St. Paul, MN – The first legislative hearing on the Minnesota People’s Bail Out Act (House File 626) was held in the Minnesota House Labor and Consumer Protection Division Committee, March 20.

Deb Konechne, a leader of the Minnesota Coalition for a People’s Bailout told the committee, “What we need is a bailout for the people. This legislation is a people’s bailout bill that addresses many of the issues that people in this state are facing and takes crucial steps to protect low-income and working Minnesotans from the ever-growing economic crisis.”

The act would put a moratorium on housing foreclosures and it would force banks and mortgage companies that foreclose on rental property to honor existing leases, thus preventing tenants from becoming homeless. Many of the touted programs to help homeowners and tenants have not yet taken effect on the ground, so Minnesota needs a moratorium.

The act also would extend and expand eligibility for unemployment benefits, create a new public works program to put people to work and place a moratorium on the five-year lifetime limit for public assistance. The act would prevent layoffs of public sector workers, including workers at the University of Minnesota.

The Minnesota Coalition for a People’s Bailout, a group of community, labor and other organizations, has been working with a broad range of community organizations to win support for the legislation.

“This legislative hearing is an important step in the effort to pass protections for low-income and working Minnesotans from the economic crisis. The act will provide protection from the most damaging affects of unemployment – mortgage foreclosures and evictions,” said Phyllis Walker, President of AFSCME Local 3800, one of the organizations supporting the act.

“Families on MFIP, the state welfare program, are facing a very bleak situation unless there is an extension of the five-year limit on receiving public assistance,” said Deb Konechne of Minnesota People’s Bailout Coalition and the Welfare Rights Committee. Konechne continued, “Grinding poverty, more homelessness, raising small children and living with disabilities in today’s blighted economy is extremely difficult. It is not realistic to expect these families to recover in the limited time currently available to them.”

The act would put in place protections for tenants in rental properties that are foreclosed. Currently, tenants in foreclosed properties can be given as little as a 60-day notice to vacate their rental homes once the bank or mortgage company reclaims the property.

“Tenants should not be made homeless when their landlord loses the property. The banks and mortgage companies have a responsibility to those tenants. Those companies have not voluntarily taken that responsibly, so it is up to the state of Minnesota to force them. Tenants have paid their rent and that rent was supposed to go to pay the landlords’ mortgages,” said Mick Kelly of the Minnesota Coalition for a Peoples’ Bailout.

The act would also put in place a moratorium on foreclosures for homeowners.

“Working people should not be losing their homes due to the economic crisis of the rich and powerful. The federal government is providing hundreds of billions of dollars to banks and corporations. Minnesota must take action to protect the homeowners who are facing foreclosure as a result of the corrupt mortgage market that the homeowner did not create and rising unemployment which is destroying the living standards of working people across the state,” Kelly continued.

The National Alliance to End Homelessness, in a January 2009 report, estimated that 1.5 million more people in the U.S. would become homeless over the next two years. This is over and above the number who would experience homelessness without the effects of the economic crisis.

A broad range of organizations have signed on to support the Bail Out Act, including the Saint Paul Regional Labor Federation, representing union households in the east metro area; AFSCME Council 5, the State Council on Black Minnesotans; AFSCME Local 3800, Elim Transitional Housing, Inc, Welfare Rights Committee and many others.

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