Unfair debt collection practices and child care funding in the legislative spotlight

With lawmakers in Salem having wrapped up their work, we take a look at a couple of legislative developments that perhaps you have not heard about, but which could make a big difference in the economic well-being of many Oregonians.

We begin the show by discussing legislation that better protects Oregonians from unfair debt collection practices. Chris Coughlin, Policy Director at Oregon Consumer Justice, talks about the just-enacted Family Financial Protection Act.

In the latter half of the show, Candice Vickers, Executive Director of Family Forward Oregon, discusses an effort to get the legislature to put sufficient resources into a vital state child care program, Employment Related Day Care.

Transcript

The sun has set on the 2024 Oregon legislative session. With lawmakers in Salem having wrapped up their work, we take a look at a couple of legislative developments that perhaps you have not heard about, but which could make a big difference in the economic well-being of many Oregonians.

In the latter half of this show, we focus on an effort to get the legislature to put sufficient resources into a vital state child care program. Candice Vickers, Executive Director of Family Forward Oregon, discusses the importance of Employment Related Day Care, a child care subsidy that makes it possible for many low-income parents to work. 

But we begin the show by discussing legislation that better protects Oregonians from unfair debt collection practices. Chris Coughlin, Policy Director at Oregon Consumer Justice, talks about the challenges that Oregonians burdened by debt face as a result of outdated and unfair debt collection practices and how the just enacted Family Financial Protection Act responds to those challenges. 

Stay tuned.

Juan Carlos Ordóñez (host): Chris, for the listeners who may not be familiar with Oregon Consumer Justice. Can you say a few words about what you do?

Chris Coughlin: Absolutely. So Oregon Consumer Justice is a nonprofit consumer advocacy organization committed to advancing a justice movement that puts people first through policy, community engagement, education and the law. 

Juan Carlos: Just a couple of hours ago, the Oregon legislature passed Senate Bill 1595. The family Financial Protection Act and Oregon Consumer Justice, along with a number of other organizations, advocated for this bill. And we will get to the details of the bill in a moment. But let me start by asking, why was this legislation necessary? What's the problem that Senate Bill 1595 responds to? 

Chris: Well, our state consumer protection and that statutes prior to this bill passing were very outdated and flawed. And there were many gaps in how consumers and Oregonians needed to be protected.

When people get into situations with debt, it's often because of some sort of an emergency. It might be an injury or medical debt, or it could be the loss of a spouse or the cost of living is just really high. And so people may depend on credit cards or other loans to get by day to day. And when there is debt and collection, then part of the problem in Oregon was our statutes were very outdated.

So for lower income workers, only $254 a week were protected. If you think about trying to pay rent, buy food and just get by in day-to-day life, that's not enough to do it. And then the other thing is our Unlawful Debt Collection Practices Act, which is what is the law that can be used when debt collectors or debt buyers start going after people — perhaps for debt that's not even theirs or for the wrong amount — that there weren't strong enough legal protections in Oregon.

Juan Carlos: How extensive are the problems that you outlined? Or maybe, if I can state it differently, what was it that Oregon Consumer Justice was seeing out there that really moved you to put forward this legislation? 

Chris: Well, I would say two things. One, some of the data. So in 2023, 16% of Oregonians had debt and collections. And this is a statewide issue, with rural communities having some of the highest rates of debt and collections. Furthermore, 28% of Oregon households in communities of color face debt and collections. That data was really powerful about how many people in the state are dealing with debt and collections. And being concerned about debt and collections and the impact on credit reports was something that many of our partner organizations were hearing more and more.

In fact, one story was John, who is a full time caregiver for his brother, who is disabled. Their mom passed away, and so that was a loss of some income to the family. And it put John in a tough spot financially. You know, he's really worked hard to get his credit into a better place. And so he was able to manage,  but then one day he went to open up his bank app to pay some bills. And his bank account had been completely emptied. He wasn't sure what happened, but it turned out a collection company had come in and garnished his wages for a $15,000 debt they said he owed for receiving medical care over 15 years ago.

And so it took him months to get this all straightened out. That was one of the stories that motivated us to move forward on this bill and a bank account protection is a key part of Senate Bill 1595. 

Juan Carlos: One of the things that we at the Oregon Center for Public Policy often point out about the current state of the economy is that there's a great deal of economic insecurity out there. More than two in five families in Oregon make too little to reasonably afford basic necessities such as food, rent, utilities and so on. I'm wondering, how is the problem of consumer debt tied to this reality of fairly widespread economic insecurity?

Chris: Either for families that aren't making enough to or to manage or families living paycheck to paycheck, oftentimes borrowing may be the only way, particularly to cover any unexpected expenses. Oftentimes, people patch things together.  As long as everything falls into place perfectly, it works. But if there is anything out of the ordinary at all, the consumer debt becomes kind of both a symptom and a cause of economic insecurity, because people get into cycles of potentially taking out a short term loan.

The unfair and outdated debt collection laws in Oregon, rather than allowing people a way to help pay off their debt and a realistic pathway for families to recover, it just push Oregonians further into a cycle of debt and poverty.

Juan Carlos: In addition to the harm that these unfair debt collection practices cause on individuals and families, is there a harm to the state as well? Are there, say, increased costs to the state as a result of people's lives being destabilized? 

Chris: Well, I think there are a couple of things. One is, if lives are destabilized as you said, oftentimes people who may have been trying to manage will end up in public assistance programs. And then the other piece is around housing stability. I mentioned Jon's story, where his bank account was wiped out. Well, what if your rent is due right then? And so then, do you go into a potential eviction scenario? We're in the middle of a housing crisis. So anything that creates more housing instability is something that the state is obviously grappling with. 

And that's not just for renters. Bonnie testified when this bill was before the legislature last session and talked about the fact that because of medical costs, she ran up a lot of expenses. She was using her credit card to pay for food and gas to get to medical treatments and so forth.
And one of the options that she might have to kind of restart would be to file for bankruptcy. However, she lives in a modest manufactured home, but it's on a piece of property that she and her deceased husband purchased. And so there is value there. But if she filed for bankruptcy, she would only be able to hold on to $40,000 of equity in the land and home that she had.

For somebody to go through bankruptcy and then really only have $40,000 for housing, for somebody who is retired on a fixed income, it’s not going to last very long and in today's market. For seniors in particular who might face bankruptcy because of medical debt, it can really lead to increased housing instability.

Juan Carlos: So let's turn to the fix. How does the Family Financial Protection Act, the bill that just passed the legislature today, better protect families burdened by debt? 

Chris: So I mentioned earlier that previously $254 a week, or 75% of take home pay, was protected. But with the new bill passing, the amount that an individual can hold onto will increase by 2027 to the value of Oregon's standard minimum wage per week. And that will be adjusted annually to keep up with inflation. That will allow us to have higher protection, and it still stays at the 75% of the disposable take home pay for anyone with higher income levels. So that's one key piece around allowing people to hold on to more of their wages. 

The second big piece would have made John's life much easier because $2,500 in a bank account will be saved. And so if you have $2,500 or less in your bank account and a creditor has a garnishment order that goes to your bank, they are not able to garnish anything at all. That's a really exciting and important part of the bill that passed to make sure that there is a stable amount so people can pay rent and continue to buy food and so forth.

The next is around the value of the homes. I mentioned that Bonnie could have held on to $40,000. That will be increased with a new bill to 150,000 for an individual and 300,000 for a couple, which brings us into alignment with our neighboring states. 

Finally, we thought about wages, bank account, house housing and then what's the other thing that many families depend on? That is often an automobile. And so currently our exemption for automobiles is $3,000, and that will be raised to 10,000 in the new bill. So those are the kind of economic protection parts of the bill. 

And then the other side. I mentioned about the laws being outdated around protections — if a debt collector is going after debt that might not be owed by the debtor. And so we've strengthened the Unlawful Debt Collection Practices Act. So it creates a violation for attempts to collect debts or fees that aren't owed by the debtor. It extends the statute of limitations to three years. It's currently one year, and that will give Oregonians, especially those with complicated medical bills, more time to understand what debt is really theirs and where creditors or debt collectors may be going over debt that actually should have been paid by insurance or should have been paid through financial assistance programs, to really identify and address violations to the Debt Collection Practices Act.

Juan Carlos: Chris, is there anything else you would like to share with us regarding the problem of consumer debt and the Family Financial Protection Act? 

Chris: Yeah, I just want to express sincere gratitude to Senator Chris Gorsek for using one of his two bills this session to introduce the Family Financial Protection Act and being a true champion in the Senate. And also to Representative Nathan Sosa for all his work during the 2023 session on the bill that laid the foundation for us to be able to move this forward in a short session.

This issue touches so many Oregonians, and that allowed us to build a broad based coalition of over 30 organizations. And I really appreciate SEIU partnering with Oregon Consumer Justice to co-convene that group. And finally, a special thanks to John, Wally, Bonnie and all the other individuals who shared their stories with legislators. They all said that they were doing it with the hope that other Oregonians wouldn't have to go through what they had gone through around debt issues. And passing the Family Financial Protection Act will make that change and really make things so much better for so many Oregonians.

Juan Carlos: That was Chris Coughlin, Policy Director at Oregon Consumer Justice, explaining the Family Financial Protection Act, a bill just enacted by the Oregon legislature which will better protect Oregonians from unfair debt collection practices. And now we turn to the topic of child care. Candice Vickers, Executive Director of Family Forward Oregon, discusses the effort to get the legislature to adequately fund Employment Related Day Care, a child care subsidy for low income working parents.

Here's my conversation with Candice. 

Juan Carlos: Candice, welcome to Policy for the People. 

Candice: Thank you. Juan Carlos, I'm excited to be here and chat with you. 

Juan Carlos: So could you share with our listeners a little bit about the mission and work of Family Forward Oregon? 

Candice: Absolutely. So we are an advocacy organization that really is centered on transformational organizing. We work to lift up the voices of mothers and caregivers and to really advocate for them in political spaces to ensure that the policies that they care about are really highlighted by the people that they elect.

Juan Carlos: So as I understand it, one of your top priorities right now, one of your top priorities during the current legislative session, is to ensure that all families who qualify for Employment Related Day Care are able to access the program. What is Employment Related Day Care and why is it that eligible families are not getting the daycare that they need? 

Candice: So Employment Related Day Care is a subsidy program that helps families with a few different identity markers, including poverty status, previous experience with domestic violence, those who are at risk for a state intervention with regard to custody. It really helps them be able to access childcare, and access it as a way to continue to participate in our economic system. And it allows them a level of choice. So they're able to find a child care provider that they believe is culturally responsive, linguistically relevant for their family, and to engage in childcare with those folks with a government subsidy to help them pay for it month to month.

In the past, families had really high co-pays. And so we've been really successful in bringing down those co-pays. The average co-pay for families right now is $10 a month. So for many families, it's really a lifeline, right? Without that subsidy, they wouldn't be able to go to school. They wouldn't be able to go to work and they wouldn't be able to participate in our economic system like all Oregonians should be able to.

Juan Carlos: And about how many families are currently not getting Employment Related Day Care even though they qualify for the program? How many families are on the waitlist? 

Candice: The waitlist is about 2000 families strong right now, Juan Carlos. And that, you know, does not take into account how many children are in each of those families. So these are just 2000 families who have a varying number of children who qualify. And have been waitlisted, now that we've expanded eligibility.  We recognized as a state that it was really important for students, whether or not they were working, or for families from a lot of different backgrounds to have access to this program. And with that increased access, they've been waitlisted. So it's about 2000 families strong right now.

Juan Carlos: So what happens to these families when they're not able to access ERDC, Employment Related Day Care? Could you speak to the pressures it puts on parents and those they support? 

Candice: For a lot of families, childcare costs as much or possibly more than housing. You know, the average cost of child care for infants in our state is around $2,600 a month and the average for toddlers is around $2,100 a month. So if you think about what our average rent is, it's pretty darn close, right? 

And so we've heard from lots of moms who have had to make the decision on whether or not to pay their rent, to feed their family, to go to work or to pay for childcare. You know, we have one mom who's the mother of four, Natalie, and she lives in our area. She's in the metro region. And she actually, when she lost access to her subsidy, had to enter a shelter and was living in a shelter with her kids because there was no way for her to work, pay for childcare and pay rent. And, you know, it's not just a metro issue. We have a mom of five, Lisa Ebony, who is in southern Oregon, who at one point was living in her car because she couldn't pay for childcare and also work at the same time.

So it's a huge impact. We think about our houselessness problem that we are experiencing here in Oregon. This is one of the key drivers of that. If I don't have access to the care that my kids need, then I'm not going to be able to engage in the workforce, which means I'm not going to be able to pay rent, let alone afford these astronomical childcare costs.

Juan Carlos: Going back to the waitlist and the factors behind it, you touched on it a little bit, but I'm wondering if you can go a little bit deeper into why there is this waitlist. Why is it that Employment Related Day Care isn't providing services to all who are eligible? 

Candice: At the beginning of 2023, the Department of Early Learning and Care requested $250 million in order to provide Employment Related Day Care subsidies to families. And they also expanded eligibility for the program, again, to make sure that students who were parents could access it and a lot of different families. And when they requested that $250 million, the response that they received was $23 million. Twenty-three million is not even enough to maintain the subsidies for the families who are currently eligible right now, let alone for anybody who's being waitlisted.

So it's a huge difference. The lawmakers were great in expanding that eligibility and creating that Department of Early Learning and Care. That's really exciting and awesome and is really cognizant of the needs of Oregonians. But simultaneously, they didn't provide the funding that the department needs in order to make sure that those families can access those supports.

Juan Carlos: So what is it that you're asking the Oregon legislature to do right now? 

Candice: Well, I think what we want them to do, at a minimum, is care about care. To care about our most vulnerable families and to care about our youngest Oregonians, to really put the walk to the walk, to match their talk. To really understand that if we want kiddos to be entering school and to be safe and protected and have the social emotional learning and growth that we all say that they need, we're asking them to actually fund this program specifically.

We want them to allocate $99 million to the program and to approve another $75 million to be put into something that's called a Special Purpose Appropriation account, and that will essentially allow the department some breathing room and hopefully begin the process of addressing that waitlist. And I want to be clear, this amount that we're asking for won't even, you know, make a dent in that waitlist and the way that it should.

This is just to make sure that those 16,000 families who are currently accessing Employment Related Day Care can count on that resource, and to have the level of predictability that they need to provide stability for their families. 

Juan Carlos: And what have you heard from the legislature? Or maybe I'll say it a little bit differently: where do things stand right now with regards to this ask that you're making of the legislature?

Chris: Well, we've had some champions. We've had some folks who really understand how important care and child care is for our families. And we've also had some folks who don't necessarily see the connection between care and these other markers of economic success that they are naming as their priorities. We've heard a lot of our elected officials talk about houselessness and behavioral health. And right now, we find ourselves really working to help educate them on the relationship between things like houselessness and behavioral health and child care and access to child care subsidies. 

But we also have some folks who are having a hard time seeing the forest for the trees. Simply, they just have not invested in child care in the same way that they've invested in health care and housing, even though it's just as important. Like we can build all of the houses and all of the apartment complexes that we want to build. But if families can't go to work to pay the rent in those places and they can't access safe and quality child care, then they're not going to be able to participate in the way that we want them to be able to participate and they're not going to be able to get off the streets and out of those tents and into those safe houses.

Juan Carlos: The challenges facing Employment Related Day Care is but one aspect of a much larger problem that you've already touched on, which is access to child care. And it's a huge and complex issue. But I’m wondering if you can outline some of the structural challenges, some of the bigger big issues facing our system of child care? 

Candice: Right. Because we know, Juan Carlos, underinvestment is just one of the issues. But you don't have to look too far to recognize that as a country, we have really gotten to this level of economic security and first world status on the backs of Black and brown women who have been providing — sometimes forced, often unpaid and frequently underpaid — childcare since before this country had a constitution.

We also know that women's work is systematically undervalued and unseen in a lot of ways, and for some reason, childcare is often seen as women's work as opposed to family work. And that's why it's really important to have an anti-racist, feminist, intersectional movement that really seeks to highlight these issues as an issue for families and for employers and for our communities, and not just for women who are often the ones that are bearing the brunt of this burden.  Our kiddos are really important. Every dad, grandpa, grandmother, aunt, uncle, your family friend can tell you how important children are in their lives. And we need to, at the same time that we recognize their importance, not leave the burden of providing that childcare on the backs of primarily Black and brown women who've been doing it for us since the beginning.

We've seen over the course of the last 50 years we have a lot more women who are working outside of the home and as they're going to work outside of the home, one thing that they're not being provided with is access to the child care that they need in order to do that stably. So there's a lot of root causes.

I think that sometimes, you know, our youngest Oregonians, our kids, the ones who aren't voting, are often erased from the conversation. And our goal is to make it to where that erasure stops and that we value our kids and our families just as much as we value anything else.

Juan Carlos: What ultimately would you like to see the Oregon Legislature do, and perhaps Congress as well, in order to really address the systemic issues facing our system of child care?
What needs to happen for there to be affordable child care for all families and having a system where all child care workers can have the dignity that they deserve? 

Candice: If I could dream, Juan Carlos, I think the dream is a universal system for child care that is multifaceted and that is culturally responsive and linguistically relevant, and that isaccessible to everybody, not just in Oregon, but in our country.

I think that we've seen this. This isn't something new. Every state, in order to join the union, in order to join into the United States of America, had to have public education written into their Constitution. It would be really great if we could have that same conversation about child care. Whenever we're working to boost the economic stability of our country, child care needs to be mentioned. It's a really needed level of infrastructure and it needs to be seen as infrastructure here, everywhere. That's my dream. My dream is that child care is as important to us as roads and bridges, and that every family has access to what they need in order to raise happy, healthy, well-adjusted kiddos who are then ready, able and excited to participate in our civic system.

Juan Carlos: A couple of days after my conversation with Candice, the legislature passed the budget bill that includes $171 million in new ERDC funding. In a follow up email response to this news, Candice said, “It's heartening to see that lawmakers have heeded our calls and made a commitment to support this critical program for the families who rely on it. We look forward to building on that positive news as we work to end the wait list for EDC and ultimately reach our goal of universal childcare.”

That's it for today's show. Thanks for listening and we will see it next time.