The Jubilee Blog

Congress Releases Draft Puerto Rico Bill to Address Financial Crisis

By Greg Williams 

The House Committee on Natural Resources released draft legislation to address Puerto Rico's debt crisis. The "Puerto Rico Oversight, Management, and Economic Stability Act" (PROMESA) creates a board to oversee Puerto Rico's finances and restructure its debt. The bill will not be officially introduced until at least mid-April when Congress returns from recess. 

"This bill includes oversight and restructuring provisions," noted Eric LeCompte, who testified to Congress on what should be included in the legislation and is the executive director of the religious development group Jubilee USA. "The next few weeks will be an important time to give feedback on the legislation."

The current draft bill creates a five-member oversight board that has the power to approve Puerto Rico's budgets and impose across-the-board spending cuts if Puerto Rico's legislature can't pass an approved budget. Puerto Rico is required under PROMESA to pass its first balanced budget by 2018. The bill also creates a debt restructuring process in federal court.

"We are concerned that the current draft fails to respect democracy in Puerto Rico," stated LeCompte, a United Nations debt expert who advises Puerto Rico's religious leaders on the crisis. "We also need to be certain that we don't balance budgets on the backs of the poor."

More than half of Puerto Rico's children live in homes that receive government assistance. Puerto Rico cut spending for health, education and took money from pensions to pay its debt. The US territory's only children's hospital, which doesn't have an MRI machine, cut its budget 14% over two years.

"Debt restructuring is critical to ending this crisis," noted LeCompte. "Puerto Rico won't see any economic growth until the debt is brought back to sustainable and payable levels."

Read the Puerto Rico Oversight, Management, and Economic Stability Act.

Read Eric LeCompte's testimony before Congress.

Read a timeline of the Puerto Rico debt crisis.

Report Questions Florida Payday Lending Rules

By Greg Williams

A new report by the Center for Responsible Lending says “payday” lending fees cost Florida residents $2.5 billion over the past decade. “Payday” lending refers to high-interest loans made primarily to low-income residents that gives the lenders access to the borrowers’ bank accounts. Critics of the practice say the loans are predatory and create cycles of increasing debt. The report argues that payday regulations passed in 2001 in Florida failed to protect borrowers, noting the state now has more payday lending stores than Starbucks.

"This report shines a very bright spotlight on predatory lending,” noted Eric LeCompte, executive director of the religious debt watchdog group Jubilee USA. “Payday lending hurts people and families living paycheck to paycheck."

According to the report, 83% of payday loans are made to customers who already have 7 or more existing loans. Many consumers take on payday loans to pay off previous payday loans and enter a cycle of increasing interest rates. The report notes that payday lenders in Florida charge an average annual interest rate of 278%. 

The Consumer Financial Protection Bureau is considering new regulations on payday loans. Florida representatives from both major parties introduced legislation to stop new federal regulations.

"All levels of government have an obligation to protect vulnerable communities from predatory behavior,” stated LeCompte. “Interest rates in the triple digits are simply immoral."

Read the report from the Center for Responsible Lending.

Supreme Court Hears Puerto Rico Bankruptcy Case

By Greg Williams 

The US Supreme Court hears arguments on whether Puerto Rico's courts can restructure about $20 billion of the US territory's $72 billion debt. Puerto Rico's legislature passed the 2014 "Recovery Act" which empowers the island's courts to restructure debt belonging to Puerto Rico's public companies. The First Circuit Court of Appeals previously ruled in 2015 that only Congress can determine how to restructure Puerto Rico's debt under US bankruptcy law.

"If the Supreme Court rules in favor of Puerto Rico, we'll have some additional tools to address some of the debt in an orderly way," said Eric LeCompte, a United Nations sovereign debt expert and Executive Director of the religious development group Jubilee USA. "While this could be positive. it still doesn't offer a comprehensive solution."

Only seven US Supreme Court justices are expected to hear the case because of Justice Antonin Scalia's death and because Justice Samuel Alito may recuse himself from hearing the case. Alito recused himself when the high court decided to take the case in December.

"I hope the Supreme Court will allow Puerto Rico's bankruptcy courts to arbitrate the debt," stated LeCompte, who testified to Congress in February on possible legislative solutions to the debt crisis. "Puerto Rico is in a downward spiral and it can't cut or tax its way out of this crisis."

Read a timeline of Puerto Rico's debt crisis

Read Eric LeCompte's testimony before Congress

Argentina Lower House Repeals Laws to Support Hedge Fund Debt Deal

By Greg Williams 

Argentina's lower house of Congress voted 165-86 to repeal two laws that blocked the country from settling its decade-long debt dispute with a group of "hold-out" investors. A US judge approved the $4.65 billion agreement on March 2 on the condition that Argentina's congress revoke the two laws.‎ Argentina's Senate now faces an April 14 deadline to also repeal the laws.

Radio Spots Focus on Puerto Rico Crisis Ahead of Sunshine State Presidential Primary

By Greg Williams

A religious development organization is running radio spots focused on resolving Puerto Rico's debt crisis on 238 stations across Florida. The ads air in Spanish and English continuously ahead of the state's March 15th presidential primary. More than 1 million Puerto Ricans live in Florida and their turnout could sway important presidential contests.

"There are counties in Florida that decide presidential races," noted Eric LeCompte, head of Jubilee USA, the organization airing the radio placements in Florida. "The turnout of Puerto Ricans living in Florida could decide not only who wins the primaries but also who wins in November."

Both parties held debates in Miami this week - the Democratic debate was hosted by the Spanish language Univision network.  

Jubilee USA Launches Puerto Rico Radio Spots Ahead of Florida Presidential Primary

By Greg Williams

Jubilee USA is running radio spots focused on Puerto Rico's debt crisis in Florida ahead of the state's March 15th presidential primary. The ads first ran in Texas ahead of the state's "Super Tuesday" primary. The radio placement urges presidential candidates to address the crisis. Florida's primary may play an important role in the US presidential election and is home to more than 1 million Puerto Ricans.

Puerto Rico & Super Tuesday

Friends - 

Ahead of Super Tuesday, Jubilee USA launched Puerto Rico focused radio ads in the critical presidential primary state of Texas.

Listen to our Puerto Rico radio ads urging presidential candidates to act on the economic and humanitarian crisis. Please share this critical radio spot with your family, friends and co-workers.

Now we need your help to continue placing these radio spots in Florida ahead of the March 15th presidential primary.‎ For every 250 dollars we can raise, 35,000 people will hear our radio placements. Please donate now so we can influence the presidential race and move Congress and the Federal Reserve.

Working with San Juan's Archbishop, the head of Puerto Rico's Bible Society and all major religious leaders on the island - we are advocating that any solution to the island's crisis must reduce child poverty. More than half of Puerto Rico's children live in homes that receive government assistance. Schools are closing and special education funding is being cut, harming some of the island's most vulnerable kids. Our radio ads are part of our broader campaign to resolve the debt crisis and protect Puerto Rico's most vulnerable citizens. This month alone, our director Eric LeCompte testified on the crisis before Congress, met with Treasury Secretary Jack Lew at the White House and met with Puerto Rico's governor. And with your help, we organized 1,000 phone calls to Congress to support bankruptcy protection for Puerto Rico.

Listen to our Puerto Rico radio ads and share this critical radio spot with your network.

Funding for pensions, law enforcement and health care are being slashed as Puerto Rico struggles under a mountain of debt. And the $42 million cut to health spending comes as the Zika virus spreads across the island. Puerto Rico has roughly the same population as Oklahoma, one of the states voting on Super Tuesday. And yet while Oklahoma's poverty rate is 17% - slightly above the national average - Puerto Rico's is nearly 50%. This is a crisis that presidential candidates cannot ignore.

Listen to our Super Tuesday ad, share it and donate. Your participation in this campaign can help win solutions to Puerto Rico's financial crisis that reduce child poverty and help the most vulnerable.

In Solidarity,

Andrew Hanauer
Campaigns Director
Jubilee USA Network
www.jubileeusa.org/support-us

P.S. Don't forget to donate. Every $250‎ we raise will allow our ad to be heard by 35,000 people in Florida.