On Tuesday, June 2, the Greater New Orleans Foundation hosted NOLA 360: The Cost of Being Poor at Cafe Istanbul. Gary Rivlin, author of Broke USA, argued it is getting more and more expensive to be poor with payday lenders, subprime credit cards, rent to own, and even the corner check cashing store.
“There are businesses collecting tens of millions of dollars a year off the exorbitant fees and interest rates they’re charging people living on the economic edge,” said Rivlin. “Never has it cost so much to live below the poverty line.”
Complementing Rivlin’s talk was a performance by the Cripple Creek Theatre Company intended to provoke thought, emotion, and action. “Our actors have created a play that captures the plight of the working poor,” said Andrew Vaught, co-founder of Cripple Creek Theatre Company, who uses theatre as way to promote understanding on various topics.
The Corporation for Enterprise Development (CFED) Asset and Opportunity profile, commissioned by the Greater New Orleans Foundation and the Ford Foundation, concluded that 71 percent of New Orleans consumers have a subprime credit score which is a disadvantage in the financial marketplace. Without good credit, consumers pay higher interest rates than other consumers on everything from credit cards to car loans to mortgages. Fifteen percent of households in Orleans Parish are unbanked meaning they have neither a checking or savings account; and, 27.4 percent are underbanked meaning that while they may have a checking and/or a savings account, they’ve used an alternative financial service, such as a payday lender.
Orleans Parish is not unique. According to the Louisiana Budget Project, Louisiana ranks sixth highest in the country for percent of households that have relied on some combination of check cashers, pawnbrokers, or payday lenders to meet their financial needs—23 percent compared to the national average of 18 percent.