One Small Step Toward Consumer Protection in the Midterm Budget Review

Guaranteed Auto Protection (GAP) and Debt Cancellation Contracts (DCC) recently came to my attention through my involvement with the Ohio Attorney General’s CSPA Advisory Group. These products are sold as protection against coming up short on a consumer loan if something bad happens to the goods. GAP or a DCC is supposed to pay off some or all of a remaining loan balance on secured consumer goods in the event of a total loss or theft of the goods – most frequently motor vehicles – covering the gap between the insurance pay out and the balance due on an installment loan. My colleagues on the advisory group tell me that GAP is very commonly sold in conjunction with motor homes and other recreational vehicles – vehicles notorious for plummeting in value as soon as the buyer drives one off the dealer’s lot. RVs are not common purchases for low income consumers, but new or late model used cars are, and for many low income families, their car is their most valuable asset.

The interesting thing about GAP and DCCs, which I think is counter-intuitive, is that these products are not legally considered to be any kind of insurance, and therefore not regulated by the Ohio Department of Insurance. Like extended warranties, GAP and DCCs are potentially prime products for ripping off consumers. GAP had not really been addressed by Ohio law, except to be defined in the tax code, until some amendments to the Retail Installment Sales Act (RISA) made their way into the Midterm Budget.
RISA regulates most contracts in which buyers make payments over time on consumer goods. This statute will now include a definition of debt cancellation or debt suspension products, require disclosures about the purchase price and terms as part of the installment contract, and prohibit a seller from conditioning the extension of credit on the purchase of GAP or other debt suspension or debt cancellation products. If you want to check out the language, here is a link to the budget bill.

Note, however, that RISA was not amended to give consumers a specific remedy against sellers and dealers who violate these new provisions. Consumers will have to look to our recently amended Consumer Sales Practices Act for relief.

Déjà vu All Over Again

Will OWF face the same fate as DMA?

 Is Ohio setting up OWF for cuts in the next budget?

In 2003, enrollment in the state Disability Medical Assistance Program (DMA) was about 32,000 people.  DMA was a state funded program that provided basic medical care for Ohioans who were disabled or dependent on prescription medications and had very low incomes, no more than $115 per month.  This was also a crucial program for Ohioans because in addition to basic health care, it provided a means to obtain medical tests and documentation to support disabilities in the Aged Blind and Disabled (ABD) Medicaid application process.  Through a series of funding cuts and enrollment freezes, the Ohio Department of Job and Family Services shrunk the DMA program to a few thousand people in 2008 and finally eliminated it altogether in 2009 because the enrolled population could not justify the cost of administration.

In 2012, Ohio is again shrinking a crucial benefits program. Ohio Works First (OWF), Ohio’s version of the federal Temporary Assistance for Needy Families program has lost 24% of its regular adult enrollees in the 12 months between June 2011 (217,203 adults) and May 2012 (164,221). This loss of adult enrollment can be attributed to a number of factors, including: time limits; sanctions; more aggressive enforcement of work requirements; aging out of dependent children; transportation; and a wide range of perceived and real barriers at the state and county agencies.   Whatever the reasons, OWF is shrinking dramatically during an economic downturn in which record numbers of people are unemployed and child poverty is growing.   OWF is shrinking dramatically in the midst of a now four year recession that should be triggering record expansions in the program. (Look to the Medicaid program in Ohio that serves much the same population. In the same time period, it has grown significantly.)  OWF is now, or will soon be, a program primarily for children, despite the continuing needs of their parents. The impact on families of smaller assistance groups and reduced monthly benefits will be catastrophic.

Counties have experienced cuts to their administrative funds in the last two state budgets.  These funding cuts make it harder for counties to meet the state and federal requirements that they provide services to help OWF recipients become self-sufficient.  Lower OWF enrollment could be used to justify further cuts to the counties which will make it ever harder to serve their low-income residents?  Lower OWF enrollments could also justify cuts in other programs such as food assistance and child care?  Other low-income programs could also be targeted for cuts based on lower OWF numbers.  Lower OWF numbers can define away the problem of poverty in Ohio.

Unlike DMA, Ohio will not eliminate the OWF program, but it is clear that it wants to shrink it, despite the growing levels of poverty and the desperate need for assistance.  A smaller OWF program will be less helpful to low-income Ohioans and not help them to get out of poverty and become self-sufficient.  The state is intentionally shrinking the safety net. Every month more Ohioans are losing that protection.

Human Services issues in HB 487, Midterm Budget Review

Governor Kasich signed the Midterm Budget Review (MBR) on June 11.  A number of human services issues got a lot of attention during the process, some good and some bad.

1.      Post Sanction Reenrollment into OWF got more difficult

RC Section 5107.05 was amended to add stricter requirements to the reenrollment requirements for Ohio Works First (OWF) recipients who have been subject to sanctions.  The changes include:

• the situations in which a sanctioned recipient must enter into a new self-sufficiency contract to resume participation in OWF;
• the completion of all components of the self-sufficiency contract rather than the willingness to come into full compliance; and,
• in many cases the assistance group must also reapply for OWF in order to resume participation in OWF.

Based on legal aid experience across the state, most sanctions are triggered by a failure to meet the work requirements or other work readiness issues.  This is often due to an absence of meaningful work, and/or transportation, child care, and scheduling issues that are a fact of life for low-income people.  This appears to be another block in the wall of barriers that the state is creating to reduce its rolls in order to meet the federal work participation requirements.  OWF enrollment has dropped 24% in the twelve month period ending in May 2012.

2.     Medicaid Given Authority for Waivers      

The MBR granted authority to the Medicaid Director at ODJFS to apply for any needed additional waivers and amendments to the state Medicaid plan to implement the proposed 1115 Medicaid waiver aimed at streamlining the Medicaid eligibility process.  We support these proposals and believe that they will help more Ohioans to qualify for Medicaid more quickly.  See the announcement from the Office of Health Transformations on the 1115 waiver. 

3.     Drug testing was out, then in, then back out, but it will be back

The bill did not include any provisions requiring drug testing of applicants or recipients for public benefits programs.  An amendment was offered late in the Senate process, but that amendment was withdrawn within 24 hours in response to testimony by advocates that the Chair said raised questions that would require further consideration.

4.     Nursing Homes lost a windfall

The MBR included a provision that would have rolled over $30 million in Medicaid funds from 2012 – 2013 for increased payments to nursing facilities.  The Governor vetoed this provision, stating that, “No new data has been presented to justify those changes, demonstrate a need, or explain the rationale for this specific amount. . . The Nursing Facility Reimbursement Subcommittee of the Unified Long Term Services and Supports Advisory Work Group established in HB 153 is the appropriate venue for considering modifications to the nursing facility reimbursement formula.”

The Governor also vetoed $1.5 million for the Aging in Place Pilot Project aimed at funding home improvements to allow individuals to stay in their homes instead of moving to a nursing facility.  The veto message stated that this program “. . . duplicates existing programs, however as nearly $18 million is currently spent annually on such efforts. . . “

New Civil Rule 65.1 Will Change Domestic Violence Practice

Ohio’s new Civil Rule 65.1 governing civil protection orders (CPO) for domestic violence victims will take effect on July 1, 2012. It reflects and incorporates nearly 2 years of work by the Supreme Court Advisory Committee on Domestic Violence and the Supreme Court Civil Rules Commission, including the participation of Mike Smalz of the Ohio Poverty Law Center, Alexandria Ruden of the Legal Aid Society of Cleveland,  and Robin Bozian of Southeastern Ohio Legal Services.

The new rule 65.1 addresses a number of problems that have arisen under existing domestic violence laws and Civil Rule 53 governing magistrates’ proceedings, including:

• gaps in protection for victims resulting from abusers’ filing of objections to magistrates’ orders, which trigger an automatic stay of the Full Hearing CPO;
• lack of discovery requirements or standards protecting victims in CPO cases; and
• conflicts between the language of the Supreme Court standard protection order forms and the literal requirements of existing Civil Rule 53 in magistrates’ proceedings as reflected in several Court of Appeals decisions.

The adoption of the new Civil Rule 65.1 will greatly impact CPO practices and procedures in Ohio because an estimated 80% of CPO cases are heard by magistrates.

Among the highlights of Civil Rule 65.1 are:

• It governs all types of CPO cases, including domestic violence CPOs (R. C. 3113.31), stalking/sexually oriented offense CPOs (R. C. 2903. 214), and juvenile CPOs (R. C. 2151.34).
• It supersedes and replaces existing Civil Rule 53 in prescribing CPO procedures in cases that are referred to magistrates.
• Initial service of the CPO petition, ex parte order, and all other documents shall be made upon the respondent in accordance with Civil Rules 4 through 4.6, thereby authorizing the use of residence or certified mail service upon the respondent if efforts to obtain personal service are unsuccessful.
• Discovery may only be had by leave of court, and the court’s discovery order must set forth the time and place of discovery; the identities of the persons permitted to be present (at a deposition) shall include any victim advocate; and “such terms and conditions deemed by the court to be necessary to assure the safety of the Petitioner, including if applicable, maintaining the confidentiality of the Petitioner’s address.”
• The magistrate may conduct the ex parte hearing and, upon the conclusion of the hearing, may grant or deny an ex parte CPO, and, unlike other magistrates’ orders, the ex parte CPO may not be appealed by filing a motion to set aside the order.
• After the full hearing, the magistrate may grant or deny a full hearing CPO, and the judge may then adopt, deny, or modify the full hearing CPO provided there is no error of law or other defect evident on the face of the order.
• The full hearing CPO becomes effective when signed by the judge and filed by the clerk, and it is a final, appealable order.
• A party may file written objections to the court’s adoption, modification, or rejection of a full hearing CPO, but the filing of objections does not stay the execution of the order.
• Instead of filing written objections, a party may appeal the order of the court concerning the issuance of a full hearing CPO to the court of appeals.
• The filing of objections stays the running of the time for appeal until the filing of the court’s ruling on the objections.

The full text of new Civil Rule 65.1 can be accessed by clicking here.  Once on the Final Rule Amendments page of the Ohio Supreme Court website, select “Ohio Rules of Appellate Procedure, Ohio Rules of Civil Procedure, Ohio Rules of Criminal Procedure, Ohio Rules of Juvenile Procedure, and Ohio Rules of Evidence” – the correct selection has an effective date of July 1, 2012 (this link and the instructions take you to the full document describing several amendments to Ohio rules of court; rule 65.1 begins on page 43). We’ve also posted the text of the new Civil Rule 65.1 by itself on the Ohio Poverty Law Center website, here.

Any questions concerning the new Civil Rule 65.1 can be addressed to Mike Smalz of the Ohio Poverty Law Center at (614) 824-2502.

Commentary: How Poverty Puts Our Democracy at Stake

By:  Sarah Biehl, Staff Attorney

The concentrations of power and wealth that we are seeing at the top and the sense of political exclusion and impossibility that we are seeing at the bottom threaten a new order that would hard to characterize as the animating ideal of our country. At the end of the day, our democracy is at stake.

–   Peter Edelman

Today I read one of the best, most poignant blog posts I’ve ever read about poverty in the United States.  In it, Peter Edelman, a law professor at Georgetown University, both promotes his new book, So Rich, So Poor: Why It’s So Hard to End Poverty in the United States, and summarizes some of his book’s main points.  I am definitely going to go out and get this book.  But, even if you don’t want to read the book, read the blog post.  In it, Professor Edelman explains very succinctly why the drive to further limit public benefits (welfare, food stamps, Medicaid, etc.) available to poor families is bad policy and harms our country.

Read it here:  How Poverty Puts Our Democracy at Stake | ACS.  And, once you’ve read, please feel free to post comments and thoughts below.  We’d love to hear what you think.

Day 23: Poetic Justice

A great story of community partners working together to help immigrants!

100 Years. 100 Stories.

At Catholic Charities – we are so very fortunate to partner throughout the community with great organizations.  Today’s story comes from The Legal Aid Society of Cleveland and was featured in the Summer 2011 issue of their newsletter, Poetic Justice.

Immigrant clients have always been an important part of The Legal Aid Society of Cleveland’s history and legacy – many of Legal Aid’s first clients in 1905 were recent immigrants from Ireland, Italy and Poland. More than one hundred years later, Legal Aid serves many refugee clients immigrating to the United States from countries in Africa, Asia and the Middle East. They come to the United States because of a well-founded fear of persecution in their home country. In addition to helping with an immigration case, Legal Aid helps immigrants with a variety of other civil matters, ensuring safety, shelter and access to the justice system.

Louise Mugongo, originally from…

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