“Poverty isn’t simply the condition of not having enough money. It’s the condition of not having enough choice and being taken advantage of because of that.”
Matthew Desmond, Poverty, by America
As they say, there’s good news and there’s bad news.
The good news — amazing, really! — is that last Thursday, the Rhode Island House of Representatives passed by a vote of 70-2 H5160 to cap payday loan interest at 36%. This marks the first time that either legislative chamber brought this important legislation to a floor vote. Thank you to Representative Karen Alzate for her sponsorship of the legislation, Speaker Joseph Shekarchi for putting it to a floor, and all of the representatives who stood up for economic justice!
The bad news is that the Senate, under the leadership of President Dominick Ruggerio, declined to pick up the bill. Yet again, Rhode Island has sent the message that our state is open for unscrupulous and predatory lenders to exploit poor and working class Rhode Islanders by charging exorbitant interest rates and trapping them in cycles of debt while draining millions of dollars in fees from our neighborhoods.
We’re disappointed by the ultimate outcome but encouraged by this year’s progress. We’ll be back next year with the Rhode Island Coalition for Payday Reform to demand action.
Independents Month celebrates independent, locally-owned businesses and the community values they embody:
Their spirit of entrepreneurship, individuality, uniqueness, and character
How they give back to our community with their time, talents, goods, and services
How they fulfill community needs that make us healthier and wealthier
Call to Action!
Independents Month is a fabulous time to:
Learn about what’s available locally
Consider the consequences of your choices
Shift some of your spending to align with your values
You can join us by taking the Indie Pledge to shift 25% of your spending to independent, locally-owned businesses in the month of July.
Proudly proclaim your independence! If you take the Indie Pledge, you receive a digital badge to share far and wide, loud and proud. If you’re a local, independent business, we’ve got a digital badge and window sticker for you; just contact jessica@localreturn.org.
Why buy local?
Money: When we shop local, money stays in our local economy longer and does more good. For every $100 you spend at a locally-owned business, an average of $68 stays in the local community. Compare that to just $43 for a big box store.
Jobs: Local businesses = local jobs. Small businesses are the state’s largest employer. They hire our neighbors, family members, and friends.
Charm: Local businesses shape the character of our communities. They make our places unique and interesting.
Climate: Buying local is good for the environment. It means less resources and energy were used to transport goods.
Community: Local businesses are more inclined to give back to the local community — think Little League teams, raffle donations, and charitable giving — because they are part of the local community. They donate almost 2.5x more per employee than national chains.
Trust: It feels good to do business with someone you know.
With every dollar we spend, we can keep money multiplying in the local economy.
Thank you to Margaux Morisseau and Alan Krinsky for joining us on Friday to provide an overview of efforts to reform predatory payday loans in Rhode Island. House Bill 5160 sponsored by Rep. Karen Alzate and Senate Bill 0175 sponsored by Sen. Ana Quezada would end the statutory carve-out allowing payday lenders to charge up to 260% APR.
April is Move Your Money Month. Choosing a local bank is one of the easiest ways to support our local economy. Thinking locally is about more than spending your dollars locally. It’s about investing in your community as a whole, and that starts with where your dollars are deposited.
Why bank local?
Community banks and credit unions are embedded in local communities, rely on strong customer relationships, and understand the needs of local people, businesses, and markets. Here are four great reasons to bank local (adapted with gratitude from the Institute for Local Self-Reliance).
1. You’ll get the same great services for lower costs.
Most locally owned banks and credit unions offer the same services at lower costs than big banks. According to national data, smaller banks offer lower average fees, better interest rates, and better terms on credit cards and other loans. They opened to serve local residents and businesses, providing services that people otherwise wouldn’t have been able to access. And they’re staffed by people from the community, which results in personalized attention.
2. Your money will be put to work supporting the local economy.
Small businesses depend on local banks for financing, especially in moments of crisis. Consider this:
In 2018, community-based financial institutions made 52% of all small business loans nationwide, even though they controlled only 16% of total banking assets. Giant banks, which controlled 59% of bank assets, made up just 27% of small business lending. (Source: ISLR)
During the pandemic, local banks distributed PPP funds to small businesses more quickly and more equitably. Community banks made 60% of all Paycheck Protection Program (PPP) loans—including 72% of PPP loans to minority-owned businesses. (Source: ICBA)
3. Like you, local banks are invested in the prosperity of the local economy and community.
Big banks are not connected to the places where they operate, and they often use a community’s deposits to make investments in other places. Local banks prosper when local communities prosper.
Small, local banks and credit unions want to turn deposits into loans and other productive investments. Big banks devote a sizeable share of their resources to Wall Street bets that may generate big profits for the bank but offer little economic or social value for the rest of us. And as we’ve seen, if they go bad they put the entire financial system at risk.
4. Decisions will be made locally.
At local banks and credit unions, loan approvals and other key decisions are made by people who live in the community, have relationships with their customers, and understand the local needs. Because of this, they often approve small business loans that big banks would reject. Even better: at credit unions, control rests with the customers, who are also the owners.
Learn more about our local banks and credit unions
You’ll want to consider your options carefully. By our count, there are local bank and credit union branches in 35 of Rhode Island’s communities.
Be specific about your needs. Be clear about what kind of product(s) you’re looking for. And remember: there’s no reason you can’t have relationships with more than one financial institution.
If you already bank local, or once you’ve made the move, celebrate it! Tell your friends and family why you’re banking local, and share your move news with us on Twitter or Instagram using #moveyourmoney, #banklocal, or one of the graphics below.
Perhaps you’ve heard about recent momentum around legislation curbing predatory lending or payday loans. Or maybe you’ve been following this issue for the past 13 years, wondering why payday lenders in Rhode Island enjoy a statutory carve-out allowing them to charge up to 260% APR.
Join us for a virtual Coffee Hour & Info Session on Friday, April 21, at 9:00 a.m. to learn more about this harmful practice and what we can do to end it in Rhode Island. We’ll be joined by Margaux Morisseau, deputy director at the Rhode Island Coalition for the Homeless, and Alan Krinsky, director of research and fiscal policy at the Economic Progress Institute.
Payday loans are high-cost loans structured to perpetuate an ongoing cycle of debt. The federal Consumer Financial Protection Bureau’s research on payday lending practices shows that the average payday loan consumer gets caught in a cycle of debt, taking out 10 loans per year due to an inability to pay off the balance with the constantly growing fees.
Rhode Island is a policy outlier. Nationally, 18 states and the District of Columbia have laws with rate caps of 36% or lower. Congress acted in 2006 to protect active-duty military personnel by capping loans to such individuals at 36%.
In 2018, payday lenders drained $7.5 million in fees from Rhode Islanders. That’s $7.5 million being extracted from our families and neighborhoods.
There is momentum building at the State House to end this carve-out and institute a 36% APR cap. Margaux and Alan will bring us up to speed about why this issue matters, answer questions about the pending legislation, and let us know what we can do to help.
UPDATED! Due to the snowstorm in the forecast, we’ve rescheduled our Local Social for Thursday, March 9. Same time, same place.
Interested in meeting neighbors who care about local economies and economic self-reliance? Come on out to our next Local Social at Bayberry Beer Hall on Thursday, March 9, at 5:30 p.m. You’ll meet some great people, drink local beer, and enjoy sparking conversation in the heart of Providence.
Bayberry Beer Hall is located at 381 West Fountain Street in Providence. Email jessica@localreturn.org for more information. See you then!
This February, Local Return joins many partners around the U.S. to support Black-owned businesses. Let’s inspire our communities to help build Black wealth and celebrate the rich culture and diversity that make up our economy and communities.
Black Beans PVD, Providence (soon to move to an expanded location at 404 Broad Street in Providence, the Southside Community Land Trust’s new Farm-to-Market Center)
Ask your favorite locally owned businesses if they carry products made or grown by Black-owned businesses.
Encourage retailers you patronize to take the Fifteen Percent Pledge, dedicating 15% of their shelf space to Black-owned brands. (Black people make up 15% of the population in the United States.)
Amplify the “Shop Black-Owned” message in February.
Use #ShopBlackOwned on social media, and share a message with your family and friends.
COVID impacted everyone, but the people and places that were hit hardest were those without a “cushion.” Communities that lack a wealth of reserves in their regular lives had no breathing room to deal with crisis, illness, loss of work, or isolation. The pandemic forced us to see the disparate outcomes and burdens that persist across our neighborhoods. It’s clear: We cannot move forward from COVID using the same economic and community development strategies that we relied on in the past, which only helped create those vulnerabilities. This is Rhode Island’s moment to move toward a stronger future, to build deep and wide community resilience. By focusing on wealth, ownership, and investment, we can help Rhode Island’s economy and communities find strong, sustainable footing.
The purpose of this policy paper is to introduce several potential strategies of community wealth-building. Our intent is to shift the boundaries of what’s considered possible in our state. We have intentionally included a diversity of ideas that could be implemented at multiple levels of government and with different degrees of investment. For each idea we discuss in the following pages, we describe how it promotes community wealth, another instance of implementation, and how it might work in Rhode Island.
We hope you will engage with these ideas, improve upon them, and help make them reality.
It’s hard to be believe, but the holidays are once again upon us. As you’re finalizing your celebrating and gift-giving plans, why not make a pledge to support independent, local businesses whenever possible?
We can’t forget that every dollar we spend has impact. When we buy from locally-owned, independent businesses, our money does more good for our local community. There are a lot of good reasons to buy local. Here are six of our favorites:
Money: When we shop local, money stays in our local economy longer and does more good. For every $100 you spend at a locally-owned business, an average of $68 stays in the local community. Compare that to just $43 for a big box store.
Jobs: Local businesses = local jobs. Small businesses are the state’s largest employer. They hire our neighbors, family members, and friends.
Charm: Local businesses shape the character of our communities. They make our places unique and interesting.
Climate: Buying local is good for the environment. It means less resources and energy were used to transport goods.
Community: Local businesses are more inclined to give back to the local community — think Little League teams, raffle donations, and charitable giving — because they are part of the local community. They donate almost 2.5x more per employee than national chains.
Trust: It feels good to do business with someone you know.
With every purchase you make, you can strengthen the Rhode Island economy. That’s a lot of power; wield it wisely!
If you’re looking to show some support beyond your wallet, here are a few ways:
Friday, November 25 is Plaid Friday. That’s right; we’re taking back Black Friday. Wear plaid to support your locally-owned, independent businesses. Share a pic of yourself on social media using #plaidFriday and #ShopIndieLocal with a few words about why you shop local.
Saturday, November 26 is Small Business Saturday. Remind everyone you know!
Tuesday, November 29 is Giving Tuesday. It’s a great time to make a few year-end charitable donations to your favorite nonprofit organizations.
Looking for some good options on how/where to spend locally this holiday season? We’re compiling a list of the local markets. (If your community is hosting a market that we’ve missed, please email jessica@localreturn.org to let us know.)
October is Shop Indie Art Month. Local artists make our local places special. They help us reflect, observe, capture, provoke, mourn, and celebrate. They’re also a major economic force. By supporting local artists, you’re contributing to the local economy and the community.
