WEBVTT - Rodney Williams, Solo Funds 0:00:01.440 --> 0:00:04.400 I'm will Lucas and this is black Tech, Dream Money. 0:00:05.080 --> 0:00:08.200 Ronnie Williams is a three time venture founder currently serving 0:00:08.240 --> 0:00:11.280 as president and co founder of Solo Funds, the largest 0:00:11.320 --> 0:00:15.440 community fintech platform for everyday Americans, providing an opportunity to 0:00:15.480 --> 0:00:20.240 access and growth capital and establish financial independence. He's also 0:00:20.320 --> 0:00:24.239 co founder Listener and Ultratonic Data over Sound Technology Leader, 0:00:24.280 --> 0:00:28.360 and he's an aspenc Institute Henry Crown fellow. Solo Funds 0:00:28.400 --> 0:00:32.559 recently reached a major milestone achieving a million users, So 0:00:32.600 --> 0:00:35.519 I'm interested if he had to rank the most important 0:00:35.520 --> 0:00:38.800 factors in achieving that milestone, between a the demand for 0:00:38.840 --> 0:00:42.400 the solution solo Funds provides, or be his ability to 0:00:42.400 --> 0:00:46.080 build community. What would Rodney say is the most important 0:00:46.159 --> 0:00:47.240 to reaching the MILLI. 0:00:47.440 --> 0:00:49.839 I think it's the right answer is probably a combination 0:00:49.880 --> 0:00:52.000 of both. I don't think that one outweighs the other. 0:00:53.960 --> 0:01:00.000 I think what made it so difficult is the concept 0:01:00.200 --> 0:01:03.120 of a community as it released to financial services is 0:01:03.800 --> 0:01:07.399 very very new. Right, That's not when you think about 0:01:07.400 --> 0:01:11.600 financial services, you don't think about community, and and so 0:01:11.800 --> 0:01:15.760 I believe that has to be a part of the 0:01:15.800 --> 0:01:19.759 growth story, not just the demand part, Right, I think 0:01:19.880 --> 0:01:22.920 I think the demand has always been there. I think 0:01:22.920 --> 0:01:25.120 the community is what makes it unique and special. 0:01:26.319 --> 0:01:29.440 You had said in another interview, the system is somewhat 0:01:29.440 --> 0:01:33.160 discriminatory or selective in that it's extremely expensive to start 0:01:33.200 --> 0:01:37.560 a financial services company. To that end, like, what are 0:01:37.600 --> 0:01:38.440 some of the most. 0:01:38.240 --> 0:01:40.440 Effective ways for people. 0:01:40.280 --> 0:01:43.240 Who are trying to build fintech, you know, whether in 0:01:43.280 --> 0:01:46.759 whatever vertical, but particularly in fintech, whatever solution. I'm sorry, 0:01:47.160 --> 0:01:48.880 you know, what are some of the best ways to 0:01:48.960 --> 0:01:52.520 create MVPs, like minimum viable product when it's so tough 0:01:52.560 --> 0:01:53.960 to get into this industry. 0:01:56.080 --> 0:01:58.560 Yeah, you know, I would I would say that I 0:01:58.600 --> 0:02:00.440 think the way in which we did it was, you know, 0:02:00.720 --> 0:02:03.800 was probably the cheapest, most efficient way to do so. 0:02:05.160 --> 0:02:08.280 It is expensive, probably more expensive. 0:02:07.880 --> 0:02:12.200 Than any other of the technology company outside of hardware, 0:02:12.680 --> 0:02:18.079 in my opinion, because of the required amount of legal 0:02:19.400 --> 0:02:26.239 work prior to launching compliance and then the ongoing regulation 0:02:26.560 --> 0:02:30.120 or compliance that's necessary that to maintain whatever the idea 0:02:30.200 --> 0:02:30.440 you have. 0:02:31.080 --> 0:02:34.080 So it's actually pretty pretty substantial upfront costs. 0:02:34.080 --> 0:02:36.080 But the way in which we did it was using 0:02:36.240 --> 0:02:40.840 the accelerators, using the the those were those were incredible, 0:02:42.200 --> 0:02:46.040 you know, launching pads for Solo. I think Solo participated 0:02:46.040 --> 0:02:52.640 in three prior to launching yet alone, maybe probably about 0:02:52.639 --> 0:02:54.120 three additional after launch. 0:02:54.600 --> 0:03:01.720 So you know, those those accelerators were huge for for 0:03:01.840 --> 0:03:03.240 not for. 0:03:03.240 --> 0:03:07.520 Trying to just leverage resources despite the uphill battle of 0:03:07.560 --> 0:03:10.600 the of the costs that it takes to do. 0:03:10.680 --> 0:03:15.000 So, you know, for I love this conversation because you know, 0:03:14.880 --> 0:03:18.079 you talk about it's really expensive to do compliance. It's 0:03:18.080 --> 0:03:22.000 heavily regulated industry, and I was reading something where you said, 0:03:22.000 --> 0:03:23.560 you know, at the end of the day, the pattern 0:03:23.600 --> 0:03:25.799 matching that vcs do when they're looking for the next 0:03:25.800 --> 0:03:28.200 billion dollar exit, there's not a number of people who 0:03:28.200 --> 0:03:31.000 walk in looking like you. You know, there's not a lot 0:03:31.000 --> 0:03:33.079 of people who have attained that level of success and 0:03:33.360 --> 0:03:34.080 look like us. 0:03:34.440 --> 0:03:34.640 You know. 0:03:34.760 --> 0:03:36.360 But when you put numbers on the board, you went 0:03:36.400 --> 0:03:39.120 on to say, people start to wake up. And so 0:03:39.840 --> 0:03:43.400 in order to get that VC attention. To your point, 0:03:43.440 --> 0:03:45.040 you know, you have to put some numbers up on 0:03:45.080 --> 0:03:46.720 the board. How do you do that if you're not 0:03:46.840 --> 0:03:47.600 Rodney Williams. 0:03:51.440 --> 0:03:58.400 Well, I think, let's be very clear. I think that 0:04:00.280 --> 0:04:06.240 I think everyone is capable of delivering on a concept 0:04:06.600 --> 0:04:08.440 in a way that they need to. 0:04:09.880 --> 0:04:11.680 I think that some. 0:04:11.600 --> 0:04:14.960 Of the most the most important things that the founder 0:04:15.000 --> 0:04:17.080 needs to do is persevere and get it done. 0:04:18.000 --> 0:04:18.919 And to do so, you. 0:04:19.000 --> 0:04:22.200 Got to learn, you know, coming from our first venture 0:04:22.240 --> 0:04:25.479 and to this venture, myself and Travis didn't get here 0:04:26.520 --> 0:04:30.479 by knowing all the answers or assuming that, you know, 0:04:30.800 --> 0:04:34.760 because I've had success in the past, it's going to automatically, 0:04:35.520 --> 0:04:38.119 you know, lead to success here. 0:04:39.279 --> 0:04:41.200 I think we we've attacked. 0:04:40.680 --> 0:04:44.120 It from the from from the position of not knowing 0:04:44.160 --> 0:04:48.320 anything right and and what that means is we need 0:04:48.360 --> 0:04:52.240 to know everything and and when when you know us 0:04:52.240 --> 0:04:55.279 standing here today reaching the numbers that we have, is 0:04:55.279 --> 0:04:57.599 that we have become the experts at what we do, 0:04:58.160 --> 0:05:00.520 and we're the best in the world at it. You know, 0:05:00.600 --> 0:05:04.600 every predecessor that has ever tried to do peer to 0:05:04.640 --> 0:05:10.440 peer finance has failed or has has never reached the scale. 0:05:11.400 --> 0:05:15.000 And you know, what we didn't know, we learned and 0:05:15.040 --> 0:05:18.120 what we knew and anchored in the community in which 0:05:18.120 --> 0:05:22.080 we serve to be quite frank we're black, we're African American. 0:05:21.880 --> 0:05:21.960 And. 0:05:23.920 --> 0:05:26.919 Fortunately I'm part of a community or we're part of 0:05:26.960 --> 0:05:29.279 a community that has been taken advantage of by financial 0:05:29.360 --> 0:05:32.560 services since the beginning of time and a lot of 0:05:32.600 --> 0:05:36.200 the we know the dos and don'ts of our community. 0:05:36.320 --> 0:05:40.200 We know the nuances of what the product needs to enable. 0:05:40.680 --> 0:05:44.640 We know the nuances and what's going to encourage users. 0:05:44.360 --> 0:05:46.960 To pay back. These are some of the things that 0:05:47.000 --> 0:05:47.440 we knew. 0:05:48.279 --> 0:05:51.040 All of the things that we didn't know is what 0:05:51.080 --> 0:05:52.960 we learned to put those numbers on the board. So, 0:05:53.560 --> 0:05:55.679 and to be clear, I think you know, we don't. 0:05:56.200 --> 0:05:59.599 I don't think we get on the stage enough to 0:05:59.640 --> 0:06:05.640 talk about the numbers on the board. But we're doing 0:06:05.680 --> 0:06:08.000 something that has never been done before, at a scale 0:06:08.040 --> 0:06:11.960 that has never been done before, and and and and 0:06:12.080 --> 0:06:15.320 there's a lot of there's a lot of what I 0:06:15.360 --> 0:06:21.000 would call pain and suffering and scar tissue and getting there. 0:06:21.720 --> 0:06:23.120 But we're excited about what's. 0:06:22.920 --> 0:06:25.640 Next coming to the game. Not knowing a whole lot, 0:06:25.720 --> 0:06:27.839 you said, to your point, but you had to learn 0:06:27.880 --> 0:06:30.400 a lot so that you could know everything about this. 0:06:31.680 --> 0:06:34.080 I'm obviously I'm sure you came in with some assumptions 0:06:34.120 --> 0:06:36.479 about things because I read your story and you and 0:06:36.640 --> 0:06:41.320 Travis both come from very successful corporate careers and having 0:06:41.360 --> 0:06:45.280 that you know, personal income, that revenue, you had people 0:06:45.320 --> 0:06:47.560 around you who didn't have it, and so in order, 0:06:48.000 --> 0:06:49.360 you were one of the people that people went to 0:06:49.440 --> 0:06:51.360 the family, like, you know, if I need one hundred dollars, 0:06:51.400 --> 0:06:52.200 I can go to Rodney. 0:06:52.680 --> 0:06:55.360 Well, so obviously other people have that issue as well. 0:06:55.360 --> 0:06:56.880 But what what are some of the things that we're 0:06:56.880 --> 0:07:00.240 surprising to you about some of the assumption as you 0:07:00.279 --> 0:07:03.920 made that may not have been turned out to be correct. 0:07:04.080 --> 0:07:05.400 You know, I used to think that it was just 0:07:05.440 --> 0:07:10.720 my friends and family, meaning that you know, mostly you know, 0:07:10.920 --> 0:07:15.920 the group of Americans that you know had limited savings 0:07:16.120 --> 0:07:19.040 and didn't really have access to short term credit, whether 0:07:19.040 --> 0:07:21.800 it's a credit card or a painting loan. I kind 0:07:21.800 --> 0:07:24.600 of you know, I originally thought that it was focused 0:07:24.640 --> 0:07:26.280 in African American communities. 0:07:28.600 --> 0:07:31.080 I'm still somewhat shocked that. 0:07:32.240 --> 0:07:36.119 No, it's it's it's it's something that's spread across all 0:07:36.480 --> 0:07:37.840 middle class Americans. 0:07:38.080 --> 0:07:39.120 You know, over. 0:07:40.560 --> 0:07:45.840 Over over one hundred and ninety million middle class Americans. 0:07:46.440 --> 0:07:49.240 Yes, it's filled with the underserved. 0:07:49.240 --> 0:07:51.480 Communities are filled with communities that you would think of 0:07:51.560 --> 0:07:57.320 like LGBTQ or you know, Americans with disability, for example, 0:07:58.120 --> 0:08:02.160 but it's also filled with black ground and women Americans 0:08:02.160 --> 0:08:05.080 who tend to be taken advantage of by financial services. 0:08:05.120 --> 0:08:09.640 So said differently, financial service companies haven't necessarily built products for. 0:08:09.640 --> 0:08:12.520 The needs for their needs. 0:08:12.760 --> 0:08:16.680 So that's probably, honestly, that one of the most incredible 0:08:16.720 --> 0:08:20.680 assumptions that that continues to shock me. And and I 0:08:20.720 --> 0:08:22.520 give you an example of that. Ten percent of our 0:08:22.560 --> 0:08:25.240 borrowers make over one hundred thousand dollars a year. You know, 0:08:26.200 --> 0:08:31.080 this person isn't financially illiterate. This person understands finance, this 0:08:31.120 --> 0:08:38.920 person has a credit card. Why has the financial system 0:08:39.200 --> 0:08:43.199 been built to whereas though they need two hundred dollars 0:08:43.240 --> 0:08:46.240 and they can't get it. And that's the biggest question. 0:08:46.600 --> 0:08:50.800 The bigger question isn't how we did it, it's why 0:08:51.520 --> 0:08:54.560 is it successful? Why is it growing? Why is there 0:08:54.679 --> 0:08:58.439 such a demand for this? Why isn't more people talking 0:08:58.480 --> 0:09:00.880 about it? You know, there's a lot of regulators and 0:09:00.920 --> 0:09:06.120 government agencies and politicians are always talking about reducing the 0:09:06.120 --> 0:09:09.240 wealth gap and increasing the access to capital. You're always 0:09:09.240 --> 0:09:12.440 talking about it, but where like, who are the people 0:09:12.480 --> 0:09:15.880 that are doing it? And why aren't you supporting them? 0:09:16.600 --> 0:09:20.840 And those are the questions that I now I sometimes 0:09:20.880 --> 0:09:25.480 perplexed by. But I'm up for the challenge as well. 0:09:26.400 --> 0:09:30.120 You know, so historically we've leaned on the big three 0:09:30.160 --> 0:09:36.079 credit companies Experience, Eco Fax, TransUnion to determine a large 0:09:36.080 --> 0:09:38.520 part of our financial situation, whether we can get loans, 0:09:38.520 --> 0:09:39.880 whether we can get a car, whether we can get 0:09:39.880 --> 0:09:43.839 a house. So many other alternatives to that have come 0:09:43.880 --> 0:09:46.199 into the conversation over the last few years, like. 0:09:46.120 --> 0:09:47.600 A social credit score and et cetera. 0:09:48.200 --> 0:09:50.560 How do you think how does Solo Funds think. 0:09:50.440 --> 0:09:53.240 About the evolution of the credit score. 0:09:54.280 --> 0:09:56.680 Well, it's somewhat broken. 0:09:58.640 --> 0:10:01.760 If you think about an missed of COVID and thinking 0:10:01.800 --> 0:10:04.360 sometime in twenty twenty one credit scores, what are all 0:10:04.400 --> 0:10:06.520 time high where. 0:10:06.320 --> 0:10:07.079 No one will working? 0:10:08.600 --> 0:10:11.480 Well, you know what that What we're ultimately talking about 0:10:11.679 --> 0:10:15.160 is that you know, the way the credit score currently 0:10:15.160 --> 0:10:17.880 works is that it's an incredible measure of historical behavior, 0:10:18.360 --> 0:10:21.760 but it doesn't necessarily give you a snapshot on the consumer, 0:10:22.240 --> 0:10:26.800 the consumer's economic position today. It gives a snapshot of 0:10:26.840 --> 0:10:33.000 what it was right and and and there's waste. There's 0:10:33.040 --> 0:10:35.520 so much technology available to you at our fingertips that 0:10:36.160 --> 0:10:38.320 it needs to it needs to be way more real time, 0:10:38.600 --> 0:10:40.720 and it needs to have a forward looking out look 0:10:41.520 --> 0:10:43.800 and and I think that's that's that's some of the 0:10:44.360 --> 0:10:46.920 nuances in which and how we made our solo score, 0:10:48.000 --> 0:10:52.160 which again takes into account real time cash flow to 0:10:52.160 --> 0:10:56.560 to to assess, uh, who who that borrower may be today, 0:10:57.800 --> 0:11:00.640 right and and and then try to under saying. 0:11:02.040 --> 0:11:03.480 What they can do in a near term. 0:11:03.840 --> 0:11:06.760 So it's a very different thing, you know what you 0:11:06.760 --> 0:11:10.720 know when when you talk to anyone about the credit 0:11:10.760 --> 0:11:14.560 report or the credit agencies, and there's a ton of 0:11:14.600 --> 0:11:18.920 secrecy on how it's scored. There's some things that we know, 0:11:20.480 --> 0:11:26.000 but it's a ton of different misconceptions about how it's scored. 0:11:29.200 --> 0:11:34.080 We actually just tried to remove all of the misconceptions. 0:11:34.400 --> 0:11:34.600 You know. 0:11:35.040 --> 0:11:37.720 The way our score works is on cash flow. When 0:11:37.720 --> 0:11:40.120 you pay something back on time, your score gets better. 0:11:40.520 --> 0:11:42.640 When you don't, your score gets worse. 0:11:43.120 --> 0:11:43.760 That simple. 0:11:44.160 --> 0:11:47.800 No, no, no magic, saw us, no nothing that the 0:11:47.800 --> 0:11:48.960 consumer can't understand. 0:11:49.040 --> 0:11:51.400 I wish our credit score was that simple. 0:11:51.840 --> 0:11:53.840 Meaning if I have a bill and I paid it 0:11:53.880 --> 0:11:56.440 on time, it should maintain or get better. But it 0:11:56.520 --> 0:12:00.640 kind of doesn't. You know, it seems that get worse 0:12:00.760 --> 0:12:03.720 if I miss a payment. I make a ton of payments, 0:12:03.760 --> 0:12:11.320 and it doesn't necessarily reflect that successful payment history in 0:12:11.360 --> 0:12:15.079 the score at least, and and and no form of immediacy. 0:12:15.800 --> 0:12:17.120 So these are some of the things in which what 0:12:17.240 --> 0:12:19.040 we leveraged to create our score. 0:12:19.480 --> 0:12:22.960 I will tell you the traditional credit system is built 0:12:23.320 --> 0:12:27.840 on that, on the credit burd and agency. So it's 0:12:27.880 --> 0:12:30.640 a necessary evil, but it is an evil that is 0:12:30.679 --> 0:12:47.920 not widely understood and and that's been been a challenge. 0:12:52.640 --> 0:12:54.480 There are many people who might have just fell on 0:12:54.520 --> 0:12:57.800 hard times or have an unexpected situation and need help. 0:12:58.000 --> 0:13:01.360 And SOLO find is that assist others who might just 0:13:01.440 --> 0:13:06.160 be financially unsaddened. How the solo funds man those behaviors 0:13:06.160 --> 0:13:08.600 on this platform to be sure both the bowers assisted 0:13:09.360 --> 0:13:10.800 and the lender is protected. 0:13:12.040 --> 0:13:13.040 Rodney speaks on it. 0:13:13.559 --> 0:13:18.079 Yeah, I will tell you where we see much far less. 0:13:19.640 --> 0:13:27.040 Than we see far less a percentages are examples of 0:13:27.160 --> 0:13:29.360 consumers bad with money. 0:13:31.160 --> 0:13:31.959 We see. 0:13:33.320 --> 0:13:39.079 Much more examples of consumers operating on extremely tight budgets. 0:13:39.880 --> 0:13:41.720 You think that then it's like a negative stereotype that 0:13:41.720 --> 0:13:44.640 they've said about us, that we just can't manage money. 0:13:45.360 --> 0:13:50.920 It's not true. It's actually really incorrect. It really bothers 0:13:50.960 --> 0:13:55.360 me because in part they're talking about my mom. When 0:13:55.400 --> 0:13:58.800 we talk about my mom, it's gonna be a problem. 0:13:59.040 --> 0:14:01.600 But I'm going to try to paint a picture for you. 0:14:03.720 --> 0:14:06.040 For of our bars are college. 0:14:05.760 --> 0:14:12.720 Educated, mostly women. They tend to have multiple children, They're 0:14:12.720 --> 0:14:16.280 gainfully employed. They live in cities like New York City, 0:14:16.480 --> 0:14:22.680 San Francisco, Miami, Atlanta. These are high cost of living cities, 0:14:23.200 --> 0:14:25.600 and they live on extremely extremely tight budgets. What I 0:14:25.600 --> 0:14:28.240 mean by extremely tight budgets is that they have less 0:14:28.240 --> 0:14:29.240 than eight hundred dollars. 0:14:29.080 --> 0:14:30.280 Of stavings in their bank account. 0:14:31.080 --> 0:14:37.760 Despite being college educated, savvy. To give you perspective, this 0:14:37.880 --> 0:14:40.960 consumer can take twenty dollars and somehow. 0:14:40.640 --> 0:14:42.080 Figure out how to live off at that point an 0:14:42.160 --> 0:14:44.160 entire week when they need to. 0:14:44.800 --> 0:14:49.240 They know every day that the bill is coming out 0:14:49.240 --> 0:14:54.200 of their checking account. Literally, they know when Netflix is 0:14:54.200 --> 0:15:00.920 coming out. Okay, this is how focused they are and finances. 0:15:01.440 --> 0:15:05.440 So what we're talking about is the cost of living 0:15:05.760 --> 0:15:10.400 is concern in a wage concern that's creating very very 0:15:10.440 --> 0:15:13.280 tight constraints on budgets. And in a time like this 0:15:13.600 --> 0:15:15.720 where inflation is happening all all of a sudden, my 0:15:15.800 --> 0:15:19.200 gas to fill my tank when from forty dollars to 0:15:19.240 --> 0:15:19.920 fifty dollars. 0:15:19.960 --> 0:15:20.640 I need that. 0:15:21.560 --> 0:15:26.000 So what happens is these consumers, despite that eight hundred 0:15:26.040 --> 0:15:30.760 dollars savings, will have a financial emergency one to four 0:15:30.840 --> 0:15:38.240 times every twelve months. And it looks very simple. My child, 0:15:39.640 --> 0:15:43.520 my child is sick. I can't go to work for 0:15:43.600 --> 0:15:46.600 three days. That's three days of pay. 0:15:47.840 --> 0:15:48.320 Wow. 0:15:49.080 --> 0:15:52.160 This is also when I now have a medical deductible 0:15:52.640 --> 0:15:55.000 because my kid is sick, and even surgery that's five 0:15:55.040 --> 0:16:00.120 hundred dollars. And the combination of the medical deductible and 0:16:00.160 --> 0:16:02.360 the fact that I'm not going to work means I'm 0:16:02.360 --> 0:16:05.560 going to be short on rent in two weeks. 0:16:07.480 --> 0:16:11.960 That's it. Eight hundred savings is gone like that. 0:16:12.960 --> 0:16:16.560 So all of a sudden, you know, you're like, you 0:16:16.560 --> 0:16:19.560 know what, I'm gonna be late on the rent. I'm 0:16:19.560 --> 0:16:23.520 gonna make sure my kid gets better, but I'm gonna 0:16:23.560 --> 0:16:26.280 incur late fees on my rent and I don't have 0:16:26.320 --> 0:16:28.560 any extra cash. Really, I'm just gonna be late. I'm 0:16:28.560 --> 0:16:30.080 just gonna make sure I got food on the table. 0:16:30.400 --> 0:16:32.280 Let me just borrow two hundred dollars to make sure 0:16:32.320 --> 0:16:37.760 I got food on the table. That's not mismanagement of money, 0:16:38.640 --> 0:16:40.960 that's a lack of cash. 0:16:41.000 --> 0:16:42.360 But that's a lack of salary. 0:16:42.640 --> 0:16:44.800 Given the cost of living and ef person lives in, 0:16:45.480 --> 0:16:50.800 there's no scenario that this person can access short term 0:16:50.840 --> 0:16:54.640 capital cheaper or more efficiently except for going to friends 0:16:54.680 --> 0:16:56.360 or family or if you talk to a lot of 0:16:56.360 --> 0:16:57.520 these consumers. 0:16:57.760 --> 0:16:59.520 I mean, what I love about this consumer is. 0:16:59.640 --> 0:17:03.360 That they're they're they're wet Americas built off of right. 0:17:03.480 --> 0:17:07.280 We see teachers who sell t shirts on Etsy. We 0:17:07.400 --> 0:17:12.440 see police officers who also drive Uber, We see you know, 0:17:12.560 --> 0:17:16.080 I mean, we see multiple streams of income, especially in 0:17:16.160 --> 0:17:22.240 moments of type and constraint moments, they actually dig themselves out. 0:17:22.960 --> 0:17:25.640 The problem is we're trying to make sure that whole 0:17:25.800 --> 0:17:28.480 isn't as deep as it would be what a subprime 0:17:28.520 --> 0:17:31.760 credit card or paying loan, we're solo. That whole is 0:17:32.240 --> 0:17:35.720 not deep at all. But it is a misconception that 0:17:35.760 --> 0:17:41.239 I hate that this group of Americans is not, you know, 0:17:41.359 --> 0:17:43.399 financially illiterate. It is not true. 0:17:44.119 --> 0:17:44.920 It's not true. 0:17:45.720 --> 0:17:48.840 Talk more about that the long term cycle of debt 0:17:48.960 --> 0:17:51.560 that many of us, not many of us, may not 0:17:51.640 --> 0:17:56.239 be aware of that the traditional emergency lenders put us 0:17:56.240 --> 0:17:59.120 in because you know, you talk about yes, there there 0:17:59.160 --> 0:18:02.080 may be some predators or a percentage race that those things, 0:18:02.320 --> 0:18:04.879 But what is this real cycle that it gets people 0:18:04.960 --> 0:18:08.160 into that's negatively affected our communities. 0:18:09.359 --> 0:18:12.920 The cycle isn't even the APR. The APR is an illusion 0:18:13.400 --> 0:18:18.400 that's inaccurate. So I'm gonna give you too truth about 0:18:18.440 --> 0:18:22.880 the APR, which causes problems for for for many Americans. 0:18:23.480 --> 0:18:30.960 Number One, the APR is as a specific fee based 0:18:31.000 --> 0:18:33.280 on the condition of credit. It is a fee that 0:18:33.320 --> 0:18:37.120 they're supposed to communicate. It's it's a it's a fee 0:18:37.200 --> 0:18:41.000 that takes the kind of like average rate and annualizes it. 0:18:43.560 --> 0:18:44.680 But I give you an example. 0:18:45.400 --> 0:18:50.720 When someone says, oh my god, that payday loan costs 0:18:50.720 --> 0:18:54.920 four hundred per the consumer is not technically paying four 0:18:55.000 --> 0:19:01.240 times what they borrow. It's an annualization relation based on 0:19:01.280 --> 0:19:05.040 the short term. It's even difficult to understand as I'm 0:19:05.080 --> 0:19:09.160 explaining it. Yeah, right, So that's that's problem number one. 0:19:10.000 --> 0:19:12.960 Problem number two, which is more important than problem number one, 0:19:13.000 --> 0:19:16.960 in my opinion, is that APR does not include subscription fees, 0:19:17.520 --> 0:19:24.359 annual fees, late fees, origination fees, instant cash fees. I 0:19:24.440 --> 0:19:27.520 give you an example, when you look at like subprime 0:19:27.520 --> 0:19:30.399 credit cards or payday loans. I only think like twenty 0:19:30.480 --> 0:19:35.679 percent of consumers actually paid them more time, so that 0:19:35.800 --> 0:19:38.760 means what a consumer is really paying should then also 0:19:38.840 --> 0:19:42.480 include the late fee, because most consumers are paying late fees. 0:19:43.320 --> 0:19:45.159 That gets into the predatory nature. 0:19:47.600 --> 0:19:50.200 And giving an example, a subprime credit card, which is 0:19:50.240 --> 0:19:53.520 an average of about five hundred dollars, is your how 0:19:53.560 --> 0:19:56.120 much credit they'll give you it will happen the highest 0:19:56.119 --> 0:20:01.560 APR that's allowed in that state, plus the an annual fee. 0:20:03.240 --> 0:20:06.800 There's a late fee, a flat late fee assessed every 0:20:06.920 --> 0:20:09.560 month that you're late for the rest of the time. 0:20:10.720 --> 0:20:15.480 Now they have caps, but for a while there's also 0:20:15.560 --> 0:20:20.800 instant cash fees that you also don't care. So when 0:20:20.800 --> 0:20:23.680 we actually we actually try to we call it total costs. 0:20:23.680 --> 0:20:26.919 We actually commission the research projects or understand what are 0:20:26.960 --> 0:20:28.080 consumers really paying? 0:20:30.359 --> 0:20:31.160 Not sure math. 0:20:31.960 --> 0:20:35.800 If a consumer takes one hundred dollars today, what are 0:20:35.840 --> 0:20:37.080 they paying twelve months from them? 0:20:37.920 --> 0:20:40.080 That's it. It's everything plus. 0:20:39.920 --> 0:20:44.119 One hundred dollars, no offens and bucks, and the data 0:20:44.200 --> 0:20:45.560 is really really upsetting. 0:20:45.680 --> 0:20:46.840 Subprime credit cards are. 0:20:46.760 --> 0:20:52.159 Actually more expensive and paying the most, which are a 0:20:52.200 --> 0:20:56.640 subprime credit card of basically one thousand dollars, the average. 0:20:56.320 --> 0:20:58.240 Consumer is going to pay like nineteen hundred dollars. 0:20:58.200 --> 0:21:02.879 Fees on top of the thousand, on top of it. 0:21:04.760 --> 0:21:08.520 Principle, Yeah, it was, it was. Actually it's actually really bad. 0:21:09.640 --> 0:21:13.159 So, you know, these are some of the things that 0:21:13.280 --> 0:21:19.520 aren't necessarily talking about, but mainly because who's who's the 0:21:19.680 --> 0:21:22.040 who's the folks in the in the room arguing about 0:21:22.040 --> 0:21:29.359 APR or talking about what consumers are really paying. Number One, 0:21:29.880 --> 0:21:33.879 that they're too far removed. I know, I know, my my, 0:21:34.400 --> 0:21:38.360 you know, the too far removed from the plight. They've 0:21:38.440 --> 0:21:41.480 they've made their money a long time ago, they're doing 0:21:41.520 --> 0:21:44.240 pretty well. They're not understanding what these consumers are really 0:21:44.240 --> 0:21:49.240 paying for. And and if they're from non underrepresentative groups, 0:21:49.280 --> 0:21:57.320 so underserved groups, it's just perpetuating a lack of understanding, right, 0:21:57.560 --> 0:21:59.320 and and and and this is one of the biggest 0:21:59.359 --> 0:22:01.959 reasons why we're we published as Total cross Support. Now 0:22:01.960 --> 0:22:05.240 why again, we kept trying to figure out why we're growing, 0:22:06.720 --> 0:22:10.040 you know, like maybe you know, because you start to 0:22:10.119 --> 0:22:13.720 question yourself, like maybe we aren't so affordable, maybe we 0:22:13.800 --> 0:22:18.080 aren't such a benefit. But when we surveyed our consumers 0:22:18.160 --> 0:22:19.800 and they're like, I was like, why didn't you why 0:22:19.800 --> 0:22:20.600 don't you? 0:22:20.640 --> 0:22:23.800 Do you have a credit card? Yes, well, that's shocking. 0:22:24.200 --> 0:22:26.440 They told us that they didn't have a credit right, 0:22:26.840 --> 0:22:28.200 why don't you use your credit card? 0:22:28.320 --> 0:22:32.000 It's too expensive? And I was so confused by that. 0:22:33.440 --> 0:22:36.119 Because my credit card isn't that expensive, but their credit 0:22:36.160 --> 0:22:36.600 card is. 0:22:38.520 --> 0:22:40.399 And these are just some of the things that you know. 0:22:41.240 --> 0:22:44.560 I think that's one of the best things about being 0:22:45.320 --> 0:22:49.000 who we are as founders and entering this space within 0:22:49.040 --> 0:22:52.560 financial services is that we it's I think it's our 0:22:52.640 --> 0:22:55.440 duty to be a voice of who we represent and 0:22:55.920 --> 0:22:59.720 to start to bring data and facts and start to push, 0:23:00.800 --> 0:23:05.200 you know, are our leaders to answer these questions and 0:23:05.520 --> 0:23:08.320 and and to and to start to create some level 0:23:08.359 --> 0:23:12.840 of reform. I'm proud to say, and I think you know, 0:23:13.000 --> 0:23:18.479 we're about a fifth of the cost of subprime of 0:23:18.560 --> 0:23:22.560 subprime credit cards, the average consumer spends about thirteen point 0:23:22.600 --> 0:23:27.639 four percent in addition to their principle after twelve months. 0:23:28.080 --> 0:23:30.600 And then I'm gonna tell you the only reason is 0:23:30.640 --> 0:23:33.600 that we don't compound fees. Not the only reason, but 0:23:34.480 --> 0:23:37.200 we don't believe we don't give you like if you're 0:23:37.280 --> 0:23:40.200 late every month, we don't charge you late fees every month. 0:23:40.600 --> 0:23:43.600 There's a one time fee that that's going to dig 0:23:43.640 --> 0:23:44.000 a hole. 0:23:46.640 --> 0:23:49.280 And you got to understand, there's no what we have been, 0:23:49.440 --> 0:23:51.840 what we have learned is that we actually have significantly 0:23:51.880 --> 0:23:53.080 better repaying the rates. 0:23:53.680 --> 0:23:56.320 No, I it's easier to get out the hole. 0:23:57.400 --> 0:24:01.680 It's really hard to pay back one hundred dollars loan 0:24:02.760 --> 0:24:06.520 that is now two hundred and fifty bucks versus one 0:24:06.560 --> 0:24:10.240 hundred dollars loan that's now you know, one hundred and 0:24:10.280 --> 0:24:11.000 thirteen dollars. 0:24:11.119 --> 0:24:11.679