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Financially troubled Metro seeks to borrow $220 million to cover loan

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Metro officials want permission to borrow $220?million to cover a loan coming due in October, as the transit agency continues struggling under restrictions imposed last year after a federal audit found numerous instances of financial mismanagement.

At a time when some Washington-area officials have become increasingly skeptical of the way the Washington Metropolitan Area Transit Authority handles its money, the agency’s chief financial officer plans to ask Metro’s board of directors on Thursday to allow him to seek the short-term loan.

Metro already is juggling several large, short-term loans, borrowed largely to make up for federal grant money that has been slow in arriving. The Federal Transit Administration, which completed the audit in March 2014, has been limiting Metro’s access to grant money until the agency fixes the problems described in the scathing financial report.

Tuesday, D.C. Council Chairman Phil Mendelson (D) called a meeting between Metro board leaders and D.C. Council members in his office to relay concerns about how the transit agency’s financial troubles are being handled. And Wednesday, council member Elissa Silverman (I-At Large) hammered Metro leaders at a public oversight hearing, accusing the board of failing to hold individuals accountable for its financial lapses or to provide a “clear picture” of the agency’s financial state.

“It’s an incredible lack of management for such an important public agency. Yet no one seems to be held accountable for it,” said Silverman, a member of the council’s finance and revenue committee. She also described Metro as an agency “lurching from crisis to crisis.”

A Metro rider is seen through orange construction mesh near an escalator that was being repaired at the L’Enfant Plaza station on Wednesday. (Evelyn Hockstein/For The Washington Post) Metro, which has faced renewed criticism since a deadly smoke incident in a subway tunnel near the L’Enfant Plaza station Jan. 12, is already trying to persuade governments in the District, Maryland and Virginia to commit to providing the cash it needs over the long term to pay for new, safer railcars, as well as other badly needed improvements. If Metro obtains the $220?million loan, it would still need an additional $208?million to cover loans due later this year. It could tap cash reserves, obtain other financing or persuade some of its lenders to extend credit terms. In documents prepared ahead of the Metro board’s meeting Thursday, Metro staff said that despite cash-flow improvements, “pressures remain on the amount and availability of cash in the near term.” Metro’s total short-term debt amounts to $502?million, money that Metro Board Chairman Mortimer Downey said has been used primarily for building projects and improvements. Last month, Wells Fargo renewed an existing $75?million Metro line of credit through March 2016. Metro spokesman Dan Stessel said Wednesday that the transit agency expected to pay off “a significant part” of the remaining debt and was likely to seek credit extensions similar to what it obtained from Wells Fargo on only “a fraction” of the credit. Stessel did not provide specific details of the plan. Metro board leaders have said that they are seeking broad funding solutions within the jurisdictions that subsidize its operations and that it does not plan to increase fares or cut services to cover its costs.A Metro Silver Line train makes it way to Washington, passing another Metro train on a lower rail. (Evelyn Hockstein/For The Washington Post) D.C. Council member Jack Evans (D-Ward 2), who represents the city on the Metro board, said during Wednesday’s hearing that despite his concerns about Metro’s management, the agency needs the cash to expand. “If Metro just stays as it is, it will not fulfill the needs of our region,” said Evans, who led the hearing as chairman of the council’s finance and revenue committee. “We need a larger Metro. We need a Metro that goes more places, that has more cars to carry people.” Silverman, despite her criticism of Metro’s finances, espoused the same sentiments about the transit system’s future growth. But local government officials say they need reassurance that Metro is implementing the FTA’s recommendations to improve the agency’s financial practices before they authorize more funding. Metro’s own audit of its finances for the fiscal year that ended June 30, 2014, is still underway and four months overdue. Acting General Manager Jack Requa told the council hearing Wednesday that the audit was on track for completion in April. “Until there is comfort that the financial management systems and processes are in order, the [chief financial officer] cannot recommend long-term borrowing or additional capital requests beyond safety needs for WMATA,” David Umansky, a spokesman for D.C. Chief Financial Officer Jeffrey S. DeWitt, said later in an e-mail. Umansky said that DeWitt was at Tuesday’s closed meeting between council members and Metro board members, and that “he expressed his continuing concerns about the lack of audited financial statements and the need for WMATA to extend its lines of credit coming due in the upcoming months.” Last March, a federal review painted a troubling picture of the transit agency, questioning Metro’s management of billions of dollars in federal grant money. The review by the Federal Transit Administration found that Metro awarded millions in no-bid contracts, skirted contracting rules and overcharged the government. The problems led FTA to shut down the automatic flow of cash to Metro, instead requiring the agency to manually draw down grant money and comply with grant application procedures. The restrictions are likely to continue through fiscal 2015, according to Metro. Metro Board Chairman Mortimer Downey said Wednesday that even he had been surprised when he read the FTA report. “I take accountability for not knowing it was not done right,” Downey said in response to questions from Silverman. At the behest of members of Congress, the Government Accountability Office has begun its own audit of Metro. Silverman said in an interview after the hearing that Wednesday marked the first time she had heard “a sense of remorse or responsibility” when Downey spoke. But Metro board leaders during the hearing also painted a more positive picture of the agency’s financial recovery.

Requa said the transit agency was “performing to budget with almost $300?million cash on hand, with the ability to make timely payments” to employees and contractors.

Requa described the agency’s success in securing the $75?million credit extension from Wells Fargo. “Financial institutions have confidence in WMATA’s financial capacity,” he said.

Lori Aratani and Robert McCartney contributed to this report.

Abigail Hauslohner covers transportation and development for The Washington Post. Previously, she served as the Post’s Cairo bureau chief.

Paul Duggan covers the Metro system and transportation issues for The Washington Post.

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How Do Payday Loans Work? | Symmes Law Group


How Do Payday Loans Work?

Posted on August 19, 2014 by Richard Symmes

One of the worst kinds of debts out there that debtors can obtain, is that of the payday loans. So why are payday loans so bad? Well for starters they may be able to charge you interest at an annual percentage rate of 1900%! Although most people take out loans with the intention of paying off their loan for on their next pay date, the payday loan companies are banking on that you will not need to make that payment. In fact they are betting on you having to take out an additional loan in order to cover the first loan. As Sara Silverman says in the video above, if you are thinking about obtaining a payday loan you should stop yourself and do anything else.

Payday loan companies are some of the most unregulated businesses out there and they are not trying to help you out and you will end up digging a hole for your self that you may not be able to recover from which may force you into filing for bankruptcy. The good news is that payday loans are dischargeable in bankruptcy, but don’t make the payday loan the reason for having to file for bankruptcy.

Also debtors should know that payday loan companies can be found locally in the Seattle metro area as well as online. The online companies you really have to watch out for as they are not bound by the laws of the United States and have been known to harass my clients even after they have filed for bankruptcy because they are overseas or on some foreign island where they won’t be subjected to U.S. law. Further I have even had former bankruptcy clients complain that they are being harassed by debt collectors who claim they owe a debt, but in fact this debt would have been discharged in the bankruptcy. These companies turned out to be scams and I can only imagine these people data was compromised from an overseas payday loan company. If you have to do it, take out the loan with a local company, but any payday loan is not advisable.

If you have additional questions regarding payday loan debt, give Symmes Law Group a call at 206-682-7975 to learn about your options.

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John Oliver & Sarah Silverman on Payday Loans

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HBO’s John Oliver (Last Week Tonight) takes a hard look at the payday loan industry. Sarah Silverman helps out with this hilarious spoof commercial in which … […]

Sarah Silverman Joins John Oliver in Tearing Apart Payday Loans …

In case you’ve missed it, John Oliver continues setting aside at least half of each episode of Last Week Tonight as a time to educate viewers about important topics they won’t hear much about elsewhere. HBO continues being cool by putting these 15-plus–minute segments on YouTube for everyone who might not have HBO.

For his latest lesson, Oliver spends 14 minutes explaining payday loans and then shutting the concept down completely, based on everything from the loan companies’ terrible names and celebrity spokespersons to the way that they ruin customers’ lives with their bad practices. He then turns it over to his own celebrity spokesperson, Sarah Silverman. Watch the entire thing below.

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John Oliver enlists Sarah Silverman to take down payday loans

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Every week, Last Week Tonight, takes one particular issue to task for a longer segment. On Sunday, John Oliver enlists Sarah Silverman to explain how payday loan companies are not our friends. There are currently more payday loan stores (which does not mean paying for a loan in Payday candy bars) in American than McDonalds or Starbucks, and they are sadly not going anywhere. Watch Silverman star in Oliver’s counter-campaign for a payday loan alternative called, “Anything Else.”

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Learn About Payday Loans with John Oliver and Sarah Silverman …

Late Night

Learn About Payday Loans with John Oliver and Sarah Silverman

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| August 11th, 2014

Here’s a clip from last night’s Last Week Tonight, in which John Oliver breaks down the corrupt payday loan industry — or as he describes it, the “recycling symbol of human misery” — with a little help from Sarah Silverman in the form of a counter campaign ad.

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Last Week Tonight with John Oliver: Predatory Lending (HBO)

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Payday loans put a staggering amount of Americans in debt. They prey on the elderly and military service members. They’re awful, and nearly impossible to regulate […]