Jumping the loan shark: "A way of monetizing poor people."

After all, cash-stuffed envelopes can take many forms.

‘A way of monetizing poor people’: How private equity firms make money offering loans to cash-strapped Americans, by Peter Whoriskey (Washington Post)

The check arrived out of the blue, issued in his name for $1,200, a mailing from a consumer finance company. Stephen Huggins eyed it carefully.

A loan, it said. Smaller type said the interest rate would be 33 percent.

Way too high, Huggins thought. He put it aside.

A week later, though, his 2005 Chevy pickup was in the shop, and he didn’t have enough to pay for the repairs. He needed the truck to get to work, to get the kids to school. So Huggins, a 56-year-old heavy equipment operator in Nashville, fished the check out that day in April 2017 and cashed it.

Within a year, the company, Mariner Finance, sued Huggins for $3,221.27. That included the original $1,200, plus an additional $800 a company representative later persuaded him to take, plus hundreds of dollars in processing fees, insurance and other items, plus interest. It didn’t matter that he’d made a few payments already.

“It would have been cheaper for me to go out and borrow money from the mob,” Huggins said before his first court hearing in April ...

Secrecy vs. transparency as "governments turn to bank loans rather than bonds."

You're right.

I need to stop giving his new ideas for borrowing and secrecy.

The Hidden Risks of a Growing Way to Pay for Infrastructure, by Lynnette Kelly (Governing)

More and more, governments are turning to bank loans rather than bonds. But too often the terms of the loans -- and who is first in line to collect -- are secret.

A perilous new financial risk may be hiding in the fine print of loan agreements in state capitals, county seats and city halls across the country. The cost could be high for millions of individuals whose investment dollars help finance the public schools, water systems, bridges and roads that we all rely on and which in many cases are in desperate need of repair.

Investment in the nation's infrastructure has long been a partnership between state and local governments and retail investors. State and local governments prioritize public projects, investment bankers provide products to help spread costs over the life of the project, investors buy in to earn reliable, often tax-free interest income, and then taxpayer dollars repay the bonds. Today, more and more communities are opting for alternatives to this traditional municipal-bond model in the form of direct loans from banks. Estimates are that the bank financing of public projects has ballooned to more than $155 billion with another $25-$30 billion being added each year.

Borrowing funds from a bank to build a bridge is not inherently problematic. The problems arise when the extent of the borrowing -- and the precise terms of the loans -- are a secret. For municipal-bond financings, states and communities have obligations under federal law to publicly disclose material information to investors at the outset. But no such disclosure requirements exist at the time they receive loans from banks. Investors who hold a city's outstanding bonds may have no idea that the city has taken on more debt or that the bank making the loan has made sure it will be first in line to collect if the city runs into financial troubles.

That's just what happened in Lawrence, Wis. The small town borrowed heavily from local banks, and it agreed to put the banks before the bondholders in the event it someday couldn't cover all of its financial obligations. When a major ratings agency learned of the unfavorable terms for bondholders, it quickly downgraded Lawrence's bonds to junk status. Bondholders who thought they were holding investment-grade paper are now left with a far riskier asset.

No one knows how many other Lawrences are out there ...

On the Bicentennial's Crutchfield seat cushions: How many were sold? Was the loan paid back?

According to tweets, news stories and other secondary sources ...

At last night's city council meeting, Pat "Patty Mac" McLaughlin retained his seat in the lead chair, with John Gonder agreeing to another term as sidekick.

A wholly redundant "aggressive panhandling" ordinance was adopted, to be immediately relegated to the considerable civic file folder (paper only, and quaintly non-electronic) marked "shit we'll never bother enforcing," but at least Shirley "Farmer Baird" now has a legislative achievement apart from creatively siphoning money to DNA's corner market stalls.

Curiously, Dan Coffey got all belligerent about the Port Authority, placing him in rare non-accord with the Gahan administration, for which the erstwhile Wizard of Westside has acted as de facto whip for the past two years. The PA was passed, anyway, and my guess would be that those unfortunate schmucks in attendance were witnessing some carefully scripted boilerplate: Pick an ordinance sure to pass, oppose it anyway with advance clearance from the top, and bolster one's credentials in the race for commissioner by taking a hard line on nothing.

Yawn.

But as Mrs. Beam pointed out, all we really want to know is how well those hired-gun Bicentennial books sold, how many of the 5,000 (!) remain to be sold, and whether Redevelopment's loan was paid back. We're fairly gripped with mercenary gala nostalgia just thinking about it.

Whatcha say, CeeSaw? Here is the newspaper report from November, 2011:

BOOK DEAL

In related news, Caesar updated the redevelopment commission on the status of a bicentennial book being prepared for release next year.

To produce and print 5,000 copies of the book will cost $144,000, Caesar said.

“I know that’s a lot of money, but there’s a lot of work that goes into these,” he said.

Redevelopment funds were used as a loan to the bicentennial commission to get the book started, and Caesar said the advance will be paid back after sales start accumulating.

Standard copies of the book will be sold for $40, but 200 limited editions will be sold for $200 through an invitation process, Caesar said.

As Caesar said the $144,000 will be derived from donations to the cause, proceeds from the book sales will go straight to funding bicentennial activities.

About $107,000 of the production total has already been raised, Caesar said.

He added the book will be extremely detailed and an appropriate representation of New Albany’s history.

“We feel there won’t be any problem selling it,” Caesar said. “These stories will have flavor to them.”

Re-energized UEA dusts off its checkbook, scatters largess.

While the UEA's unexpectedly bountiful checkbook is open, kindly permit me to reveal that economic development officials in Birdseye have pieced together a multi-dollar deal to lure NABC from New Albany to rural paradise by Cappuccino's sight.

Mass exodus to Birdseye; little people evacuate New Albany in search of cleanliness, lower educational standards.

Them relocated little people are going to need Regressive Pints, hence the town's heated courtship of yours truly. I'm not sure how much longer we can hold the line here. In fact, about $70K in grants and loans should do nicely to make us feel more welcome, and if the UEA's once again tapped out, can't we just bond some TIF or something like that? Isn't it time to reconsider NABC's Riverview Brewing Towers idea?

C'mon, people, is there anything more "quality of life" than craft beer? Room temperature sarsaparilla may have been enough for your great-grandfather, but he went out with the Charleston, Maalox and ordinance enforcement.

I shall submit NABC's terms via carrier pigeon, or Shirtless Marvin. You have been warned.

Quills among New Albany UEZ grant recipients; Collections were up 175 percent in UEZ last year, by Daniel Suddeath (N and T)

Over the past year, the New Albany Urban Enterprise Zone Association has handed out facade grants for 34 properties totaling more than $70,000.

A sizable chunk of that total was recently granted to Quills Coffee in order for the business to expand and remodel its Market Street location in downtown New Albany.

Quills garnered a $16,000 grant and also received an $8,000 loan from the UEZ.