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Loans Bad Credit Online – Bad Credit Credit Cards – Pay for shoes in instalments? ‘Buy now, pay later’ shopping gaining ground in Singapore | Fintech Zoom | Fintech Zoom

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Loans Bad Credit Online – Bad Credit Credit Cards – Pay for shoes in instalments? ‘Buy now, pay later’ shopping gaining ground in Singapore | Fintech Zoom

Bad Credit Credit Cards – Pay for shoes in instalments? ‘Buy now, pay later’ shopping gaining ground in Singapore

SINGAPORE: Ms Doleries Kwok was about to complete her purchase for a pair of Adidas slip-on shoes on e-retailer Zalora when she noticed a new payment option. 

It was a “buy now, pay later” (BNPL) service called Rely, which could split the S$90 payment into three equal monthly instalments with no interest or service fees.

This was new to Ms Kwok. She asked around; none of her friends had tried it either. Even though she did not need to pay for her new shoes via instalments, she decided to give it a go, tempted by a S$20 cashback for first-time users. 

The next step to create an account with Rely took mere minutes. All she had to do was key in personal details like NRIC, contact number, address and choose a preferred debit or credit card, and the instalment plan was in place. 

“It was convenient,” she told CNA. “I initially thought there might be some catch to it, like a membership fee, because to be able to split into interest-free instalments sounds too good to be true.” 

“But there was no membership fee involved. Just create an account will do.”

SMALL BUT GROWING INDUSTRY

Ms Kwok is among a small but growing group of shoppers here who have given BNPL schemes a shot.

Simply put, these are short-term payment plans that allow individuals to make a purchase and pay for it over time. Instalments are not a foreign concept, but BNPL services allow one to split the cost for small-ticket everyday items, without interest fees and without having to own a credit card.

This alternative payment method, primarily for e-commerce, has seen red hot growth in overseas markets, especially Australia, Europe and the United States, for some time now, although it is starting to stir concerns among some regulators about the ease with which shoppers can make purchases.

A recent report by US financial technology leader FIS said BNPL accounted for 2.1 per cent of global e-commerce transactions in 2020. This is expected to double to 4.2 per cent by 2024. Global BNPL services include Sweden’s Klarna, which is now Europe’s most valuable start-up with a valuation of US$31 billion, and Australia’s Afterpay.


FILE PHOTO: A smartphone displays a Klarna logo on top of banknotes is in this illustration taken January 6, 2020. REUTERS/Dado Ruvic/Illustration/File Photo

Singapore is playing catch-up to the growing trend, as it sees its own crop of homegrown players.

Two new providers – OctiFi and Pace – entered the market last year despite the COVID-19 pandemic, joining Rely which was the first mover in 2017, as well as hoolah and Atome which have been around since 2018 and end-2019, respectively.

The same report from FIS said BNPL is the fastest-growing online payment method in Singapore. Currently accounting for just 3 per cent of the market, it is on track to grow to 13 per cent by 2024.

The four players that CNA spoke to – Atome, hoolah, OctiFi and Pace – said they have had more users and merchants coming on board. Rely turned down CNA’s interview request for this article.

Atome, for instance, now has 100,000 users, with growth at 20 per cent a month. 

Other players declined to reveal specific numbers – Pace would only say its users are “in the thousands” while hoolah said it saw “phenomenal” growth of 400 per cent last year. Age-wise, the bulk of BNPL users are between 18 and 35 years old.

The pandemic is one reason for this unabated growth, as more turned to selling and shopping online, BNPL players said. It also helped that the market in Singapore has grown more comfortable with digital payment options and innovation by start-ups.

Beyond e-commerce checkouts, BNPL players said they also see demand from retailers to have this option in stores.

“Not everyone can sell online. As things return to normal, many of the smaller merchants are keen to find new ways to get customers back,” said OctiFi’s founder Ed Chin.

READ: Buy now, pay whenever? Lockdown lift for online shopping loans

In addition, instalments seem more attractive to consumers during tough times, as an alternative to getting what they want while managing cash flows, said Atome’s chief executive officer David Chen.

Local BNPL players are generally offering three interest-free, equal monthly payments for shoppers at retailers that range from fashion, beauty, furniture to electronics. Anyone above the age of 18 with a debit or credit card can create an account.

There are no account or other sign-up fees for now, but users who fail to make their instalments in time will have their accounts frozen and face penalties.

Providers have varying late-fee penalties. For instance, Atome charges a S$20 administrative fee if a payment is missed. If this fee and the outstanding payment are not paid within seven days, an additional S$10 fee is imposed, subject to a cap of S$60.

Some others base it on transaction sizes, like hoolah charges a S$15 late-payment fee for orders between S$100 and S$999.99. The fee is S$5 for those below S$100 and S$30 for orders above S$1,000.

There are also no sign-up or platform fees for merchants. In fact, BNPL firms pay merchants in full, absorbing all of the credit risk, except for an approximate 4 to 6 per cent cut at the point of sale.

“There is no risk for merchants (as) merchants receive the total payment for any orders upfront once the product is sold,” said hoolah’s co-founder and chief executive officer Stuart Thornton.

Through their services, BNPL companies said they are helping consumers to buy what they want while enabling retailers to boost sales.

On the latter, hoolah said those it partnered have reported a 20 to 40 per cent jump in average on conversion and order sizes, while Pace noted that some of its merchants saw 15 to 20 per cent more sales within the first 30 days.

“An item may have been too expensive previously but by splitting payment into three, the item is now more affordable and customers can manage their cost,” said Pace’s founder Turochas Fuad. “And by doing so, we have increased the sales orders for our merchants.”

JUST ANOTHER DEBT?

But questions about the BNPL model have emerged, such as whether consumers may be spending more than they can afford and hence chalking up unnecessary debt.

Regulators in the United Kingdom and Australia are reviewing or tightening rules around the emerging industry.

The UK government said last month that it will introduce rules for BNPL credit, such as requiring providers to make affordability checks before lending to a customer.

The Australian Securities and Investments Commission is actively monitoring the sector and has raised concerns about how one in five BNPL consumers were missing payments and some were facing financial hardship.

READ: Americans take to ‘buy now, pay later’ shopping during pandemic, but can they afford it?

Mr Anton Ruddenklau, partner and head of financial services at KPMG Singapore, said BNPL services have raised an “ethical dilemma”.

“It’s so easy now to buy on instalment so there’s a question if BNPL is supporting customers to buy what they want, or are they making a market and encouraging people to buy more,” he explained.

“Are we encouraging people to have unaffordable lifestyles? Are we encouraging people to go into debt although they may not see it as debt and just see it as three easy payments?”

Overseas regulators have also pointed out that BNPL services are attracting “vulnerable customers” due to a “very basic” credit risk assessment in place, Mr Ruddenklau added.

REGULATIONS IN SINGAPORE?

In Singapore, the Monetary Authority of Singapore (MAS), along with other government agencies, is “reviewing the appropriate regulatory approach” for BNPL schemes, the Business Times reported last month.

The central bank has reached out to the industry for information on their business and developments in this space. It is unable to share a specific timeline for the conclusion of its review, a spokesperson told CNA.

MAS noted that BNPL schemes have gained prominence over the past year in Singapore and elsewhere, meaning that the potential benefits and risks for consumers have become “more relevant”.

While convenient, consumers “may be at risk of spending more than what they have budgeted for” when using BNPL services. “Where consumers are not careful and overspend, such schemes can still result in overstretched finances and cause potential financial distress,” said the spokesperson, who urged consumers to bear in mind that BNPL plans are “still debts to be repaid” with late fees and charges imposed if repayments are missed.

FILE PHOTO: A view of the Monetary Authority of Singapore's headquarters in Singapore

A view of the Monetary Authority of Singapore’s headquarters on Jun 28, 2017. (File photo: Reuters/Darren Whiteside)

MAS added that should a regulatory framework be needed, it will be “risk-proportionate and evenly applied across providers so as to effectively mitigate risks to consumers”.

“Steps taken by the industry to address such risks will be taken into account, as will potential benefits that BNPL schemes could bring to consumers and businesses,” it said in its emailed response.

One measure that regulators could be considering is to ensure data-sharing between BNPL firms and other entities such as credit agencies and mainstream lenders, according to KPMG Singapore’s Mr Ruddenklau. Another is to require standardised affordability checks for BNPL schemes.

How these products are being promoted could also be another area for regulators to look into, he said, citing developments in Australia that require retailers to highlight traditional payment methods on their websites first before BNPL options.

“What they are asking is for BNPL to not be the default payment mechanism. They want to give customers an informed choice (with) the right type of advertising otherwise it might shift unfairly to people who don’t necessarily understand the product or are not well-positioned.”

READ: Capital One stops ‘risky’ buy-now-pay-later credit card transactions

Mr Ruddenklau added: “What regulators, including MAS, are saying is BNPL is not a bad product, it just needs to be shaped in a way to ensure that people don’t get to unsustainable levels of debt.

“Or people who are taking out a loan are doing it in a way that they can afford, so it doesn’t affect give them a bad credit rating in the future.”

MANAGING RISKS 

Local BNPL firms told CNA that they have been in touch with the authorities and are welcoming of any regulation.

“We want to build a healthy and sustainable business for the long term … and I believe that regulation in a way protects us. Because without it, it will encourage bad players who don’t look after the interests of consumers or merchants,” said Atome’s Mr Chen.

The four players that CNA spoke with said safeguards are in place. These range from in-house risk management systems and internal assessments, to imposing a credit or buying limit to each customer in order to minimise the risk of bad debt.

For instance, Pace puts a S$1,500 cap on debit card purchases and a S$3,000 limit on credit card transactions.

“The idea about fintech is cheaper, better, faster and so we are a bit more relaxed compared to the banks for example,” said Mr Fuad.

“We will take on some risks – but not crazy risks … As much as we can, we use data and credit history that we can get to prevent people from using (our platform) to buy anything beyond their means.”

Mr Thornton stressed that hoolah is focused on “responsible affordability” and the company has rejected “transactions when we think people are moving towards the wrong direction”.

“We’ve done that purposely to show that we are not like those old consumer finance-type companies where revenue or profit is made from people’s inability to pay back,” he said.

So far, the late payment rate at Atome has been less than 1 per cent, with the average overdue amount being less than S$30. The start-up said it is able to keep this number low as it closely monitors payment behaviours and will suspend users with irregular payment history or too many concurrent transactions.

For the others, missed repayments have been “extremely low” or “insignificant”.

BNPL players also said they tend to offer users a grace period before issuing late-payment penalties. In some cases, these fees do get waived when users’ circumstances are taken into account.

“We designed our services with consumers being top of mind,” said OctiFi’s Mr Chin. “So we generally offer work-out plans if consumers are falling behind and we always try to waive our fees to help.”

COMPETITION HEATING UP

Nevertheless, signs are pointing to continued growth in this trend, with bigger fintech firms or even the banking incumbents either jumping in or forging partnerships.

Pace said it has partnered OCBC to offer its BNPL service to the bank’s debit cardholders, while the fintech arm of gaming hardware and software firm Razer teamed up with Rely to provide BNPL services in Southeast Asia.

Incumbents are moving to maintain their relevance, said Mr Ruddenklau.

“You may get lower interests and lower margins, but the data coming from these transactions have value in their own right … So the banks are making a bet that over time, they will retain relevance against an industry which is growing very quickly,” he explained.

BNPL players are confident that they can hold steady on their turf through innovation and attracting more merchants. Having a different positioning to target slightly bigger-ticket items is also a way out for younger players.

“Some of these bigger-ticket items could be healthcare-related or in the home service segment … These are purchases that are north of S$1,000 or S$2,000 – that’s not usually where our competitors are in so we have been trying to grow in this area,” said OctiFi’s Mr Chin.

Overseas expansion is on the cards for most of them as well.

Atome is already available in almost all of Southeast Asia, as well as Hong Kong and China. It is aiming to be “deeper” in each of these markets by building up its merchant and user base, said Mr Chen.

Having expanded into Malaysia and Hong Kong, hoolah is keeping an eye on Thailand and other parts of North Asia moving forward.

For Pace, which is already available in Malaysia, Thailand and Hong Kong, it intends to venture into North Asia by the next quarter.

“Asia remains under penetrated compared to other markets, with no one single brand that covers the entire Asia-Pacific. So it’s definitely not a crowded market yet,” Mr Fuad said.

Bad Credit Credit Cards – Pay for shoes in instalments? ‘Buy now, pay later’ shopping gaining ground in Singapore

Loans Bad Credit Online – Bad Credit Credit Cards – Pay for shoes in instalments? ‘Buy now, pay later’ shopping gaining ground in Singapore | Fintech Zoom

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Inside the Highly Profitable and Secretive World of Payday Lenders

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Illustration by Sarah Maxwell, Folio Art

When Bridget Davis got started in the family’s payday lending business in 1996, there was just one Check ’n Go store in Cincinnati. She says she did it all: customer service, banking duties, even painting walls.

The company had been established two years earlier by her husband, Jared Davis, and was growing rapidly. There were 100 Check ’n Go locations by 1997, when Jared and Bridget (née Byrne) married and traveled the country together looking for more locations to open storefront outlets. They launched another 400 stores in 1998, mostly in strip malls and abandoned gas stations in low-income minority neighborhoods where the payday lending target market abounds. Bridget drove the supply truck and helped select locations and design the store layouts.

But Jared soon fired his wife for committing what may be the ultimate sin in the payday lending business: She forgave a customer’s debt. “A young woman came to pay her $20 interest payment,” Bridget wrote in court documents last year during divorce proceedings from Jared. “I pulled her file, calculated that she had already paid $320 to date on a principle [sic] loan of $100. I told her she was paid in full. [Jared] fired me, stating, ‘We are here to make money, not help customers manage theirs. If you can’t do that, you can’t work here.’ ”

Photograph by Brittany Dexter

It’s a business philosophy that pays well, especially if you’re charging fees and interest rates of 400 percent that can more than triple the amount of the loan in just five months—the typical time most payday borrowers need to repay their debt, says the Pew Charitable Trusts, a nonprofit organization focused on public policy. Cincinnati-based Check ’n Go now operates more than 1,100 locations in 25 states as well as an internet lending service with 24/7 access from the comfort of your own home, according to its website. Since its founding, the company has conducted more than 50 million transactions.

What the website doesn’t say is that many, if not most, of those transactions were for small loans of $50 to $500 to working people trying to scrape by and pay their bills. In most states—including Ohio, until it reformed its payday lending laws in 2019—borrowers typically fork over more than one-third of their paycheck to meet the deadline for repayment, usually in two weeks. To help guarantee repayment, borrowers turn over access to their checking account or deposit a check with the lender. In states that don’t offer protection, customers go back again and again to borrow more money from the same payday lender, typically up to 10 times, driving themselves into a debt trap that can lead to bankruptcy.

Jared and Bridget Davis are embroiled in a nasty court battle related to his 2019 divorce filing in Hamilton County Domestic Relations Court. Thousands of pages of filings and 433 docket entries by April 26 offer the public a rare glimpse into the business operations of Check ’n Go, one of Cincinnati’s largest privately-owned companies, as well as personal lifestyles funded by payday lending.

The company cleared $77 million in profit in 2018, a figure that dipped the following year to $55 million, according to an audit by Deloitte. That drop in revenue may have something to do with the payday lending reform laws and interest rate caps passed recently in Ohio as well as a growing number of other states.


The day-to-day business transactions that provide such profit are a depressing window into how those who live on the edge of financial security are often stuck with few options for improving their situations. If a borrower doesn’t repay or refinance his or her original loan, a lender like Check ’n Go deposits the guarantee check and lets it bounce, causing the borrower to incur charges for the bounced check and eventually lose his or her checking account, says Nick DiNardo, an attorney for the Legal Aid Society of Greater Cincinnati. After two missed payments, payday lenders usually turn over the debt to a collection agency. If the collection agency fails to collect the full amount of the original loan as well as all fees and interest, it goes to court to garnish the borrower’s wages.

That devastating experience is all too familiar to Anthony Smith, a 60-year-old Wyoming resident who says he was laid off from several management positions over a 20-year period. He turned to payday lenders as his credit rating dropped and soon found himself caught in a debt trap that took him years to escape.

Two things happened in 2019, Smith says, that turned around his financial fortunes. First, he found a stable manufacturing job with the Formica Company locally, and then he took his mother’s advice and opened a credit union account. GE Credit Union not only gave him a reasonable loan to pay off his $2,500 debt but also issued him his first credit card in a decade. “I had been a member [of the credit union] for just two months, and I had a credit rating of 520. Can you imagine?” he says. Smith says he is now debt-free for the first time in 10 years.

Consumer advocates say Check ’n Go is one of the biggest payday lending operations in the nation. But knowing its exact ranking is difficult because most payday lending companies, including Check ’n Go and its parent company CNG Holdings, are privately held and reluctant to disclose their finances.

Brothers Jared and David Davis own the majority of the company’s privately held stock. David bought into the company in 1995, but CNG got its game-changing infusion of capital from the brothers’ father, Allen Davis, who retired as CEO of then-Provident Bank in 1998. Allen sold off $37 million in stock options and essentially became CNG’s bank and consultant.

By 2005, however, the sons were part of a public court battle against their father. Allen accused Jared and David of treating his millions in CNG stock as compensation instead of a transfer from his ex-wife (and the brothers’ mother), sticking him with a $13 million tax bill. In turn, the brothers accused Allen of putting his mistress and his yacht captain on the company payroll, taking $1.2 million in fees without board approval, and leading the company into ventures that lost Check ’n Go a lot of money. Several years of legal fighting later, the IRS was still demanding its $13 million. CNG officials did not respond to requests for comment for this story.

Jared and David split $22 million in profit from CNG in 2018 and, according to the Deloitte audit, CNG’s balance sheet showed another $42 million that could be split between the two brothers in 2019. Jared, however, elected not to receive his $21 million distribution “in order to create this artificial financial crisis and shelter millions of dollars from an equitable split between us,” according to Bridget’s divorce filing.

Worse, she claims, Jared said they would be responsible for paying taxes out of their personal accounts rather than from CNG’s company earnings, making her personally responsible for half of the $5.5 million in taxes for 2019. She believes it wasn’t happenstance that $5.5 million was wired to Jared’s private bank account in December of that same year. Bridget has refused to sign the joint tax return, and Jared filed a complaint with the court saying a late tax filing would cost them $1 million in penalties and missed tax opportunities.

“For the duration of our marriage and to the present, Jared has full and complete control of all money paid to us from various investments we have made in addition to our main source of income, CNG,” Bridget wrote in her motion. She suspects that Jared, without her knowledge or consent, plowed the money for their taxes and from other sources of income into Black Diamond Group, the fund that invests in the Agave & Rye restaurant chain. Beyond the original restaurant opened in Covington in 2018, “they have opened four other locations in one year,” she wrote, including Louisville and Lexington. (The ninth location opened in Hamilton this spring.) Agave & Rye’s website touts its Mexican fare as “a chef-inspired take on the standard taco, elevating this simple food into something epic!”

In his response, Jared wrote, “We have very limited regular sources of income.” He says he isn’t receiving any additional distributions from CNG, the couple’s primary source of income, “and this is not within my control. The company has declared that we would not make any further distributions in 2020 given economic circumstances. This decision is based on a formula and is not discretionary.” Agave & Rye helped produce $645,000 in income for Black Diamond in 2020 but has paid out $890,000 in loans, he says. Through August 31, 2020, he wrote, the couple’s “expenses have exceeded income from all sources.”


The divorce case filings start slinging mud when the couple accuses each other of breaking up their 22-year marriage and finding new partners. Jared claims Bridget began an affair during their marriage with Brian Duncan, a contractor she employed through her house flipping business. Bridget, he says, paid Duncan’s company $75,000 in 2018 as well as giving him a personal gift of $70,000 that same year. Jared says she also bought Duncan at least one car and purchased a house for him near hers on Shawnee Run Road for $289,000, then loaned money to Duncan. Jared says Duncan has been late in repaying the note.

While Bridget says Duncan has been drug-free for several years, he has a rap sheet with Hamilton County courts from 2000 to 2017 that runs five pages long. It lists a half-dozen counts of drug abuse and drug possession, including heroin and possession of illegal drug paraphernalia; assaulting a police officer; stealing a Taser from a police officer; criminal damaging while being treated at UC Health; more than a dozen speeding and traffic violations; a half-dozen counts of driving with a suspended license; receiving stolen property; twice fleeing and resisting arrest; three counts of theft; two counts of forgery; and one count for passing bad checks.

Bridget has fired back that Jared not only is hiding his money from her but spending it lavishly on vacations, resorts, and high-end restaurants with his new girlfriend, Susanne Warner. Bridget says Jared gifted Warner with $40,000 without Bridget’s knowledge, then declared it on their joint tax return as a “contribution.” Bridget’s court filings include photocopies of social media posts of Jared and Warner globetrotting from summer 2019 to summer 2020: vacation at Beaver Creek Village in Avon, Colorado; cocktails at High Cotton in Charleston, South Carolina, and dinner at Melvyn’s Restaurant and Lounge in Palm Springs, California; getaways at resorts in Nashville and at a lakefront rental on Norris Lake ($600 per night); in the Bahamas at a Musha Cay private residence ($57,000 per night), at South Beach in Miami, and at a private beach at Fisher Island; in Mexico at Cabo San Lucas; in the U.S. Virgin Islands at Magen’s Bay and on a private yacht ($4,500 per night); in California at Desert Hot Springs, the Ritz-Carlton in Rancho Mirage, and Montage at Laguna Beach; and in the Bahamas at South Cottage ($2,175 per night).

For her part, Bridget has gone through some of the top lawyers in town faster than President Trump during an impeachment—six in all, two of whom she’s sued for malpractice. She sent four binders of evidence to the Ohio Supreme Court, asking for the recusal of Hamilton County Judge Amy Searcy and claiming Searcy was biased because of campaign donations from Jared and his companies. Rather than deal with the list of questions sent to her by Chief Justice Maureen O’Connor, Searcy stepped down. Two other judges have since stepped into the fray, and in March Bridget filed for a change of venue outside of Hamilton County, arguing she can’t get a fair trial in her hometown. At press time, a trial date had been set for June 28 in Hamilton County.

The poor-mouthing in the divorce case has reached heights of comic absurdity. Jared claims he’s “illiquid” because he didn’t get his distribution from CNG in 2019. Bridget has received debt collection notices for the nearly $21,000 owed on her American Express card and a $735 bill from Jewish Hospital. There’s no sign yet that anyone is coming to repossess her Porsche, which according to her filings has a $5,000 monthly payment. Each party has received $25,000 a month in living expenses, an amount later reduced to $15,000 under a temporary legal agreement while the divorce case is being sorted out. Court filings show that Jared’s net worth is almost $206 million and Bridget’s is $22.5 million.


In the early 1990s, Allen Davis was raising eyebrows at Provident Bank (later bought by National City), and not only because of his very unbanker-like look of beard, ponytail, and casual golf wear. He was leading the company into questionable subprime home loans for people with bad credit and a frequent-shopper program for merchants, though the bank’s charter barred him from getting involved in full-blown predatory lending practices. With guidance and funding from his father, Jared, at age 26, launched Check ’n Go in 1994 and became a pioneer in the payday lending industry. Jared and his family saw there were millions of Americans who didn’t have checking or savings accounts (“unbanked”) or an adequate credit rating (“underbanked”) but still needed loans to meet their everyday expenses. What those potential customers did have was a steady paycheck.

Conventional banks share a big part of the blame for the nation’s army of unbanked borrowers by imposing checking account fees and onerous penalties for bounced checks. In 2019, the Federal Deposit Insurance Corporation estimated there were 7.1 million U.S. households without a checking or savings account.

The Davises launched Check ’n Go on the pretext that it would “fill the gap” for people who occasionally needed to borrow money in a hurry—a service for those who couldn’t get a loan any other way. But consumer advocates say the real business model for payday lending isn’t a service at all. The majority of the industry’s revenue comes from repeat business by customers trapped in debt, not from borrowers looking for a quick, one-time fix for their financial troubles.

Ohio’s payday lending lobbyists got a strong hold on the state legislature in the late 1990s, and by 2018 Democratic gubernatorial candidate Richard Cordray could rightfully claim in a campaign ad that “Ohio’s [payday lending] laws are now the worst in the nation. Things have gotten so bad that it is legal to charge 594 percent interest on loans.” His statement was based on a 2014 study by the Pew Charitable Trusts.

The frustration for consumer advocates was that Ohioans had been trying to reform those laws since 2008, when voters overwhelmingly approved a ballot initiative placing a 28 percent cap on the interest of payday loans. But—surprise!—lenders simply registered as mortgage brokers, which enabled them to charge unlimited fees.

The Davis family and five other payday lending companies controlled 90 percent of the market back then, an express gravy train ripping through the poorest communities in Ohio. The predatory feeding frenzy, especially in Ohio’s hard-hit Rust Belt communities, prompted a 2017 column at The Daily Beast titled, “America’s Worst Subprime Lender: Jared Davis vs. Allan Jones?” (Jones is founder and CEO of Tennessee-based Check Into Cash.) In 2016 and 2017, consumer advocates mustered their forces again, and this time they weren’t allowing for loopholes. The Pew Charitable Trusts joined efforts with bipartisan lawmakers and Ohioans for Payday Loan Reform, a statewide coalition of faith, business, local government, and nonprofit organizations. Consumer advocates found a legislative champion in State Rep. Kyle Koehler, a Republican from Springfield.

It no doubt helped reform efforts that former Ohio Speaker of the House Cliff Rosenberger resigned in spring 2018 amid an FBI investigation into his cozy relationship with payday lenders. Rosenberger had taken frequent overseas trips—to destinations including France, Italy, Israel, and China—in the company of payday lending lobbyists. In April 2019, Ohio’s new lending law took effect and, since then, has been called a national model for payday lending reform that balances protections for borrowers, profits for lenders, and access to credit for the poor, according to the Pew Charitable Trusts. New prices in Ohio are three to four times lower for payday loans than before the law. Borrowers now have up to three months to repay their loans with no more than 6 percent of their paycheck. Pew estimates that the cost of borrowing $400 for three months dropped from $450 to $109, saving Ohioans at least $75 million a year. And despite claims that the reforms would eliminate access to credit, lenders currently operate in communities across the state and online. “The bipartisan success shows that if you set fair rules and enforce them, lenders play by them and there’s widespread access to credit,” says Gabe Kravitz, a consumer finance officer at the Pew Charitable Trusts.

Other states like Virginia, Kansas, and Michigan are following Ohio’s lead, Kravitz says. Some states, such as Nebraska, have even capped annual interest on payday loans. As a result, Pew researchers have seen a reduction in the number of storefront lending op­erations across the country. Even better, Kravitz says, there’s no evidence that borrowers are turning instead to online payday lending operations.

Cincinnati is one of five cities chosen for a grant to replicate the success of Boston Builds Credit, an ambitious effort that city launched in 2017 to provide credit counseling in poor and minority communities by training specialists at existing social service agencies. The program also encourages consumer partnerships with credit unions, banks, and insurance companies to offer small, manageable loans that can help the unbanked and underbanked improve their credit ratings. “Right now, local organizations are all kind of working in silos on the problem in Cincinnati,” says Todd Moore of the nonprofit credit counseling agency Trinity Debt Relief. Moore, who applied for the Boston grant, says he’s looking for an agency like United Way or Strive Cincinnati to lead the effort here.

Anthony Smith is thankful that he’s escaped the downward spiral of his payday loans, especially during the pandemic’s economic turmoil. “I’m blessed for every day I can get paid and have a job during these difficult times, just to be able to pay my bills and meet my responsibilities,” he says. “I’ve always kept a job, but until now I’ve had crappy credit. That doesn’t mean I’m a bad guy.”

Can others worth millions of dollars say the same?

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What’s Questionable Credit and Can I Get a Car Loan With It?

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Questionable’s definition means that something’s quality is up for debate. If a lender says that your credit score is questionable, it’s likely that they mean it’s poor, or at the very least, they’re hesitant to approve you for vehicle financing. Here’s what most lenders consider questionable credit, and what auto loan options you may have.

Questionable Credit and Auto Lenders

Many auto lenders may consider questionable credit as a borrower with a credit score below 660. The credit score tiers as sorted by Experian the national credit bureau, are:

  • Super prime: 850 to 781
  • Prime: 780 to 661
  • Nonprime: 660 to 601
  • Subprime: 600 to 501
  • Deep subprime: 500 to 300

The nonprime credit tiers and below is when you start to get into bad credit territory and may struggle to meet the credit score requirements of traditional auto lenders.

This is because lenders are looking at your creditworthiness – your perceived ability to repay loans based on the information in your credit reports. Besides your actual credit score, there may be situations where the items in your credit reports are what’s making a lender question whether you’re a good candidate for an auto loan. These can include:

  • A past or active bankruptcy
  • A past or recent vehicle repossession
  • Recent missed/late payments
  • High credit card balances
  • No credit history

There are ways to get into an auto loan with questionable credit. Your options can change depending on what’s making your credit history questionable, though.

Questionable Credit Auto Loans

If your credit score is less than stellar, it may be time to look at these two lending options:

  • What Is Questionable Credit and Can I Get a Car Loan With It?Subprime financing – Done through special finance dealerships by third-party subprime lenders. These lenders can often assist with many unique credit situations, provided you can meet their requirements. A great option for new borrowers with thin files, situational bad credit, or consumers with older negative marks.
  • In-house financing – May not require a credit check, and is done through buy here pay here (BHPH) dealers. Typically, your income and down payment amount are the most important parts of eligibility. Auto loans without a credit check may not allow for credit repair and may come with a higher-than-average interest rate.

Both of these car loan options are typically available to borrowers with credit challenges. However, if you have more recent, serious delinquencies on your credit reports, a BHPH dealer may be for you. Most traditional and subprime lenders typically don’t approve financing for borrowers with a dismissed bankruptcy, a repossession less than a year old, or borrowers with multiple, recent missed/late payments.

Requirements of Bad Credit Car Loans

In many cases, your income and down payment size are the biggest factors in your overall eligibility for bad credit auto loans. Expect to need:

  • 30 days of recent computer-generated check stubs to prove you have around $1,500 to $2,500 of monthly gross income. Borrowers without W-2 income may need two to three years of professionally prepared tax returns.
  • A down payment of at least $1,000 or 10% of the vehicle’s selling price. BHPH dealers may require up to 20% of the car’s selling price.
  • Proof of residency in the form of a recent utility bill in your name.
  • Proof of a working phone (no prepaid phones), proven with a recent phone bill in your name.
  • A list of five to eight personal references with name, phone number, and address.
  • Valid driver’s license with the correct address, can’t be revoked, expired, or suspended.

Depending on your individual situation, you may need fewer or more items to apply for a bad credit auto loan. However, preparing these documents before you head to a dealership can speed up the process!

Ready to Get on the Road?

With questionable credit, finding a dealership that’s able to assist you with an auto loan is easier said than done. Here at Auto Credit Express, we want to get that done for you with our coast-to-coast network of special finance dealerships.

Complete our free auto loan request form and we’ll get right to work looking for a dealer in your local area that can assist with many tough credit situations.

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Bad Credit

Entrepreneur Tae Lee Finds Her Fortune

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By Jasmine Shaw
For The Birmingham Times

Birmingham native Tae Lee had plans last year to visit the continent of Africa, the South American country of Columbia, and the U.S. state of Texas.

“I was going to stay in each place for like four to six weeks, and then COVID-19 happened,” she said. “So, I just was like, ‘You know what, I’m just gonna go to Mexico and stay for six months.’”

Once home from Playa Del Carmen, located on Mexico’s Yucatán Peninsula, the 33-year-old entrepreneur put the final touches on “Game of Fortune: Win in Wealth or Lose in Debt,” a financial literacy card game for ages 10 and up.

“We created ‘Game of Fortune’ because we realized there was a gap in learning the fundamentals of money,” said Lee. “We go through life not knowing anything about money and then—‘Bam!’—real life hits. Credit, debt, and bills come at us quick!”

Lee believes the game “gives players a glimpse of real life” by using everyday scenarios to teach them how to make wiser financial decisions without having to waste their own money.

“I feel like [financial literacy] can be learned in ways other than somebody standing up and preaching it to you over and over again,” she said. “You can learn it in ways that are considered fun, as well.”

Which is why “we want the schools to buy it, so we can give students a fun way to learn about financial literacy,” she added.

Lee, also called the “Money Maximizer,” is an international best-selling financial author, speaker, coach, and trainer who is known for her financial literacy books, including “Never Go Broke (NGB): An Entrepreneur’s Guide to Money and Freedom” and the “NGB Money Success Planner High School Edition.” The Birmingham-based financial guru focuses on creating diverse streams of income in the tax, real estate, insurance, and finance industries.

For Lee, it’s about building generational wealth, not debt.

Indispensable Lessons

Lee got her first glance at entrepreneurial life as a child watching her mother, Valeria Robinson, run her commercial cleaning company, V’s Cleaning. Robinson retired in 2019.

“My grandmother had a cleaning service, too,” said Lee. “So, even though I didn’t start out as an entrepreneur, watching my mom and grandma do it taught me a lot.”

Lee grew up in Birmingham and attended Riley Elementary School, Midfield Middle School, and Huffman High School. She then went on to Jacksonville State University, in Jacksonville, Alabama, where she earned bachelor’s degree in physical education. She struggled to find a career in her field and became overwhelmed by student loans.

“My credit and stuff didn’t get bad until after college,” she said. “I was going through school and taking money, but nobody told me, ‘Oh, you’re gonna have to pay all of this back.’”

Before embarking on her extensive career in money management, Lee had not learned the indispensable lessons that she now shares with clients.

“‘Don’t have bad credit.’ That’s all I learned,” she remembers. “Financial literacy just wasn’t taught much. I learned the majority of my lessons as I aged.”

In an effort to ward off collection calls and raise her credit score, Lee researched tactics to strategically eliminate her debt.

“I knew I had to pay bills on time, and I couldn’t be late with payments,” she said.

Lee eventually began helping friends revamp their finances and opened NGB Inc. in 2017 to share fun, educational methods to help her clients build solid financial foundations.

“People were always coming to me like, ‘How do I invest in this?’ and ‘How do I do that?’ So, I said to myself, ‘You know what, people should be paying to pick your brain.’”

Legacy Building

While Lee enjoyed watching her clients reach milestones, like buying a new car with cash or making their first stock market investment, she was also designing “Game of Fortune” to teach the value of legacy building.

“The game gives players the knowledge to build generational wealth, not generational debt,” she said. “It gives you a glimpse of life, money, and what can truly happen if you mismanage your coins.”

Using index cards to create her first “Game of Fortune” sample deck, Lee filled each card with pertinent terms related to debt elimination and credit and wealth building. She then called on a few friends to help her work through the kinks.

Three of her good friends—Barbara Bratton, Daña Brown, and Sha Cannon—were just a few of the people that gave feedback on the sample deck.

“From there I met with Brandon Brooks, [owner of the Birmingham-based Brooks Realty Investments LLC], and four other financial advisors to fine-tune the definitions and game logistics,” Lee said.

Though Lee was unable to land a job in physical education after graduating from college, she now sees her career with NGB Inc. as life’s unexpected opportunity to teach on her own terms.

“Bartending and waitressing taught me that working for someone else was not for me,” she replied. “In order to get the life I always wanted, I had to create my own business.”

In her entrepreneurial pursuits, Lee strives to be an open-minded leader who embraces the need for flexibility.

“COVID-19 has shown me that in entrepreneurship you have to maneuver,” she said. “When life changes, sometimes your business will, too. You may have to change the path, but your ending goal can be the same.”

“Game of Fortune: Win in Wealth or Lose in Debt” is available and sold only on the “Game of Fortune” website: gameoffortune.money. To learn more about Tae Lee and Never Go Broke Inc., visit taelee.money and nevergobroke.money or email tae@taelee.money; you also can follow her on Facebook (https://www.facebook.com/nevergobrokeinc) and Instagram (@nevergobrokeinc).

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