1 00:00:15,276 --> 00:00:23,516 Speaker 1: Pushkin. I live in Berkeley, California. It's a peaceful place 2 00:00:23,596 --> 00:00:26,716 Speaker 1: for an American city. In twenty years, I've never so 3 00:00:26,836 --> 00:00:30,396 Speaker 1: much as noticed the police station. Never occurred to me 4 00:00:30,476 --> 00:00:33,116 Speaker 1: that I even needed to know where it was. So 5 00:00:33,476 --> 00:00:38,676 Speaker 1: it's Joe, yes, Zoe. But now here I am inside 6 00:00:38,716 --> 00:00:42,076 Speaker 1: the place, surrounded by cinder block walls and pictures of 7 00:00:42,196 --> 00:00:45,916 Speaker 1: legendary police officers, and across the table from me there's 8 00:00:45,916 --> 00:00:48,916 Speaker 1: a living legend officer, Joe LaDou. So I'm going to 9 00:00:48,996 --> 00:00:52,356 Speaker 1: tell you what happened to me and why I'm here. 10 00:00:53,116 --> 00:00:58,156 Speaker 1: So beginning of last year, we started to get calls 11 00:00:58,676 --> 00:01:01,516 Speaker 1: at eight in the morning from City Group Big Bank, 12 00:01:02,116 --> 00:01:04,036 Speaker 1: and he's like, I was getting the kids out of 13 00:01:04,076 --> 00:01:06,076 Speaker 1: the door of a breakfast and the phone to ring. 14 00:01:06,156 --> 00:01:08,476 Speaker 1: And this happened not ten times, at twenty times, thirty times, 15 00:01:08,476 --> 00:01:11,036 Speaker 1: but fifty time. I mean it was just like harassment. 16 00:01:11,436 --> 00:01:13,396 Speaker 1: And they said I owed the money. And it was 17 00:01:13,436 --> 00:01:17,116 Speaker 1: absolutely bizarre because I didn't never an never any business 18 00:01:17,116 --> 00:01:19,156 Speaker 1: with City Group, I mean, no credit cards, know nothing, 19 00:01:19,196 --> 00:01:21,156 Speaker 1: but they said we had like fifteen thousand dollars of 20 00:01:21,236 --> 00:01:23,836 Speaker 1: outstanding and loans. I just want to say that again 21 00:01:23,876 --> 00:01:26,716 Speaker 1: so you hear it. City Group said I owed them 22 00:01:26,796 --> 00:01:30,916 Speaker 1: fifteen thousand dollars, and so finally I said, look quick 23 00:01:30,916 --> 00:01:33,356 Speaker 1: calling us, you're just driving us crazy in the mornings. 24 00:01:33,676 --> 00:01:36,476 Speaker 1: And for whatever reason, they just stopped calling. Okay. The 25 00:01:36,596 --> 00:01:38,516 Speaker 1: next thing it happens is I get a note from 26 00:01:38,556 --> 00:01:42,436 Speaker 1: American Express saying my credit score has collapsed because I 27 00:01:42,476 --> 00:01:46,676 Speaker 1: have welshed on a debt to City Group. So American 28 00:01:46,716 --> 00:01:48,916 Speaker 1: Express called me and says we're gonna put a limit 29 00:01:48,956 --> 00:01:51,436 Speaker 1: on your account because your FICO score has declined. And 30 00:01:51,476 --> 00:01:53,196 Speaker 1: I called them and said, well, how's this happen? How 31 00:01:53,236 --> 00:01:57,156 Speaker 1: do you even know this? Oh? Well, a credit aggregator 32 00:01:57,396 --> 00:02:01,156 Speaker 1: name Experience has sent us a report saying you've got 33 00:02:01,156 --> 00:02:04,236 Speaker 1: some bad debts. I didn't even know what Experience was 34 00:02:04,596 --> 00:02:07,516 Speaker 1: or what it did. As it turns out, there are 35 00:02:07,516 --> 00:02:10,076 Speaker 1: a bunch of companies that make their money by gathering 36 00:02:10,116 --> 00:02:13,116 Speaker 1: up whatever any one bank or credit card company has 37 00:02:13,156 --> 00:02:16,116 Speaker 1: to say about you, and then spreading the word to 38 00:02:16,156 --> 00:02:19,276 Speaker 1: the others, so that if one bank thinks you owe 39 00:02:19,316 --> 00:02:22,556 Speaker 1: them money, all the others see you as a problem. 40 00:02:22,836 --> 00:02:26,036 Speaker 1: Experience is one of those companies, and I'd become one 41 00:02:26,076 --> 00:02:29,996 Speaker 1: of those problems. Someone claiming to be me opening a 42 00:02:30,636 --> 00:02:36,036 Speaker 1: credit card account with City Bank in Sioux Fall, South Dakota, 43 00:02:36,156 --> 00:02:42,396 Speaker 1: and he gave as his address a street in Miami, 44 00:02:43,116 --> 00:02:45,556 Speaker 1: but it's a street that doesn't even exist. A credit 45 00:02:45,596 --> 00:02:49,796 Speaker 1: limit was fifteen thousand. Somehow he managed to borrow sixteen thousand, 46 00:02:49,836 --> 00:02:52,036 Speaker 1: four hundred and six dollars and repay none of it 47 00:02:53,236 --> 00:02:57,196 Speaker 1: four hundred and six dollars. When I called Experience to 48 00:02:57,236 --> 00:02:59,396 Speaker 1: say how come you have this on my credit report, 49 00:03:00,156 --> 00:03:01,916 Speaker 1: they said, well, we can't do anything about it's a 50 00:03:01,956 --> 00:03:03,516 Speaker 1: city group, said you o them this money. So I 51 00:03:03,516 --> 00:03:05,956 Speaker 1: call City Group and City Group said they didn't know 52 00:03:05,996 --> 00:03:09,396 Speaker 1: who I was, and add no record of my Social 53 00:03:09,436 --> 00:03:10,996 Speaker 1: Security number. I mean, it was just a mass. I 54 00:03:11,556 --> 00:03:14,596 Speaker 1: was stuck in on hold for hours and they gave 55 00:03:14,636 --> 00:03:18,556 Speaker 1: me no joy, I mean no joy at all. Finally, 56 00:03:18,836 --> 00:03:21,436 Speaker 1: Experience tells me that I need to file an identity 57 00:03:21,476 --> 00:03:25,436 Speaker 1: theft complaint with the ftc IS at the Federal Trade Commission, 58 00:03:25,716 --> 00:03:28,716 Speaker 1: which I did, and they said I had to go 59 00:03:29,396 --> 00:03:32,476 Speaker 1: come to the police station and file a report for 60 00:03:32,516 --> 00:03:35,636 Speaker 1: them to take seriously my claim that my identity had 61 00:03:35,676 --> 00:03:39,676 Speaker 1: been stolen. So to summarize myself, just there a big 62 00:03:39,716 --> 00:03:43,916 Speaker 1: New York bank hands fifteen sixteen grand to someone pretending 63 00:03:43,956 --> 00:03:48,036 Speaker 1: to be me, Michael Lewis. Then some credit agency broadcasts 64 00:03:48,076 --> 00:03:51,156 Speaker 1: a total eye about my behavior, and now I need 65 00:03:51,156 --> 00:03:53,556 Speaker 1: to drive down to my local police station and bother 66 00:03:53,636 --> 00:03:56,836 Speaker 1: a local cop. So that's why I'm here. I want 67 00:03:56,836 --> 00:03:59,996 Speaker 1: to file a police report for identity theft, and I 68 00:04:00,036 --> 00:04:01,556 Speaker 1: want to ask you a couple questions about it before 69 00:04:01,556 --> 00:04:04,036 Speaker 1: I do it. And the first is how often do 70 00:04:04,036 --> 00:04:07,716 Speaker 1: you all have people filing identity theft reports with the police? 71 00:04:08,156 --> 00:04:10,596 Speaker 1: Very frequently, so it's this is not weird, it's not 72 00:04:10,596 --> 00:04:13,236 Speaker 1: completely uncommon. No, no, but that isn't the question I 73 00:04:13,316 --> 00:04:16,596 Speaker 1: most wanted an answer to. I've been stewing on another 74 00:04:16,676 --> 00:04:19,516 Speaker 1: question for so long it's almost hard to put it 75 00:04:19,556 --> 00:04:22,676 Speaker 1: into words. I mean, just as a law enforcement officer, 76 00:04:22,916 --> 00:04:26,276 Speaker 1: does it not strike you as strange that I've never 77 00:04:26,276 --> 00:04:28,236 Speaker 1: had anything to do with either one of these parties 78 00:04:28,436 --> 00:04:31,516 Speaker 1: and they wrote me into this and it's my problem. 79 00:04:31,516 --> 00:04:35,076 Speaker 1: All of a sudden, it seems to me that city 80 00:04:35,116 --> 00:04:37,956 Speaker 1: group should be filing some sort of complaint with the police, 81 00:04:38,036 --> 00:04:39,796 Speaker 1: not me, and that I shouldn't have to deal with 82 00:04:39,836 --> 00:04:43,356 Speaker 1: this at all. It's very odd that it's framed this way. 83 00:04:43,476 --> 00:04:45,796 Speaker 1: The whole notion of identity stuff. No one. I'm still 84 00:04:45,836 --> 00:04:48,716 Speaker 1: met for the first time. Officer lad is looking at 85 00:04:48,756 --> 00:04:52,916 Speaker 1: me a little dubiously like I'm crossing some line, like 86 00:04:52,956 --> 00:04:55,116 Speaker 1: I'm going to start asking him for his opinions about 87 00:04:55,156 --> 00:04:58,876 Speaker 1: animal rights or about the local Native American burial ground 88 00:04:58,916 --> 00:05:00,876 Speaker 1: that somehow wound up under the parking lot of a 89 00:05:00,916 --> 00:05:04,156 Speaker 1: fish restaurant. Cops don't control the rules of the game. 90 00:05:04,316 --> 00:05:07,076 Speaker 1: They just enforce them. The very idea that I should 91 00:05:07,116 --> 00:05:08,956 Speaker 1: have to spend a minute having to deal with this 92 00:05:09,156 --> 00:05:12,116 Speaker 1: seems just a little odd. I mean, if you take 93 00:05:12,116 --> 00:05:14,476 Speaker 1: it out of the financial sector and you say I 94 00:05:14,636 --> 00:05:20,236 Speaker 1: managed to persuade Zoe that I am Audrey and I 95 00:05:20,316 --> 00:05:23,196 Speaker 1: get her to lend me ten grand Audrey's my producer 96 00:05:23,236 --> 00:05:26,996 Speaker 1: on this episode, and Zoe is my associate producer. They're 97 00:05:27,036 --> 00:05:29,676 Speaker 1: here at the station with me recording, just standing there 98 00:05:29,676 --> 00:05:34,876 Speaker 1: in their headphones, expressionless, dead eyed. It's alway's not going 99 00:05:34,916 --> 00:05:38,276 Speaker 1: to have any ability to disrupt my life or get 100 00:05:38,276 --> 00:05:40,196 Speaker 1: me invite I mean, it's an odd thing that the 101 00:05:40,236 --> 00:05:43,436 Speaker 1: financial system has now put this sort of strain on 102 00:05:43,836 --> 00:05:47,596 Speaker 1: police resources, it seems to me. So let me put 103 00:05:47,636 --> 00:05:49,756 Speaker 1: it in as a question. If people are coming in 104 00:05:49,756 --> 00:05:51,916 Speaker 1: and filings reports, is taking your time and all the rest. 105 00:05:52,236 --> 00:05:53,956 Speaker 1: Has it ever struck you that it seems a little 106 00:05:53,956 --> 00:05:55,396 Speaker 1: crazy to have the police in the middle of this 107 00:05:56,436 --> 00:05:58,516 Speaker 1: To answer, it's it's interesting in the fact that it's 108 00:05:58,516 --> 00:06:00,596 Speaker 1: a different type of victimization, right. I don't want to 109 00:06:00,596 --> 00:06:02,436 Speaker 1: think of myself as a victim, but if you want 110 00:06:02,436 --> 00:06:06,276 Speaker 1: me to be one, But it turns out I have 111 00:06:06,396 --> 00:06:08,196 Speaker 1: to be the victim at least if I want him 112 00:06:08,196 --> 00:06:10,956 Speaker 1: to file a report. If I'm not a victim, that 113 00:06:11,116 --> 00:06:13,436 Speaker 1: I'm to blame for whatever a fake Michael Lewis has 114 00:06:13,476 --> 00:06:16,036 Speaker 1: been doing at his fake address. He is the funny thing, 115 00:06:16,236 --> 00:06:19,076 Speaker 1: I feel victimized not by whoever that guy dude was 116 00:06:19,116 --> 00:06:22,276 Speaker 1: in Miami, but by city group. Like they present themselves 117 00:06:22,316 --> 00:06:26,396 Speaker 1: as someone who has been victimized by essentially my inability 118 00:06:26,436 --> 00:06:29,636 Speaker 1: to prevent anybody from stealing my identity. But really, if 119 00:06:29,676 --> 00:06:31,956 Speaker 1: they'd never not done the dopey thing in the first place, 120 00:06:31,996 --> 00:06:33,956 Speaker 1: we wouldn't even be here. And that's the thing that 121 00:06:34,436 --> 00:06:36,756 Speaker 1: kind of gets under my skin, is that the financial 122 00:06:36,836 --> 00:06:39,116 Speaker 1: sector has figured out a way to shift the burden 123 00:06:39,596 --> 00:06:42,796 Speaker 1: of this problem onto people who have nothing to do 124 00:06:42,836 --> 00:06:46,036 Speaker 1: with the problem. Let me get youse, right, dispatch one thirty. 125 00:06:46,956 --> 00:06:49,436 Speaker 1: I've never had a case number. Can you put me 126 00:06:49,436 --> 00:06:51,356 Speaker 1: on the board and generate numbers for a by thirty 127 00:06:51,396 --> 00:06:54,676 Speaker 1: point five to nineteen? You know what all those numbers mean? 128 00:06:55,196 --> 00:06:57,516 Speaker 1: Oh yeah, I'm talking through it. It's just like another language. 129 00:07:00,076 --> 00:07:05,116 Speaker 1: Six zero one six. Definitely, thank you. I feel like 130 00:07:05,116 --> 00:07:07,596 Speaker 1: I because this again. So I'm going to give you 131 00:07:07,596 --> 00:07:09,356 Speaker 1: a business card with the case number, and I'm also 132 00:07:09,356 --> 00:07:11,476 Speaker 1: going to give you a victim of identity the pamphlet. 133 00:07:11,756 --> 00:07:15,156 Speaker 1: I already said this, but I'm the real Michael Lewis, 134 00:07:15,636 --> 00:07:18,996 Speaker 1: and this is against the rules. A show about the 135 00:07:19,036 --> 00:07:22,196 Speaker 1: decline of the human referee in American life and what 136 00:07:22,276 --> 00:07:29,876 Speaker 1: that's doing to our idea of fairness. Here are the 137 00:07:29,916 --> 00:07:34,516 Speaker 1: two most dangerous words in the English language consumer finance. 138 00:07:35,836 --> 00:07:37,836 Speaker 1: The phrase now gets tossed around as if it's a 139 00:07:37,956 --> 00:07:40,676 Speaker 1: natural part of human existence, like it's been around forever. 140 00:07:41,716 --> 00:07:44,396 Speaker 1: But the first national credit cards didn't exist until Bank 141 00:07:44,396 --> 00:07:47,556 Speaker 1: of America created them in the late nineteen sixties, and 142 00:07:47,596 --> 00:07:50,196 Speaker 1: it wasn't until the mid nineteen seventies that City Group 143 00:07:50,236 --> 00:07:54,116 Speaker 1: figured away around the usury laws. Laws that have existed 144 00:07:54,356 --> 00:07:57,836 Speaker 1: since the first Babylonian dynasty that put limits on how 145 00:07:57,916 --> 00:08:01,316 Speaker 1: much interest a lender could charge a borrower. In the 146 00:08:01,356 --> 00:08:03,956 Speaker 1: mid seventies, the Supreme Court ruled that the laws that 147 00:08:03,996 --> 00:08:06,996 Speaker 1: applied to lenders were the state laws where the lender 148 00:08:07,196 --> 00:08:11,116 Speaker 1: was based, as opposed to where the loan occurred. In 149 00:08:11,156 --> 00:08:15,356 Speaker 1: a desperate move to revive its economy, South Dakota got 150 00:08:15,436 --> 00:08:18,756 Speaker 1: rid of the usury laws in nineteen seventy nine, which 151 00:08:18,796 --> 00:08:21,476 Speaker 1: is why the City Group credit card I never applied 152 00:08:21,516 --> 00:08:25,876 Speaker 1: for was issued from Sioux Falls, South Dakota. The original 153 00:08:25,876 --> 00:08:28,276 Speaker 1: city Group credit card agreement back in the nineteen seventies 154 00:08:28,356 --> 00:08:31,156 Speaker 1: ran a page and a half. The one I never 155 00:08:31,236 --> 00:08:34,636 Speaker 1: signed was more than thirty pages of tiny print, And 156 00:08:34,716 --> 00:08:37,956 Speaker 1: as you no doubt already know, it's a mine field 157 00:08:38,036 --> 00:08:42,556 Speaker 1: of complicated fees and penalties. But it's not just credit 158 00:08:42,596 --> 00:08:45,876 Speaker 1: cards now. It's all the Wall Street banks, the payday lenders, 159 00:08:45,876 --> 00:08:48,996 Speaker 1: the subprime mortgage lenders, the car loan originators, the student 160 00:08:49,076 --> 00:08:53,476 Speaker 1: loan services, and the vast shadowy network of companies supposedly 161 00:08:53,556 --> 00:08:58,796 Speaker 1: keeping track of the credit worthiness of ordinary Americans. This 162 00:08:59,196 --> 00:09:01,996 Speaker 1: is where trust and institutions has taken the biggest hit. 163 00:09:03,196 --> 00:09:05,636 Speaker 1: When money people figured out how to inflict pain and 164 00:09:05,676 --> 00:09:10,036 Speaker 1: suffering even on middle class white people without any consequence 165 00:09:10,076 --> 00:09:15,236 Speaker 1: for themselves. How do they do this? That's easy. Consumer 166 00:09:15,236 --> 00:09:19,196 Speaker 1: finance has had an incredible gift for remaining unrefereed, and 167 00:09:19,276 --> 00:09:21,316 Speaker 1: the absence of a ref is what's allowed them to 168 00:09:21,316 --> 00:09:24,196 Speaker 1: screw up the lives of millions and millions of ordinary 169 00:09:24,236 --> 00:09:31,236 Speaker 1: people look super emotional today. So if I cry meet 170 00:09:31,356 --> 00:09:35,276 Speaker 1: Katie Highland of New Rochelle, New York, public school teacher, 171 00:09:35,636 --> 00:09:39,396 Speaker 1: mother of two small children, it's related to this too, 172 00:09:39,516 --> 00:09:44,516 Speaker 1: which is interesting. This to which she refers is consumer finance. 173 00:09:45,156 --> 00:09:49,236 Speaker 1: Some old student loans. Student loans started flowering in the 174 00:09:49,316 --> 00:09:51,836 Speaker 1: nineteen eighties after the boom and credit cards and the 175 00:09:51,876 --> 00:09:55,876 Speaker 1: effective death of usury laws. Just now, about forty four 176 00:09:55,916 --> 00:09:59,116 Speaker 1: million Americans owe a total of one point five trillion 177 00:09:59,156 --> 00:10:02,916 Speaker 1: dollars in student debt. More than four million of those Americans, 178 00:10:02,956 --> 00:10:06,196 Speaker 1: most of them young people, are already in default. Some 179 00:10:06,316 --> 00:10:08,556 Speaker 1: large number of the rest are heading towards it. And 180 00:10:08,636 --> 00:10:11,436 Speaker 1: if you think they're just a bunch of deadbeats, we'll 181 00:10:11,476 --> 00:10:15,516 Speaker 1: just hold that thought. Why do you want to introduce yourself? 182 00:10:15,996 --> 00:10:20,676 Speaker 1: That's Audrey, my producer, act like a big girl. My 183 00:10:20,796 --> 00:10:25,556 Speaker 1: name is Riley, And what's your name, Jackson? What do 184 00:10:25,596 --> 00:10:28,396 Speaker 1: you usually do when you come home? Um, just go 185 00:10:28,516 --> 00:10:31,036 Speaker 1: on a couch. But if I feel very sleep y'all, 186 00:10:31,076 --> 00:10:35,516 Speaker 1: just follow asleep. But if we do falls you really 187 00:10:35,556 --> 00:10:39,556 Speaker 1: like you'll so fast? Oh yeap is we can't follow 188 00:10:39,596 --> 00:10:43,436 Speaker 1: asleep into and mommy can't start to work at night 189 00:10:43,476 --> 00:10:47,076 Speaker 1: into like nine o'clock. What did she do at night? 190 00:10:47,116 --> 00:10:50,156 Speaker 1: What type of work? Um? She just goes on a 191 00:10:50,236 --> 00:10:55,596 Speaker 1: computer and maybe like sends emails and and actually sends, 192 00:10:55,756 --> 00:10:59,076 Speaker 1: um what she does to work on her computer to 193 00:10:59,196 --> 00:11:04,196 Speaker 1: school so her school can be running very good. That's Jackson, 194 00:11:04,436 --> 00:11:07,956 Speaker 1: Katie's son. Katie teaches reading and writing to eighth graders 195 00:11:07,956 --> 00:11:11,316 Speaker 1: in the Bronx and works with kids who struggle in school. 196 00:11:12,436 --> 00:11:16,116 Speaker 1: Years ago, Katie got a bachelor's degree in English and 197 00:11:16,156 --> 00:11:19,116 Speaker 1: then a master's in secondary education. So the loans I 198 00:11:19,436 --> 00:11:22,116 Speaker 1: took out since day one. I graduated high school in 199 00:11:22,156 --> 00:11:23,836 Speaker 1: two thousand and one, and I had to take loans 200 00:11:23,836 --> 00:11:26,756 Speaker 1: out immediately. My mom raised three kids by herself, so 201 00:11:26,796 --> 00:11:30,036 Speaker 1: we didn't have anything. So it was always understood that 202 00:11:30,076 --> 00:11:32,196 Speaker 1: I was going to have student loans and I was 203 00:11:32,196 --> 00:11:34,596 Speaker 1: going to have to pay them back, and so from 204 00:11:34,756 --> 00:11:37,716 Speaker 1: day one that's what I did. Do you remember if 205 00:11:37,756 --> 00:11:40,236 Speaker 1: you could take yourself back to that time, like, how 206 00:11:40,236 --> 00:11:42,556 Speaker 1: did you think it was gonna go? Yeah, to play 207 00:11:42,556 --> 00:11:45,036 Speaker 1: out like in the like being there and then thinking 208 00:11:45,076 --> 00:11:47,596 Speaker 1: about the future. Yeah, I just thought, like, these are 209 00:11:47,636 --> 00:11:50,116 Speaker 1: all adults, they have my best interested at a heart, 210 00:11:50,236 --> 00:11:52,876 Speaker 1: and the people that are doing these things, who are 211 00:11:52,876 --> 00:11:56,796 Speaker 1: associated with colleges and financial institutions, like They're going to 212 00:11:58,036 --> 00:11:59,756 Speaker 1: tell me the thing that I'm supposed to do, and 213 00:11:59,796 --> 00:12:01,396 Speaker 1: then when it comes time to pay it back, I'm 214 00:12:01,396 --> 00:12:02,716 Speaker 1: going to have a job and I'm gonna have plenty 215 00:12:02,716 --> 00:12:05,556 Speaker 1: of money and it's going to be easy. And you know, 216 00:12:05,836 --> 00:12:07,916 Speaker 1: it was just something like, oh, yeah, everyone's student loans. 217 00:12:07,916 --> 00:12:12,516 Speaker 1: It's annoying, but it's dual sort of thing. She doesn't 218 00:12:12,556 --> 00:12:14,996 Speaker 1: recall anyone ever trying to explain to her how her 219 00:12:14,996 --> 00:12:18,316 Speaker 1: loans worked. She just remembers the financial advisor at her 220 00:12:18,316 --> 00:12:21,156 Speaker 1: college giving her some papers to sign and that was that. 221 00:12:22,036 --> 00:12:24,156 Speaker 1: In the end, to pay for college and grad school, 222 00:12:24,356 --> 00:12:27,556 Speaker 1: she took out several loans totaling seventy seven thousand dollars. 223 00:12:27,996 --> 00:12:30,916 Speaker 1: The loans came from the US Department of Education, but 224 00:12:30,956 --> 00:12:33,516 Speaker 1: the government farmed out the management of its student loans 225 00:12:33,516 --> 00:12:37,916 Speaker 1: to the private sector. The consumer finance industry. The company 226 00:12:37,996 --> 00:12:42,876 Speaker 1: advising her is called Naviant. When Katie has problems or questions, 227 00:12:43,396 --> 00:12:48,076 Speaker 1: she needs to call Naviant. I realized that the amount 228 00:12:48,076 --> 00:12:51,076 Speaker 1: of money that they expected me to pay every month 229 00:12:51,236 --> 00:12:53,916 Speaker 1: wasn't going to be possible. That was when I first 230 00:12:53,956 --> 00:12:56,916 Speaker 1: started like calling them and saying, listen, how do I 231 00:12:56,956 --> 00:13:00,196 Speaker 1: get my payments lower? What do I do? You know, 232 00:13:00,276 --> 00:13:02,916 Speaker 1: I'm a teacher. I only make such a such an 233 00:13:02,876 --> 00:13:05,436 Speaker 1: amount of money, and you know, I don't really know 234 00:13:05,476 --> 00:13:07,596 Speaker 1: how you guys expect me to pay this back with 235 00:13:07,636 --> 00:13:11,276 Speaker 1: what I'm making. Every time I called it was a 236 00:13:11,276 --> 00:13:14,596 Speaker 1: Fourbearian swords deferment or you know, oh, this is great, 237 00:13:14,676 --> 00:13:16,596 Speaker 1: like you don't have to make payments for this amount 238 00:13:16,636 --> 00:13:20,916 Speaker 1: of time, and sort of kept guiding me in that direction. 239 00:13:21,876 --> 00:13:25,116 Speaker 1: In two thousand and seven, the United States Congress created 240 00:13:25,156 --> 00:13:28,956 Speaker 1: the Public Service Loan Forgiveness Program for people who wanted 241 00:13:28,996 --> 00:13:31,516 Speaker 1: to go into public service so they could afford to 242 00:13:31,516 --> 00:13:36,156 Speaker 1: do it. Police officers, firefighters, soldiers, teachers. People who did 243 00:13:36,156 --> 00:13:38,676 Speaker 1: those sort of jobs for ten years and made one 244 00:13:38,796 --> 00:13:41,796 Speaker 1: hundred and twenty student loan payments on time could walk 245 00:13:41,796 --> 00:13:44,796 Speaker 1: away from the rest of what they borrowed. It was 246 00:13:44,876 --> 00:13:47,036 Speaker 1: just the sort of thing that a company like Naviant 247 00:13:47,116 --> 00:13:51,036 Speaker 1: might alert borrowers too, but they didn't tell Katie. Katie 248 00:13:51,076 --> 00:13:53,716 Speaker 1: heard about it on our own in two and fourteen 249 00:13:53,996 --> 00:13:57,636 Speaker 1: from a fellow teacher. I kind of felt relief when 250 00:13:57,676 --> 00:14:01,916 Speaker 1: I first found out about this one particular program because 251 00:14:02,196 --> 00:14:04,196 Speaker 1: I was a great like I am a big believer 252 00:14:04,436 --> 00:14:08,196 Speaker 1: of like the hard stuff will pass, and so for 253 00:14:08,276 --> 00:14:10,756 Speaker 1: me that's what this was. It was like, Okay, this 254 00:14:10,796 --> 00:14:12,236 Speaker 1: is gonna suck, Like you're not going to be able 255 00:14:12,276 --> 00:14:13,796 Speaker 1: to go why you're not going to be able to 256 00:14:13,836 --> 00:14:15,596 Speaker 1: have birthday parties for your kids or do this or 257 00:14:15,636 --> 00:14:18,116 Speaker 1: do that. But in ten years, if you're in this plan, 258 00:14:18,276 --> 00:14:20,436 Speaker 1: like it'll be worth it at the end because it'll 259 00:14:20,476 --> 00:14:22,876 Speaker 1: be gone and then you can just like really put 260 00:14:22,916 --> 00:14:25,236 Speaker 1: your time and your money into, you know, the things 261 00:14:25,236 --> 00:14:26,916 Speaker 1: that you want to do for your family and your kids. 262 00:14:27,516 --> 00:14:31,876 Speaker 1: And so she called Navigant again. That's where the trouble 263 00:14:32,076 --> 00:14:35,476 Speaker 1: really began, when she called the company that was paid 264 00:14:35,556 --> 00:14:38,996 Speaker 1: to help her understand her situation to ask them for help. 265 00:14:39,636 --> 00:14:41,516 Speaker 1: I was getting all the paperwork filled out for the 266 00:14:41,516 --> 00:14:44,476 Speaker 1: public service loan forgiveness, and I remember, like I have 267 00:14:44,636 --> 00:14:46,636 Speaker 1: going back and forth, like faxing and they'd be like, 268 00:14:46,636 --> 00:14:47,876 Speaker 1: oh no, the data is wrong and you have to 269 00:14:47,876 --> 00:14:49,836 Speaker 1: fill it out again, and I would fax it again 270 00:14:49,836 --> 00:14:52,116 Speaker 1: and oh no, this was in a different format. You 271 00:14:52,196 --> 00:14:54,476 Speaker 1: have to fax it again. It was the same way 272 00:14:54,516 --> 00:14:56,356 Speaker 1: I felt when I was trying to get Experience or 273 00:14:56,396 --> 00:14:58,956 Speaker 1: city group or whoever to explain what they've done to 274 00:14:58,996 --> 00:15:02,236 Speaker 1: my credit, the whole music, the phony, thank you for 275 00:15:02,276 --> 00:15:05,676 Speaker 1: your patience, the deep mystery of the exact location of 276 00:15:05,716 --> 00:15:07,636 Speaker 1: the person who finally comes on the other end of 277 00:15:07,636 --> 00:15:11,156 Speaker 1: the line, the total inability of anyone to solve anything. 278 00:15:12,076 --> 00:15:14,316 Speaker 1: And they said that I you know, no one was 279 00:15:14,356 --> 00:15:19,316 Speaker 1: eligible until two thousand and seventeen, because at that point 280 00:15:19,356 --> 00:15:21,596 Speaker 1: it would have been ten years from the when the 281 00:15:21,596 --> 00:15:24,836 Speaker 1: program started. By twenty seventeen, she'd have spent ten years 282 00:15:24,836 --> 00:15:26,956 Speaker 1: as a teacher and made one hundred and twenty on 283 00:15:27,116 --> 00:15:30,236 Speaker 1: time payments. What remained of her loans would then be 284 00:15:30,516 --> 00:15:33,276 Speaker 1: entirely forgiven. And I said, to my mom's say, this 285 00:15:33,316 --> 00:15:35,756 Speaker 1: is going to be amazing. What a relief like if 286 00:15:35,796 --> 00:15:38,796 Speaker 1: this happens, like I'll be able to save and maybe 287 00:15:38,796 --> 00:15:41,276 Speaker 1: one day by a house or whatever. And I remember 288 00:15:41,316 --> 00:15:43,836 Speaker 1: calling back in the end of two thousand and sixteen 289 00:15:43,956 --> 00:15:46,196 Speaker 1: to make sure that things were ready for the beginning 290 00:15:46,236 --> 00:15:50,076 Speaker 1: of two thousand and seventeen and them telling me that no, 291 00:15:50,676 --> 00:15:55,596 Speaker 1: you're not eligible. You were never eligible and basically, if 292 00:15:55,596 --> 00:15:59,436 Speaker 1: you want to become eligible, you have to consolidate your 293 00:15:59,476 --> 00:16:03,796 Speaker 1: loans and you have to start from scratch, starting now 294 00:16:03,956 --> 00:16:06,476 Speaker 1: at ten years. And I was like, well, wait a minute. 295 00:16:06,876 --> 00:16:09,356 Speaker 1: Katie Hyland asked Navigant to go back and listen into 296 00:16:09,356 --> 00:16:12,676 Speaker 1: phone records of all her previous calls, all those conversations 297 00:16:12,716 --> 00:16:17,876 Speaker 1: about faxing and paperwork and waiting until twenty seventeen. They 298 00:16:18,116 --> 00:16:20,756 Speaker 1: said that they did, and they and then they called 299 00:16:20,796 --> 00:16:24,116 Speaker 1: me back and said, we never heard any instances on 300 00:16:24,196 --> 00:16:27,316 Speaker 1: the phone records of you asking anything about public service 301 00:16:27,356 --> 00:16:32,156 Speaker 1: loan forgiveness. And I was like, well, that's an outright lie. 302 00:16:32,756 --> 00:16:44,796 Speaker 1: Oh that familiar feeling. If you want to track Katie 303 00:16:44,836 --> 00:16:48,116 Speaker 1: Highland's misery to its source, you need to travel to 304 00:16:48,156 --> 00:16:51,396 Speaker 1: Wilkes Barry, Pennsylvania, or at least call someone who knows 305 00:16:51,436 --> 00:16:55,196 Speaker 1: the place. It's the type of place that you grow 306 00:16:55,316 --> 00:16:59,156 Speaker 1: up in and your whole family is there, and chances 307 00:16:59,156 --> 00:17:01,036 Speaker 1: are you settled down and you stay there for the 308 00:17:01,036 --> 00:17:04,116 Speaker 1: rest of your life. Lynn Sabolski grew up in Wilkes Barry. 309 00:17:04,716 --> 00:17:10,076 Speaker 1: For employment, it is an economically depressed area and so 310 00:17:10,356 --> 00:17:13,916 Speaker 1: employers like Navy and major employers or the area are 311 00:17:13,996 --> 00:17:18,516 Speaker 1: really important in terms of upholding the local economy. Lynn's 312 00:17:18,556 --> 00:17:21,716 Speaker 1: been in the student loan industry for fifteen years. Until 313 00:17:21,796 --> 00:17:23,836 Speaker 1: last year. She worked in the Naviant call center in 314 00:17:23,916 --> 00:17:28,756 Speaker 1: Wilkes Barry, the place Katie Hiland called for help to 315 00:17:28,756 --> 00:17:31,396 Speaker 1: take advantage of the program Congress had created for people 316 00:17:31,436 --> 00:17:34,676 Speaker 1: like her, the program to make the student debt of 317 00:17:34,796 --> 00:17:38,436 Speaker 1: public servants bearable. Your team is handling calls that are 318 00:17:38,436 --> 00:17:40,476 Speaker 1: coming in from people who have student loans that they're 319 00:17:40,476 --> 00:17:43,836 Speaker 1: dealing with correct and so what were the pressures on 320 00:17:43,876 --> 00:17:48,516 Speaker 1: you that bothered you. The biggest pressure that was on 321 00:17:48,556 --> 00:17:52,396 Speaker 1: me was the seven minute rule, and that was representatives 322 00:17:52,396 --> 00:17:55,596 Speaker 1: were told to keep their phone calls to no more 323 00:17:55,636 --> 00:17:59,876 Speaker 1: than seven minutes. Also within those requirements were that you 324 00:18:00,396 --> 00:18:04,716 Speaker 1: validate the caller's identity, that you validate their contact information, 325 00:18:04,836 --> 00:18:09,476 Speaker 1: that you read a script to proving use of their 326 00:18:09,516 --> 00:18:12,716 Speaker 1: telephone and their text messaging. And so by the time 327 00:18:12,756 --> 00:18:15,516 Speaker 1: you know you had to mention autodebit, you had to 328 00:18:15,556 --> 00:18:18,876 Speaker 1: mention the company website and all of this eats away 329 00:18:19,156 --> 00:18:23,476 Speaker 1: at the seven minutes that you're given, yes call, running 330 00:18:23,476 --> 00:18:25,436 Speaker 1: out the clock that the basketball it used to be 331 00:18:25,476 --> 00:18:27,636 Speaker 1: known as the four Corners office, right right before they 332 00:18:27,636 --> 00:18:29,596 Speaker 1: put it, before they put in the shot clock. So 333 00:18:29,876 --> 00:18:34,196 Speaker 1: so what what and if you win over seven minutes? 334 00:18:34,236 --> 00:18:36,396 Speaker 1: What would happen here? I should say for the record 335 00:18:36,556 --> 00:18:39,956 Speaker 1: that a Naviant representative wrote to us. The company said 336 00:18:39,996 --> 00:18:44,596 Speaker 1: that quote, while Naviant, like other customer service oriented companies, 337 00:18:45,036 --> 00:18:48,356 Speaker 1: measures call times, we do not set any time limits 338 00:18:48,396 --> 00:18:51,476 Speaker 1: for calls. Lynn Sabolski got a different message at her 339 00:18:51,516 --> 00:18:54,516 Speaker 1: call center. The reps were put in a position where 340 00:18:55,276 --> 00:18:59,596 Speaker 1: they couldn't give the barrowers the information that really needed 341 00:18:59,636 --> 00:19:03,596 Speaker 1: to be quick given. And so what some of the 342 00:19:03,676 --> 00:19:07,716 Speaker 1: representatives started doing. We're looking for ways to you know, 343 00:19:07,836 --> 00:19:11,756 Speaker 1: get their calls under of the representatives would pretend that 344 00:19:11,796 --> 00:19:15,036 Speaker 1: the call had disconnected. They would, you know, accidentally on purpose, 345 00:19:15,116 --> 00:19:18,356 Speaker 1: hang up on a barrower because that barrower needed to 346 00:19:18,356 --> 00:19:21,796 Speaker 1: talk about an income based repayment option and it's a 347 00:19:21,836 --> 00:19:24,476 Speaker 1: long application in the barrowe has too many questions and 348 00:19:24,556 --> 00:19:26,516 Speaker 1: somebody's looking at their watch going, hey, I got to 349 00:19:26,596 --> 00:19:29,596 Speaker 1: keep this under seven minutes, or you know, the kids 350 00:19:29,636 --> 00:19:32,596 Speaker 1: aren't going to have dinner. Lind Sabolski was never on 351 00:19:32,636 --> 00:19:34,516 Speaker 1: the phone with Katie Hiland, at least not that we 352 00:19:34,596 --> 00:19:37,156 Speaker 1: know of, but she knows pretty well what happened to her. 353 00:19:37,796 --> 00:19:40,396 Speaker 1: Naviant was meant to be advising people with student loans 354 00:19:40,436 --> 00:19:43,636 Speaker 1: on behalf of the Department of Education, but the Department 355 00:19:43,636 --> 00:19:48,396 Speaker 1: of Education pays Naviant a fee for every account they manage. 356 00:19:48,876 --> 00:19:51,156 Speaker 1: The less time they spend on each account, the less 357 00:19:51,156 --> 00:19:54,356 Speaker 1: it costs them to manage that account. The seven minute 358 00:19:54,436 --> 00:19:57,756 Speaker 1: rule is there just to maximize profit per customer. We 359 00:19:57,876 --> 00:20:00,756 Speaker 1: could see throughout the day how far we were out 360 00:20:00,796 --> 00:20:04,716 Speaker 1: of standard is what it would be called. So for example, 361 00:20:04,716 --> 00:20:06,836 Speaker 1: I had a display on my computer that would show 362 00:20:06,876 --> 00:20:09,836 Speaker 1: me at any given moment if I was red, yellow, 363 00:20:09,956 --> 00:20:12,236 Speaker 1: or green in terms of, you know, how my numbers 364 00:20:12,236 --> 00:20:15,236 Speaker 1: were holding up. And then if you kept your phone 365 00:20:15,236 --> 00:20:18,436 Speaker 1: calls to seven minutes or under, you got a bonus. 366 00:20:18,516 --> 00:20:20,956 Speaker 1: And that could be a few hundred dollars in an 367 00:20:20,956 --> 00:20:24,756 Speaker 1: economically depressed area. That's the difference between you know, paying 368 00:20:24,756 --> 00:20:28,516 Speaker 1: your groceries or your car payment or not. You got 369 00:20:28,556 --> 00:20:31,996 Speaker 1: that right. The customer service reps for student loans have 370 00:20:32,036 --> 00:20:35,356 Speaker 1: their own consumer financial problems which they can only solve 371 00:20:35,396 --> 00:20:38,996 Speaker 1: if they ignore yours. You know, there's this thing called empathy. 372 00:20:39,116 --> 00:20:41,396 Speaker 1: You know, if you're calling me because you're in distress, 373 00:20:41,476 --> 00:20:44,156 Speaker 1: because your finances are a mess and you need help, 374 00:20:44,156 --> 00:20:47,316 Speaker 1: and you're talking to somebody who is dependent on making 375 00:20:47,316 --> 00:20:50,316 Speaker 1: this call a seven minute thing because their finances are 376 00:20:50,356 --> 00:20:53,396 Speaker 1: not that great and they're not in a position, you know, 377 00:20:53,476 --> 00:20:56,876 Speaker 1: to get something better than you know, it feels doubly 378 00:20:56,916 --> 00:21:00,516 Speaker 1: deceptive because you know that you're kind of in the 379 00:21:00,556 --> 00:21:08,996 Speaker 1: same shoes. Here's the reality of consumer finance. A town 380 00:21:09,156 --> 00:21:12,916 Speaker 1: of people highly dependent on a student loan servicing firm 381 00:21:14,076 --> 00:21:16,316 Speaker 1: is being put to work finding ways to screw the 382 00:21:16,396 --> 00:21:20,556 Speaker 1: equally desperate people who've taken out the loans, to do 383 00:21:20,676 --> 00:21:23,276 Speaker 1: things like make it extremely difficult for a teacher to 384 00:21:23,276 --> 00:21:27,076 Speaker 1: opt into the program Congress had created specifically to reward 385 00:21:27,116 --> 00:21:30,516 Speaker 1: people like her. But if Naviant allowed Katie Highland to 386 00:21:30,596 --> 00:21:33,196 Speaker 1: enter the program, her account would be taken away from 387 00:21:33,236 --> 00:21:39,036 Speaker 1: Naviant and Naviant would lose revenue. Katie Highland wasn't Naviant's client, 388 00:21:39,516 --> 00:21:44,396 Speaker 1: she was its crop. The CEO of Naviant is named 389 00:21:44,476 --> 00:21:48,476 Speaker 1: Jack Ramondi. In twenty seventeen, he was paid six and 390 00:21:48,476 --> 00:21:52,116 Speaker 1: a half million dollars. We asked to interview him or 391 00:21:52,156 --> 00:21:54,756 Speaker 1: some spokesperson in Navian, but they didn't want to talk. 392 00:21:55,436 --> 00:21:57,436 Speaker 1: But let's leave that to one side for a moment. 393 00:21:58,116 --> 00:22:02,516 Speaker 1: Let's consider this business of student loans, servicing, the behavior 394 00:22:02,556 --> 00:22:07,356 Speaker 1: it encourages, the spirit in which it operates. Naviant isn't 395 00:22:07,396 --> 00:22:10,996 Speaker 1: some little pissant fly by night. It's listed on the 396 00:22:11,076 --> 00:22:14,316 Speaker 1: Nasdaq Stock Exchange as a market cap of nearly three 397 00:22:14,356 --> 00:22:18,796 Speaker 1: billion dollars. It services three hundred billion dollars in student loans. 398 00:22:19,396 --> 00:22:24,156 Speaker 1: It's the heart of consumer finance. So a manager came 399 00:22:24,156 --> 00:22:26,156 Speaker 1: over me while I was on the phone discussing an 400 00:22:26,196 --> 00:22:29,716 Speaker 1: income based repayment plan with a barrower, and they said, 401 00:22:30,476 --> 00:22:34,396 Speaker 1: don't give anybody time frames. Try to avoid discussing that. 402 00:22:34,436 --> 00:22:37,796 Speaker 1: But if anybody asks you outright, tell them it's two 403 00:22:37,796 --> 00:22:41,636 Speaker 1: weeks you It obviously bothered you, and you're an empathetic individual. 404 00:22:41,756 --> 00:22:43,436 Speaker 1: Was there anybody? Were there any people you were working 405 00:22:43,436 --> 00:22:46,396 Speaker 1: with who sort of embraced the Navigant way and we're 406 00:22:46,436 --> 00:22:49,116 Speaker 1: like seeing if they could break speed records with their calls. Yes, 407 00:22:50,196 --> 00:22:54,676 Speaker 1: there's always that person. If I assumed and it was there, 408 00:22:54,716 --> 00:22:57,916 Speaker 1: like I imagine, like a young guy, I literally sat 409 00:22:57,956 --> 00:23:00,236 Speaker 1: next to that guy, and you know the problem was, 410 00:23:00,716 --> 00:23:04,876 Speaker 1: you know, the lower though his calls became, he was 411 00:23:04,956 --> 00:23:08,316 Speaker 1: getting training opportunities, he was being promoted. So basically the 412 00:23:08,396 --> 00:23:11,196 Speaker 1: worst perform in terms of getting the barrowers the information 413 00:23:11,236 --> 00:23:13,716 Speaker 1: they need, those are the people who then move up 414 00:23:13,756 --> 00:23:16,276 Speaker 1: the ladder. He is a superstar man. He's destined for 415 00:23:16,676 --> 00:23:19,316 Speaker 1: the CEO suite. I was being told to like talk 416 00:23:19,316 --> 00:23:23,476 Speaker 1: to him and try and pick up some tips. Did 417 00:23:24,156 --> 00:23:26,276 Speaker 1: you ever try to listen to what he was doing 418 00:23:26,316 --> 00:23:29,116 Speaker 1: to figure out how on earth he was doing that? Oh? Yeah, 419 00:23:29,156 --> 00:23:33,716 Speaker 1: The easiest way to get somebody off the phone is 420 00:23:33,756 --> 00:23:36,996 Speaker 1: to give them a temporary solution and send them paperwork 421 00:23:36,996 --> 00:23:40,636 Speaker 1: to look out later. So you know. So one of 422 00:23:40,676 --> 00:23:44,596 Speaker 1: the issues around forbearance is that, you know, interest continues 423 00:23:44,636 --> 00:23:47,436 Speaker 1: to collect on balances and it's not always a good 424 00:23:47,476 --> 00:23:50,716 Speaker 1: financial decision for barrowers to put their loans in, but 425 00:23:50,876 --> 00:23:53,796 Speaker 1: it's one of the only options that can be processed 426 00:23:53,876 --> 00:23:57,036 Speaker 1: right over the phone. That's exactly what Navian did with 427 00:23:57,116 --> 00:24:01,276 Speaker 1: Katie Hyland. They encourage her to accept forbearance for years. 428 00:24:02,276 --> 00:24:07,556 Speaker 1: The words sounds so reassuring, almost like forgiveness. Actually all 429 00:24:07,556 --> 00:24:10,476 Speaker 1: it did was compound the Amouncia for a loan that 430 00:24:10,596 --> 00:24:13,996 Speaker 1: was originally seventy seven thousand dollars, she'd wind up repaying 431 00:24:14,276 --> 00:24:16,756 Speaker 1: more than one hundred and twenty thousand dollars, and in 432 00:24:16,796 --> 00:24:19,596 Speaker 1: the bargain, they totally screwed up her ability to get 433 00:24:19,596 --> 00:24:22,276 Speaker 1: out from under her loan altogether. Like I said, I 434 00:24:22,276 --> 00:24:24,836 Speaker 1: can usually put in the blood, sweat and the tears 435 00:24:24,916 --> 00:24:26,636 Speaker 1: if I know the thing is temporary and then it's 436 00:24:26,716 --> 00:24:31,196 Speaker 1: leading to something that is going to be better. That 437 00:24:31,276 --> 00:24:35,916 Speaker 1: was when it became like really glaringly real, and then 438 00:24:36,596 --> 00:24:39,636 Speaker 1: sort of panicking because there was nothing I could do. 439 00:24:40,396 --> 00:24:43,356 Speaker 1: It's amazing how much pain you can create inside of 440 00:24:43,396 --> 00:24:50,076 Speaker 1: seven minutes. I don't think people have any real idea 441 00:24:50,116 --> 00:24:52,676 Speaker 1: how dangerous it would bet a shop for ordinary consumer 442 00:24:52,756 --> 00:24:55,196 Speaker 1: goods if there weren't a referee between you and the 443 00:24:55,236 --> 00:24:58,356 Speaker 1: people who sell you things. But there is a referee, 444 00:24:58,836 --> 00:25:02,076 Speaker 1: at least in the United States. It's called the Consumer 445 00:25:02,116 --> 00:25:06,436 Speaker 1: Products Safety Commission. Check out its website. You'll find hundreds 446 00:25:06,436 --> 00:25:09,396 Speaker 1: of products that it's ordered pulled off the shelves before 447 00:25:09,436 --> 00:25:13,876 Speaker 1: they kill or maimed consumers. Just recently, they forced the 448 00:25:13,916 --> 00:25:17,596 Speaker 1: recall of thirty two thousand high chairs prone to detaching 449 00:25:17,676 --> 00:25:21,476 Speaker 1: from their bases and launching the babies inside. They also 450 00:25:21,516 --> 00:25:25,636 Speaker 1: saved you from wireless speakers that catch fire, flashlights that explode, 451 00:25:25,916 --> 00:25:28,076 Speaker 1: shower doors that fall in on you when you're buck 452 00:25:28,196 --> 00:25:31,676 Speaker 1: naked and blinded by soap, and stare masters whose steps 453 00:25:31,676 --> 00:25:36,916 Speaker 1: accelerate incredibly quickly, all by themselves. As I speak, the 454 00:25:36,956 --> 00:25:40,676 Speaker 1: Commission has just removed from the market fifteen hundred cracker 455 00:25:40,796 --> 00:25:46,916 Speaker 1: barrel old country store decorative pineapples lasceration risk. You probably 456 00:25:46,916 --> 00:25:49,716 Speaker 1: didn't know that, but now that you do, it's highly 457 00:25:49,756 --> 00:25:52,916 Speaker 1: unlikely that you think, why is the government acting as 458 00:25:52,916 --> 00:25:56,036 Speaker 1: this referee to protect me from being impaled by a fruit? 459 00:25:57,836 --> 00:26:01,436 Speaker 1: More likely you're thinking, thank god they recall the decorative 460 00:26:01,476 --> 00:26:06,156 Speaker 1: pineapples before I bought mine. When you take out a 461 00:26:06,196 --> 00:26:10,236 Speaker 1: student loan, or any kind of loan, buying a product 462 00:26:10,876 --> 00:26:14,956 Speaker 1: a curious sort of product, this product is far more 463 00:26:15,036 --> 00:26:18,836 Speaker 1: likely to kill you than any exploding flashlight. If you 464 00:26:18,916 --> 00:26:21,116 Speaker 1: doubt that, just spend some time in the many student 465 00:26:21,196 --> 00:26:25,956 Speaker 1: loan chat rooms devoted to suicide. Most consumer financial products 466 00:26:25,996 --> 00:26:30,076 Speaker 1: are more complicated than high chairs or decorative pineapples, much 467 00:26:30,116 --> 00:26:32,316 Speaker 1: more likely to have fatal flaws that no one but 468 00:26:32,396 --> 00:26:36,316 Speaker 1: an expert can spot. Plus they come with a servicer. 469 00:26:36,356 --> 00:26:39,196 Speaker 1: You know nothing about the human beings who will handle 470 00:26:39,236 --> 00:26:42,236 Speaker 1: your loan until you pay it off. That guy who 471 00:26:42,276 --> 00:26:44,276 Speaker 1: gets promoted for getting you off the phone inside of 472 00:26:44,316 --> 00:26:47,556 Speaker 1: seven minutes without helping you. He's part of the product 473 00:26:47,636 --> 00:26:50,956 Speaker 1: you bought and tied yourself to for years, and he 474 00:26:51,116 --> 00:26:55,316 Speaker 1: too presents a laceration risk. So why wouldn't there be 475 00:26:55,356 --> 00:26:58,716 Speaker 1: a referee for all this, a neutral party whose job 476 00:26:58,716 --> 00:27:02,716 Speaker 1: it is to spot dangerous financial products and pull them 477 00:27:02,756 --> 00:27:05,956 Speaker 1: from the market before they do more harm. Oh wait, 478 00:27:06,276 --> 00:27:10,356 Speaker 1: that's not an original thought. Someone's already had it. I'm 479 00:27:10,356 --> 00:27:13,996 Speaker 1: Elizabeth Warren. I am the senior Senator from the Commonwealth 480 00:27:14,036 --> 00:27:19,076 Speaker 1: of Massachusetts. Before she was Elizabeth Warren, she was Professor 481 00:27:19,116 --> 00:27:23,916 Speaker 1: Elizabeth Warren at Harvard, specializing in bankruptcy law and why 482 00:27:23,996 --> 00:27:27,436 Speaker 1: middle class people go broke. And so it's the early 483 00:27:27,516 --> 00:27:33,156 Speaker 1: two thousands and I'm trying to figure out how do 484 00:27:33,196 --> 00:27:37,156 Speaker 1: you fix this problem? You're going to laugh. I'm thinking 485 00:27:37,196 --> 00:27:42,676 Speaker 1: about toasters. You can't buy a toaster anywhere in America 486 00:27:42,796 --> 00:27:45,796 Speaker 1: that has a one in five chance of bursting into 487 00:27:45,796 --> 00:27:48,836 Speaker 1: flames and burning down your house. We have a Consumer 488 00:27:48,876 --> 00:27:52,236 Speaker 1: Product Safety Commission that just says, nope, sorry, you don't 489 00:27:52,276 --> 00:27:54,956 Speaker 1: get to put those things on the market. Actually, toasters 490 00:27:54,996 --> 00:27:59,116 Speaker 1: do burst into flames. Back in two eleven, Hamilton Beach 491 00:27:59,316 --> 00:28:02,716 Speaker 1: was forced to recall three hundred thousand of its classic 492 00:28:02,876 --> 00:28:07,116 Speaker 1: chrome too slicer because breakfast can kill you. We do 493 00:28:07,236 --> 00:28:10,676 Speaker 1: not require people to have engineering degrees to buy toasters. 494 00:28:10,956 --> 00:28:13,636 Speaker 1: They don't have to look at wiring diagrams and know 495 00:28:13,756 --> 00:28:18,196 Speaker 1: what weight wiring you used and whether it has appropriate insulation. 496 00:28:18,276 --> 00:28:20,516 Speaker 1: We don't ask any of those questions. We just say, 497 00:28:20,876 --> 00:28:23,756 Speaker 1: you know, there's like some minimum safety here. Somebody buys 498 00:28:23,756 --> 00:28:26,196 Speaker 1: a toaster, it better be able to toast and it 499 00:28:26,276 --> 00:28:29,556 Speaker 1: can't burst into flames. And I thought about it in 500 00:28:29,676 --> 00:28:32,996 Speaker 1: terms of, wait a minute, why is that so on 501 00:28:33,116 --> 00:28:38,276 Speaker 1: toasters and it's not so on mortgages, And so, at 502 00:28:38,276 --> 00:28:41,356 Speaker 1: what moment do you become so alive do these problems 503 00:28:41,396 --> 00:28:43,756 Speaker 1: that all of a sudden, the world's getting very complicated 504 00:28:43,796 --> 00:28:48,196 Speaker 1: for the financial consumer at his expense, that you become 505 00:28:48,236 --> 00:28:51,036 Speaker 1: so alive to this that you're moved to write about it. 506 00:28:51,676 --> 00:28:54,516 Speaker 1: So you've got to watch. What's happening is more lenders 507 00:28:54,556 --> 00:28:57,996 Speaker 1: now are starting to move into this space of and 508 00:28:58,036 --> 00:29:03,556 Speaker 1: here's the key building a profit model based on tricking people, 509 00:29:03,756 --> 00:29:07,876 Speaker 1: on cheating people, so that becomes the business model. The 510 00:29:07,956 --> 00:29:12,116 Speaker 1: business model is taser rates with subprime mortgages, double cycle 511 00:29:12,196 --> 00:29:15,476 Speaker 1: billing with credit cards, interest rates that leap from thirty 512 00:29:15,476 --> 00:29:17,876 Speaker 1: to two percent on payday loans if you're late with 513 00:29:17,916 --> 00:29:21,276 Speaker 1: a single payment. Again, if you're an American adult or 514 00:29:21,316 --> 00:29:23,596 Speaker 1: maybe even a child, you know what I'm talking about. 515 00:29:24,156 --> 00:29:28,036 Speaker 1: Elizabeth Warren wanted to create a government agency to referee 516 00:29:28,076 --> 00:29:32,116 Speaker 1: all that. When you first float this idea, how is 517 00:29:32,156 --> 00:29:36,676 Speaker 1: it greeted? Okay, so when I first float this, let 518 00:29:36,716 --> 00:29:39,396 Speaker 1: me come on, this is the early two thousands, and 519 00:29:39,476 --> 00:29:42,836 Speaker 1: I'm talking about a new government agency. Oh, just what 520 00:29:42,916 --> 00:29:46,276 Speaker 1: everybody's looking for? Right? Does anybody take an interest in it? 521 00:29:46,396 --> 00:29:49,996 Speaker 1: A healthy sort of constructive interest in it? Or people 522 00:29:50,036 --> 00:29:53,116 Speaker 1: think you're a crackpot? Well, I hope nobody thought I 523 00:29:53,196 --> 00:29:55,476 Speaker 1: was a crack pot. I look far too serious for that, 524 00:29:55,636 --> 00:29:58,236 Speaker 1: and I you know, I wear glasses. I mean, come on, 525 00:29:58,276 --> 00:30:01,596 Speaker 1: I could be a crackpot. Elizabeth Warren then does whatevery 526 00:30:01,676 --> 00:30:06,796 Speaker 1: crackpot professor does. She writes an obscure article. It's published 527 00:30:06,796 --> 00:30:09,076 Speaker 1: the summer of two thousand and seven in the journal 528 00:30:09,276 --> 00:30:15,036 Speaker 1: democracy title unsafe at any rate you propose creating this 529 00:30:15,076 --> 00:30:17,716 Speaker 1: new umpire. Everybody kind of thinks that that will never happen, 530 00:30:18,036 --> 00:30:20,076 Speaker 1: And then all of a sudden, the world shapes itself 531 00:30:20,116 --> 00:30:21,876 Speaker 1: in a way that it sees, oh my god, we 532 00:30:21,956 --> 00:30:25,236 Speaker 1: need this umpire, right. The world gets on board, then 533 00:30:26,316 --> 00:30:29,916 Speaker 1: gets on board for a short trip anyway. The two 534 00:30:29,956 --> 00:30:33,316 Speaker 1: thousand and eight financial crisis has its roots and consumer finance. 535 00:30:34,316 --> 00:30:37,036 Speaker 1: The entire nation got so pissed off at Wall Street 536 00:30:37,396 --> 00:30:40,596 Speaker 1: that Wall Street lost control of the political process. In 537 00:30:40,636 --> 00:30:45,516 Speaker 1: two and ten, Congress created the Consumer Financial Protection Bureau. 538 00:30:46,996 --> 00:30:49,836 Speaker 1: They designed the agency so that Congress wouldn't have direct 539 00:30:49,916 --> 00:30:53,516 Speaker 1: control of its budget, because everyone suspected that the finance 540 00:30:53,556 --> 00:30:56,076 Speaker 1: industry might one day try to kill the new referee. 541 00:30:58,356 --> 00:31:02,436 Speaker 1: In two and thirteen, Elizabeth Warren became a United States Senator, 542 00:31:03,116 --> 00:31:12,956 Speaker 1: but that wasn't enough to stop what eventually happened. When 543 00:31:12,956 --> 00:31:16,276 Speaker 1: you hear the phrase government agency, what do you think? 544 00:31:17,596 --> 00:31:22,116 Speaker 1: What picture forms in your mind? Probably of some nondescript 545 00:31:22,196 --> 00:31:25,356 Speaker 1: concrete building with small windows and gray men and women 546 00:31:25,396 --> 00:31:28,556 Speaker 1: walking in just after nine and walking out just before five, 547 00:31:29,556 --> 00:31:34,476 Speaker 1: doing as little as possible, and that unwillingly vast sums 548 00:31:34,476 --> 00:31:36,796 Speaker 1: of money have been spent to keep that picture in 549 00:31:36,796 --> 00:31:39,756 Speaker 1: your mind, A lot of it by companies engaged in 550 00:31:39,836 --> 00:31:44,156 Speaker 1: consumer finance. My name is Seth Frontman. I used to 551 00:31:44,196 --> 00:31:48,316 Speaker 1: work at the Consumer Financial Protection Bureau. Seth Frontman got 552 00:31:48,356 --> 00:31:51,396 Speaker 1: to know the consumer finance industrial complex in the early 553 00:31:51,436 --> 00:31:54,316 Speaker 1: two thousands when he went to work for a former 554 00:31:54,356 --> 00:31:57,796 Speaker 1: Marine who had been elected to Congress. He was instantly 555 00:31:57,836 --> 00:32:02,556 Speaker 1: inundated with stories of American soldiers being deceived and abused 556 00:32:02,676 --> 00:32:08,116 Speaker 1: by financial firms. There were literally service members who were 557 00:32:08,356 --> 00:32:13,836 Speaker 1: flying back from Iraq and Afghanistan because their banks were 558 00:32:13,956 --> 00:32:18,516 Speaker 1: illegally foreclosing on their houses while they were deployed. And 559 00:32:18,596 --> 00:32:21,556 Speaker 1: they would spend like every waking moment when they weren't 560 00:32:21,596 --> 00:32:25,836 Speaker 1: down raged with their troops battling with Wells Fargo or 561 00:32:25,956 --> 00:32:29,316 Speaker 1: Bank of America or one of these other companies. And literally, 562 00:32:29,316 --> 00:32:33,236 Speaker 1: while they were getting shot at in Iraq and Afghanistan, 563 00:32:33,796 --> 00:32:36,636 Speaker 1: their spouses and kids were at home dealing with kind 564 00:32:36,636 --> 00:32:39,876 Speaker 1: of foreclosure notices and banks. It turns out that the 565 00:32:39,916 --> 00:32:42,996 Speaker 1: banks weren't just being odious, they were breaking the law. 566 00:32:43,516 --> 00:32:47,316 Speaker 1: So there's actually a statute called the Service Member Civil 567 00:32:47,316 --> 00:32:50,316 Speaker 1: Relief Act, which has been in place in some form 568 00:32:50,396 --> 00:32:52,996 Speaker 1: or another. I believe since like the Civil War and 569 00:32:53,076 --> 00:32:56,276 Speaker 1: it has like a host of different protections, but one 570 00:32:56,316 --> 00:33:00,476 Speaker 1: of those essentially dramatically limited the way in which a 571 00:33:00,516 --> 00:33:03,436 Speaker 1: service member who was on active duty could get their 572 00:33:03,436 --> 00:33:06,876 Speaker 1: house foreclosed on the banks. Just hope the soldiers didn't 573 00:33:06,876 --> 00:33:08,956 Speaker 1: know about the statute and made it hard for them 574 00:33:08,956 --> 00:33:13,956 Speaker 1: to take advantage of it. Sound familiar. There was really 575 00:33:13,996 --> 00:33:17,396 Speaker 1: nowhere these soldiers could turn for help except to individual 576 00:33:17,436 --> 00:33:22,436 Speaker 1: members of Congress until the Consumer Financial Protection Bureau gets started. 577 00:33:22,996 --> 00:33:26,356 Speaker 1: Seth Frautman joins up right away, specifically to help members 578 00:33:26,356 --> 00:33:30,116 Speaker 1: of the military. In its first five years, the bureau 579 00:33:30,156 --> 00:33:33,036 Speaker 1: handed back nearly twelve billion dollars to people who've been 580 00:33:33,116 --> 00:33:37,716 Speaker 1: ripped off by consumer finance companies. It created a new 581 00:33:37,756 --> 00:33:40,916 Speaker 1: disincentive for companies that made money by ripping people off, 582 00:33:41,276 --> 00:33:45,596 Speaker 1: because it sued the asses off those companies. A couple 583 00:33:45,636 --> 00:33:48,836 Speaker 1: of years in, Seth moved from working with veterans to 584 00:33:48,916 --> 00:33:52,636 Speaker 1: working with students, where you shocked when you collided with 585 00:33:52,716 --> 00:33:57,436 Speaker 1: the student loan situation just how bad it was. Yes, literally, 586 00:33:57,476 --> 00:34:02,316 Speaker 1: one of the hardest parts about the job was convincing 587 00:34:02,476 --> 00:34:06,076 Speaker 1: people it was actually as bad as it is Without 588 00:34:06,116 --> 00:34:08,276 Speaker 1: seeming like a crazy person with their hair on fire 589 00:34:08,356 --> 00:34:11,316 Speaker 1: all the time, right, which I'm probably not good at. 590 00:34:11,916 --> 00:34:13,796 Speaker 1: One of the things that lit his hair on fire 591 00:34:13,956 --> 00:34:17,476 Speaker 1: was the behavior of student loan servicers the Naviance of 592 00:34:17,516 --> 00:34:21,196 Speaker 1: the world. Seth's student loan unit looked into a bunch 593 00:34:21,196 --> 00:34:26,796 Speaker 1: of complaints. It found that loan servicers were preventing school teachers, cops, 594 00:34:26,836 --> 00:34:31,636 Speaker 1: and firefighters from getting into the loan forgiveness program the 595 00:34:31,676 --> 00:34:34,476 Speaker 1: one Congress had created for them back in two thousand 596 00:34:34,476 --> 00:34:38,116 Speaker 1: and seven. Seth found out about the seven minute rule. 597 00:34:38,716 --> 00:34:42,636 Speaker 1: They have essentially every incentive under the book to ensure 598 00:34:43,116 --> 00:34:45,756 Speaker 1: that the people on their phones are not doing as 599 00:34:45,756 --> 00:34:47,516 Speaker 1: good of a job as possible, but getting off the 600 00:34:47,556 --> 00:34:50,876 Speaker 1: phone as quick as possible. Seth went to his boss, 601 00:34:51,236 --> 00:34:55,116 Speaker 1: Richard Cordray, who was head of the bureau. Together they 602 00:34:55,156 --> 00:34:58,476 Speaker 1: decided to file a massive lawsuit against Navian, which of 603 00:34:58,476 --> 00:35:01,996 Speaker 1: course alarmed the entire consumer financi industry. I mean, if 604 00:35:02,036 --> 00:35:04,436 Speaker 1: this new agency was actually going to stop consumers from 605 00:35:04,476 --> 00:35:06,396 Speaker 1: being ripped off, where would it leave the companies that 606 00:35:06,436 --> 00:35:10,156 Speaker 1: made money from it? So then what happens then, Essentially, 607 00:35:11,116 --> 00:35:16,036 Speaker 1: with a flip of a switch, Director Cordrey leaves the bureau, 608 00:35:16,676 --> 00:35:22,356 Speaker 1: the Bureau is given an acting director who also has 609 00:35:22,396 --> 00:35:25,476 Speaker 1: a full time job as the head of the Office 610 00:35:25,476 --> 00:35:29,996 Speaker 1: of Management and Budget. Right, So, mulvany, mcmulvaaney, the structure 611 00:35:30,116 --> 00:35:35,236 Speaker 1: of the CFPB is just fundamentally flawed. On one hand, 612 00:35:35,236 --> 00:35:37,516 Speaker 1: people call it independent, but the real bottom line is 613 00:35:37,516 --> 00:35:41,516 Speaker 1: it's simply unaccountable and that's wrong. That's mcmulvaney talking to 614 00:35:41,556 --> 00:35:43,996 Speaker 1: Fox News as lou Dabbs. At the end of November 615 00:35:43,996 --> 00:35:47,316 Speaker 1: twenty and seventeen, we were slated to put out our 616 00:35:47,396 --> 00:35:51,276 Speaker 1: annual report documenting how college debit cards had a particular 617 00:35:51,356 --> 00:35:56,876 Speaker 1: risk for consumers despite protections that should be in place. Essentially, 618 00:35:57,076 --> 00:36:00,436 Speaker 1: when the new leadership of the bureau came in, we 619 00:36:00,436 --> 00:36:03,636 Speaker 1: were told that we would put that report in in 620 00:36:03,716 --> 00:36:06,596 Speaker 1: a drawer that was no longer our job. Did you 621 00:36:07,436 --> 00:36:09,676 Speaker 1: did you have the option of us ignoring that? No? 622 00:36:10,236 --> 00:36:12,836 Speaker 1: What would happen if you did? I assume I would 623 00:36:12,916 --> 00:36:14,716 Speaker 1: end up where I am here, just a lot earlier 624 00:36:14,716 --> 00:36:18,276 Speaker 1: in the process, in the processes where Seth is, as 625 00:36:18,316 --> 00:36:21,676 Speaker 1: you're probably guessing, is out of a job. He left 626 00:36:21,676 --> 00:36:25,436 Speaker 1: Donald Trump's CFPB. Maybe I shouldn't ask him to speculate 627 00:36:25,716 --> 00:36:28,916 Speaker 1: about what's going on now with his former employer. But 628 00:36:28,956 --> 00:36:31,716 Speaker 1: I can't help myself what's going through the mind of 629 00:36:31,796 --> 00:36:34,396 Speaker 1: mc mulvaney when he says, you'd ask you to put 630 00:36:34,436 --> 00:36:36,916 Speaker 1: that report in the drawer. So I don't know. I 631 00:36:36,916 --> 00:36:39,276 Speaker 1: don't want to give any legitimacy to the argument because 632 00:36:39,316 --> 00:36:42,956 Speaker 1: it doesn't fucking matter, right, Like, the only thing that 633 00:36:42,996 --> 00:36:46,876 Speaker 1: matters is there's someone on a college campus right now 634 00:36:46,996 --> 00:36:51,676 Speaker 1: who has debit card that a bank has negotiated with 635 00:36:51,756 --> 00:36:55,196 Speaker 1: his school. He thought it gave that some legitimacy. He 636 00:36:55,276 --> 00:36:59,156 Speaker 1: took out that card, and he now has hundreds of 637 00:36:59,196 --> 00:37:03,996 Speaker 1: dollars of overdraft fees. And though he's pretty much screwed 638 00:37:04,276 --> 00:37:08,596 Speaker 1: for a remainder of his life because of the work 639 00:37:08,636 --> 00:37:11,436 Speaker 1: that we were allowed to do. That was not an 640 00:37:11,476 --> 00:37:14,956 Speaker 1: attempt to like make me or us seem grandiose. That's 641 00:37:14,996 --> 00:37:25,836 Speaker 1: just that's just how it works, all right. So I'm 642 00:37:25,876 --> 00:37:28,196 Speaker 1: standing in front of a building that used to have 643 00:37:28,236 --> 00:37:30,916 Speaker 1: a big sign on it, and the sign said Consumer 644 00:37:30,996 --> 00:37:35,916 Speaker 1: Financial Protection Bureau. One of the first things mc mulvaney 645 00:37:36,036 --> 00:37:39,356 Speaker 1: did as acting head of the CFPB was to change 646 00:37:39,396 --> 00:37:44,076 Speaker 1: the acronym to BCFP, so to put the word bureau 647 00:37:44,156 --> 00:37:49,916 Speaker 1: first instead of consumer of nineteen seventies brutalist architecture. It 648 00:37:49,956 --> 00:37:53,156 Speaker 1: looks like it was designed to maximize the number of 649 00:37:53,236 --> 00:37:59,036 Speaker 1: ledges people would jump off after they had a financial reversal. Anyway, 650 00:37:59,076 --> 00:38:00,676 Speaker 1: they used to be a sign here until just a 651 00:38:00,716 --> 00:38:02,996 Speaker 1: couple of weeks ago, and it was very proudly saying 652 00:38:02,996 --> 00:38:06,196 Speaker 1: what it was. Well, two weeks ago they took down 653 00:38:06,196 --> 00:38:09,716 Speaker 1: the sign. I'm staring right here at what is I mean, 654 00:38:09,756 --> 00:38:13,596 Speaker 1: it's just that cinder block wall Banks found out about 655 00:38:13,636 --> 00:38:18,516 Speaker 1: the name change from CFPB to BCFP. Just that could 656 00:38:18,516 --> 00:38:20,876 Speaker 1: cost them up to three hundred million dollars to update 657 00:38:20,876 --> 00:38:24,436 Speaker 1: all their databases and forums. The agency itself was spending 658 00:38:24,476 --> 00:38:27,756 Speaker 1: millions to change its signage and branding, all just to 659 00:38:27,796 --> 00:38:30,436 Speaker 1: make the name sound less inviting to the consumers. It's 660 00:38:30,436 --> 00:38:35,676 Speaker 1: meant to serve the streets. You know, I speak into 661 00:38:35,716 --> 00:38:42,156 Speaker 1: my iPhone and poured that that would be against the law. Well, um, 662 00:38:42,276 --> 00:38:46,316 Speaker 1: I don't know that. I can't say that exactly. I 663 00:38:46,356 --> 00:38:48,276 Speaker 1: don't think this is the law. I think we're allowed 664 00:38:48,276 --> 00:38:50,876 Speaker 1: to suppere and do whatever we're going to do or 665 00:38:50,916 --> 00:38:57,716 Speaker 1: out here. Well you know, um I don't. I just 666 00:38:58,276 --> 00:39:00,356 Speaker 1: you you can go in the street. But you know, 667 00:39:00,596 --> 00:39:05,476 Speaker 1: I don't think you can do that here. The new 668 00:39:05,516 --> 00:39:08,196 Speaker 1: director of the CFPV or whatever you call it, finally 669 00:39:08,236 --> 00:39:11,916 Speaker 1: gave up trying to brand the place. Still, this is 670 00:39:11,956 --> 00:39:15,516 Speaker 1: the way referee dies, not with a bang, but a distraction. 671 00:39:16,276 --> 00:39:19,636 Speaker 1: This massive explosion in the public square gets muffled. A 672 00:39:19,716 --> 00:39:23,196 Speaker 1: million tragedies silently unfold in the lives of ordinary people 673 00:39:23,636 --> 00:39:26,596 Speaker 1: who thought they were the customers and found out they 674 00:39:26,596 --> 00:39:32,996 Speaker 1: were just the crop. Yeah, I have so here. My 675 00:39:33,076 --> 00:39:36,116 Speaker 1: original loan amount was seventy seven thousand, five hundred and 676 00:39:36,156 --> 00:39:40,956 Speaker 1: forty I have forty six thousand, five hundred and sixty 677 00:39:40,956 --> 00:39:45,356 Speaker 1: one left to pay off. I've paid back fifty three thousand, 678 00:39:45,436 --> 00:39:50,676 Speaker 1: eight hundred and ninety That's a lot on money. Katie 679 00:39:50,716 --> 00:39:53,756 Speaker 1: Highland still waiting. She also joined other teachers in a 680 00:39:53,836 --> 00:39:57,916 Speaker 1: lawsuit against Navian. There was a US government audit of 681 00:39:57,996 --> 00:40:02,396 Speaker 1: loan services like Navian. It found that thirty thousand qualified 682 00:40:02,436 --> 00:40:08,036 Speaker 1: people teachers, firefighters, soldiers, had applied to the loan forgiveness program. 683 00:40:08,116 --> 00:40:13,756 Speaker 1: Only ninety si got their loans forgiven ninety six. The 684 00:40:13,836 --> 00:40:17,836 Speaker 1: student loan servicers found tricks to deny all the rest. 685 00:40:18,636 --> 00:40:20,996 Speaker 1: And that doesn't even count the greater number of people 686 00:40:21,476 --> 00:40:24,436 Speaker 1: like Katie Highland who never got to submit an application 687 00:40:24,476 --> 00:40:26,836 Speaker 1: in the first place. Like literally, I don't know if 688 00:40:26,876 --> 00:40:28,796 Speaker 1: you want to put it, but like my teeth, like 689 00:40:28,916 --> 00:40:31,876 Speaker 1: from grinding and anxiety, I've had one, two, three, four, 690 00:40:31,996 --> 00:40:34,796 Speaker 1: five teeth had to come out, which is what I'm 691 00:40:34,836 --> 00:40:36,436 Speaker 1: dealing with like currently at the moment, which is like 692 00:40:36,556 --> 00:40:39,156 Speaker 1: making me very upset. I can't smile anymore and stuff, 693 00:40:40,116 --> 00:40:44,756 Speaker 1: and dental insurance doesn't cover implants and so like I 694 00:40:44,836 --> 00:40:47,316 Speaker 1: have lost like all these teeth and I'm thirty five, 695 00:40:47,516 --> 00:40:50,876 Speaker 1: and it's like it's like crazy, but it's like the 696 00:40:50,996 --> 00:40:54,876 Speaker 1: stress is constant. If a toaster had blown up and 697 00:40:55,076 --> 00:40:58,956 Speaker 1: maimed a mother of two, you'd say, God, that's awful, 698 00:40:59,396 --> 00:41:02,076 Speaker 1: get that toaster off the market and get her some compensation. 699 00:41:03,436 --> 00:41:06,756 Speaker 1: But a consumer finance company steals the happiness from her life, 700 00:41:07,476 --> 00:41:11,636 Speaker 1: and we're all half inclined to think, Oh, it's her problem. 701 00:41:11,796 --> 00:41:16,476 Speaker 1: She borrowed the money, dug her own grave. Why is 702 00:41:16,516 --> 00:41:19,916 Speaker 1: that I don't see any payoff? And it just keeps 703 00:41:19,916 --> 00:41:23,556 Speaker 1: getting harder and harder, And that's soul crushing, and it's 704 00:41:23,596 --> 00:41:28,156 Speaker 1: it's hard also with like little kids to be happy 705 00:41:28,356 --> 00:41:32,996 Speaker 1: and everything's okay, and you know, and you know, to 706 00:41:33,076 --> 00:41:36,116 Speaker 1: encourage them to do things and follow their dreams. And 707 00:41:36,396 --> 00:41:38,716 Speaker 1: my mom got mad at me the other day because 708 00:41:38,716 --> 00:41:41,316 Speaker 1: my daughter, who you met, should I want to be 709 00:41:41,316 --> 00:41:42,676 Speaker 1: a teacher? And I was like, no, you don't, you 710 00:41:42,756 --> 00:41:45,116 Speaker 1: never ever want to be a teacher. My mom was like, Katie, 711 00:41:45,116 --> 00:41:49,036 Speaker 1: she's four, it's pretty much where I am. Well, I 712 00:41:49,076 --> 00:41:53,036 Speaker 1: won't make you look at these anymore. It might be 713 00:41:53,276 --> 00:41:57,316 Speaker 1: absolutely kind of painful for her, because all of this 714 00:41:57,756 --> 00:42:03,596 Speaker 1: counts with a bill and getting something changed to another 715 00:42:03,636 --> 00:42:08,276 Speaker 1: thing that's the same, but changing to it. I love you, 716 00:42:09,796 --> 00:42:14,836 Speaker 1: I feel well, it does feel kind of painful, right mommy. Yeah, 717 00:42:15,196 --> 00:42:17,316 Speaker 1: A lot of the papers, Yeah there, it's a lot 718 00:42:17,356 --> 00:42:19,556 Speaker 1: of paperwork. It's a lot of and a lot of pain. 719 00:42:20,036 --> 00:42:26,196 Speaker 1: Yea for doing it. Yeah, So while we actually while 720 00:42:26,316 --> 00:42:31,276 Speaker 1: we move on, and that's pretty much what I did. 721 00:42:31,556 --> 00:42:36,436 Speaker 1: Just just move on. You're very thoughtful. Well, it is 722 00:42:36,756 --> 00:42:41,956 Speaker 1: very good to be thoughtful for everybody. But the person 723 00:42:42,316 --> 00:42:47,836 Speaker 1: who's the most best person on earth is this lady 724 00:42:47,916 --> 00:42:54,876 Speaker 1: right there, Jackson. I'm so in love with you. So 725 00:42:55,036 --> 00:42:58,916 Speaker 1: much of life is just dumb luck. Consumer finance companies 726 00:42:58,956 --> 00:43:02,596 Speaker 1: got lucky if the student loan servicing industry had somehow 727 00:43:02,676 --> 00:43:05,836 Speaker 1: been invented in the early nineteenth century, in the late 728 00:43:05,916 --> 00:43:09,916 Speaker 1: nineteenth century or even the mid twentieth some ref would 729 00:43:09,916 --> 00:43:13,396 Speaker 1: have probably been put in place. But right now refs 730 00:43:13,396 --> 00:43:16,876 Speaker 1: are hard to create, and so the head of Navigant 731 00:43:17,356 --> 00:43:20,756 Speaker 1: makes six million dollars a year while Katie Highland's teeth 732 00:43:20,796 --> 00:43:34,836 Speaker 1: fall out one by one. I've never had a consumer loan. 733 00:43:34,876 --> 00:43:37,236 Speaker 1: I've always paid my AMX bill on time and always 734 00:43:37,236 --> 00:43:39,996 Speaker 1: paid cash for everything else, which is to say I've 735 00:43:40,036 --> 00:43:42,396 Speaker 1: never been at the mercy of the consumer finance industry. 736 00:43:42,756 --> 00:43:45,116 Speaker 1: The next aspect is to go back and resolve the 737 00:43:45,156 --> 00:43:47,636 Speaker 1: issue that's on your credit report, which is more time 738 00:43:47,836 --> 00:43:51,476 Speaker 1: to all three credit bureaus. Yes, and yet there I 739 00:43:51,756 --> 00:43:54,756 Speaker 1: was not quite able to get away from it, because 740 00:43:54,796 --> 00:43:57,636 Speaker 1: even when you think you're free and clear of consumer finance, 741 00:43:57,956 --> 00:44:00,196 Speaker 1: it can pull you into its fucked up little world 742 00:44:00,236 --> 00:44:03,356 Speaker 1: in which they create problems and then make them your problems. 743 00:44:03,876 --> 00:44:07,276 Speaker 1: You and Officer Joe ledou Berkeley Police, well, we want 744 00:44:07,316 --> 00:44:09,436 Speaker 1: you to focus on now, certainly going forward is some 745 00:44:09,476 --> 00:44:12,156 Speaker 1: of the crime prevention techniques, which is this right here 746 00:44:12,196 --> 00:44:13,796 Speaker 1: has got your soul security number on it. So when 747 00:44:13,796 --> 00:44:15,956 Speaker 1: you're dealing with. It should be shredded, not just tossing 748 00:44:15,996 --> 00:44:17,836 Speaker 1: the trash. Because when we have people going through the 749 00:44:17,836 --> 00:44:20,116 Speaker 1: trash and they see this and they go, oh, who's 750 00:44:20,156 --> 00:44:23,356 Speaker 1: going through my trash? Yeah, people do it? Do they absolutely? 751 00:44:23,356 --> 00:44:25,596 Speaker 1: I've never seen any of my garbage kins outside my house. 752 00:44:25,636 --> 00:44:27,556 Speaker 1: I stare at it all the time, the way it 753 00:44:27,916 --> 00:44:29,916 Speaker 1: blows out of the trash truck and somebody's walking down 754 00:44:29,916 --> 00:44:31,156 Speaker 1: the street and they go, oh, here we go. We 755 00:44:31,236 --> 00:44:33,916 Speaker 1: got Michael and Lewis and we got your soul Security number, 756 00:44:33,916 --> 00:44:36,476 Speaker 1: and sorry, we have taken so much of your time. 757 00:44:36,596 --> 00:44:39,796 Speaker 1: This is great. I gather up the mess of papers, 758 00:44:40,396 --> 00:44:43,156 Speaker 1: the letters from MX saying my credit rating is shot, 759 00:44:44,036 --> 00:44:48,316 Speaker 1: the credit reports from experience, the FTC pamphlet on all 760 00:44:48,356 --> 00:44:50,476 Speaker 1: the things I need to do to fix this problem 761 00:44:50,636 --> 00:44:53,196 Speaker 1: that a Wall Street bank created all by itself. So 762 00:44:53,236 --> 00:44:54,596 Speaker 1: I'm gonna give you that if you want to make copies. 763 00:44:55,356 --> 00:44:58,036 Speaker 1: A single envelope falls out of the pile. So this 764 00:44:58,116 --> 00:45:00,236 Speaker 1: is I brought this in and I haven't opened it. 765 00:45:00,236 --> 00:45:03,436 Speaker 1: It's from City Group, City Group, to whom I apparently 766 00:45:03,956 --> 00:45:06,796 Speaker 1: still o sixteen thousand dollars in their minds, and I 767 00:45:06,796 --> 00:45:10,556 Speaker 1: didn't I had opened it because yeah, no, it's it's 768 00:45:10,596 --> 00:45:13,836 Speaker 1: an offer for a credit card. Yep, you're you're great, right, 769 00:45:14,756 --> 00:45:16,676 Speaker 1: do you want to City group credit carding? I'm good, 770 00:45:16,716 --> 00:45:23,996 Speaker 1: I appreciate it. Lend to anybody. I'm Michael Lewis, Thanks 771 00:45:24,036 --> 00:45:27,916 Speaker 1: again for listening to Against the Rules. Against the Rules 772 00:45:27,956 --> 00:45:31,156 Speaker 1: is brought to you by Pushkin Industries. The show is 773 00:45:31,196 --> 00:45:34,956 Speaker 1: produced by Audrey Dilling and Katherine Girdo, with research assistance 774 00:45:35,076 --> 00:45:39,836 Speaker 1: from Zoe Oliver Gray and Beth Johnson. Our editor is 775 00:45:39,916 --> 00:45:44,916 Speaker 1: Julia Barton. Mia Lowe Bell is our executive producer. Our 776 00:45:44,956 --> 00:45:49,116 Speaker 1: theme was composed by Nick Brittell, with additional scoring by 777 00:45:49,116 --> 00:45:55,196 Speaker 1: Seth Samuel, mastering by Jason Gambrel. Our show was recorded 778 00:45:55,276 --> 00:45:59,156 Speaker 1: at Northgate Studios in Berkeley by TOFA Ruth Special thanks 779 00:45:59,196 --> 00:46:02,556 Speaker 1: to our founders Jacob Weisberg and Malcolm Gladwell