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Newsom: Bring check-cashing biz under control

By Josh Richman
Tuesday, April 5th, 2011 at 3:53 pm in ballot measures, Gavin Newsom, taxes.

Lt. Gov. Gavin Newsom hopes to put a measure on the 2012 ballot asking voters to enact tight controls on check-cashing and payday loan businesses that he said are sucking working people and communities of color dry.

“This would be at the top of my list,” he said this afternoon, and efforts to push such regulations through the Legislature have failed because this industry is “very influential out here in Sacramento.”

“These guys just buy us off” and bills “don’t even get out of committee,” Newsom said, adding he’s “talking to folks” about a ballot measure. “It would be ideal to have it on the 2012 ballot, it would be an interesting debate, an important one.”

Newsom brought this up as we discussed his touting a new online calculator that will help California families determine if they qualify for the Earned Income Tax Credit (EITC), a federal tax credit that can boost an individual’s or family’s federal refund by as much as $5,666.

The WEb Connector EZ asks four questions and within minutes lets taxpayers know whether they are eligible for the EITC. When taxpayers finish using the WEb Connector EZ, they can enter their zip code to locate free tax assistance programs available from the IRS and community agencies.

Created in 1975, the EITC is a refundable federal income tax credit for low to moderate income working individuals and families, conceived in part to offset the burden of social security taxes and to provide an incentive to work. When the EITC exceeds the amount of taxes owed, it results in a tax refund to those who claim and qualify for it.

But Newsom said today that more than half of California’s African-American and Latino families don’t have accounts at banks or other credit institutions. Even if they qualify for and get the EITC, what do they do with the money, he asked?

He said he’d like to find a way to expand the Bank on San Francisco free banking program conceived during his mayoral tenure to a statewide level so more Californians can start saving money and building credit ratings. Meanwhile, he said, the nation has as many check-cashing and payday loan businesses as it does McDonalds’ and Starbucks Coffee stores combined, many of them charging percentages that are “devastating working people and poor folks.”

Asked about last week’s Chronicle report that he’s prepping to run for governor again, Newsom insisted “it’s nothing unusual … I’m doing what everybody else does, paying down a little debt on the LG’s (lieutenant governor’s campaign) account.”

“I’m never going to run against Jerry Brown,” he said.

For this week, he’s concentrating on making Californians aware they may be eligible for the EITC so that they don’t leave thousands of dollars they’ve earned on the table as they file their tax returns. He called the EITC “one of the great anti poverty programs in this country – it makes work matter.”

The WEb Connector EZ calculator – created by Intuit Inc., makers of popular products such as TurboTax, Mint.com and Quicken – is offered by the WE Connect campaign, which aims to empower low-income families to lead healthier and more financially secure lives by connecting them to resources such as the EITC, California’s Healthy Families Program and CalFresh. Founded in 2005 by former California First Lady Maria Shriver and now run by the California Endowment, WE Connect has helped millions of Californians through its community events, web-based tools, public-private partnerships, and publications.

“WE Connect is committed to making it as easy as possible for families struggling during this economic downturn to connect with money-saving programs and services that help bring economic security into the household,” Dr. Robert Ross, president and CEO of The California Endowment, said in a news release. “It’s important we help get the word out about these programs so that families can take advantage of them.”

Meanwhile, if you made $49,000 or less last year; if you made $58,000 or less and on active military service; or if you qualify for the EITC, you can come to a free tax preparation event from noon to 6 p.m. this Friday, April 8, at Eastmont Town Center, 7200 Bancroft Ave. in Oakland (enter the building off Foothill Blvd.). To avoid waiting in line, call 866-577-1231 to make a reservation; mention that you’re calling to reserve your spot for the California Free Tax Event, which is co-sponsored by the Earn It! Keep It! Save It! program.

Participants can use TurboTax with help from volunteers and tax experts, and obtain refunds in as few as 12 days. You’ll need to bring a copy of your 2009 tax return, if available; a Social Security Number or Individual Taxpayer Identification Number for each family member; proof of income including W2s and 1099 forms; documentation of deductible expenses; account and routing numbers of checking and savings accounts for direct deposit and a faster refund; child care provider information; and landlord’s information if you’re claiming a renter’s credit.

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