Legal Reference at the Library—Financial Information to Empower Patron Decision-making
For more on WebJunction and Legal Services Corporation’s training initiative Improving Access to Civil Legal through Public Libraries see oc.lc/legal-justice.
For many library staff, the most intimidating questions posed by patrons are those that involve legal issues—an area in which librarians often have little or no expertise. Yet there are valuable ways that public libraries can help guide people toward positive legal outcomes.
To highlight some strategies that public library staff can use when responding to legal questions, WebJunction will be publishing a series of stories in the coming months that share the legal reference experiences of library practitioners. We hope this series, “Legal Reference at the Library,” will prove both inspiring and educational. You can read Part I of this series here.
In Part II of our series, we again hear from Luis Interiano, Reference Librarian at West Baton Rouge Library in Port Allen, Louisiana, as he helps patrons find resources to inform important financial decisions and avoid predatory companies.
The two real-life examples that follow demonstrate that many patrons who seek help from library staff may not recognize that civil legal issues are at play in their questions. Both stories show how understanding one’s legal rights before something becomes an issue can save many headaches down the road for a patron. In his story, Luis illustrates how common it is to find unreliable, misleading, or just plain inaccurate legal information online. Luis was able to guide these patrons through some confusing information so they could make informed financial decisions. Luis tells his story in his own voice.
Case: A mother and daughter seek help obtaining an online loan
Two patrons, mother and daughter aged perhaps 80 and 60 years old, came to the library with an advertisement they had received in the mail for a loan. It required online registration, so they asked for my help. I immediately suspected that the loan might be a “payday loan” with extremely high interest rates that can be a major problem for most working-class people if they are not paid off within a short time. I did not want to appear to block my patrons’ wishes, however, so I waited until I could learn more information about the loan.
I first helped them navigate to the loan website but immediately ran into a problem because it required the registrant to communicate by email. Neither of the women had an email address, so my first task was to help the daughter create an email address for her mother since the loan offer was in her mother’s name, and her mother could not see or type well.
Once registered, they were about to submit their information to apply for the loan when I spotted a button on-screen that said, “Check your rate.” Finally, I had the opening I had been searching for. I told my patrons that from my experience, both personal and professional, short-term loans like these had potentially ruinous interest rates. They agreed to check and clicked the button. The Annual Percentage Rate was revealed to be 299%! The patrons asked what that meant. I explained that if they kept the loan for one year, they would have to repay the principal amount of $1,500 plus 299% or, for ease of calculation, three times the principal in interest; in other words, they would receive $1,500 now but would have to repay an additional $4,500 in interest for a total of $6,000 at the end of a year. They were shocked. I explained that these loans are often called “payday loans” because they are meant to be paid back at the end of one month, when the amount would be much less, instead of at the end of one year when the amount could be devastating.
But, as always, I gave them my disclaimer that I am a librarian and not a financial or legal advisor, so I suggested that they talk to a professional financial advisor before accepting the terms of the loan. Also, I found and printed for them the front page of the Consumer Financial Protection Bureau's (CFPB) section on “Payday Loans.”
The daughter was against completing the loan, and her mother was in favor, but the daughter asked the mother if she would have $1,500 to pay back next month. When the mother said no, the daughter said she would not continue the application, and they left.
I felt that I had helped these patrons avoid a problematic financial situation, but I had to walk a fine line between helping them with what they came to the library to do and warning them not to take the loan. A warning would have crossed the line from my professional mandate of connecting patrons to information and into acting as a consumer advocate or financial advisor. I presented them with the factual information on total interest paid over time and gave them printed information from a reputable government website that addresses these issues.
Case: Patron seeks help in avoiding bankruptcy
Although a U.S. Citizen raised in New Orleans since age six, I was born in Tegucigalpa, Honduras and speak Spanish as a native language. I can provide library services to Spanish-speaking patrons, including in the area of legal reference. One such patron was a Hispanic man who needed legal or financial advice in managing his debts to avoid bankruptcy.
I already knew that debt management companies are not a worry-free way of handling debt, but in my research on mostly commercial sites, I found that the way debt management companies work may cause creditors to sue the individual, as detailed in 10 things debt-settlement companies won’t tell you.
I explained to my patron in Spanish that he may want to be careful of what company he talks to about settling debt, that debt management companies may have a particular plan in mind where they ask the individual to:
- Stop paying all creditors and to refuse to answer their phone calls
- Send payments instead to the debt management company to be kept in an escrow account
- Allow the debt to “age” so the creditors will be more willing to negotiate to settle the debt at a smaller percentage of the original amount
What these debt management companies downplay (except for one single statement they are required by law to make), is that as the individual’s debt ages, especially if it is unpaid for over one year, the creditors may sue the individual, and the debt management company does not provide legal aid of any kind. I had verified this in previous years by calling a debt management company to ask how they worked. Specifically, I asked if there was a chance of a lawsuit by following their plan, and they said yes. I asked about legal aid, and they said none was offered, but the company representative tried to downplay the danger by saying a lawsuit only happens in 1% of the cases they handle.
I recommended that this patron see a fiduciary financial counselor who is bound by law to act in the interests of the client. In situations like this, I always give the patron contact information for the pro bono organizations that offer help in Spanish.
Useful Reference Links from the Stories:
- The Consumer Financial Protection Bureau (CFPB) was created to make sure that the financial products and services that Americans depend on every day—including credit cards, mortgages, and loans—work better for the people who use them. They have a useful glossary with Spanish / English financial terms and information about debt collection.
- US Department of the Treasury’s page on debt management
- US Courts page on bankruptcy, which explains the details of the two types of bankruptcies that individuals can file: Chapter 7 and Chapter 13.
- The Spanish language version of LawHelp.org