the for-profit companies who push these loans often obscure how much of a cut their taking.

Broxite David Vizcaino will compete in the 2011 Special Olympics in Athens, Greece.

Usurious Tax-Time Loans Drained $22.5 Million from the Bronx in Just One Year

Tax refund anticipation loans (RALs) siphoned $54.7 million from the pockets of low income New Yorkers in just one year, according to a report issued last week by the Neighborhood Economic Development Advocacy Project (NEDAP), a New York City-based financial justice group (disclosure: I sit on the organization's board). More than 40% of this amount came from the pockets of Bronx residents, at an estimated cost of nearly $22.5 million.

Based on its analysis of recently-released IRS data for tax filing year 2007, NEDAP found that RALs were overwhelmingly concentrated in New York City's low- and moderate-income neighborhoods of color, especially in the West Bronx. RALs drained millions of dollars from neighborhoods throughout the Bronx, Upper Manhattan, and Central and Northeast Brooklyn.

While the number of RALs made citywide dropped between 2006 and 2007, both the number of RALs and money spent on RALs went up in the Bronx; our borough’s share of NYC dollars spent on RALs jumped from 33% to 41%.

The four top zip codes for money lost to RALs were all in the Bronx, including 10453 which was first in the City at $1.74 million. 10456, 10452 and 10457 rounded out spots two through four.  Also in the top ten citywide were zip codes 10458, 10468 and 10467, each of which saw more than $1 million going towards RALs in 2007.

RALs are high-cost loans, secured by taxpayers’ projected tax refunds and Earned Income Tax Credits (EITC). Aggressively marketed to lower income taxpayers as a way to obtain fast cash, RALs carry interest rates from 50% to 500%, according to the National Consumer Law Center and Consumer Federation of America.

Free Tax Preparation Services Offered for Bronx Residents

Neighborhood and citywide nonprofits and financial institutions are joining forces to provide free tax preparation services to Bronx residents, hoping to keep more money in our neighborhoods. Every year, Bronx neighborhoods lose millions of dollars in tax preparation fees and refund anticipation loan interest – much of this coming out of the federal Earned Income Tax Credit. Through this initiative, Bronxites making less than $72,000 will be able to file their federal and state returns without any fees.

In 2006, about one-third of all applications for Refund Anticipation Loans in New York City (more than 71,000 filers) were made by Bronx residents. The total fees paid by these filers for tax preparation, the loans themselves and any other miscellaneous fees totaled approximately $19.5 million dollars, based on calculations made by the Neighborhood Economic Development Advocacy Project using the Consumer Federation of America’s estimate of $273 for an average filer. More than 80% of these Refund Anticipation Loan applications were made by low income Bronxites, who paid more than $16 million for these services. Two-thirds of applications came from households who received the Earned Income Tax Credit, one of the largest federal anti-poverty programs.

Even at the neighborhood level, the amount of money paid for tax preparation and Refund Anticipation Loans exceeds $1 million in many northwest Bronx zip codes. For instance, more than 5,600 filers in 10453 spent more than $1.5 million on tax preparation and Refund Anticipation Loans.

By providing free tax preparation services in these same neighborhoods, much needed money will stay in the pockets of Bronxites. Services began this Saturday, January 24th at the Heiskell Enterprise Technology Center in Refuge House, 2715 Bainbridge Avenue, and run through March 28th. Services will also be offered at Mosholu Preservation Corporation, 3400 Reservoir Oval East, and Ridgewood Savings Bank, 3445 Jerome Avenue, and are by appointment only. Contact University Neighborhood Housing Program at 718-933-2539 for more information or to schedule an appointment.

Sponsored by:
• University Neighborhood Housing Program
• Fordham Bedford Children’s Services
• Fordham Bedford Housing Corporation
• Mosholu Preservation Corporation
• West Bronx Housing & Neighborhood Resource Center
• Food Bank for New York City
• ARIVA
• Ridgewood Savings Bank
• JPMorgan Chase Bank
• Signature Bank
• TD Bank

Bronx News Roundup: Nov. 12

Getting a little bit of a late start today, but let's see what's floating around cyberspace.

My favorite story today is about a Morrisania area grandfather named Diogenes Angeles, 57, who used karate learned as a youngster to successfully defend himself against a trio of would-be attackers.

State Senator Carl Kruger of Brooklyn said he and the other two Democratic dissidents, Ruben Diaz, Sr. and Senator-elect Pedro Espada, Jr., both of the Bronx, would not decide on who they would support for Democratic leader until January. New York Democrats now control the State Senate 32-30, but need the threesome, which Espada is now dubbing, "The Three Amigos,"to vote in Malcolm Smith, the party's current minority leader.

More on this in the Daily News and more coming in the new edition of the Norwood News, which will be online and on the streets by tomorrow morning. We spoke with Espada, Jr. on Monday. He basically said the same he planned to vote for a Democrat, "but not Malcolm Smith." Say what you will about Espada, but the man knows how to make headlines. We're going to keep a close eye on how this story unfolds.

Bronxites are having a disporpotionally tough time getting new or refinanced loans, according a new report by Furman Center for Real Estate and Urban Policy, an NYU thinktank.

The DOE is asking principals to trim 1.3% of their budgets, meaning big schools will take bigger hits. The north Bronx's DeWitt Clinton High School stands to lose $400,000.

Speaking of cuts, the Animal Care and Control Center, a nonprofit wing of the Health Department, will slash $434,000 from its budget. The Center wants to put a new animal shelter in the old Fordham Library, much to the dismay of local residents and leaders.

Look for what's new in the Norwood News, coming tomorrow.

Consumer Protection in Financial Services: The Bronx is Heard on Capitol Hill

Guest Opinion from Blogger Gregory Lobo Jost:

Yesterday I had the opportunity to tesify in front of the House Appropriations Subcommittee on Financials Services and General Goverment. Congressman Jose Serrano is the Chair of this Subcommittee and had this to say about the hearing in his newsletter:

"All consumers are at risk of being victimized by financial predators...Each year countless working class parents who are struggling to achieve the American dream tragically have their hopes of upward mobility crushed by the practices of dishonest businesses. While their plight often goes unrecognized, the enduring housing crisis has opened the eyes of many Americans to their struggles, and made us all aware of the devastating effects such exploitation can have on the strength of our economy."

My testimony focused primarily on expanding absence of conventional banks in places like the Bronx (a legacy of redlining), and how this has opened the door to fringe financial institutions. In addition to speaking highly of Senator Dodd's bill (S.2452) to add protections for homebuyers and homeowners, I focused on Refund Anticipation Loans offered by tax preparers throughout low income areas. Here are some excerpts:

Without a doubt there is need for stronger consumer protections in financial services, especially in low- and moderate-income communities of color that in the past were victims of redlining. The Bronx is entirely too familiar with redlining, as this practice led to the borough’s notorious incendiary reputation. While the Community Reinvestment Act has helped immensely to turn around the fortunes of places like the Bronx, the residual effects of redlining have led to abusive lending practices, often referred to as “reverse-redlining.” Traditional banks continue to have a relatively small branch presence in our neighborhoods, opening up the door to fringe financial institutions such as payday lenders and check cashers who often double as mortgage brokers pushing subprime products. ...It is three times as hard to find a bank branch in the Bronx as it is nationally...In fact, our borough’s many Puerto Rican-born residents are much more likely to find a bank branch back on the island than they are in the Bronx.

...this residual effect of redlining has created a vacuum for predatory and irresponsible lending to come into our neighborhoods and make a fortune off the meager incomes of our residents through the guise of rent-to-own stores, tax preparers that offer refund anticipation loans (RALs), and one-stop-shop mortgage agencies pushing their subprime dope.

At UNHP, we have performed outreach, intake and referrals to many struggling Bronx homeowners over the past eight years. In the past two-and-a-half years, many of those calls have come from new homeowners who by no means could afford their homes. Others, many senior citizens, have owned their homes for a long time but can no longer afford their current mortgage thanks to the unsavory terms of a recent refinancing. Our own research has shown that the majority of Bronx homeowners going into foreclosure during the first three quarters of 2007 were not the victims of 2/28 or 3/27 ARMs; almost 65% of the loans going into foreclosure during this period were less than two years old! This exemplifies the extent of atrocious underwriting in recent years, where huge numbers of loans were made without regards to the borrower's ability to repay. The proliferation of the securitized secondary market has made this all possible through its blatant lack of accountability.

Outside of mortgages, one of the main areas that our neighborhoods could use more consumer protection is with tax preparation, specifically with protection against the exorbitant interest rates and fees that come with Refund Anticipation Loans (RALs). Once again, it is the same neighborhoods like the South and West Bronx that are targeted by tax preparation services offering RALS. The financial effects are devastating as tens of millions of dollars meant for low- and moderate-income families struggling to literally pay the rent are being siphoned off through RALs.

To make matters worse, it is one of our nation’s largest anti-poverty programs that is being preyed upon by RALs. It is indeed the very same low-income neighborhoods where households receive and depend upon the Earned Income Tax Credit (EITC) that RALs are targeted and flourish. In effect, the federal government is subsidizing tax preparation companies and their national lender partners by allowing them to take advantage of folks living on the edge who are desperate for cash. Congress can easily change all of this by requiring the IRS to ban RALs on Earned Income Tax Credit dollars.

Congress can also act by ending Federal preemption of state laws that would in effect do away with predatory loan products like RALs. It is no wonder that (at least in New York) only national banks make these loans; State laws and banking regulations prohibit such high interest rates so only banks not subject to these rules can offer such predatory products. This is a loophole that needs to be closed.

While this subcommittee deals specifically with appropriations (funding the federal government's agencies), the hearing will hopefully lead to more protections for consumers from Washington which will in the end benefit places like the Bronx.