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Monday, December 09, 2019 {{ new Date().getDay() }}

By Kevin G. Hall, McClatchy Washington Bureau

WASHINGTON — Roughly one in three adult Americans has past-due debt that’s been turned over to a collections agency, according to a novel new study.

Southern states fare worst in the study, with most having four in 10 residents with credit files that show debt in collection. The New England states fared best.

The findings overlap other economic data that together suggest millions of Americans continue struggling to make ends meet in an uneven economic recovery that has benefited the top end far more than the middle and bottom.

“Debt in collection is pervasive, and it threads through nearly all communities,” said Caroline Ratcliffe, the lead researcher on the report entitled Debt in America, published by the centrist think tank Urban Institute. “Every third person you see on the street has debt reported on their credit file.”

McClatchy obtained a copy of the report ahead of its release. Among the findings, based on records shared with researchers by the credit reporting agency TransUnion, are:

— 35 percent of Americans with a credit file have debt in collection reported in these files. Bills more than 180 days overdue are sent to collection agencies.

— The average amount owed on bills in collection is $5,200.

— 5.3 percent of Americans with a credit file have bills reported to a credit bureau between 30 and 180 days past due.

— The average amount owed on past-due debt not yet in collections is $2,258.

_Americans with bills in collection and past-due debt owe a combined average of $9,123.

Future research will focus on a breakdown of debt by category, which will give a better sense of how much is credit card debt versus medical bills or student loans. The latter is likely an important part of the story.

“The big thing that was changing is big increases in student loan debt, which would also be part of this,” said Ratcliffe. “We know that a lot of the recovery happened more at the top than the bottom, people with delinquent debt are those least likely to be (able to) pay down the debt.”

Other existing statistical measures fill in the missing pieces. The Federal Reserve issues a quarterly report on delinquency rates on loans by commercial banks, and the latest, from January through March, shows 2.31 percent of credit card debt is delinquent.

That’s lower than what the Urban Institute study shows, and suggests that credit cards aren’t the whole story. The low levels of credit card delinquency, said experts, reflects both consumer reticence to take on new debt and weaker borrowers who no longer have access to credit.

There are an estimated 222 million credit files, and researchers got access to a random sample of 7 million in the month of September 2013. They then built a model to estimate national, regional and state levels of past-due debt and debt in collections. Another 22 million adults, 9 percent of the adult population, don’t have credit files and fall outside the study.

State-level data proved striking in the Urban Institute report — conducted with the Consumer Credit Research Institute in San Diego. It showed that 13 states and the District of Columbia had more than 40 percent of their citizens with credit files with debt actively in collection, 11 of those states in the South.

Nevada, slammed during the housing crisis that brought the deep national recession, led the pack at 47 percent. Other states over the 40 percent mark included Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, New Mexico, North Carolina, South Carolina, Texas and West Virginia.

On the better side were North Dakota, Minnesota and South Dakota. The three states, rich in oil and minerals, had substantially lower percentages of citizens with debt in collection, respectively at 19.2 percent, 19.8 percent and 20.8 percent.

Among metropolitan areas, Southern cities fared poorly in terms of the percentage of their population with credit files that had debt in collections. South Carolina’s cities of Greenville and Charleston came in at 44 percent and 42.8 percent. Charlotte, N.C., was also elevated at 41.8 percent.

Florida, another state hard hit by the housing crisis and recession, had several cities with high percentages in collections. Miami was a hair under 40 percent. Jacksonville, Orlando and Tampa showed 45 percent, 44.8 percent and 41.6 percent. The Lakeland area between Orlando and Tampa had a very elevated 47.3 percent in collections, while North Port on the Gulf of Mexico was at 35 percent.

Despite an energy boom, several Texas cities had high levels of debt in collection. The border city of McAllen had a whopping 51.7 percent in collections, San Antonio 44.5 percent, El Paso 44.4 percent, Dallas 44.3 percent and Houston 43.7 percent.

The West Coast fared slightly better, with California having 33 percent of all its citizens with credit files with debt in collection, while Washington had 31.2 percent. Among major metro areas, the California cities of San Francisco and Sacramento showed 26.7 percent and 31.7 percent, while Fresno was elevated at 43 percent.

In Washington, the Seattle area stood at 31.9 percent while Spokane and its environs were at 30.9 percent. In the middle of the nation, Kansas City saw 35 percent of its credit files in collections, while Wichita and its nearby Kansas communities had 33.4 percent in collections.

The credit-bureau data provides researchers another window into both the behavior of consumers and their precarious financial state.

“Our ambition is to use this as a basis akin to financial epidemiology,” Christopher Trepel, managing director of the Consumer Credit Research Institute, likening the research to that of scientists studying disease. “My hope is that we are about to define a new science of financial distress in a sense.”

CCRI researches the behavior of consumers in financial distress. Its work is funded by Encore Capital Group, a large purchaser of distressed debt.

Photo: Phillip Taylor PT via Flickr

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Rep. Bennie Thompson

Photo by Customs and Border Protection (Public domain)

Chairman Bennie Thompson (D-MS) Friday afternoon announced the House Select Committee on the January 6 Attack has issued subpoenas to 14 Republicans from seven states who submitted the forged and "bogus" Electoral College certificates falsely claiming Donald Trump and not Joe Biden won the 2020 presidential election in their states.

The Chairman appeared to suggest the existence of a conspiracy as well, noting the "the planning and coordination of efforts," saying "these so-called alternate electors met," and may know "who was behind that scheme."

Keep reading... Show less

Chris Cuomo

News Literacy Week 2022, an annual awareness event started by the News Literacy Project, a nonpartisan nonprofit dedicated to making everyone “smart, active consumers of news and information and equal and engaged participants in a democracy” has closed out. From January 24 to 28, classes, webinars, and Twitter chats taught students and adults how to root out misinformation when consuming news media.
There’s no downplaying the importance of understanding what is accurate in the media. These days, news literacy is a survival tactic. One study estimated that at least 800 people died because they embraced a COVID falsehood — and that inquiry was conducted in the earliest months of the pandemic. About 67 percent of the unvaccinated believe at least one COVID-19 myth, according to the Kaiser Family Foundation.
It’s not that accurate information isn’t available; people are rejecting reports of vaccine efficacy and safety because they distrust the news media. A third of Americans polled by Gallup said they have no trust at all in mass media; another 27 percent don’t have much at all.
Getting people to believe information presented to them depends more on trust than it does on the actual data being shared. That is, improving trust isn’t an issue of improving reporting. It’s an issue of improving relationships with one’s audience.
And that’s the real news problem right now; some celebrity anchors at cable news outlets are doing little to strengthen their relationships with their audiences and a lot to strengthen their relationships with government officials.
The most obvious example is how CNN terminated Prime Time anchor Chris Cuomo last month for his failure to disclose the entirety of his role in advising his brother, former New York Gov. Andrew Cuomo, on the sexual harassment accusation that unfolded in Albany, a scandal that eventually led to Andrew Cuomo’s resignation.
But there are others. Just this month, the House Select Committee to Investigate the January 6th Attack on the United States Capitol revealed that another anchor on another cable news network, Laura Ingraham of Fox News’ The Ingraham Angle, texted then-White House Chief of Staff Mark Meadows last January, advising Meadows how Trump should react to reports of possible armed protests at state capitols around the country. This revelation followed the story that Sean Hannity, host of the eponymous news hour at Fox News, also texted Meadows with advice last year.
And while he didn't advise a government official, CNN anchor Don Lemon revealed information not available to the public when he texted embattled Empire actor Jussie Smollett to tip him off about the Chicago Police Department’s wavering faith in his story about an assault. That’s from Smollett’s own sworn testimony.
When English philosopher Edmund Burke joked about the press being the Fourth Estate — in addition to the First, Second and Third (the clergy, nobility and commoners, respectively) — his point was that, despite their influence on each other, these “estates” — bastions of power — are supposed to be separate.
The Fourth Estate will always be an essential counterweight to government. But, since Donald Trump was elected in 2016, we’ve been so focused on stopping an executive branch from pressing the press to support an administration's agenda — either by belittling journalists or threatening to arrest them for doing their jobs — that we’ve ignored the ways that it affects and influences other Estates, and not necessarily through its reporting.
That is, we have news personalities-cum-reporters who are influencing government policy — and not telling us about it until it’s too late.
The United States has fostered an incredible closeness between the Second Estate — which in 2021 and 2022 would be political leaders — and the Fourth Estate. About a year ago, an Axios reporter had to be reassigned because she was dating one of President Biden’s press secretaries. Last year, James Bennet, the former editorial page editor of the New York Times and brother of Colorado Senator and 2020 Presidential candidate Michael Bennet, had to recuse himself publicly from the Gray Lady’s endorsement process. In 2013, the Washington Post reported at least eight marriages between Obama officials and established journalists.
To be clear, there aren’t any accusations that anyone just mentioned engaged in anything other than ethical behavior. But I, for one, don’t believe that James and Michael Bennet didn’t discuss Michael’s campaign. I don’t think the Axios reporter and her West Wing-employed boyfriend — or any journalists and their federally employed spouses, for that matter — didn’t share facts that the public will never know. Such is the nature of family and intimacy.
And as long as those conversations don’t affect the coverage of any news events, there’s nothing specifically, technically wrong with them. But that doesn’t mean that they aren’t damaging.
As these stories show, when we don’t know about these advisor roles, at least not until someone other than the journalist in question exposes them, it causes a further erosion of trust in news media.
What’s foolish about the Cuomo, Ingraham, Hannity, and Lemon improprieties is that they don't necessarily need to be the problem they’ve become. Cuomo’s show contained opinion content like 46 percent of CNN’s programming. An active debate rages on as to whether Fox News is all opinion and whether or not it can rightly even be called opinion journalism since its shows are so studded with inaccuracies and lies.
What that means is that Cuomo, Ingraham, Hannity, and Lemon are allowed to take a stand as opinion journalists; Cuomo and Lemon never really worked under a mandate of objectivity and Ingraham and Hannity likely wouldn’t honor it if they did. Indeed, a certain subjectivity — and explaining how it developed for the journalist — is part of an opinion journalist’s craft. To me, little of these consulting roles would be problematic if any of these anchors had just disclosed them and the ways they advised the people they cover.
But they didn’t. Instead, the advice they dispensed to government employees and celebrities was disclosed by a third party and news of it contributes to the public’s distrust in the media. While personal PR advisory connections between journalists and politicians haven’t been pinpointed as a source of distrust, they may have an effect. Almost two-thirds of respondents in a Pew Research poll said they attributed what they deemed unfair coverage to a political agenda on the part of the news organization. No one has rigorously examined the ways in which individual journalists can swing institutional opinion so it may be part of the reason why consumers are suspicious of news.
Cleaning up ex post facto is both a violation of journalistic ethics and ineffective. Apologies and corrections after the fact don't always improve media trust. In other credibility contests, like courtroom battles, statements against one’s interests enhance a person’s believability. But that’s not necessarily true of news; a 2015 study found that corrections don’t automatically enhance a news outlet’s credibility.
It’s a new adage for the 21st century: It’s not the consulting; it’s the cover-up. Journalists need to disclose their connections to government officials — up front — to help maintain trust in news media. Lives depend on it.

Chandra Bozelko did time in a maximum-security facility in Connecticut. While inside she became the first incarcerated person with a regular byline in a publication outside of the facility. Her “Prison Diaries" column ran in The New Haven Independent, and she later established a blog under the same name that earned several professional awards. Her columns now appear regularly in The National Memo.


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