Speaker 1: Hmm, what's lansing my boils? I'm Robert Evans. This is
Speaker 1: Behind the Bastards, the show where I talk about terrible
Speaker 1: people and try out a new intro every week. Sharine,
Speaker 1: what what did you think of that one? Is that?
Speaker 1: Is that a winner? Yeah? I'm cringing just so. I
Speaker 1: think an emotional reaction is what you wanted, and you've
Speaker 1: got it. Yeah. Yeah, and we've we've done extensive market
Speaker 1: testing and our our listeners are are huge fans of
Speaker 1: boils and in lansings of boils. Uh, Sophie. Sophie brought
Speaker 1: that info to me last week, so we're trying to
Speaker 1: play to that demo. Yeah, I mean, I haven't thought
Speaker 1: about boils in a long time. I'm glad you brought
Speaker 1: that back to my to my attention. You know that
Speaker 1: they're they're disgusting. Make boils be on Sharine's mind again.
Speaker 1: I suppose we've kind of spoiled the fact that our
Speaker 1: guest today is is Sharine Lanna Units from the Ethnically
Speaker 1: Ambiguous podcast. Sharine, you've got any other plugs to plug
Speaker 1: up at the start? That's me. That's all I got.
Speaker 1: Follow me on the socials and that's all about that's
Speaker 1: about it. Here six there we go, follow Sharine on
Speaker 1: the socials. Now Sharine, Today we're talking about the payday
Speaker 1: loan industry. Have you ever had to use a payday loan? Uh? Fortunately? No,
Speaker 1: good good, I have not either. Um. It's a it's
Speaker 1: a it's a pretty messed up thing. And today we're
Speaker 1: going to talk about it for like an hour or so.
Speaker 1: So I cannot wait for you to teach me all
Speaker 1: about this thing I know nothing about. Excellent. Well, everyone buckling,
Speaker 1: strap your strap, your listening chairs on, throw on your
Speaker 1: you're here in goggles, and uh, prepare to be taken
Speaker 1: on a journey into the payday loan industry. That was
Speaker 1: That was beautiful. Thank you, thank'd The Magic school Bus. Yes,
Speaker 1: I like to think of every episode of this show
Speaker 1: as like an episode of the Magic school Bus. But
Speaker 1: Miss Frizzle is drunk and abusive. Um, are you saying
Speaker 1: that you are drunken abusive? Yes? Oh, and you're imagine
Speaker 1: that Miss Frizzle is drunk abusive and just has a gun. Yeah,
Speaker 1: I mean I do, I do have a yeah, but no, yeah,
Speaker 1: I hope that the rest of the audience is kind
Speaker 1: of not the most informed about this topic because I
Speaker 1: kind of like being a pleab surrounded by pleabs, and
Speaker 1: you can be the misfrizzle, you know. Yeah, and I was.
Speaker 1: I was the pleab until about seventy two hours ago
Speaker 1: when I started reading about this. So, yeah, exactly, this
Speaker 1: is the This is the slightly less blind leading the
Speaker 1: blind into the land of eyeglasses. I kind of lost
Speaker 1: the thread of that metaphor. We're in the magic school
Speaker 1: of us. Where are we going. We're going into a
Speaker 1: paid a loan We're going into We're going into a
Speaker 1: paid a loan store. Yeah. Yeah. So I want to
Speaker 1: start by asking people to think about how weird it
Speaker 1: is that workers have to wait weeks, if not months,
Speaker 1: to get paid for the work that they do. Theoretically,
Speaker 1: your employer and benefits from your labor as soon as
Speaker 1: you do it, whether you're driving an uber, managing a bank,
Speaker 1: or using a drone to fire missiles and insurgents, or
Speaker 1: wedding parties in rural Afghanistan, but you, the laborer, don't
Speaker 1: actually get paid for your work until long after you
Speaker 1: do it. This is such a normal, accepted part of
Speaker 1: our system that I don't think most of us ever
Speaker 1: really talk about it much, and this peculiarity in our
Speaker 1: labor market has led to the creation of an entire,
Speaker 1: mighty industry. The business of paid a loans short term lending,
Speaker 1: as it prefers to be called by its friends and family,
Speaker 1: got its start in the United States in the late
Speaker 1: eighteen hundreds. This was the dawn of what we today
Speaker 1: recognize as normal jobs, where people make a regular salary
Speaker 1: and get paid on an intermittent basis. Prior to this point,
Speaker 1: it had been more normal for folks to make a
Speaker 1: daily wage. If you showed up and worked twelve hours
Speaker 1: on a farm or a building project, you're a factory.
Speaker 1: You walked home with cash in your pocket at the
Speaker 1: end of the day. Regular modern style jobs changed the norms,
Speaker 1: and this caused problems for workers. Bank accounts didn't really
Speaker 1: exist for normal people in the late eighteen hundreds, and
Speaker 1: it was common for them to run out of money
Speaker 1: between paychecks because they'd have medical emergencies, or things would
Speaker 1: ache or whatever. Uh, and short term loans evolved as
Speaker 1: a way to keep the emerging blue collar working class
Speaker 1: alive in the gaps between pay day. So it starts
Speaker 1: like you can see in kind of this normal space
Speaker 1: is like people are getting paid differently, so they need,
Speaker 1: you know, a little bit of money now and then
Speaker 1: to like help them help them bridge the gap between
Speaker 1: their pay cycles. Right, can I raise my hand? I'm
Speaker 1: raising my hand. Yes, raise your hand. I have a question.
Speaker 1: That means I have a question. Uh, where does the
Speaker 1: money come from? Well, it comes from payday lenders. Um,
Speaker 1: So you would have like normal people wouldn't have credit
Speaker 1: and like wouldn't be able to get like a loan
Speaker 1: from a bank. Like a bank is not going to
Speaker 1: give you a loan if you need three hundred bucks
Speaker 1: to make up a hole in your in your in
Speaker 1: your like budget or whatever. So instead these companies come
Speaker 1: in and basically front you, you know, three hundred bucks.
Speaker 1: But so they're like private companies, their private private lenders,
Speaker 1: private lenders essentially like a rich person. Yeah, that's that's
Speaker 1: literally how it was. In some cases. It's just like
Speaker 1: someone with enough money to like throw out loans. And
Speaker 1: because they're small loans, like a normal loan, like you know,
Speaker 1: six percent would be a lot of interest to pay um,
Speaker 1: But because these are small loans and they're very short term,
Speaker 1: they had like way higher rates of interest. So a
Speaker 1: onely week loan would regularly be somewhere between a hundred
Speaker 1: and twenty and five a p r um. Yeah, so
Speaker 1: that now we're talking the eight hundred still and that
Speaker 1: seems insane, but those rates are actually really low compared
Speaker 1: to the modern equivalents and paiday loans, so like today's
Speaker 1: payday loans will regularly top five and interest um. Yeah,
Speaker 1: so that that seems like it might be a little
Speaker 1: bit abusive, right, yes, yes it would. Now. Uh, this
Speaker 1: is where we get the term loan shark. That's how
Speaker 1: these people came to be known, primarily because they got
Speaker 1: essentially famous. If you would like, watch a lot of
Speaker 1: old TV shows from the forties and fifties that would
Speaker 1: show loan characters like you know you you've heard the
Speaker 1: story about, like the mob guy threatening to break someone's
Speaker 1: leg or whatever if they don't pay a debt. Right
Speaker 1: of course, yeah, of that happened from time to time,
Speaker 1: But the reality is that they more often relied on
Speaker 1: wage garnishment, public embarrassment, or what was called bawling out,
Speaker 1: which is less fun than it sounds. It's basically screaming
Speaker 1: at someone to shame them into pay. What the fuck? Yeah,
Speaker 1: that's that's like just public humiliation. Yeah, that's exactly how
Speaker 1: most of the paid a loan industry worked in the
Speaker 1: late eighteen hundreds was if you didn't pay, they would
Speaker 1: try to humiliate you. That's like psychological torture. It's like
Speaker 1: psychological manipulation. It is psychological manipulation. But does it does
Speaker 1: it change your opinion on this at all? Sharine to
Speaker 1: learn that this actually created a great job opportunity for
Speaker 1: women in the workplace slightly. You know, keep keep talking.
Speaker 1: I'm gonna quote from a scholarly Commons article. Quote to
Speaker 1: compel payments salary lenders pestered debtors incessantly at home, or
Speaker 1: sent ballers out to make a scene at work, or
Speaker 1: processed wage assignments, or use the hours of attorney they
Speaker 1: had taken to confess judgment for before justices of the peace.
Speaker 1: They did not have to lay a hand on customers
Speaker 1: in arrears to do a profitable business. Indeed, many firms
Speaker 1: had a preference for hiring women as loan agents because,
Speaker 1: as one news story explained, they give an appearance of
Speaker 1: harmlessness to the lending establishment, and an outraged borrower is
Speaker 1: not so anxious to kick the manager out of a
Speaker 1: window if she is a woman. So so it wasn't
Speaker 1: necessarily for the benefit of women, but yeah, it was
Speaker 1: just because you wouldn't beat up a loan shark who
Speaker 1: was a lady sick. Um. Well, as much as I
Speaker 1: really appreciate job opportunes for women, uh, I mean that's
Speaker 1: problematic as ship. Yeah, I would say problematic as ship
Speaker 1: is fair. Um. So, starting after the Civil War, what
Speaker 1: we're called chattel mortgage lenders became increasingly common. So these
Speaker 1: were paid a loans backed up by the debtors furniture
Speaker 1: and family possessions as collateral. The explicit goal of the
Speaker 1: arrangements offered was to trap debtors in an endless cycle
Speaker 1: where they would never quite pay off their loan and
Speaker 1: thus would spend the rest of their lives racing to
Speaker 1: pay off the interest in order to avoid literally losing
Speaker 1: their beds. So people would like mortgage their furniture in
Speaker 1: order to make ends meet. For sad. That's like, I mean,
Speaker 1: I feel like it just boils down to a rich
Speaker 1: person taking advantage of a poor person that's desperate. That's
Speaker 1: all it boils down to. Yeah, and that's so sad. Yeah,
Speaker 1: that is the rich person that must have I mean,
Speaker 1: the rich person must have better things to do. But
Speaker 1: they're just greedy. They want money and it's money. Yeah,
Speaker 1: but they already have it, they want more. So the
Speaker 1: term loan shark came up essentially because the very form
Speaker 1: of the deal trapped the barrower and an endless cycle.
Speaker 1: So you were essentially like always being like chased down
Speaker 1: by the shark. You couldn't escape it. Um. The practice
Speaker 1: was almost immediately recognized as problematic by various state governments
Speaker 1: as well as the federal government, and they tried a
Speaker 1: number of ways to get a handle on the problem.
Speaker 1: States started by placing what we're called or recaps, and
Speaker 1: by the nineteen teens most states limited annual interest in
Speaker 1: between eighteen and forty two. So this seems a lot
Speaker 1: fairer than a hundred and right, um, and it would
Speaker 1: stop people from getting trapped in sustainable cycles of debt,
Speaker 1: but it also kind of wiped out the entire short
Speaker 1: term loan industry. Um. See. The only way that these
Speaker 1: loans could work was by giving relatively small amounts of
Speaker 1: money to people with no credit. By definition, their consumer
Speaker 1: base had a high default rate. A lot of people
Speaker 1: would just completely fail to pay their debts, so the
Speaker 1: only way the industry could be profitable was to charge
Speaker 1: these high rates of interest. When the government capped that,
Speaker 1: loan sharks didn't go away, but they did change. The
Speaker 1: endless debt cycles and ballings out were replaced by mafia
Speaker 1: men who would offer illegal loans and ensured repayment by
Speaker 1: beating the ever living ship out of clients who failed
Speaker 1: to pay. So that's kind of problem, the solving the
Speaker 1: problem forever, um now, So so you're so you're saying
Speaker 1: this is all stemming from the fact that people don't
Speaker 1: get paid by the day as much as to you
Speaker 1: every other week or every month or whatever. Yes, And
Speaker 1: that's like one of the things you have to remember
Speaker 1: at the core of this issue is that no matter
Speaker 1: how fucked up the payday loan industry is and seems,
Speaker 1: people still need them, um because like they you know,
Speaker 1: they have no money for nine or ten days and
Speaker 1: their kid has to go to a doctor or like
Speaker 1: they have. Isn't that something that we should tackle? It
Speaker 1: seems like yeah, yeah, certainly, it certainly seems like it, um,
Speaker 1: But we're not, um, why would we tackle systemic problems
Speaker 1: in our economic system as opposed to covering up a
Speaker 1: band aid, or like, like your your knee gets gased
Speaker 1: open and you're just like worrying about the blood trickling
Speaker 1: on your ankle and not actually the wound. It's that's
Speaker 1: a gory sorry, Mr Fiddles, it is a gory situation. Now.
Speaker 1: I started by saying that, like the mob guys would
Speaker 1: beat the ship out of people for not paying loans,
Speaker 1: and that did happen. But one of the weird things
Speaker 1: about this story is that the majority of evidence suggest
Speaker 1: us that mafia lenders weren't actually all that bad by
Speaker 1: the standards of paid a loans um like the more
Speaker 1: legitimate lenders. They made their money by locking people into
Speaker 1: an endless cycle of debt, but they like didn't actually
Speaker 1: beat people up all that often. Uh, and their interest
Speaker 1: payments were kind of low compared to like when legitimate
Speaker 1: companies would offer paid a loans. So I found a
Speaker 1: great quote on exactly how sort of like physical violence
Speaker 1: in the loan industry really did work. You know, the
Speaker 1: stereotype is the mob guy breaking your legs from not
Speaker 1: paying a debt. That wasn't super common to happen. According
Speaker 1: to scholarly comments, quote. The debt or is motivated to
Speaker 1: pay not only because his body has pledged as collateral,
Speaker 1: but also because he wants to preserve his only line
Speaker 1: of credit. The creditor, in turn, wants to avoid the
Speaker 1: expense of hiring a nutcracker to collect the debt. As
Speaker 1: a nineteen sixties Chicago juice man that's what they called
Speaker 1: people who beat people up for loans explained the cost
Speaker 1: of hiring a thug to break a deadbeat's leg might
Speaker 1: exceed the sum he owned owed, and with a broken leg,
Speaker 1: it would be hard for the debtor to own money
Speaker 1: and catch up on his payments. Imposing a less stabilitating
Speaker 1: penalty usually made more sense. A finger deliberately slit open
Speaker 1: with the razor blade never kept anybody from working and
Speaker 1: serves as a constant reminder of the next payday. But
Speaker 1: the best strategy this loan shark consisted was to select
Speaker 1: customers carefully and not load them with excessive debt. When
Speaker 1: business is good in a smoothly run operation, muscle is
Speaker 1: seldom needed for collections. One of the few empirical studies
Speaker 1: of a mob loan shark operation confirms this view, based
Speaker 1: on FBI case files. The study reported that interviews with
Speaker 1: a hundred and fifteen customers of the loan business turned
Speaker 1: up only one debtor who had been threatened. None were beaten.
Speaker 1: So I mean, I feel like I've watched enough Sopranos
Speaker 1: to know that's not true, But um, I'm just kidding now.
Speaker 1: I think it's also very interesting that it went from
Speaker 1: psychological manipulation and torture to the complete opposite, just like
Speaker 1: pure physical Yeah, isn't that fascinating? That's fascinating, Like it's
Speaker 1: weird how that happens. How Like when the businesses are
Speaker 1: completely legal and the lead system allows them, they psychologically
Speaker 1: torture you in charge utterly ruinous rates of debt or
Speaker 1: of interest, and then when the business is illegal, the
Speaker 1: interest rates go down, but they have to slice open
Speaker 1: your finger to get you to pay sometimes, and like
Speaker 1: that's that, like you you have to pick one of
Speaker 1: the two, like, because people are going to get these
Speaker 1: loans either way. I mean it's a little bit still
Speaker 1: psychological because you said something like, um, cutting a finger,
Speaker 1: like it will be a concert reminder of your debt
Speaker 1: because it's like on your hand. So yeah, that's so
Speaker 1: fucking manipulative it is. I mean I gotta say, I
Speaker 1: kind of I'm more on the mob's side than the
Speaker 1: legitimate lenders. Same here, no, same here, I think I
Speaker 1: think ultimately, even though the mobsters are probably better off,
Speaker 1: like financially, I feel like for the majority of the time,
Speaker 1: mobsters kind of came from lower class or like middle
Speaker 1: class or like you know what I mean, people are understanding. Yeah,
Speaker 1: they they're the they have a better understanding of maybe
Speaker 1: the desperation they feel or like the trials and gup
Speaker 1: relations of not having a lot of money. And also,
Speaker 1: I mean, Tony Soprano is a complicated character. You know, um,
Speaker 1: this is going to turn into this as apparents episode,
Speaker 1: Tony Soprano put in a forty hour work week every week.
Speaker 1: You know. Yeah, he wasn't. He wasn't slacking off like
Speaker 1: certain unnamed presidents. I mean like he was working around.
Speaker 1: Sure he was sucking around and like whatever. But at
Speaker 1: the same time, he's a busy man. And I think
Speaker 1: I think that's a difference. I think that's a difference because, uh,
Speaker 1: legal operation is usually run by rich people that usually
Speaker 1: don't lift a finger for their money. Maybe they don't anymore,
Speaker 1: maybe they have in the past, where their daddy did
Speaker 1: or whatever. But tony soprano working guy. Yeah, that's why
Speaker 1: I have a lot more respect for like a drug
Speaker 1: dealer than one of these guys who worked at like
Speaker 1: a mutual fund or whatever scanning people out during the
Speaker 1: financial crash, someone who was like, we're going to as
Speaker 1: fargo selling people bad loans. Like, at least the drug dealer,
Speaker 1: Like there, you know, for one thing, it's an honest transaction.
Speaker 1: You want some heroin, you get some heroin. And for
Speaker 1: another thing, like they're out there pounding the ground, they're working, working,
Speaker 1: working the floor, so to speak. They're putting on some risk.
Speaker 1: I I gotta respect that more than you respect the
Speaker 1: financial criminal. So I feel the same way about the
Speaker 1: mafia mafia in this case, Like, yeah, maybe you're cutting
Speaker 1: open some people's fingers, but at least that's honest finger
Speaker 1: cutting work. Yeah, that's honest finger cutting work. Honest finger
Speaker 1: cutting work. Now, by the nineteen sixties, it was not
Speaker 1: uncommon for mafia lenders to offer annual aprs of under
Speaker 1: two for their short term loans. FBI studies also reported
Speaker 1: surprisingly low rates given the industry, often around a hundred
Speaker 1: and fifty a p R in many cases, mob loans
Speaker 1: were less than half as expensive as modern payday loans. UH. Now,
Speaker 1: as I stated, violence was not the norm, but cases
Speaker 1: did occur that we're shocking enough to spark public outrage.
Speaker 1: In one incident in nineteen thirty five, a young clerk
Speaker 1: was beaten within an inch of his life for welching
Speaker 1: on a debt. This launched a series of investigations by
Speaker 1: Thomas Dewey, the governor of New York. Twenty seven people
Speaker 1: were arrested for violent collection of debts. Throughout the nineteen
Speaker 1: forties and fifties, U S. States cracked down on mafia
Speaker 1: loan sharks, and unfortunately, they did so by doing the
Speaker 1: opposite of what they'd done to kill the non violent
Speaker 1: loan sharks, raising ursurycaps and allowing legal lenders to charge
Speaker 1: exorbitant interest rates once again. So by the nineteen seventies,
Speaker 1: deregulation of the paid a loan industry had largely starved
Speaker 1: the mob out of the business and allowed a thriving
Speaker 1: new industry of perfectly legitimate companies charging five and six
Speaker 1: interest for short term loans. UH. Individual states realized pretty
Speaker 1: quickly that this was even worse than letting the mob
Speaker 1: give people loans instead. They started to change their laws
Speaker 1: back and reintroduced caps to interest rates. But the big
Speaker 1: banks had gotten a taste of how much money paid
Speaker 1: A loans could provide. They brought out their lawyers. In
Speaker 1: the nineteen seventy eight, the Supreme Court ruled on a
Speaker 1: case in Minnesota. That state had had imposed strict laws
Speaker 1: on the interest that could be charged on loans, but
Speaker 1: banks from other states with hired limits had started coming
Speaker 1: in and operating paid a loan businesses, charging the interest
Speaker 1: rates of their state of origin. When the case hit
Speaker 1: the Supreme Court, the Supreme Court ruled that this behavior
Speaker 1: was totally fine, and from now on banks would partner
Speaker 1: with short term lending companies to charge outrageously high interest
Speaker 1: rates for short term loans, regardless of what the original
Speaker 1: individ or what the individual states themselves had on the books.
Speaker 1: As a result of this, certain states like Kansas and
Speaker 1: Nevada became the hubs for increasingly enormous paid a lending businesses.
Speaker 1: So that's cool. What a twist, Yeah, what a twist? Twist. So,
Speaker 1: by the early nineteen nineties, the paiday loan industry was
Speaker 1: growing at an exponential rate. It had gone from the
Speaker 1: purview of shady but ultimately human mobsters to a multibillion
Speaker 1: dollar business run by gigantic, faceless corporations that hid behind
Speaker 1: the multitude of names and constantly moved across state lines
Speaker 1: to make their questionably legal behavior harder to prosecute. Again,
Speaker 1: it's kind of a mark of where this story is
Speaker 1: going that we're going to look back on the old
Speaker 1: days of the mafia cutting up people's fingers, is yeah,
Speaker 1: the good old days of payday lending. Yeah. I mean
Speaker 1: it's crazy that throughout like basically over a century of
Speaker 1: this one's ever been like, let's just let's just get
Speaker 1: to the root of the problem, Like what why do
Speaker 1: people keep wanting money or needing money? Rather, it's because
Speaker 1: of the the just the time between their paychecks. And
Speaker 1: that's infuriating that that hasn't even been addressed. It's just
Speaker 1: the payday loan fucking clusterfuck keeps getting more clusterfucking yeah,
Speaker 1: and nobody, nobody ever even talks about like, well, maybe
Speaker 1: we should reform how workers get paid because maybe people
Speaker 1: deserve to get their money the day that they earn it,
Speaker 1: because why wouldn't they, Like it's like the only reason
Speaker 1: it seems weird to suggest that change to us is
Speaker 1: because it's not how it works. Um. But like if
Speaker 1: you try to think back on it, like, well, why
Speaker 1: does the company get the value of your labor immediately
Speaker 1: but you have to wait weeks or months to get
Speaker 1: the money that you know, when you put it that way,
Speaker 1: it's sucking bullshit. It's total bullshit. Like what if I
Speaker 1: what if I work an an immense amount of work
Speaker 1: and then I die the next day, I have no
Speaker 1: like you know what I mean, Like they have benefited,
Speaker 1: but I have not exactly you should be able to
Speaker 1: and I'm owed on my deathbed. Yeah, that's bullshit. They
Speaker 1: got to bury a bunch of money in your casket,
Speaker 1: which isn't going to help you any and it'll probably
Speaker 1: I mean, like, I mean, okay, I'm freelanced. I've never
Speaker 1: actually had like a salary full time job. But the
Speaker 1: I like, I work on a day rate when I
Speaker 1: work in production or like whatever. As a filmmaker, you
Speaker 1: get like a standard rate sometimes, but even that, it's
Speaker 1: it's like weeks after the job is over that you
Speaker 1: finally get paid. And I'm wondering, like maybe there are
Speaker 1: some things that are like, well the budget, Like I don't,
Speaker 1: I don't know, man, what's the I don't think there's
Speaker 1: no there's no solving this, there's no Oh my god. Yeah,
Speaker 1: there there are some companies there. There's one company based
Speaker 1: out of the Bay Area that's trying to like reform
Speaker 1: the system. And the way they're trying to do it
Speaker 1: is by essentially, if you work for a company like
Speaker 1: uber or lift um, you sign up a thing with
Speaker 1: them and basically they pay you what you earn when
Speaker 1: you earn it, and they take like one percent, like
Speaker 1: a flat rate. Uh, and you get your money instantly,
Speaker 1: and then when the company pays you, the money goes
Speaker 1: to the company that has been giving you your money.
Speaker 1: So like essentially um. Yeah, So like there are attempts
Speaker 1: like it also, is it because of taxes? I don't know,
Speaker 1: because I can't. It can't be in most cases because,
Speaker 1: like you, I've spent most of my working career as
Speaker 1: a freelancer, usually getting paid four to six weeks after
Speaker 1: I do the work, uh, and they don't take any
Speaker 1: taxes out. That's like how freelancing works. So I think
Speaker 1: it's just a system that was set up because it
Speaker 1: really benefits the companies that employ us um and that
Speaker 1: has been going on for so long that most people
Speaker 1: don't ever think about how messed up it is that
Speaker 1: they've got to wait a month to get their money. Yeah, yeah,
Speaker 1: you're right. But then at the same time, I'd like,
Speaker 1: I mean, maybe I've worked on too many indie indie
Speaker 1: film shoots, but like when I hire someone as a
Speaker 1: sound person or whatever, I try to pay them, like,
Speaker 1: if not after the workday, like within the next morning
Speaker 1: or the day after that. So it's like, I feel
Speaker 1: like when you're not married to the system, when you're
Speaker 1: not thinking this is the only way it has to be,
Speaker 1: then you're more open minded. Like I've never had a
Speaker 1: salary job where I had to wait a couple of weeks.
Speaker 1: In my mind, I was like, well, they worked for
Speaker 1: me all for twelve hours. Today I will pay them,
Speaker 1: you know what I mean. So I think maybe we're
Speaker 1: just maybe the majority of people are just they think
Speaker 1: this is the way it has to be. Yeah, and
Speaker 1: that's true. We've got to break Freeman. It's not I
Speaker 1: mean to go back to the noble drug dealer. You know.
Speaker 1: When I was when I was a very poor young man,
Speaker 1: the only friends of mine, who ever had cash on
Speaker 1: hand were the ones who made their living selling drugs,
Speaker 1: because you get paid as soon as you provide a
Speaker 1: service if you're if you're a drug dealer, yet another
Speaker 1: reason all of business should take a hand out of
Speaker 1: the leaf out of the book of dealing drugs. What
Speaker 1: if everything worked like drugs? Okay? But then The Wire
Speaker 1: to bring back television? I mean not, it doesn't end
Speaker 1: well for a lot of people. I only watched the
Speaker 1: first episode of The Wire, but it seemed like it
Speaker 1: was going pretty well, you're wrong, Well, you're wrong. You
Speaker 1: need to watch the Does it does it go to
Speaker 1: a dark place that's unfortunate? Well, first of all, it's
Speaker 1: an amazing show, but also, like I understand, mean, I
Speaker 1: keep bringing up TV as because I think it's funny
Speaker 1: to like think of my only source of information about
Speaker 1: drugs or or the mafia are from television. But at
Speaker 1: the same time not false. Um, but I do think
Speaker 1: it is a very insightful way to understand. I don't know, like,
Speaker 1: how else do we learn just from film and television?
Speaker 1: And that's how the the word gets out? Yeah, that's uh.
Speaker 1: I think this episode is just trying to tell you
Speaker 1: all that just give drug dealing a shot. I mean
Speaker 1: that that too. I was going to say, burn the
Speaker 1: system down, but you know what, our listeners shouldn't burn down, Sharine.
Speaker 1: Ad breaks the wonderful companies that support our our our
Speaker 1: show with products and services, don't. What if a payday
Speaker 1: loan ad came on right after this, then I'm sure
Speaker 1: it's a completely ethical payday loan company, just like completely
Speaker 1: ethical company Coke Industries, who advertised on our show, Oh no,
Speaker 1: we love here. Sharine. You were just telling me the
Speaker 1: other day, Robert, I really have a lot of crude
Speaker 1: oil that I need refined. Do you know anyone who
Speaker 1: can refine my crude oil and put out more than
Speaker 1: twice as much carbon into the atmosphere as other crude
Speaker 1: oil refineries? And I said, I said, I know exactly.
Speaker 1: And and Coke Industries that that's your that's your go to.
Speaker 1: You're not wrong, You're not wrong. You know what else
Speaker 1: isn't wrong? Products? We're back, we're talking about payday loans.
Speaker 1: When we when we last uh finished at least reading
Speaker 1: into the script. We've gotten to the point where the
Speaker 1: Supreme Court in nineteen seventy eight ruled that banks could
Speaker 1: essentially charge whatever interest rates were legal in their states
Speaker 1: of origin, but extend the loans to people in other
Speaker 1: states that put on, you know, different caps on interest rates. Um.
Speaker 1: And this is sort of responsible for the meteoric rise
Speaker 1: of the modern payday loan industry. So by the late
Speaker 1: nineteen nineties, rates of between two hundred and five pent
Speaker 1: had become the norm. Lenders began tacking on additional service
Speaker 1: fees to get around limits on the amount of interest
Speaker 1: they could charge. By the early two thousand's, eleven million
Speaker 1: Americans spent an average of five hundred dollars a year
Speaker 1: on fees alone. The situation was already out of control,
Speaker 1: but not so out of control that an extremely gifted
Speaker 1: grifter couldn't make it out of control. Here and this
Speaker 1: brings us to a little guy named Scott Tucker. You
Speaker 1: ever heard of Scott Tucker? Shearine, it sounds like a motherfucker.
Speaker 1: Scott Tucker is a motherfucker. Uh. He was originally going
Speaker 1: to be the subject of this entire episode. Um, he's
Speaker 1: not the father of payday loans, but I think it
Speaker 1: might be accurate to call him like the stepfather who
Speaker 1: moves in when you're already sixteen and shares his Miller
Speaker 1: Tall Boys with you. He's the that guy of of
Speaker 1: feel like, look at you funny when you work shorts
Speaker 1: in the house and like yes, yeah, yeah, And he
Speaker 1: never he never quite crosses the line. But in a way,
Speaker 1: just making the comments is crossing the line. But like
Speaker 1: you can't do anything actionable because your mom's really into him.
Speaker 1: He's that. He's that guy of the payday loan industry.
Speaker 1: Like you maybe like got some food on your next
Speaker 1: to your lip, and he like just us his thumb
Speaker 1: to take it off without saying anything to you. And yeah,
Speaker 1: you have goose bumps everywhere and you have to keep
Speaker 1: it to yourself for the rest of your life. And
Speaker 1: then maybe they have a kid, and then that kid
Speaker 1: has no idea that his dad is a fucking creep.
Speaker 1: Yeah he that that you you really have a field
Speaker 1: for Scott Walker. Uh he said, he said Scott Walker,
Speaker 1: but Scott Tucker. Sorry, that's another piece of ship named Scott.
Speaker 1: Not a great name. Not a great name. Scott Freeze
Speaker 1: the Way to Beat. That's an advertising for tape. Scott
Speaker 1: was born on May fifth, nineteen sixty two, in Kansas City, Missouri.
Speaker 1: He attended Rockhurst High School in Kansas State University, where
Speaker 1: he studied business administration. Two years into that degree, he
Speaker 1: decided he'd learned enough about business, so he dropped out
Speaker 1: of school and went into business for himself. In nineteen eight,
Speaker 1: he borrowed fifty thousand dollars from the American Bank of
Speaker 1: Kansas City, offering what he said was his new Porsche
Speaker 1: as collateral. Now, the reality is that Scott did not
Speaker 1: own a Porsche. He had briefly, but he'd sold it
Speaker 1: in order to fund his scams and just lied to
Speaker 1: the bank that he still had it. Tucker's business plan
Speaker 1: was to use the money he acquired from this real
Speaker 1: loan to fund a fake loan business. According to the
Speaker 1: Center for Public Integrity quote, while a partner in Oregon
Speaker 1: ran newspaper and magazine ads throughout the country offering commercial loans,
Speaker 1: Tucker posed as the president of a seemingly high powered
Speaker 1: investment bank in Overland Park called Chase, Morgan, Stearns and Lloyd.
Speaker 1: The operation was a fraud, collecting more than a hundred
Speaker 1: thousand dollars in advanced fees from at least fifteen borrowers
Speaker 1: without providing any loans. So his first loan business doesn't
Speaker 1: actually give people loans. He's he's just stealing money, um
Speaker 1: and and kind of stealing the name of JP Morgan
Speaker 1: and Chase, as well as bear Stearns and Lloyd's of London.
Speaker 1: But I don't feel so bad about that because all
Speaker 1: of those companies are terrible. Um, but that is what
Speaker 1: he's doing now. Tucker wasn't only do you only have
Speaker 1: me on to talk about like shitty white men grifters. Yes,
Speaker 1: that's why I'm here. Yes, you're my You're you're you're
Speaker 1: my shitty white men grifters. Get I mean, immediately after
Speaker 1: this episode, we're gonna take talk about Jacob wool again.
Speaker 1: So I cannot wait to bring up that motherfucker again.
Speaker 1: So Tucker wasn't only a major crimes kind of guy.
Speaker 1: In nineteen eighty nine, while he was in the middle
Speaker 1: of his stealing money from people and pretending to run
Speaker 1: a loan company business, he got in trouble for writing
Speaker 1: bad checks to a moving company he hired to move
Speaker 1: loads of used furniture for another one of his businesses.
Speaker 1: This kind of sloppiness ensured that Tucker was quickly caught
Speaker 1: committing tens of thousands of dollars in fraud. He was
Speaker 1: convicted in nineteen ninety one and spent a year in prison. Now,
Speaker 1: the next five years of Tucker's life are a little
Speaker 1: bit of a mystery. He either kept his nose clean
Speaker 1: and obeyed the law for half a decade, or he
Speaker 1: got up to a series of smaller scale grifts and
Speaker 1: he wasn't caught for them. Whatever the truth, by nineteen
Speaker 1: ninety seven he was ready to get back into the
Speaker 1: major crimes game. That year he met Charles Hallinan generally
Speaker 1: referred to as the godfather of payday loans, although that
Speaker 1: isn't quite true, as we've gotten over already. But Helenan
Speaker 1: was wildly successful at running a series of shady quasi
Speaker 1: legal companies operating under the lending laws of one state
Speaker 1: while offering loans in completely different states. Because Khan men
Speaker 1: instinctively recognized their own, Halenan instantly liked Tucker. The two
Speaker 1: became fast friends, and Helenan saw the young man as
Speaker 1: a protege. He agreed to loan Scott Tucker five thousand
Speaker 1: dollars to create a payday lending company. Tucker would be
Speaker 1: president and run the business from Overland Park, Kansas. As
Speaker 1: part of a deal, Tucker signed a contract promising not
Speaker 1: to create any competing paid A loan companies. I'm sure
Speaker 1: that that's gonna go. Well mm hmm, yeah, two con
Speaker 1: men just shaking hands there, so what a pure friends
Speaker 1: with a pure friendship. I am sure neither of them
Speaker 1: will take advantage of the other. Let's read the next paragraph.
Speaker 1: Helen and and Tucker inked their deal in September of nine.
Speaker 1: Tucker instantly started a new company see okay management and
Speaker 1: direct violation of the contract he just signed with his mentor.
Speaker 1: He began shuffling assets over from the company he created
Speaker 1: with Helenan to his new business. Next, Tucker built up
Speaker 1: a network of dummy corporations based out of Carson City, Nevada,
Speaker 1: which he could use to receive money from the network
Speaker 1: of paid A lending businesses he established at the same time.
Speaker 1: Within a couple of weeks, Tucker was running through a
Speaker 1: convoluted series of businesses lending companies with names like Cash Advance,
Speaker 1: Preferred Cash Loans, and United Cash Loads. For years, Tucker
Speaker 1: kept Helenan in the dark about the fact that he
Speaker 1: basically used the other man's money to build up a
Speaker 1: paid a loan Empire, the he was the soul beneficiary of.
Speaker 1: He called his friend every Saturday and gave him updates
Speaker 1: on their company, which was actually the fakest of his
Speaker 1: fake companies. He assured the other man that c Okay
Speaker 1: Management was just a part of their new lending service.
Speaker 1: The reality, however, is that Tucker had done something new
Speaker 1: and completely unprecedented in the world of scammy payday loans.
Speaker 1: The standard for Helenan and other paid A lenders was
Speaker 1: to base your company in states like Nevada and Kansas
Speaker 1: that allowed cripplingly high rates of interest to be charged. Then,
Speaker 1: thanks to the Supreme Court, they could offer loans to
Speaker 1: people in states like California was stronger laws in place,
Speaker 1: but even the states with the loosest ursory laws still
Speaker 1: had some laws about that kind of thing, and some
Speaker 1: laws was too many laws for Scott Tucker. He realized
Speaker 1: that Native American reservations offered a unique opportunity. They got
Speaker 1: to pass loan. Yeah, he's suffered enough by the hands
Speaker 1: of a white man. No, no, they have not. Now
Speaker 1: they're getting sucked into one of his grifts. For literal
Speaker 1: he's on the dollar. Yeah, yeah, So Native American reservations
Speaker 1: could pass their own laws about like ursory levels and stuff.
Speaker 1: And Scott Tucker found that if he basically convinced reservations
Speaker 1: without laws about these things to let him operate companies
Speaker 1: out of their land and offered them a token bribe,
Speaker 1: well then he could really really get into fucking over
Speaker 1: some poor people. So, yeah, he's an innovator. You love innovators.
Speaker 1: That's what built this country. I love innovators. I mean,
Speaker 1: I mean this country was literally built by innovative people
Speaker 1: finding innovative ways to take advantage of Native Americans. So
Speaker 1: like he's really, he's he's just following the steps of
Speaker 1: his ancestors. Really, yeah, yeah, Scott Tucker, the junior, junior, junior,
Speaker 1: the fourth and fifth or whatever. He's just following in
Speaker 1: the footsteps of his shitty, fucking scum relatives. It's a
Speaker 1: noble tradition, a noble, noble, noble mr who I mean,
Speaker 1: look all Tucker is doing, like sharene p R is
Speaker 1: clearly not enough to be charging people for short term loans.
Speaker 1: So he had to find some way to get that
Speaker 1: number above se and using Native American Reservations was the
Speaker 1: only way to do it. Like that seems perfectly ethical
Speaker 1: to me. Um, I'll be right back. I'm just gonna
Speaker 1: go dump of this when they're really it's fine, I'm
Speaker 1: just gonna dump out of the balcony. Yeah, and I'm
Speaker 1: just gonna set up a little business on a Native
Speaker 1: American reservation. But also, but also it's like, how much
Speaker 1: money is enough for these fox? You know what I mean?
Speaker 1: Like you're already rich, You're already benefiting and and profiting
Speaker 1: off of people that are so much less fortunate than
Speaker 1: you and less privilege than you. Look, how much is enough?
Speaker 1: Why can't these greedy fox just just well be fucking satisfied.
Speaker 1: We'll get to why he couldn't be satisfied with the
Speaker 1: amount of money at a little bit charing. Because Scott
Speaker 1: Tucker's got got some big plans from the money he's
Speaker 1: grifting out of people. I don't wanna, don't want to
Speaker 1: make it think like he doesn't have he doesn't have
Speaker 1: some ambitions here, so investing in becoming a DJ or
Speaker 1: something or like getting kind of he's does the very
Speaker 1: rich person equivalent of becoming a dj. Um. But we'll
Speaker 1: get to that in just a second. So, according to
Speaker 1: the Kansas City star. Tucker's businesses quote operated under brand
Speaker 1: names including a marilone Cash Advance, one Click Cash, United
Speaker 1: Cash Loans, and five hundred Fast Fast Cash. In addition
Speaker 1: to steep interest rates, authorities said consumers were tricked by
Speaker 1: the terms of the loan through renewals and fees. Five
Speaker 1: hundred dollar loan could result in the borrow we're owing
Speaker 1: nineteen hundred and twenty five dollars. So that's the kind
Speaker 1: of like level of grift we're we're talking about, Like
Speaker 1: your kid gets a medical bill and you need five
Speaker 1: hundred bucks to cover the debt, and then you know,
Speaker 1: in a month or two, you wind up owing two
Speaker 1: grand to Scott Tucker because you don't know how to
Speaker 1: read a contract act as well as Scott Tucker's lawyers
Speaker 1: know how to write one. Um, and because he's operating
Speaker 1: out of Native American land, it doesn't matter what the
Speaker 1: laws are in your state. UM. Yeah, so that's fun.
Speaker 1: Over the years, Tucker turned to five hundred thousand dollar
Speaker 1: investment into a two billion dollar a year business with
Speaker 1: more than four and a half million annual customers. This
Speaker 1: meant his companies accounted for roughly of the eleven million
Speaker 1: Americans who used paid A loans. Now. Tucker did, of
Speaker 1: course attract legal attention, but it wasn't immediately clear that
Speaker 1: Scott Tucker was actually behind any of his companies. Regulators
Speaker 1: wound up fighting his front businesses, never realizing that they
Speaker 1: were all essentially disposable shell companies arms of the same octopus. Now.
Speaker 1: Kansas was the first state to attempt to do something
Speaker 1: about one of Tucker's companies, a paid A lender called
Speaker 1: cash Advance back in the early aughts. They went after
Speaker 1: it for deceptive practices that led to Kansen's illegally being
Speaker 1: charged almost eight interest in short term loans, according to
Speaker 1: the Center for Public Integrity. Quote Danny Volpat, the lead
Speaker 1: attorney in the case for Kansas Bank Commission n says
Speaker 1: he never knew that Tucker, living and working in the
Speaker 1: same state, was actually behind the paid A lenders he
Speaker 1: battled for more than two years. Will Pat settled with
Speaker 1: one of Tucker's shell companies in Nevada, a Shell but
Speaker 1: no longer exists. Tucker quickly abandoned the trade name cash
Speaker 1: Advance for these reasons. Bill Pat says it's unclear that
Speaker 1: Tucker would violate the settlement agreement if he started lending
Speaker 1: in Kansas again. So you see, because of the way
Speaker 1: all these shell companies are set up and where they're located,
Speaker 1: it's kind of impossible for anyone to go after him,
Speaker 1: like state level governments. It's the same reason why like
Speaker 1: a drug enterprise, you would want to have people located
Speaker 1: in different states doing different things, because it disrupts law enforcement,
Speaker 1: like it, it just makes it impossible to catch. So
Speaker 1: Tucker did keep lending in Kansas, just under new companies
Speaker 1: with new names. His businesses were all run from Overland
Speaker 1: Park in a massive six person office, but in order
Speaker 1: to keep up the illusion that these were Native American
Speaker 1: run businesses, Tucker's employees were given daily weather weather reports
Speaker 1: from the tribal lands where they were supposed to be based.
Speaker 1: This way they could more effectively lie to borrowers. It
Speaker 1: took until two thousand five for any state authorities to
Speaker 1: even learn that Scott to even learn the name Scott Tucker.
Speaker 1: This is because yeah, well it's because he hired an
Speaker 1: actor to pretend to be the CEO of his business
Speaker 1: and to register all the show. Yeah yeah, now fucking
Speaker 1: love like the beginning of like well, actually no, JT.
Speaker 1: Lee Roy was nothing like that. But but what is
Speaker 1: it with I'm just mad? Yeah, well, I mean I
Speaker 1: always get so mad on your fucking show, Robert, I
Speaker 1: mean always mad. But Sharine, does it change your mind
Speaker 1: to know that it's not illegal to do that in
Speaker 1: the state of Nevada. I don't care about what illegal
Speaker 1: or not in this fucking country. Obviously we're fucked. Yeah. Yeah,
Speaker 1: and his Tony Soprano. Yeah, it's always not real. Yeah,
Speaker 1: it's it's amazing that Tony Soprano was breaking the law.
Speaker 1: But Scott Tucker wasn't. I mean he was, actually, but
Speaker 1: at this point he wasn't. Um So when this con
Speaker 1: came to light in the color Colorado Attorney General subpoena
Speaker 1: and him, Tucker was not charged with any crime because
Speaker 1: it wasn't illegal to have a fake person pretend to
Speaker 1: be this CEO of the company. It was just some
Speaker 1: guy he hired. Yeah, it was just some schmuck. He
Speaker 1: just needed a name. Would and what would he do?
Speaker 1: Whould just like appear at places that Tucker were supposed
Speaker 1: to be at. No, No, it wasn't even that detailed.
Speaker 1: He would just register, like sign his name when they
Speaker 1: were registering the new companies and like, yeah, like it
Speaker 1: was that simple, Like he just wanted a name that
Speaker 1: wasn't Scott Tucker on all this stuff, so it was
Speaker 1: that much harder to come after him. Yeah. So uh.
Speaker 1: Years later, one of Tucker's former employees laid out under
Speaker 1: oath exactly how many of these shell businesses Tucker operated quote.
Speaker 1: In addition to owning one Click Cash, c Okay also
Speaker 1: owned or was affiliated with a marylan Us, Fast Fast Cash,
Speaker 1: United Cash Loans, Preferred Cash Loans, and Internet Cash Advanced Marketing.
Speaker 1: I understand that there were at least five hundred Internet
Speaker 1: based paid A lending companies that are currently affiliated with
Speaker 1: one of the five companies mentioned above owned by clk um. So.
Speaker 1: This employee was witnessed to some of the unspeakable human
Speaker 1: cost ofers empire of debt. He later reported under oath,
Speaker 1: I often saw a customer loan of three hundred dollars
Speaker 1: turned into a nine hundred dollar debt in a very
Speaker 1: short period of time due to interest rollover in late fees.
Speaker 1: He estimated that six of the money he brought in
Speaker 1: during a given month came from the interest rollover in
Speaker 1: late fees rather than the customer paying down the principal balance.
Speaker 1: So again, the business isn't people paying down their balance.
Speaker 1: The business is conning them into paying extra money through
Speaker 1: late fees and service charges and whatnot. And for a
Speaker 1: very long time, Tucker's paid a lending business did spectacularly
Speaker 1: well for him. He netted somewhere around four hundred million
Speaker 1: dollars and that's just the money we can verify. He
Speaker 1: bought a one point three million dollar ferrari, an eight
Speaker 1: million dollar house in Aspen, and a one point eight
Speaker 1: million dollar house in Kansas. Most of his ill gotten riches, however,
Speaker 1: were spent on his true passion. You want, I guess
Speaker 1: you want to guess what it is sharing? You want
Speaker 1: to guess what what what this guy's equivalent of becoming
Speaker 1: a DJ is. Um let me think maybe it's gin
Speaker 1: or like sometimes or No. No, he wanted to be
Speaker 1: a arcade master. No, I mean that is kind of
Speaker 1: close because a lot of arcades have racing games, and
Speaker 1: Scott Tucker wanted to be a race car driver. What
Speaker 1: that's the most That's the widest dream I've ever heard of. Yeah,
Speaker 1: if you look him up on Wikipedia, his name is
Speaker 1: even given as stop Scott Tucker parentheses racing driver um,
Speaker 1: and he wasn't you say it's the whitest thing ever.
Speaker 1: It's it's it's really not um because he doesn't get
Speaker 1: involved in the honest, god fearing beer soaked kind of
Speaker 1: races that like NASCAR fans watch. He did prestige, fancy
Speaker 1: races and like Europe and ship like the Ferrari Challenge
Speaker 1: and the Rolex sports Car Series and the American Laman Series.
Speaker 1: Like he didn't even do like the honest, drunken NASCAR
Speaker 1: rally kind of races like he was. He was really
Speaker 1: in the stupid, fancy, rich guy multimillion dollar cars. Have
Speaker 1: a question, Yes, is this guy married or or with anybody?
Speaker 1: Or is he fun? Yeah? No, he was married to
Speaker 1: some broad What is humanity? What is now? So if
Speaker 1: we just showed me a picture of him, he's gross. Yeah,
Speaker 1: he's a gross looking guy. He's a fucking dru by
Speaker 1: ass motherfucker. His face is like melting on either side. Yeah,
Speaker 1: he looks like like a young Jeff Gordon, if Jeff
Speaker 1: Gordon had wandered too close to a candle. Now, he
Speaker 1: does seem to have been a pretty decent race car driver,
Speaker 1: like at least he won some races, and he was
Speaker 1: Rookie of the Year at one point. I don't think
Speaker 1: he was like super good, but I don't have any
Speaker 1: real ability to rate race car drivers. Um. He seems
Speaker 1: from what I've read, like he was sort of on
Speaker 1: the edge of where he might have been good enough
Speaker 1: to drive professionally if he hadn't had hundreds of millions
Speaker 1: of dollars um. But he probably wouldn't have ever established
Speaker 1: a racing career if he hadn't had hundreds of millions
Speaker 1: of dollars. Now, the term used within the racing community
Speaker 1: for dudes like Scott is a gentleman driver, and that's
Speaker 1: essentially racing lingo for a rich guy who buys a
Speaker 1: really fancy car and is able to become a professional
Speaker 1: race car driver because they're rich for some other reason. Okay,
Speaker 1: so gentleman driver. Scott Tucker was well known within the
Speaker 1: racing community, and he verged on being famous outside of Kansas. Curiously,
Speaker 1: he did no racing inside the state of Kansas and
Speaker 1: seems to have gone out of his way to avoid
Speaker 1: attracting any attention there. Articles I've read that interviewed people
Speaker 1: on the racing scene are mixed about Tucker. Some of
Speaker 1: his fellow racers said that he was very good, but
Speaker 1: Gunner Jannette, who finished runner up to Tucker in a
Speaker 1: twos and ten race, was less positive. Here's this American
Speaker 1: Life quote. Jeanette said he didn't like the manner that
Speaker 1: Chucker Tucker chose to win the championship. He cheated really
Speaker 1: well inside of the rules, which maybe says a lot
Speaker 1: about his character, says Jeannette. Uh. He adds that Tucker
Speaker 1: was a detail oriented racer who found loophole's for the
Speaker 1: first time in series history. He got them to allow
Speaker 1: him to get points in whichever car finished better. It
Speaker 1: was very difficult racing against him, where he would drive
Speaker 1: two cars and basically if one car had an issue
Speaker 1: in the other car finished better, he would get points
Speaker 1: for that, says Jeanette, whose team only fielded one car. Wow,
Speaker 1: So he was a continent in everything you did. That's
Speaker 1: the only thing he knows how to do is be
Speaker 1: a con man. How you doing? How you doing? Their sharing?
Speaker 1: Um My blood is boiling. Let's bring it back to
Speaker 1: the boils. I am. I am going to guess that
Speaker 1: Scott Tucker spent at least as much money on his
Speaker 1: side racing career as it would have taken to replace
Speaker 1: the water systems in Flint, Michigan. When you put it
Speaker 1: that way, When you put it that way, it is
Speaker 1: disgusting what fucking these grifters do. Like, it's not how
Speaker 1: selfish and disgusting of a of a person do you
Speaker 1: have to be deep down to be that fucking greedy
Speaker 1: and selfish? And I'm just pissed. I mean, but the
Speaker 1: alternative sharene is that he wouldn't be able to own
Speaker 1: multiple million dollar Ferraris. And can you imagine anyone being
Speaker 1: happy without that? I mean that is true. I guess
Speaker 1: anyone for every day of the week. So yeah, exactly,
Speaker 1: seen driving the same one on Monday and Tuesday. Yeah,
Speaker 1: like a poor person driving a Ferrari on two consecutive days. Now,
Speaker 1: yeah exactly, like some some kind of fu yeah dirt farmer.
Speaker 1: Now starting a two thousand eight, Tucker began dealing with
Speaker 1: increasing legal threats to his empire. One of them came
Speaker 1: from his old mentor, Hallinan. Halenan claims that around two
Speaker 1: thousand six, Scott's weekly call stopped and we're replaced by
Speaker 1: occasional emails. Halenan sent an accountant over to look into
Speaker 1: their company and found that it had quote essentially been
Speaker 1: ransacked and substantially of all of its assets catch and
Speaker 1: profits diverted. So we realized that this business he'd put
Speaker 1: half a million dollars into funding had basically been hollowed
Speaker 1: out by the guy he thought was his partner, and
Speaker 1: all of the money put into establishing an empire of
Speaker 1: scammy uh payday loan businesses. So helen and sued his
Speaker 1: former business partner, which had the unhappy side effect of
Speaker 1: drawing legal attention towards both men, who up until that
Speaker 1: point had mostly been insulated due to the structure of
Speaker 1: their companies. In October of two thousand eight, and Olaf County,
Speaker 1: Kansas deputy sheriff ticketed Scott Tucker for going eighty six
Speaker 1: miles per hour and a sixty mile per hour zone.
Speaker 1: Here's how a joint investigation between CBS and I Watch
Speaker 1: News described what happened next. Quote Two days later, Tucker's wife, brother,
Speaker 1: sister in law, and sister in law, as well as
Speaker 1: several businesses with ties to the payday loan mogul, suddenly
Speaker 1: donated a total of four thousand dollars to the campaign
Speaker 1: of a candidate for local district attorney, the office that
Speaker 1: prosecutes traffic tickets. Among the businesses that donated a thousand
Speaker 1: dollars to the campaign were to payday loan companies that
Speaker 1: the Miami Tribe of Oklahoma claims to own. Weeks later,
Speaker 1: the ticket was reduced to a proper parking to the
Speaker 1: surprise of the deputy who ticketed Tucker. The charge kept
Speaker 1: Tucker's driving record clean. Wow. Cool cool stuff. Now cool stuff.
Speaker 1: The good news is that this lawsuit with Hallohan, his
Speaker 1: old partner, which was settled out of court, in this
Speaker 1: bribery of a district attorney candidate to get his charges reduced,
Speaker 1: these would wind up being the seeds of Scott Tucker's undoing.
Speaker 1: But before we get to that, you know, we gotta
Speaker 1: get to right now. Um, I was gonna jump out
Speaker 1: of the window after that break or before after Okay,
Speaker 1: I'll do that after okay, Well we are about products.
Speaker 1: We're back. So I actually am really thrilled because I
Speaker 1: like that the undoing of this motherfucker was, in fact,
Speaker 1: it was just their greediness getting the better of them,
Speaker 1: you know what I mean. It's kind of how like
Speaker 1: Ted Bundy got caught because he was driving all times.
Speaker 1: You know, Ted Bundy only got caught by police when
Speaker 1: he was driving stupidly because he doesn't know how to
Speaker 1: drive obviously. Yea. But I mean they're not they're not
Speaker 1: the same type of evil at all. But I'm saying,
Speaker 1: I like when they're undoing is done by them. Yeah,
Speaker 1: I like that too, because it's it's it's this kind
Speaker 1: of thing where like it's not even a serious charge,
Speaker 1: like going twenty six miles over the speed limit. If
Speaker 1: that's your only traffic crime, it's not going to get
Speaker 1: your license taken away or anything like that. Um, you'll
Speaker 1: pay a heavy fee like like fine. But like Scott
Speaker 1: Tucker could afford that ship. Um, he just he just
Speaker 1: it bugged him to not have a perfect driving record
Speaker 1: because he fancied himself this great race car driver. So
Speaker 1: he Yeah, he essentially exposed everything for that, And it's
Speaker 1: that's funny. That's really funny. In two thousand eleven, I
Speaker 1: Watched News published an investigation that marked the first time
Speaker 1: Tucker's fraudule loan Empire was laid out in the open. Now,
Speaker 1: by that point, the I R S and law enforcement
Speaker 1: were already interested in Tucker's business because of the lawsuit
Speaker 1: with hallinan Um and he'd started to claim in public
Speaker 1: that he no longer had anything to do with any
Speaker 1: of his paid a loan businesses. I watch his investigation
Speaker 1: looked into the structure of his bribes to the Kansas
Speaker 1: District Attorney and essentially used that to like lay out
Speaker 1: the structure of his organization. So I'm gonna quote from
Speaker 1: their investigation. Among the companies that gave five dollar campaign
Speaker 1: donations to the prosecutor on the same day as several
Speaker 1: of Tucker's relatives were two tribal businesses, AMG Services and
Speaker 1: M and E Services. AMG Services operates out of an
Speaker 1: office complex and Overlent Park, the same office that Tucker
Speaker 1: lists his own and securities and Exchange commission filings. A
Speaker 1: MG Services pays the property tax on Tucker's eight million
Speaker 1: dollar vacation rental and Aspen, Colorado. According to the county records,
Speaker 1: one of AMG services biggest vendors said in a lawsuit
Speaker 1: that Scott Tucker in two thousand nine was the owner
Speaker 1: and chief officer of A MG Services. Most revealing of
Speaker 1: all bank records showed that Tuck and his brother Blaine
Speaker 1: were the only two people able to sign for four
Speaker 1: paid A lending businesses of one tribe. The tribes may
Speaker 1: only receive a sliver of the revenue from the paid
Speaker 1: A lending business, So all this sort of laid out
Speaker 1: the exact structure of his company, including the fact that
Speaker 1: he was basically bilking these Native American tribes for their
Speaker 1: land and giving them pennies on the dollar. Another class
Speaker 1: action lawsuit from borrowers in California revealed that the exact
Speaker 1: amount that these tribes received was between one and two
Speaker 1: percent of revenue from the loans, which again raked in
Speaker 1: eight or more in interest. Over the years, twenty two
Speaker 1: different states took Tucker to court, with varying degrees of success,
Speaker 1: but a combination of years of lawsuits and dogged reporting
Speaker 1: gradually revealed the true face of Tucker's business. In two
Speaker 1: thousand fourteen, facing increasing legal challenges, Scott's brother Blaine, committed
Speaker 1: suicide by leaping off the top of a parking garage.
Speaker 1: I should not make any jokes about jumping out of windows.
Speaker 1: I've learned well. I mean, a window is not a
Speaker 1: parking garage unless that parking garage has Winna why did
Speaker 1: he do I mean, obviously at this to be a questioned,
Speaker 1: but what was he involved in the business at all? Yeah?
Speaker 1: He both of his brothers were involved in the business,
Speaker 1: and in fact, one of his brothers got in trouble
Speaker 1: because the money that they were making sort of legitimately
Speaker 1: through paid a loans wasn't enough, and so he just
Speaker 1: started buying people's information and uh calling them and telling
Speaker 1: them that they owed him money and having debt collectors
Speaker 1: threatened people who hadn't taken out loans um and one
Speaker 1: of the debt collectors that he hired to do this
Speaker 1: threatened to rape a guy's wife for not paying a
Speaker 1: debt that he didn't owe. And so that guy started
Speaker 1: suing the pants off of Scott Tucker's brothers, and it
Speaker 1: was it was this whole big mess, um, So what
Speaker 1: the fuck? Yeah, they, like Scott Tucker, was mostly focused
Speaker 1: on the basic crimes of of running. So it's it's
Speaker 1: a fucking family of awful of evil. Yeah. Once Scott
Speaker 1: Tucker got successful, he brought his brothers in, and his
Speaker 1: brothers were even less disappointed than him. He had too
Speaker 1: I think two that were involved at least to too
Speaker 1: many Jesus fucking Christ. Yeah, riddance whatever, way, too too many.
Speaker 1: This is the Tucker family is a great case for
Speaker 1: why condom should be free. Um yeah, yeah, I agree. Yeah.
Speaker 1: Uh wait, So after his brother committed suicide, did that
Speaker 1: change anything? Well, there were a number of federal lawsuits
Speaker 1: and investigations underway at that point. So his brother's suicide
Speaker 1: like it ended his brother Blaine's problems, but Scott Tucker
Speaker 1: was still in hot water, and in September of two
Speaker 1: thousand sixteen, the Federal Trading Commission hit Scott Tucker with
Speaker 1: a one point three billion dollar civil judgment, the largest
Speaker 1: ever obtained in a litigated case. Tucker's home and his
Speaker 1: beloved race cars were all repossessed by the government. It's
Speaker 1: a real heartbreaker. Yeah. Yeah, he probably cried about that.
Speaker 1: I'm sure he did. Now that makes me happy, Yeah,
Speaker 1: it does. I feel happy for the first time today.
Speaker 1: If you watch his race car being taken away and
Speaker 1: him crying in its garage, yeah, you get to see
Speaker 1: him be sad in the in Dirty Money, the first
Speaker 1: episode of that Netflix series, because it's like filmed right
Speaker 1: around when the from it was taking all of his ship,
Speaker 1: and it's it's pretty good. It's pretty good. Nice now, uh?
Speaker 1: In two thousand sixteen is like that same year, a
Speaker 1: New York grand jury indicted Tucker and a bunch of
Speaker 1: his business partners for extending deceptive loans, unlawful debt collection,
Speaker 1: and racketeering. The case revealed that Tucker had actually been
Speaker 1: charging even more interest than had previously been known. Some
Speaker 1: of his customers paid upwards of a thousand percent interest
Speaker 1: on their loans. Tho thousand percent. I can't even compute
Speaker 1: that in my fucking plead brain. What the funk A
Speaker 1: thousand percent? No? And it's it's weird that this sentence
Speaker 1: is something I'm going to literally say, But it's definitely
Speaker 1: more ethical to just cut people's fingers open. Like I
Speaker 1: agree with you. I've never agreed with you more. Yeah, yeah,
Speaker 1: wild that that's the case. So Tucker was sentenced to
Speaker 1: sixteen years in prison for running a three point five
Speaker 1: billion dollar criminal empire. That same year, Tucker's mentor, Helenan,
Speaker 1: was convicted of collecting more than four d two million
Speaker 1: dollars in the legal debt. He was sentenced to fourteen
Speaker 1: years in prison. But Shrine, if you're thinking the bust
Speaker 1: of two major payday loan scammers meant the industry itself
Speaker 1: was in for hard times. Think again, were you thinking that?
Speaker 1: I mean, I know that there are still pay dalan
Speaker 1: companies that exist now, so I'm know I know that
Speaker 1: their end, or their demise or their fucking decade of
Speaker 1: vacation time in prison didn't mean the end of the
Speaker 1: payday loan companies. But um, you would think, I mean,
Speaker 1: in in a world that is better than the one
Speaker 1: we live in, you would think that evil people in
Speaker 1: control of payday loan companies would at least learn from
Speaker 1: these evil people's mistakes, right, you would think that. But no,
Speaker 1: I mean they learned from their mistakes and that they
Speaker 1: don't commit as obvious of crimes, but they do continue
Speaker 1: to do the same terrible things. So it didn't it
Speaker 1: didn't lessen It didn't lessen it at all, And no one,
Speaker 1: no one was scared, too scared enough to change their ways.
Speaker 1: And in fact, the region of Kansas that Tucker worked in,
Speaker 1: specifically like around Kansas City, like the wealthy neighborhoods there,
Speaker 1: became sort of a haven for the payday loan industry
Speaker 1: because of local laws in that regard and suddenly, like
Speaker 1: anybody with enough cash to open up a business, UM
Speaker 1: was able to create online payday loan companies that just
Speaker 1: funneled huge amounts of money into neighborhoods like Mission Hill
Speaker 1: in Kansas, around Kansas City, where like the very wealthiest
Speaker 1: people in Kansas lived. I found an article published a
Speaker 1: year after the FTC in Diet at Scott Tucker UM.
Speaker 1: It quotes several attendees at Catholic churches in wealthy areas,
Speaker 1: most notably Saint Anne's and Mission Hills, about sort of
Speaker 1: how the payday lending industry flushed the area with cash.
Speaker 1: Around two thousand and thirteen and fourteen, UM One Worship
Speaker 1: recalled quote. It was most obvious at the school auctions.
Speaker 1: You'd see these clicks of people pulling up in limos
Speaker 1: acting wild, dropping a lot of money on exotic two
Speaker 1: week vacations and the other lavish items up forbidding, or
Speaker 1: all of a sudden, so and so has a brand
Speaker 1: new Range Rover, or so and so family is moving
Speaker 1: into some giant Mission Hills mansion. You see it enough
Speaker 1: times and you start to go, where is this money
Speaker 1: coming from? And on one hand, it's St Anne. This
Speaker 1: is a school in a church that serves Mission Hills
Speaker 1: in Prairie Village, you expect to see nice cars in
Speaker 1: the parking lot, but there was something so sudden and
Speaker 1: so loud about this. It was this bizarre explosion of
Speaker 1: really extreme wealth. So David Hudnall is the journalist who
Speaker 1: wrote this story, and he pressed Reverend Keith Lunsford of St.
Speaker 1: Anne as to whether or not he thought taking money
Speaker 1: gotten from fleecing the poor was a very Christian uh
Speaker 1: thing to engage in. And Reverend Lunsford responded, I don't
Speaker 1: have any firsthand knowledge of anybody at St. An involved
Speaker 1: in the paid a loan industry, So he didn't. It isn't.
Speaker 1: Isn't the church just one big giant paid a loan industry? Yeah? Sure,
Speaker 1: like yeah yeah, and and and a lot of the
Speaker 1: Pentecostal ones as well, um like Krefflo doll uh and
Speaker 1: some of those folks. So I have I have an
Speaker 1: unrelated question. When you have a sec yeah, my hand
Speaker 1: is raised, absolutely, ask away. Okay, thank you, Mr Frizzle. Um,
Speaker 1: I want to ask A while ago you mentioned that
Speaker 1: Tucker worked at a building that had like six hundred employees.
Speaker 1: So the employees at these companies. Are they paid well?
Speaker 1: Are they basically like labor force that are like they
Speaker 1: might as well be factory workers that get paid the
Speaker 1: bare minimum and just to survive, or at the very least,
Speaker 1: are they paying their workers a decent amount to live?
Speaker 1: You know what I mean? Some of them were paid
Speaker 1: very well, Like the ones whose job was to actually
Speaker 1: collect debts generally got a portion of those debts. And
Speaker 1: if they were bringing in tens of thousands of dollars
Speaker 1: a month, they lived very well. Um, As you know,
Speaker 1: when it came to people that weren't as critical to
Speaker 1: the business and weren't involved in as much as the
Speaker 1: shady stuff, I think Tucker probably paid them as little
Speaker 1: as he could get away with, because that's how most
Speaker 1: of these people tend to work. You see. I was
Speaker 1: trying to give him the benefit of the doubt. That
Speaker 1: was like, maybe he at least gave some people job.
Speaker 1: But in the end, um, he is unredeemable, so keep going.
Speaker 1: Sorry for interrupting. I would call him an unredeemable asshole.
Speaker 1: Speaking of unredeemable assholes. After the payday loan industry exploded
Speaker 1: in Mission Hills, St Anne's church managed to meet an
Speaker 1: eight million dollar fundraising goal. UM. One parishioner told the
Speaker 1: Pitch which is the site I found this article and
Speaker 1: that covers local Kansas City news. It presented a moral
Speaker 1: conundrum for St. Anne because there was all this money
Speaker 1: coming into the church through donations and through the auctions,
Speaker 1: and I mean it was huge money. And gradually everybody
Speaker 1: realized that it was money that, if you trace it
Speaker 1: back to its route, came from poor people who were
Speaker 1: being taken advantage of who are being charged crazy interest rates.
Speaker 1: So there were a lot of behind closed doors, hushed tones,
Speaker 1: conversations happening about it. People on the finance committee, in
Speaker 1: the school board, we're talking about the morality of taking
Speaker 1: that money. But in the end, I think they just
Speaker 1: looked the other way. Now. David huddon All, the journalist
Speaker 1: who wrote this story, also went over to a poor
Speaker 1: part of town and talked to a reverended a church
Speaker 1: whose clientele were the victims of rich people who funded
Speaker 1: the renovations at St. Anne. Because David huddon All is
Speaker 1: a good journalist, he talked to Reverend Ernie Davis, who
Speaker 1: told him, we've seen members of our parish who lost
Speaker 1: their homes through the snowball effective paid a lending. It
Speaker 1: has absolutely ravaged the lives of people in our parish.
Speaker 1: There's no justification for it. In the faith we share,
Speaker 1: anything that oppresses the poor is condemned in both Jewish
Speaker 1: and Christian scriptures. People have a sense of what is
Speaker 1: right and fair, whether it's through scripture or through their hearts,
Speaker 1: and charging especially poor people, hundreds of percent and interest
Speaker 1: is oppressive. So that's fun. Yeah, but was this guy
Speaker 1: still part of the problem. No, No, this guy. This
Speaker 1: guy led a church in a poorer part of town
Speaker 1: where like all of his parishioners were losing their houses
Speaker 1: because the loans. The people at St. Anne's were making
Speaker 1: millions of Yeah, because it's all churches, bullshit, Yes, some people, Okay,
Speaker 1: just rich churches. Yeah, okay, cool, um, keep going. Sorry,
Speaker 1: I bet you're wondering, sharene, how bad is the payday
Speaker 1: loan industry? Really? Like? What? What? Like? What? What do
Speaker 1: we know statistically about the actual impacts that it has
Speaker 1: on poor people? Right? Like that? That that that's kind
Speaker 1: of what I have. I have a couple of questions
Speaker 1: that I've I've been saving up. But yeah, well have
Speaker 1: you dropped the questions and then I'll get I'll get
Speaker 1: onto my Well, well, okay, so I was thinking credit cards.
Speaker 1: So you have paid a loan industries that supply poor
Speaker 1: people or desperate people with immediate money. Then you have
Speaker 1: credit cards. It's very easy to open a credit card
Speaker 1: as long as you have decent credit. I'm sure a
Speaker 1: credit card will give you credit. I mean, a credit
Speaker 1: card company is going to give you a credit card
Speaker 1: if you're just like passable. Um, so are paid a
Speaker 1: loan industries tackling those that have worst credit that can't
Speaker 1: have a credit card or that's exactly it. These are
Speaker 1: for people who can't get credit because they I mean
Speaker 1: oftentimes because they had credit cards and they like we're
Speaker 1: really bad with them, um. But other times just because
Speaker 1: they've never had any sort of credit history, because they're
Speaker 1: very very poor and they've only ever worked. Like a
Speaker 1: lot of the people who get paid a loans have
Speaker 1: never had a bank account, you know. They're the kind
Speaker 1: of people who grew up in the poorest parts of town,
Speaker 1: like like like a lot of them are like black
Speaker 1: and Hispanic people who grew up in very very poor
Speaker 1: circumstances and have only ever worked sort of cash in
Speaker 1: hand jobs and who just don't I've just I've just
Speaker 1: showed my privilege thinking that everyone can get a credit card.
Speaker 1: But obviously I forgot that it's a privilege to even
Speaker 1: considering a credit card. Yeah, yeah, exactly, like the the
Speaker 1: the paiday loans are mainly for people who really like
Speaker 1: credit cards aren't even an option for them, because as
Speaker 1: bad as the credit card industry is, it's generally a
Speaker 1: lot less abuse of than the payday loan industry. Yeah.
Speaker 1: I was thinking about that. Yeah, I agree. Um, and
Speaker 1: I guess. I mean, my other one is not really
Speaker 1: a question, more of a statement, but I can save it. Okay, Well,
Speaker 1: let's let's let's get onto some statistics. So I decided
Speaker 1: to look into I wanted to like find all of
Speaker 1: the research I could on how bad payday loans were
Speaker 1: and like how they actually impact the poor and communities. Um.
Speaker 1: I found a two fourteen consumer Financial Financial Protection Bureau
Speaker 1: study that they did on like, they evaluated twelve million
Speaker 1: payday loans in three states. According to the New York Times,
Speaker 1: quote study discredits once and for all, the industry's portrayal
Speaker 1: of these loans is a convenient option for people who
Speaker 1: can easily repay the debt on the next payday, customarily
Speaker 1: in two weeks. In fact, only fifteen percent of borrowers
Speaker 1: in the study could raise the money to repay the
Speaker 1: total debt without borrowing again within fourteen days. Twenty of
Speaker 1: these borrowers default on a loan at some point, which
Speaker 1: can result in credit damage and more bank fees, and
Speaker 1: sixty renewed a loans, sometimes more than ten times and
Speaker 1: had to pay fees that put them on a slippery
Speaker 1: slow towards death that we would be difficult to repay.
Speaker 1: So Richard Cordray, the director of the Consumer Financial Protection Bureau,
Speaker 1: described the story of a woman in Pennsylvania who lost
Speaker 1: her job at a hospital and took out a short
Speaker 1: term eight hundred dollar loan to pay rent. As at
Speaker 1: the time she spoke to the CFPB, she had aid
Speaker 1: more than four hundred dollars on the loan and was
Speaker 1: still in debt. She was also still being hounded by
Speaker 1: debt collectors. Ye In two sixteen, Christine dough Bridge of
Speaker 1: the Federal Reserve conducted a study that found paiday loans
Speaker 1: actually helped families in the wake of natural disasters and
Speaker 1: other singular issues. Quote in periods of temporary financial distress
Speaker 1: after extreme weather events like hurricanes and blizzards. I find
Speaker 1: that paid a loan access mitigates declines and spending on food,
Speaker 1: mortgage payments, and home repairs in an average period. However,
Speaker 1: I find that access to pay day credit reduces well being.
Speaker 1: Loan access reduces spending on non durable goods overall, and
Speaker 1: reduces housing and food related spending particularly. So it's not
Speaker 1: an inherently bad thing to offer short term loans like
Speaker 1: this to people who have had a disaster hit them,
Speaker 1: like a hurricane funk up their house or what I mean.
Speaker 1: I I understand that, But at the same time, if
Speaker 1: that happened, like if the natural for natural disaster did
Speaker 1: occur and a family or a person needed money immediately,
Speaker 1: in what in what world does the majority of these
Speaker 1: p well like Because they have to pay back the
Speaker 1: loan pretty much immediately or very short shortly after they
Speaker 1: borrow it, so they won't rack up interests. So if
Speaker 1: they don't have a hundred dollars a week ago, why
Speaker 1: would they have it the next week to pay it back?
Speaker 1: You know what I mean? Like it feels like some
Speaker 1: they would have to borrow from other companies, even they
Speaker 1: would have to keep having loan after loan after loan,
Speaker 1: unless unless, unless, like they're they're truly just waiting for
Speaker 1: their paycheck, you know what I mean, and if that
Speaker 1: paycheck can can help them in the end. But I
Speaker 1: don't know, just it's a it's an evil cycle. It
Speaker 1: is an evil cycle. And like I think, what what
Speaker 1: Doughbridge found is that like the only people for whom
Speaker 1: it wasn't an evil cycle, where the people with regular
Speaker 1: paychecks that just got delayed because like something fucked up happened,
Speaker 1: or like you know, the government shut down, Like a
Speaker 1: lot of people used payday loans, and I'm gonna guess
Speaker 1: those people were less hurt from it than like the
Speaker 1: very impoverished tended to be. So like the primary communities
Speaker 1: preyed on what studies have found, the primary communities where
Speaker 1: paid a loans operate in our neighborhoods with higher minority populations,
Speaker 1: lower education levels, and more poverty. They're also particularly common
Speaker 1: in the families of U. S Service personnel um and
Speaker 1: in fact, studies have found that access to paiday loans
Speaker 1: reduces job performance of soldiers and lowers retentions levels of
Speaker 1: of US military personnel as well. So that's fucked up. Yeah,
Speaker 1: it's super fucked up. Yeah that like, uh, we take
Speaker 1: advantage of the people that are trying to serve us.
Speaker 1: That that's like the like one of the number one
Speaker 1: uh like customer bases of the payday loan industry as
Speaker 1: soldiers who can't make ends meet. Yeah, kind of messed up,
Speaker 1: fucked yeah. I mean it's already fucked that they take
Speaker 1: advantage of marginalized people. That's already fucked as it is
Speaker 1: because oftentimes communities that are impoverished are by default have
Speaker 1: a large marginalized community. Because that's just like the systematic
Speaker 1: racism at work. But it's that's just layers of fucked
Speaker 1: up after layers are sucked up. I wait, but are
Speaker 1: the interest rates any better now? Are they just as bad?
Speaker 1: They're better than like no one charges what Scott Tucker
Speaker 1: was charging. You're not seeing thousand percent and interest rates,
Speaker 1: but like five to six something, seven hundreds sometimes percent
Speaker 1: is still pretty pretty normal. I think is more like
Speaker 1: that's a lot, Yes, that's a lot of money. Yes,
Speaker 1: that's not fair. Here's where things get really convoluted, shrine um,
Speaker 1: because as I how could it get worse because I
Speaker 1: was I wanted to end this with like a big
Speaker 1: dump of statistics I found on how bad uh paid
Speaker 1: A loans were, and I I put, I already read
Speaker 1: a few of those to you. I definitely found some,
Speaker 1: but I also found a bunch of studies saying that
Speaker 1: they were good, uh, and that they don't hurt people,
Speaker 1: and that they don't primarily target minority communities and that
Speaker 1: so you mentioned the natural disasters, Yeah, so I you know,
Speaker 1: Like one place I wound up at was like a
Speaker 1: website called Journalists Research, which is an actually really useful
Speaker 1: little site that summarizes research on a subject. And they
Speaker 1: had a bunch of links to like summaries of payday
Speaker 1: loan studies, about half of which said payday loans were
Speaker 1: bad and about half of which sounded like this quote. Uh.
Speaker 1: Chentel Desai at Virginia Commonwealth University and Gregory Ellie House
Speaker 1: and at Federal at the Federal Reserve found that a
Speaker 1: Georgia ban on payday loans hurts locals ability to pay
Speaker 1: other debts. They conclude that payday loans do not appear
Speaker 1: on net to exacerbate consumers debt problems and call from
Speaker 1: more research before new regulations are imposed. So you run
Speaker 1: into a lot. I ran into a lot of stories
Speaker 1: like that. Um As I dug around more, I started
Speaker 1: to worry that I might have found made a mistake
Speaker 1: and focusing on the payday loan industry as a bastard.
Speaker 1: I found a Freakonomics article titled our payday loans as
Speaker 1: evil as people say It's cited a lot of that
Speaker 1: same research, and came to the conclusion that actually, everything
Speaker 1: is fine in the payday loan industry, and the growing
Speaker 1: calls to have the government regulated are short sighted. Look
Speaker 1: at all benefits in some way. Give me, give me
Speaker 1: a moment, Give me a moment owned by the k brothers.
Speaker 1: I dug around a little little bit more, and then
Speaker 1: I came across a Washington Post article titled how a
Speaker 1: payday loan industry insider tilted academic research in its favor.
Speaker 1: So the article uh starts in two thousand thirteen, when
Speaker 1: the Consumer Financial Protection Bureau under President Obama was preparing
Speaker 1: to lay out a sweeping series of regulations to make
Speaker 1: the payday lending industry less of an abuse of nightmare.
Speaker 1: Henry Miller, who was an attorney who works in the
Speaker 1: payday lending industry, reached out to a professor in Georgia
Speaker 1: and asked if she'd be interested in testing the number
Speaker 1: one criticism of the paiday loan industry, which is that
Speaker 1: its customers are hurt by its loans, according to the
Speaker 1: Washington Post quote. Over the next year, Miller worked closely
Speaker 1: with Jennifer Lewis Priestley, a professor of statistics and data
Speaker 1: science at Kinnesaw State University, suggesting research to site, the
Speaker 1: type of data to use, and even lecturing her on proofreading.
Speaker 1: Punctuation and capitalization are somewhat random, he said in a
Speaker 1: February email, responding to a draft of the report. You
Speaker 1: might want to have your maiden aunt, who went to
Speaker 1: high school before nineteen sixty read this. So the fuck
Speaker 1: I know he was a man splaining fucking the English language.
Speaker 1: He sure was, and she let him do it because
Speaker 1: he was giving her a thirty dollar grant to publish
Speaker 1: the study. And this is a different Henry Miller than
Speaker 1: the one that wrote like tropic of cancer, right, Yes,
Speaker 1: this is not the Henry Miller. This is the Henry
Speaker 1: Miller who was a shill for the payday loan industry okay, cool,
Speaker 1: yeah our Hillary, Hillary Miller, Um Henry but one l
Speaker 1: yeah um. Priestley's report ultimately concluded that taking out repeated
Speaker 1: payday loans did not and according to the emails, Miller
Speaker 1: discussed the results with a CFPB economist. It's unclear how
Speaker 1: it factored in the bureau decisions, but it has been
Speaker 1: repeatedly touted by paid a lending supporters. So basically, Priestley's
Speaker 1: report concluded that payday loans were actually not bad for people,
Speaker 1: and that that wound up going to the Consumer Financial
Speaker 1: Protection Bureau UH and and being weighed in and their
Speaker 1: decisions as to whether or not to regulate the industry. Now,
Speaker 1: oh my god. Priestly's report is only one of the
Speaker 1: pro payday loan sources I ran into when I was
Speaker 1: trying to figure out how bad UH the industry was,
Speaker 1: and the post lays out a pretty damning story of
Speaker 1: industry academic collusion here. In exchange for that thirty dollar grant,
Speaker 1: Priestly gave Miller and his payday loan industry bosses shocking
Speaker 1: control over her work, and one December email, Miller asked
Speaker 1: her to change the way she analyzed data about borrow
Speaker 1: where credit scores. Priestly responded, I am here to serve.
Speaker 1: I just want to make sure that what I am
Speaker 1: doing analytically is reflecting your thinking. The email ended with
Speaker 1: a smiley face when the report was yeah. When the
Speaker 1: report was published, it noted that Miller's nonprofit, which was
Speaker 1: essentially a mouthpiece for the payday loan industry, did not
Speaker 1: exercise any control over the editorial content of her paper,
Speaker 1: But when The Post interviewed her, Priestly admitted that she
Speaker 1: offered to share authorship of the report with Miller, and
Speaker 1: he declined. Now, one of Hillary Miller's goals for his
Speaker 1: pet academic was to have her attack the idea that
Speaker 1: payday loan's trapped people in an unending cycle of debt.
Speaker 1: Two fourteen Consumer Financial Bureau study found that most borrowers
Speaker 1: are forced to renew their loans so many times that
Speaker 1: they pay more in fees than the actual amount they borrow.
Speaker 1: In March of two fourteen, Miller sent Priestly an email
Speaker 1: asking her to avoid the term cycle of debt in general.
Speaker 1: We do not accept the notion that a cycle of
Speaker 1: debt even exists, and I would appreciate it if you
Speaker 1: would delete all references to this term unless you are
Speaker 1: rebutting its existence. Oh my god, Priestley did as she
Speaker 1: was asked, who is this asshole? I mean that just
Speaker 1: trotted onto the scene like what she's where does? You
Speaker 1: could almost say she's kind of like the people who
Speaker 1: are being taken advantage of the payday loan industry, and
Speaker 1: that she needed a chunk of money quickly, and she was.
Speaker 1: She was, she was caught in the cycle. Yeah yeah,
Speaker 1: and they I mean, I mean they're not charging her
Speaker 1: interest for the thirty grand I'll give them that. But well,
Speaker 1: that is still fucked shade. And that is a that's
Speaker 1: in modern that's like recent, that's a recent thing. You
Speaker 1: were researching it the other day and you yeah, we're
Speaker 1: about to get some other person is going to be
Speaker 1: researching like whether or not the should take out a loan,
Speaker 1: and they're going to come across an article being like
Speaker 1: they're not that bad, and then they're gonna just it's
Speaker 1: going to continue. It actually gets a lot more infuriating
Speaker 1: than that. Oh my god. Okay, let's hear it. So,
Speaker 1: according to the Washington Post quote, as the publication of
Speaker 1: the study neared, Miller congratulated Priestly on her work. Priestly
Speaker 1: study found that paid a loan customers who repeatedly borrow
Speaker 1: money over a long period have better financial outcomes than
Speaker 1: those who borrow for a shorter time. These borrowers also
Speaker 1: benefited from living in states where paid a lending wasn't
Speaker 1: heavily restricted. The report found, this is a terrific paper,
Speaker 1: he said in April email. When it is done, you're
Speaker 1: going to be famous and your phone will ring off
Speaker 1: the hook. The group was developing a strategy for releasing
Speaker 1: the report. He said, we want them to believe that
Speaker 1: the results are honest, verifiable, and most portantly correct. Now
Speaker 1: sharene If this was just one cooked study, it would
Speaker 1: be damning, but not damning of all of the different
Speaker 1: studies that I came across that seemed to have positive
Speaker 1: things to say about the pay day loan industry. But
Speaker 1: of course it wasn't just one study. The Huffington Post
Speaker 1: published an article in two thousand fifteen that discussed the
Speaker 1: payday loan industry interference into multiple studies, including a two
Speaker 1: thousand eleven paper do payday loans trapped consumers and a
Speaker 1: cycle of debt? One guess as to the paper's conclusions.
Speaker 1: Here's the Huffington Post quote. The email show that the
Speaker 1: payday loan industry gave economics professor Mark Fussoro at least
Speaker 1: thirty nine thousand, nine twelve dollars to write his paper
Speaker 1: and paid an undisclosed sum to his research partner, Patricia Cerrillo.
Speaker 1: In response, the industry received early drafts of the paper
Speaker 1: provided line by line revisions suggested deleting a section that
Speaker 1: reflected poorly end payday lenders, and even removed a disclosure
Speaker 1: detailing the role paid a lending played In the preparation
Speaker 1: of the paper. Fusaro cut two critical findings from his
Speaker 1: paper at Miller's behest. First was a finding that payday
Speaker 1: loan borrowers tended to have freequent debt over drafts and
Speaker 1: the debit overdrafts in the period before their loan. This
Speaker 1: looked bad for the industry because one of their chief
Speaker 1: claims that most borrowers could afford the loans they were
Speaker 1: stable people dealing with emergencies. Obviously, if people were failing
Speaker 1: to pay their debts prior to getting a paid a loan,
Speaker 1: then it makes it seem like the paid a loan
Speaker 1: industry is just taking advantage of people who are having
Speaker 1: financial difficulties. In an email, Fusorrow's coofered author told him
Speaker 1: quote Hillary called me the other day for an update.
Speaker 1: I told him about where we were in data collection
Speaker 1: and also this other finding. I suspect he isn't too
Speaker 1: happy about that finding and pointed out it wasn't the
Speaker 1: original objective of the study. I acknowledge that they cut
Speaker 1: this finding. Miller also had them cut a chunk of
Speaker 1: the author's note, which would have disclosed that paid A
Speaker 1: lending companies had helped to write the study. Here's a
Speaker 1: quote from Miller in an email he sent to them.
Speaker 1: The unnamed paid A lenders and the unnamed blind reviewers
Speaker 1: do not need or want your thanks. It will actually
Speaker 1: undermine the lenders objectives and participating in the study. If
Speaker 1: you do so, so, that's cool. I I think just
Speaker 1: the phrase objective of the study is already just like
Speaker 1: does not make any sense. You don't make a study
Speaker 1: with an objective. You study too to find the correct response.
Speaker 1: You know what I mean? Like, if you go into
Speaker 1: a study quote unquote with an objective, you're already skewing it. Yeah,
Speaker 1: it makes no sense. The objective of science is to
Speaker 1: arrive at the truth through the testing of like observable phenomena.
Speaker 1: Not that's what I'm saying exactly, it's you don't have
Speaker 1: an objective going in that doesn't make any fucking sense. Yeah,
Speaker 1: it's frustrating. It's the same people that like fact check
Speaker 1: fucking scientists when it comes to climate change. They just
Speaker 1: make up their own definitions of what the words facts mean,
Speaker 1: what the words study means, and then people just buy
Speaker 1: into it because they haven't learned this new definition that's incorrect. Now,
Speaker 1: dream you may not remember from way back in two
Speaker 1: thousand eight, but one of the things that President Obama
Speaker 1: ran on when he was first running for election was
Speaker 1: that he was going to reform the paid a loan industry. Uh.
Speaker 1: And he spent years and years and years as president
Speaker 1: having the Consumer Financial Protection Bureau figure out a list
Speaker 1: of rules that they could kick into place to essentially
Speaker 1: wipe out the payday loan industries it currently exists. Uh.
Speaker 1: And near the end of his term, they finally like
Speaker 1: hit upon exactly what new restrictions they needed to put
Speaker 1: in place. Um. Now, they announced these restrictions in two
Speaker 1: thousands seventeen, and they were expected to reduce paid A
Speaker 1: loan volume by sixty UM. So this would have been
Speaker 1: a massive hit to uh an incredibly slimy industry. However,
Speaker 1: a couple of months ago that the new restrictions should
Speaker 1: have hit in August of two thousand nineteen, but very
Speaker 1: recently the Consumer Financial Protection Bureau under President Trump changed
Speaker 1: course and scrapped most of the proposed changes the Obama
Speaker 1: administration it's spent years putting together and preparing to implement.
Speaker 1: According to the Motley Fool quote, the CFPB will get
Speaker 1: most of the rules that previously sought, leaving only modest
Speaker 1: changes to paid A lending practices. The one rule that
Speaker 1: remains impacts lenders collection of loan payments. Most borrowers pay
Speaker 1: by automatic bank drafts. Under the new rule, after two
Speaker 1: failed withdrawal attempts, lenders would have to get authorization for
Speaker 1: any additional withdrawal attempts, and that's it. Everything else gets
Speaker 1: to stay. The article. Also, so the things that Obama
Speaker 1: tried to implement since he was elected in two thousand
Speaker 1: and eight were it was gonna be like until last August,
Speaker 1: like like eleven years later, like well, I mean it
Speaker 1: took like it took Uh, yeah, it took a long time, um,
Speaker 1: like long enough for Trump to overturn it. Basically, yeah, exactly. Um.
Speaker 1: And it's it's worth noting that in April of two
Speaker 1: thou eighteen, not that long before the CFPB changed its rules,
Speaker 1: the paid a loan industry trade group, the Consumer Financial
Speaker 1: Services Association, held its annual conference. You want to guess
Speaker 1: where they held there, two thousand eighteen annual conference? In
Speaker 1: my butt hole? I don't know. No, not not in
Speaker 1: your butth hole, but in the Trump National Dooral Golf
Speaker 1: Club in Miami. That's that's the same place. Yeah, yeah,
Speaker 1: it is. It is a butt hole, that's for sure.
Speaker 1: It's now all of our buttles. Ah. How you feeling sharing?
Speaker 1: I mean, more therapy is what I'm feeling. But you know,
Speaker 1: there are moments where you have such little faith in
Speaker 1: humanity that you're just like, what's the point? Why why
Speaker 1: am I still here? Um? And I'm glad that coming
Speaker 1: onto your show really makes me think of my life
Speaker 1: as such a meaningless blip in in a white man's game.
Speaker 1: So thank you for that. Robert, Well, you're welcome sharene I.
Speaker 1: You know, hope is as toxic as cigarettes. According to
Speaker 1: uh to most World Health Organization reports. So is that
Speaker 1: in a recent study, was that their objective to find? Okay, yeah,
Speaker 1: it was actually funded by the paid a loan industry. Um,
Speaker 1: so you know it's good. But if this entire episode
Speaker 1: was just like a huge ad for like the payday loan,
Speaker 1: Like what if like you were sponsored actually at this point,
Speaker 1: I would be nothing would surprise me if you were actually,
Speaker 1: if you were actually like Scott Tucker, Sun or some
Speaker 1: ship well you know, Sharine, if you really do need
Speaker 1: a short term loan, Americash can can leave you a
Speaker 1: thousand dollars, no questions asked and interest rates less than
Speaker 1: you know, and that's that's pretty low. Nine hundreds of
Speaker 1: smaller number than a thousand, So you're kind of making bank.
Speaker 1: Those are numbers that that are smaller than the other
Speaker 1: you know, those are numbers. Those are numbers. That's actually
Speaker 1: the motto of Americash. You know. You know, um, you know,
Speaker 1: like when you strain too hard on the toilet and
Speaker 1: like maybe pop out of hemorrhoid or two, and your
Speaker 1: asshole becomes unredeemable, an unredeemable as that is Scott Tucker,
Speaker 1: he is an unredeemable asshole, and he's just a you
Speaker 1: can't go back after that. You can't. You can maybe
Speaker 1: you could tuck in a hemorrhoid or two on a
Speaker 1: good day, but most of the days they're just like,
Speaker 1: have you have a little tag, just just flopping in
Speaker 1: the wind. I might say, I might say that Scott Tucker,
Speaker 1: like the whole payday loan industry is an unredeemable asshole,
Speaker 1: and Scott Tucker is one particularly flappy hemorrhoid. Yeah, yeah,
Speaker 1: I like that metaphor. And then on the next episode
Speaker 1: of The Magic School Bus, We're gonna go straight into
Speaker 1: the asshole. We're gonna be the enema, the enema going
Speaker 1: right in before a really uh rigorous uh, just a
Speaker 1: night of really crazy strap on pegging. Um, I'm pissed.
Speaker 1: When I'm pissed, I talked about, butts you talk about
Speaker 1: when you're pissed. I'm starting to realize this, which is pegging,
Speaker 1: is not don't don't, uh don't. It's a fun it's
Speaker 1: a fun time. I'm sure. I'm sure you. I'm sure
Speaker 1: you'd be open to it. I think if I know
Speaker 1: anything about you, you'd be open to pegging. I have
Speaker 1: I have no issues with pegging. Pegging is much more
Speaker 1: ethical than, for example, the payday loan industry. I agree.
Speaker 1: And if can we get sponsored by pegging the concept
Speaker 1: of pegging, Yeah, we'll just try to just get a
Speaker 1: strap on sponsor. I will. I'm just trying to make
Speaker 1: myself feel better. I'm trying to make myself feel better
Speaker 1: after this awful decision I had to come on your
Speaker 1: show again. So, um, I'm thinking of pegging. Well, I'm
Speaker 1: thinking that next we should talk about Jacob Wohl for
Speaker 1: like an hour. How does that feel A nice palate cleanser, Yeah,
Speaker 1: nice palate cleanser. I mean those of you have that
Speaker 1: have been following the show probably remember me from being
Speaker 1: on the other Grifters episode. Um, and like last week
Speaker 1: or something, the tweets about there are first episode together
Speaker 1: there with Jacob Ball and the Grifters started getting a
Speaker 1: lot of like retweets and comments again, so I was like, Oh,
Speaker 1: I guess he's like in the news. So I'm curious
Speaker 1: what you have for me today for update me on
Speaker 1: this on this fucker's life. Well sharene you and I
Speaker 1: will have that conversation in a manner of minutes. But
Speaker 1: for our listeners. It will happen on Thursday when they
Speaker 1: hear the next episode Behind the Bastards. So before we
Speaker 1: break for that, do you want to plug some plug
Speaker 1: doubles which is different from pegging pegables? UM, you know,
Speaker 1: anal plugs are also a thing, but not today. Today,
Speaker 1: I'm going to plug the podcast. I co host Ethnically Ambiguous.
Speaker 1: It's a fun time. UM. I co hosted with my
Speaker 1: friend uh Anna Hosni. I was gonna say Anna, but
Speaker 1: we can call her both um. And we talked about
Speaker 1: Middle Eastern experience in the US, being daughters of immigrants,
Speaker 1: and we also have fun guests on just like me
Speaker 1: that I'm a guest on this one. UM, that's what
Speaker 1: podcasting is, okay. Anyway, you can follow us on Ethnically
Speaker 1: am am B on Twitter, Ethnically am B, Ethnically am Big,
Speaker 1: m B I G on Instagram, and I'm Shiro Hero
Speaker 1: on instagram s h E e r O h E
Speaker 1: r O and Twitter at Shiro Hero six six six.
Speaker 1: I hope you guys enjoyed this episode more than I did,
Speaker 1: and I hope that you enjoyed this episode more than
Speaker 1: I enjoyed. Reading about paid a loans Um. You can
Speaker 1: find me on Twitter at I right, okay. You can
Speaker 1: find this podcast on the twin Instagram's at Bastards pod.
Speaker 1: You can find our website with all the sources for
Speaker 1: this at behind the Bastards dot com. I have another
Speaker 1: podcast called it Could Happen Here, and it's about the
Speaker 1: Second American Civil War, which, after an episode like this,
Speaker 1: seems almost more optimistic than just letting some of this continue.
Speaker 1: But it's not. It can happen here, can happen? It
Speaker 1: could happen here? Aspirationally? Um, but no, it's a super
Speaker 1: big bummer. It's very sad. Uh. That's oh. You buy
Speaker 1: T shirts on t public dot com. You can also
Speaker 1: get some pay day loans from t public dot com. Um,
Speaker 1: enter the code Robert Evans and you'll get like a
Speaker 1: nine h yeah versus a thousand percent. Yep. We'll knock
Speaker 1: a p off of that interest rate for you. That's
Speaker 1: all I got for today, Sophie, would you toss some
Speaker 1: bagels angrily against the wall for me? Just at that
Speaker 1: it ricocheted off the wall and landed right back into
Speaker 1: her lap. It was a beautiful thing. Physics is a
Speaker 1: real Fantasysics is fantastic. That was the first remote bagel
Speaker 1: throwing that I think anyone has ever engaged in, so
Speaker 1: you know we're This is a ground breaking show, ground
Speaker 1: breaking show, and until next week's groundbreaking episode. I loved
Speaker 1: about