WEBVTT - The Payday Loan Industry Is Bastards All The Way Down 0:00:00.240 --> 0:00:08.440 Hmm, what's lansing my boils? I'm Robert Evans. This is 0:00:08.480 --> 0:00:10.920 Behind the Bastards, the show where I talk about terrible 0:00:10.960 --> 0:00:14.000 people and try out a new intro every week. Sharine, 0:00:14.080 --> 0:00:15.520 what what did you think of that one? Is that? 0:00:15.680 --> 0:00:19.319 Is that a winner? Yeah? I'm cringing just so. I 0:00:19.360 --> 0:00:21.720 think an emotional reaction is what you wanted, and you've 0:00:21.720 --> 0:00:25.279 got it. Yeah. Yeah, and we've we've done extensive market 0:00:25.280 --> 0:00:28.360 testing and our our listeners are are huge fans of 0:00:28.400 --> 0:00:32.360 boils and in lansings of boils. Uh, Sophie. Sophie brought 0:00:32.360 --> 0:00:34.000 that info to me last week, so we're trying to 0:00:34.000 --> 0:00:35.840 play to that demo. Yeah, I mean, I haven't thought 0:00:35.840 --> 0:00:37.840 about boils in a long time. I'm glad you brought 0:00:37.880 --> 0:00:40.159 that back to my to my attention. You know that 0:00:40.320 --> 0:00:46.000 they're they're disgusting. Make boils be on Sharine's mind again. 0:00:46.800 --> 0:00:48.879 I suppose we've kind of spoiled the fact that our 0:00:48.880 --> 0:00:52.360 guest today is is Sharine Lanna Units from the Ethnically 0:00:52.360 --> 0:00:55.240 Ambiguous podcast. Sharine, you've got any other plugs to plug 0:00:55.320 --> 0:00:59.480 up at the start? That's me. That's all I got. 0:01:00.320 --> 0:01:02.600 Follow me on the socials and that's all about that's 0:01:02.600 --> 0:01:07.000 about it. Here six there we go, follow Sharine on 0:01:07.040 --> 0:01:11.720 the socials. Now Sharine, Today we're talking about the payday 0:01:11.760 --> 0:01:16.560 loan industry. Have you ever had to use a payday loan? Uh? Fortunately? No, 0:01:17.000 --> 0:01:20.560 good good, I have not either. Um. It's a it's 0:01:20.560 --> 0:01:24.119 a it's a pretty messed up thing. And today we're 0:01:24.120 --> 0:01:26.880 going to talk about it for like an hour or so. 0:01:26.880 --> 0:01:29.280 So I cannot wait for you to teach me all 0:01:29.319 --> 0:01:33.479 about this thing I know nothing about. Excellent. Well, everyone buckling, 0:01:33.760 --> 0:01:37.040 strap your strap, your listening chairs on, throw on your 0:01:37.280 --> 0:01:40.200 you're here in goggles, and uh, prepare to be taken 0:01:40.240 --> 0:01:43.840 on a journey into the payday loan industry. That was 0:01:44.120 --> 0:01:48.680 That was beautiful. Thank you, thank'd The Magic school Bus. Yes, 0:01:49.360 --> 0:01:51.080 I like to think of every episode of this show 0:01:51.160 --> 0:01:53.840 as like an episode of the Magic school Bus. But 0:01:53.880 --> 0:01:57.680 Miss Frizzle is drunk and abusive. Um, are you saying 0:01:57.680 --> 0:02:02.560 that you are drunken abusive? Yes? Oh, and you're imagine 0:02:02.600 --> 0:02:05.880 that Miss Frizzle is drunk abusive and just has a gun. Yeah, 0:02:06.120 --> 0:02:11.200 I mean I do, I do have a yeah, but no, yeah, 0:02:11.200 --> 0:02:13.320 I hope that the rest of the audience is kind 0:02:13.320 --> 0:02:16.880 of not the most informed about this topic because I 0:02:16.919 --> 0:02:19.760 kind of like being a pleab surrounded by pleabs, and 0:02:19.800 --> 0:02:22.560 you can be the misfrizzle, you know. Yeah, and I was. 0:02:22.639 --> 0:02:25.400 I was the pleab until about seventy two hours ago 0:02:25.480 --> 0:02:29.760 when I started reading about this. So, yeah, exactly, this 0:02:29.880 --> 0:02:33.640 is the This is the slightly less blind leading the 0:02:33.720 --> 0:02:38.640 blind into the land of eyeglasses. I kind of lost 0:02:38.680 --> 0:02:40.840 the thread of that metaphor. We're in the magic school 0:02:40.840 --> 0:02:43.080 of us. Where are we going. We're going into a 0:02:43.080 --> 0:02:45.800 paid a loan We're going into We're going into a 0:02:45.800 --> 0:02:49.400 paid a loan store. Yeah. Yeah. So I want to 0:02:49.400 --> 0:02:51.680 start by asking people to think about how weird it 0:02:51.720 --> 0:02:54.400 is that workers have to wait weeks, if not months, 0:02:54.400 --> 0:02:57.000 to get paid for the work that they do. Theoretically, 0:02:57.040 --> 0:02:59.480 your employer and benefits from your labor as soon as 0:02:59.520 --> 0:03:02.040 you do it, whether you're driving an uber, managing a bank, 0:03:02.120 --> 0:03:04.320 or using a drone to fire missiles and insurgents, or 0:03:04.320 --> 0:03:07.480 wedding parties in rural Afghanistan, but you, the laborer, don't 0:03:07.480 --> 0:03:09.640 actually get paid for your work until long after you 0:03:09.720 --> 0:03:12.079 do it. This is such a normal, accepted part of 0:03:12.120 --> 0:03:14.000 our system that I don't think most of us ever 0:03:14.040 --> 0:03:17.240 really talk about it much, and this peculiarity in our 0:03:17.320 --> 0:03:19.600 labor market has led to the creation of an entire, 0:03:19.680 --> 0:03:24.120 mighty industry. The business of paid a loans short term lending, 0:03:24.200 --> 0:03:26.280 as it prefers to be called by its friends and family, 0:03:26.320 --> 0:03:28.160 got its start in the United States in the late 0:03:28.200 --> 0:03:30.760 eighteen hundreds. This was the dawn of what we today 0:03:30.800 --> 0:03:34.240 recognize as normal jobs, where people make a regular salary 0:03:34.240 --> 0:03:37.200 and get paid on an intermittent basis. Prior to this point, 0:03:37.240 --> 0:03:38.800 it had been more normal for folks to make a 0:03:38.880 --> 0:03:41.120 daily wage. If you showed up and worked twelve hours 0:03:41.120 --> 0:03:43.240 on a farm or a building project, you're a factory. 0:03:43.520 --> 0:03:45.280 You walked home with cash in your pocket at the 0:03:45.320 --> 0:03:49.120 end of the day. Regular modern style jobs changed the norms, 0:03:49.120 --> 0:03:52.080 and this caused problems for workers. Bank accounts didn't really 0:03:52.080 --> 0:03:54.560 exist for normal people in the late eighteen hundreds, and 0:03:54.600 --> 0:03:56.480 it was common for them to run out of money 0:03:56.520 --> 0:03:59.880 between paychecks because they'd have medical emergencies, or things would 0:04:00.000 --> 0:04:03.000 ache or whatever. Uh, and short term loans evolved as 0:04:03.040 --> 0:04:05.520 a way to keep the emerging blue collar working class 0:04:05.560 --> 0:04:08.040 alive in the gaps between pay day. So it starts 0:04:08.080 --> 0:04:10.120 like you can see in kind of this normal space 0:04:10.200 --> 0:04:13.040 is like people are getting paid differently, so they need, 0:04:13.360 --> 0:04:15.280 you know, a little bit of money now and then 0:04:15.320 --> 0:04:18.280 to like help them help them bridge the gap between 0:04:19.120 --> 0:04:21.560 their pay cycles. Right, can I raise my hand? I'm 0:04:21.600 --> 0:04:23.799 raising my hand. Yes, raise your hand. I have a question. 0:04:23.800 --> 0:04:26.560 That means I have a question. Uh, where does the 0:04:26.560 --> 0:04:30.279 money come from? Well, it comes from payday lenders. Um, 0:04:30.440 --> 0:04:33.360 So you would have like normal people wouldn't have credit 0:04:33.480 --> 0:04:34.800 and like wouldn't be able to get like a loan 0:04:34.880 --> 0:04:36.120 from a bank. Like a bank is not going to 0:04:36.160 --> 0:04:37.920 give you a loan if you need three hundred bucks 0:04:37.960 --> 0:04:40.800 to make up a hole in your in your in 0:04:40.839 --> 0:04:45.320 your like budget or whatever. So instead these companies come 0:04:45.320 --> 0:04:47.680 in and basically front you, you know, three hundred bucks. 0:04:47.760 --> 0:04:52.159 But so they're like private companies, their private private lenders, 0:04:52.279 --> 0:04:56.320 private lenders essentially like a rich person. Yeah, that's that's 0:04:56.360 --> 0:04:58.760 literally how it was. In some cases. It's just like 0:04:58.800 --> 0:05:02.120 someone with enough money to like throw out loans. And 0:05:02.839 --> 0:05:05.480 because they're small loans, like a normal loan, like you know, 0:05:05.520 --> 0:05:08.840 six percent would be a lot of interest to pay um, 0:05:08.880 --> 0:05:13.520 But because these are small loans and they're very short term, 0:05:13.560 --> 0:05:16.240 they had like way higher rates of interest. So a 0:05:16.320 --> 0:05:19.440 onely week loan would regularly be somewhere between a hundred 0:05:19.440 --> 0:05:23.680 and twenty and five a p r um. Yeah, so 0:05:23.720 --> 0:05:26.159 that now we're talking the eight hundred still and that 0:05:26.240 --> 0:05:29.560 seems insane, but those rates are actually really low compared 0:05:29.600 --> 0:05:32.160 to the modern equivalents and paiday loans, so like today's 0:05:32.160 --> 0:05:37.840 payday loans will regularly top five and interest um. Yeah, 0:05:38.080 --> 0:05:40.320 so that that seems like it might be a little 0:05:40.360 --> 0:05:45.120 bit abusive, right, yes, yes it would. Now. Uh, this 0:05:45.160 --> 0:05:47.840 is where we get the term loan shark. That's how 0:05:47.839 --> 0:05:50.680 these people came to be known, primarily because they got 0:05:50.760 --> 0:05:53.279 essentially famous. If you would like, watch a lot of 0:05:53.279 --> 0:05:55.440 old TV shows from the forties and fifties that would 0:05:55.440 --> 0:05:57.680 show loan characters like you know you you've heard the 0:05:57.680 --> 0:05:59.680 story about, like the mob guy threatening to break someone's 0:05:59.760 --> 0:06:01.680 leg or whatever if they don't pay a debt. Right 0:06:01.800 --> 0:06:04.839 of course, yeah, of that happened from time to time, 0:06:04.920 --> 0:06:07.200 But the reality is that they more often relied on 0:06:07.320 --> 0:06:11.039 wage garnishment, public embarrassment, or what was called bawling out, 0:06:11.760 --> 0:06:14.719 which is less fun than it sounds. It's basically screaming 0:06:14.720 --> 0:06:19.600 at someone to shame them into pay. What the fuck? Yeah, 0:06:19.839 --> 0:06:24.200 that's that's like just public humiliation. Yeah, that's exactly how 0:06:24.600 --> 0:06:26.440 most of the paid a loan industry worked in the 0:06:26.520 --> 0:06:29.400 late eighteen hundreds was if you didn't pay, they would 0:06:29.440 --> 0:06:32.560 try to humiliate you. That's like psychological torture. It's like 0:06:32.560 --> 0:06:37.120 psychological manipulation. It is psychological manipulation. But does it does 0:06:37.120 --> 0:06:38.960 it change your opinion on this at all? Sharine to 0:06:39.040 --> 0:06:42.440 learn that this actually created a great job opportunity for 0:06:42.480 --> 0:06:45.360 women in the workplace slightly. You know, keep keep talking. 0:06:48.839 --> 0:06:52.200 I'm gonna quote from a scholarly Commons article. Quote to 0:06:52.240 --> 0:06:55.520 compel payments salary lenders pestered debtors incessantly at home, or 0:06:55.560 --> 0:06:57.919 sent ballers out to make a scene at work, or 0:06:57.960 --> 0:07:01.000 processed wage assignments, or use the hours of attorney they 0:07:01.000 --> 0:07:04.239 had taken to confess judgment for before justices of the peace. 0:07:04.600 --> 0:07:06.600 They did not have to lay a hand on customers 0:07:06.600 --> 0:07:09.679 in arrears to do a profitable business. Indeed, many firms 0:07:09.680 --> 0:07:12.160 had a preference for hiring women as loan agents because, 0:07:12.200 --> 0:07:14.840 as one news story explained, they give an appearance of 0:07:14.840 --> 0:07:17.840 harmlessness to the lending establishment, and an outraged borrower is 0:07:17.880 --> 0:07:19.840 not so anxious to kick the manager out of a 0:07:19.840 --> 0:07:23.600 window if she is a woman. So so it wasn't 0:07:23.640 --> 0:07:27.960 necessarily for the benefit of women, but yeah, it was 0:07:28.040 --> 0:07:30.480 just because you wouldn't beat up a loan shark who 0:07:30.520 --> 0:07:33.680 was a lady sick. Um. Well, as much as I 0:07:33.760 --> 0:07:38.040 really appreciate job opportunes for women, uh, I mean that's 0:07:38.120 --> 0:07:43.520 problematic as ship. Yeah, I would say problematic as ship 0:07:43.600 --> 0:07:47.760 is fair. Um. So, starting after the Civil War, what 0:07:47.840 --> 0:07:51.440 we're called chattel mortgage lenders became increasingly common. So these 0:07:51.440 --> 0:07:53.960 were paid a loans backed up by the debtors furniture 0:07:54.000 --> 0:07:57.320 and family possessions as collateral. The explicit goal of the 0:07:57.440 --> 0:08:00.680 arrangements offered was to trap debtors in an endless cycle 0:08:00.680 --> 0:08:02.480 where they would never quite pay off their loan and 0:08:02.480 --> 0:08:04.280 thus would spend the rest of their lives racing to 0:08:04.280 --> 0:08:07.320 pay off the interest in order to avoid literally losing 0:08:07.360 --> 0:08:10.360 their beds. So people would like mortgage their furniture in 0:08:10.480 --> 0:08:14.800 order to make ends meet. For sad. That's like, I mean, 0:08:15.120 --> 0:08:17.040 I feel like it just boils down to a rich 0:08:17.080 --> 0:08:19.920 person taking advantage of a poor person that's desperate. That's 0:08:19.960 --> 0:08:22.960 all it boils down to. Yeah, and that's so sad. Yeah, 0:08:23.080 --> 0:08:25.880 that is the rich person that must have I mean, 0:08:25.920 --> 0:08:28.520 the rich person must have better things to do. But 0:08:29.240 --> 0:08:34.560 they're just greedy. They want money and it's money. Yeah, 0:08:34.600 --> 0:08:38.600 but they already have it, they want more. So the 0:08:38.679 --> 0:08:42.520 term loan shark came up essentially because the very form 0:08:42.559 --> 0:08:45.000 of the deal trapped the barrower and an endless cycle. 0:08:45.040 --> 0:08:47.640 So you were essentially like always being like chased down 0:08:47.720 --> 0:08:50.319 by the shark. You couldn't escape it. Um. The practice 0:08:50.360 --> 0:08:53.840 was almost immediately recognized as problematic by various state governments 0:08:53.880 --> 0:08:55.559 as well as the federal government, and they tried a 0:08:55.640 --> 0:08:57.480 number of ways to get a handle on the problem. 0:08:57.920 --> 0:09:01.160 States started by placing what we're called or recaps, and 0:09:01.200 --> 0:09:04.120 by the nineteen teens most states limited annual interest in 0:09:04.160 --> 0:09:07.520 between eighteen and forty two. So this seems a lot 0:09:07.600 --> 0:09:11.600 fairer than a hundred and right, um, and it would 0:09:11.600 --> 0:09:14.920 stop people from getting trapped in sustainable cycles of debt, 0:09:15.200 --> 0:09:17.480 but it also kind of wiped out the entire short 0:09:17.600 --> 0:09:21.160 term loan industry. Um. See. The only way that these 0:09:21.160 --> 0:09:23.880 loans could work was by giving relatively small amounts of 0:09:23.880 --> 0:09:26.920 money to people with no credit. By definition, their consumer 0:09:26.960 --> 0:09:28.840 base had a high default rate. A lot of people 0:09:28.880 --> 0:09:31.000 would just completely fail to pay their debts, so the 0:09:31.000 --> 0:09:33.200 only way the industry could be profitable was to charge 0:09:33.240 --> 0:09:35.720 these high rates of interest. When the government capped that, 0:09:36.000 --> 0:09:38.960 loan sharks didn't go away, but they did change. The 0:09:39.080 --> 0:09:42.080 endless debt cycles and ballings out were replaced by mafia 0:09:42.120 --> 0:09:44.760 men who would offer illegal loans and ensured repayment by 0:09:44.800 --> 0:09:47.040 beating the ever living ship out of clients who failed 0:09:47.080 --> 0:09:51.360 to pay. So that's kind of problem, the solving the 0:09:51.400 --> 0:09:55.679 problem forever, um now, So so you're so you're saying 0:09:55.760 --> 0:09:58.079 this is all stemming from the fact that people don't 0:09:58.120 --> 0:10:00.280 get paid by the day as much as to you 0:10:00.800 --> 0:10:03.400 every other week or every month or whatever. Yes, And 0:10:03.440 --> 0:10:05.080 that's like one of the things you have to remember 0:10:05.120 --> 0:10:07.400 at the core of this issue is that no matter 0:10:07.400 --> 0:10:10.319 how fucked up the payday loan industry is and seems, 0:10:10.840 --> 0:10:14.520 people still need them, um because like they you know, 0:10:14.640 --> 0:10:16.439 they have no money for nine or ten days and 0:10:16.480 --> 0:10:18.160 their kid has to go to a doctor or like 0:10:18.240 --> 0:10:21.440 they have. Isn't that something that we should tackle? It 0:10:21.480 --> 0:10:27.120 seems like yeah, yeah, certainly, it certainly seems like it, um, 0:10:27.160 --> 0:10:31.199 But we're not, um, why would we tackle systemic problems 0:10:31.760 --> 0:10:34.640 in our economic system as opposed to covering up a 0:10:34.679 --> 0:10:37.480 band aid, or like, like your your knee gets gased 0:10:37.520 --> 0:10:40.320 open and you're just like worrying about the blood trickling 0:10:40.360 --> 0:10:43.400 on your ankle and not actually the wound. It's that's 0:10:43.400 --> 0:10:50.040 a gory sorry, Mr Fiddles, it is a gory situation. Now. 0:10:50.640 --> 0:10:53.320 I started by saying that, like the mob guys would 0:10:53.320 --> 0:10:55.120 beat the ship out of people for not paying loans, 0:10:55.160 --> 0:10:57.360 and that did happen. But one of the weird things 0:10:57.400 --> 0:11:00.000 about this story is that the majority of evidence suggest 0:11:00.040 --> 0:11:02.880 us that mafia lenders weren't actually all that bad by 0:11:02.880 --> 0:11:06.280 the standards of paid a loans um like the more 0:11:06.400 --> 0:11:09.600 legitimate lenders. They made their money by locking people into 0:11:09.640 --> 0:11:14.240 an endless cycle of debt, but they like didn't actually 0:11:14.280 --> 0:11:17.040 beat people up all that often. Uh, and their interest 0:11:17.080 --> 0:11:21.079 payments were kind of low compared to like when legitimate 0:11:21.120 --> 0:11:23.960 companies would offer paid a loans. So I found a 0:11:23.960 --> 0:11:28.439 great quote on exactly how sort of like physical violence 0:11:28.480 --> 0:11:30.640 in the loan industry really did work. You know, the 0:11:30.679 --> 0:11:32.839 stereotype is the mob guy breaking your legs from not 0:11:33.120 --> 0:11:36.520 paying a debt. That wasn't super common to happen. According 0:11:36.559 --> 0:11:39.480 to scholarly comments, quote. The debt or is motivated to 0:11:39.480 --> 0:11:41.800 pay not only because his body has pledged as collateral, 0:11:41.800 --> 0:11:44.040 but also because he wants to preserve his only line 0:11:44.040 --> 0:11:46.480 of credit. The creditor, in turn, wants to avoid the 0:11:46.480 --> 0:11:49.439 expense of hiring a nutcracker to collect the debt. As 0:11:49.440 --> 0:11:52.360 a nineteen sixties Chicago juice man that's what they called 0:11:52.440 --> 0:11:56.400 people who beat people up for loans explained the cost 0:11:56.400 --> 0:11:58.520 of hiring a thug to break a deadbeat's leg might 0:11:58.520 --> 0:12:01.600 exceed the sum he owned owed, and with a broken leg, 0:12:01.640 --> 0:12:03.160 it would be hard for the debtor to own money 0:12:03.160 --> 0:12:05.720 and catch up on his payments. Imposing a less stabilitating 0:12:05.720 --> 0:12:09.120 penalty usually made more sense. A finger deliberately slit open 0:12:09.120 --> 0:12:11.560 with the razor blade never kept anybody from working and 0:12:11.559 --> 0:12:14.280 serves as a constant reminder of the next payday. But 0:12:14.360 --> 0:12:17.080 the best strategy this loan shark consisted was to select 0:12:17.120 --> 0:12:20.440 customers carefully and not load them with excessive debt. When 0:12:20.440 --> 0:12:23.000 business is good in a smoothly run operation, muscle is 0:12:23.040 --> 0:12:25.840 seldom needed for collections. One of the few empirical studies 0:12:25.840 --> 0:12:28.640 of a mob loan shark operation confirms this view, based 0:12:28.640 --> 0:12:31.280 on FBI case files. The study reported that interviews with 0:12:31.320 --> 0:12:33.960 a hundred and fifteen customers of the loan business turned 0:12:34.000 --> 0:12:36.600 up only one debtor who had been threatened. None were beaten. 0:12:37.400 --> 0:12:40.000 So I mean, I feel like I've watched enough Sopranos 0:12:40.000 --> 0:12:43.320 to know that's not true, But um, I'm just kidding now. 0:12:43.480 --> 0:12:46.440 I think it's also very interesting that it went from 0:12:46.640 --> 0:12:51.200 psychological manipulation and torture to the complete opposite, just like 0:12:51.280 --> 0:12:55.360 pure physical Yeah, isn't that fascinating? That's fascinating, Like it's 0:12:55.400 --> 0:12:58.439 weird how that happens. How Like when the businesses are 0:12:58.480 --> 0:13:02.560 completely legal and the lead system allows them, they psychologically 0:13:02.600 --> 0:13:06.480 torture you in charge utterly ruinous rates of debt or 0:13:06.520 --> 0:13:09.520 of interest, and then when the business is illegal, the 0:13:09.559 --> 0:13:12.440 interest rates go down, but they have to slice open 0:13:12.440 --> 0:13:14.679 your finger to get you to pay sometimes, and like 0:13:14.760 --> 0:13:16.880 that's that, like you you have to pick one of 0:13:16.920 --> 0:13:18.880 the two, like, because people are going to get these 0:13:18.880 --> 0:13:21.520 loans either way. I mean it's a little bit still 0:13:21.559 --> 0:13:25.440 psychological because you said something like, um, cutting a finger, 0:13:25.600 --> 0:13:27.520 like it will be a concert reminder of your debt 0:13:27.559 --> 0:13:33.280 because it's like on your hand. So yeah, that's so 0:13:33.720 --> 0:13:37.079 fucking manipulative it is. I mean I gotta say, I 0:13:37.400 --> 0:13:39.720 kind of I'm more on the mob's side than the 0:13:39.760 --> 0:13:43.560 legitimate lenders. Same here, no, same here, I think I 0:13:43.559 --> 0:13:50.080 think ultimately, even though the mobsters are probably better off, 0:13:50.320 --> 0:13:53.320 like financially, I feel like for the majority of the time, 0:13:53.360 --> 0:13:57.160 mobsters kind of came from lower class or like middle 0:13:57.200 --> 0:14:00.640 class or like you know what I mean, people are understanding. Yeah, 0:14:00.679 --> 0:14:03.199 they they're the they have a better understanding of maybe 0:14:03.240 --> 0:14:06.320 the desperation they feel or like the trials and gup 0:14:06.320 --> 0:14:08.720 relations of not having a lot of money. And also, 0:14:08.800 --> 0:14:13.959 I mean, Tony Soprano is a complicated character. You know, um, 0:14:14.200 --> 0:14:16.440 this is going to turn into this as apparents episode, 0:14:16.559 --> 0:14:19.680 Tony Soprano put in a forty hour work week every week. 0:14:19.800 --> 0:14:22.240 You know. Yeah, he wasn't. He wasn't slacking off like 0:14:22.320 --> 0:14:26.280 certain unnamed presidents. I mean like he was working around. 0:14:26.360 --> 0:14:29.360 Sure he was sucking around and like whatever. But at 0:14:29.360 --> 0:14:31.560 the same time, he's a busy man. And I think 0:14:31.560 --> 0:14:35.400 I think that's a difference. I think that's a difference because, uh, 0:14:35.760 --> 0:14:39.680 legal operation is usually run by rich people that usually 0:14:39.760 --> 0:14:42.840 don't lift a finger for their money. Maybe they don't anymore, 0:14:42.960 --> 0:14:45.040 maybe they have in the past, where their daddy did 0:14:45.160 --> 0:14:49.200 or whatever. But tony soprano working guy. Yeah, that's why 0:14:49.240 --> 0:14:51.760 I have a lot more respect for like a drug 0:14:51.800 --> 0:14:54.520 dealer than one of these guys who worked at like 0:14:54.600 --> 0:14:57.960 a mutual fund or whatever scanning people out during the 0:14:57.960 --> 0:15:00.200 financial crash, someone who was like, we're going to as 0:15:00.240 --> 0:15:05.440 fargo selling people bad loans. Like, at least the drug dealer, 0:15:05.600 --> 0:15:09.000 Like there, you know, for one thing, it's an honest transaction. 0:15:09.080 --> 0:15:11.120 You want some heroin, you get some heroin. And for 0:15:11.160 --> 0:15:14.720 another thing, like they're out there pounding the ground, they're working, working, 0:15:14.880 --> 0:15:17.400 working the floor, so to speak. They're putting on some risk. 0:15:17.560 --> 0:15:21.080 I I gotta respect that more than you respect the 0:15:21.120 --> 0:15:23.440 financial criminal. So I feel the same way about the 0:15:23.440 --> 0:15:26.560 mafia mafia in this case, Like, yeah, maybe you're cutting 0:15:26.600 --> 0:15:28.920 open some people's fingers, but at least that's honest finger 0:15:28.960 --> 0:15:34.520 cutting work. Yeah, that's honest finger cutting work. Honest finger 0:15:34.520 --> 0:15:37.720 cutting work. Now, by the nineteen sixties, it was not 0:15:37.800 --> 0:15:41.359 uncommon for mafia lenders to offer annual aprs of under 0:15:40.760 --> 0:15:44.520 two for their short term loans. FBI studies also reported 0:15:44.520 --> 0:15:47.680 surprisingly low rates given the industry, often around a hundred 0:15:47.720 --> 0:15:50.640 and fifty a p R in many cases, mob loans 0:15:50.680 --> 0:15:54.680 were less than half as expensive as modern payday loans. UH. Now, 0:15:54.800 --> 0:15:57.160 as I stated, violence was not the norm, but cases 0:15:57.160 --> 0:15:59.600 did occur that we're shocking enough to spark public outrage. 0:15:59.680 --> 0:16:02.160 In one incident in nineteen thirty five, a young clerk 0:16:02.280 --> 0:16:04.200 was beaten within an inch of his life for welching 0:16:04.200 --> 0:16:06.760 on a debt. This launched a series of investigations by 0:16:06.800 --> 0:16:09.680 Thomas Dewey, the governor of New York. Twenty seven people 0:16:09.720 --> 0:16:12.720 were arrested for violent collection of debts. Throughout the nineteen 0:16:12.760 --> 0:16:15.200 forties and fifties, U S. States cracked down on mafia 0:16:15.280 --> 0:16:18.000 loan sharks, and unfortunately, they did so by doing the 0:16:18.000 --> 0:16:20.160 opposite of what they'd done to kill the non violent 0:16:20.240 --> 0:16:23.960 loan sharks, raising ursurycaps and allowing legal lenders to charge 0:16:23.960 --> 0:16:27.760 exorbitant interest rates once again. So by the nineteen seventies, 0:16:28.000 --> 0:16:31.040 deregulation of the paid a loan industry had largely starved 0:16:31.080 --> 0:16:33.200 the mob out of the business and allowed a thriving 0:16:33.200 --> 0:16:36.200 new industry of perfectly legitimate companies charging five and six 0:16:36.960 --> 0:16:41.400 interest for short term loans. UH. Individual states realized pretty 0:16:41.440 --> 0:16:43.440 quickly that this was even worse than letting the mob 0:16:43.520 --> 0:16:46.200 give people loans instead. They started to change their laws 0:16:46.200 --> 0:16:49.400 back and reintroduced caps to interest rates. But the big 0:16:49.400 --> 0:16:51.400 banks had gotten a taste of how much money paid 0:16:51.400 --> 0:16:54.000 A loans could provide. They brought out their lawyers. In 0:16:54.000 --> 0:16:56.280 the nineteen seventy eight, the Supreme Court ruled on a 0:16:56.280 --> 0:16:59.880 case in Minnesota. That state had had imposed strict laws 0:16:59.880 --> 0:17:01.920 on the interest that could be charged on loans, but 0:17:01.960 --> 0:17:04.280 banks from other states with hired limits had started coming 0:17:04.280 --> 0:17:07.280 in and operating paid a loan businesses, charging the interest 0:17:07.359 --> 0:17:09.760 rates of their state of origin. When the case hit 0:17:09.760 --> 0:17:12.000 the Supreme Court, the Supreme Court ruled that this behavior 0:17:12.080 --> 0:17:14.560 was totally fine, and from now on banks would partner 0:17:14.560 --> 0:17:17.440 with short term lending companies to charge outrageously high interest 0:17:17.520 --> 0:17:20.360 rates for short term loans, regardless of what the original 0:17:20.440 --> 0:17:23.560 individ or what the individual states themselves had on the books. 0:17:23.960 --> 0:17:25.960 As a result of this, certain states like Kansas and 0:17:26.000 --> 0:17:29.639 Nevada became the hubs for increasingly enormous paid a lending businesses. 0:17:30.480 --> 0:17:36.200 So that's cool. What a twist, Yeah, what a twist? Twist. So, 0:17:36.440 --> 0:17:38.879 by the early nineteen nineties, the paiday loan industry was 0:17:38.920 --> 0:17:41.040 growing at an exponential rate. It had gone from the 0:17:41.080 --> 0:17:44.439 purview of shady but ultimately human mobsters to a multibillion 0:17:44.480 --> 0:17:47.600 dollar business run by gigantic, faceless corporations that hid behind 0:17:47.640 --> 0:17:50.280 the multitude of names and constantly moved across state lines 0:17:50.320 --> 0:17:54.439 to make their questionably legal behavior harder to prosecute. Again, 0:17:54.560 --> 0:17:56.200 it's kind of a mark of where this story is 0:17:56.240 --> 0:17:57.800 going that we're going to look back on the old 0:17:57.880 --> 0:18:00.280 days of the mafia cutting up people's fingers, is yeah, 0:18:00.280 --> 0:18:03.600 the good old days of payday lending. Yeah. I mean 0:18:04.320 --> 0:18:08.240 it's crazy that throughout like basically over a century of 0:18:08.280 --> 0:18:11.400 this one's ever been like, let's just let's just get 0:18:11.440 --> 0:18:14.199 to the root of the problem, Like what why do 0:18:14.280 --> 0:18:17.639 people keep wanting money or needing money? Rather, it's because 0:18:17.840 --> 0:18:24.160 of the the just the time between their paychecks. And 0:18:24.359 --> 0:18:27.560 that's infuriating that that hasn't even been addressed. It's just 0:18:27.680 --> 0:18:33.680 the payday loan fucking clusterfuck keeps getting more clusterfucking yeah, 0:18:33.720 --> 0:18:36.480 and nobody, nobody ever even talks about like, well, maybe 0:18:36.480 --> 0:18:39.520 we should reform how workers get paid because maybe people 0:18:39.680 --> 0:18:42.280 deserve to get their money the day that they earn it, 0:18:42.480 --> 0:18:45.720 because why wouldn't they, Like it's like the only reason 0:18:45.840 --> 0:18:48.199 it seems weird to suggest that change to us is 0:18:48.240 --> 0:18:51.800 because it's not how it works. Um. But like if 0:18:51.800 --> 0:18:53.720 you try to think back on it, like, well, why 0:18:53.800 --> 0:18:56.600 does the company get the value of your labor immediately 0:18:56.720 --> 0:19:00.320 but you have to wait weeks or months to get 0:19:00.320 --> 0:19:02.200 the money that you know, when you put it that way, 0:19:02.240 --> 0:19:06.879 it's sucking bullshit. It's total bullshit. Like what if I 0:19:07.000 --> 0:19:09.840 what if I work an an immense amount of work 0:19:10.240 --> 0:19:11.919 and then I die the next day, I have no 0:19:12.200 --> 0:19:14.240 like you know what I mean, Like they have benefited, 0:19:14.240 --> 0:19:17.040 but I have not exactly you should be able to 0:19:17.440 --> 0:19:20.879 and I'm owed on my deathbed. Yeah, that's bullshit. They 0:19:20.960 --> 0:19:22.840 got to bury a bunch of money in your casket, 0:19:23.720 --> 0:19:26.159 which isn't going to help you any and it'll probably 0:19:26.240 --> 0:19:31.480 I mean, like, I mean, okay, I'm freelanced. I've never 0:19:31.520 --> 0:19:34.879 actually had like a salary full time job. But the 0:19:35.119 --> 0:19:36.680 I like, I work on a day rate when I 0:19:36.720 --> 0:19:39.320 work in production or like whatever. As a filmmaker, you 0:19:39.359 --> 0:19:43.359 get like a standard rate sometimes, but even that, it's 0:19:43.359 --> 0:19:46.000 it's like weeks after the job is over that you 0:19:46.040 --> 0:19:49.640 finally get paid. And I'm wondering, like maybe there are 0:19:49.760 --> 0:19:53.200 some things that are like, well the budget, Like I don't, 0:19:53.720 --> 0:19:56.760 I don't know, man, what's the I don't think there's 0:19:56.800 --> 0:20:01.879 no there's no solving this, there's no Oh my god. Yeah, 0:20:01.920 --> 0:20:06.200 there there are some companies there. There's one company based 0:20:06.200 --> 0:20:08.080 out of the Bay Area that's trying to like reform 0:20:08.160 --> 0:20:10.120 the system. And the way they're trying to do it 0:20:10.119 --> 0:20:12.040 is by essentially, if you work for a company like 0:20:12.160 --> 0:20:15.840 uber or lift um, you sign up a thing with 0:20:15.880 --> 0:20:19.760 them and basically they pay you what you earn when 0:20:19.800 --> 0:20:21.960 you earn it, and they take like one percent, like 0:20:22.000 --> 0:20:25.040 a flat rate. Uh, and you get your money instantly, 0:20:25.080 --> 0:20:27.399 and then when the company pays you, the money goes 0:20:27.680 --> 0:20:30.320 to the company that has been giving you your money. 0:20:30.359 --> 0:20:34.960 So like essentially um. Yeah, So like there are attempts 0:20:35.000 --> 0:20:38.680 like it also, is it because of taxes? I don't know, 0:20:38.800 --> 0:20:41.679 because I can't. It can't be in most cases because, 0:20:41.840 --> 0:20:43.879 like you, I've spent most of my working career as 0:20:43.920 --> 0:20:47.840 a freelancer, usually getting paid four to six weeks after 0:20:47.880 --> 0:20:50.400 I do the work, uh, and they don't take any 0:20:50.440 --> 0:20:54.240 taxes out. That's like how freelancing works. So I think 0:20:54.320 --> 0:20:57.520