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More than 1,600 Californians have been evicted during pandemic
The coronavirus pandemic enters a new month, meaning struggling Americans once again worry about paying their rent. That includes Jade Brooks, facing eviction from a Boston apartment she shares with her mother and an 8-year-old cousin. (July 31)
AP Domestic
Like any parent, Jamie Burson didn’t want her 11-year-old son to discover how frightened she really was about the coronavirus. But it’s hard to mask anxiety when you’re living and sleeping together in the same car.
After Burson was evicted from her two-bedroom apartment in Vacaville the second week of April, she heeded Gov. Gavin Newsom’s order to shelter in place by cooping up in a two-door sedan near her Walmart job. With school campuses shuttered, her son propped his school-issued laptop on top of the glovebox and attended class in the same passenger seat he slept in.
It helped that he could occasionally spend a night at a relative’s or friend’s house, although Burson hesitated to ask to sleep there herself, partly out of fear of spreading the virus to friends and family.
“I was scared because of how many people were dying on a daily basis,” said Burson, who was evicted for a late February rent payment. “Made me feel like mankind was going to go extinct. I’ve never lived to see any type of disease take people out the way this one has.”
More than 1,600 California households like Burson’s have been evicted since Newsom declared a statewide state of emergency March 4, according to data CalMatters obtained via public record requests from more than 40 California sheriffs’ departments. Nearly a third of those evictions took place after Newsom’s March 19 shelter-in-place order, and more than 400 since Newsom issued a self-described March 27 “eviction moratorium.”
The 1,600 evictions are likely a significant undercount of how many renters have been forced to leave their homes since the pandemic struck, as both court-sanctioned and informal evictions often do not show up on the sheriffs’ lockout lists obtained by CalMatters. Additionally, sheriffs’ departments in 14 counties did not respond to data requests; more than 14 million Californians live in those counties, including Los Angeles County, the state’s largest, with 10 million residents.
Newsom’s moratorium — which tenant groups criticized as belated and inadequate — focused on delaying eviction cases related to financial hardship from the pandemic until May 31. An April 6 emergency rule passed by the Judicial Council, the governing body for the state court system, went further, halting nearly all eviction court proceedings in California.
But neither Newsom’s executive orders nor the Judicial Council rule addressed a major subset of eviction cases: tenants like Burson who already lost in court, often for missed rent payments in February or March, and were simply waiting on sheriffs’ deputies to lock them out. Federal eviction moratoria also did not stop these evictions.
As state lawmakers scramble to find a solution for a looming “eviction wave” when courts reopen as early as this month, tenant groups and public health experts warn that the loophole in state protections continues to endanger renters who may become homeless or move into unsafe and overcrowded housing.
Just last week, the Los Angeles County Sheriff’s Department resumed serving its backlog of nearly 1,000 scheduled eviction lockouts, even as the county remains on a state watchlist for surging coronavirus cases. When performing eviction lockouts in the past few months, San Bernardino County sheriff’s deputies encountered two separate households where tenants claimed they were quarantining because of COVID-19, according to a sheriff’s spokesperson. Those households were allowed to complete their quarantine before being evicted.
“(These evictions) could have been prevented, and it really is distressing to hear that this many people have been evicted when we have these shelter-in-place orders,” said Madeline Howard, senior staff attorney at the Western Center on Law and Poverty, which has lobbied for tighter eviction protections during the pandemic.
Unclear authority
Burson now stays in a one-bedroom motel room in Fairfield, paid for by a temporary Solano County homelessness program. She’s unsure where she’ll live once the program ends this week.
She was evicted because of a late February rent payment, lost the eviction lawsuit by default when she says she misunderstood how to respond within the legally required five-day window, and was given until early April to vacate the property. She left before she thought law enforcement was scheduled to lock her out.
While she understands that it was technically within her landlord’s right to kick her out, she wonders why the eviction wasn’t postponed.
“Why wasn’t everything set aside, period?” said Burson, who had been living in the Vacaville apartment for more than a year.
ROEM Development Corporation, owner of the apartment complex from which Burson was evicted, and FPI Management, the building’s property management company, did not respond to requests for comment.
Upon being informed by CalMatters that Burson was no longer occupying the apartment, Todd Rothbard, the landlord attorney who represented ROEM in the eviction lawsuit, said his firm would consider no longer contesting a legal motion Burson had filed to remove the eviction from her record. Evictions stay on tenant records for seven years, and can make it very difficult for renters to find another place to live.
But although Rothbard sympathizes with some tenants, he pushed back on the notion that Burson should not have been evicted in the first place.
“Life can be hard,” Rothbard said. “To the extent people need help, it’s nice to see when society is able to provide help. But it is somewhat unfair to say to a landlord who is in business ‘Hey, it’s now your obligation to support this person.’ Because it’s not.”
Rothbard also said Newsom and the Judicial Council have already overstepped their constitutional powers by the eviction protections they’ve mandated. Instructing sheriffs to not perform eviction lockouts would likely be challenged in court.
Some constitutional law experts say it’s at best unclear what is and isn’t within Newsom’s power when it comes to “enforcing writs” in eviction cases — legalese for court orders to sheriffs’ departments to perform lockouts. Separation of powers between the court system and the executive branch complicate his authority.
“While a governor possesses broad authority under the Emergency Services Act to respond to the pandemic, directing county sheriffs to disobey or slow-walk lawful court orders is beyond a governor’s emergency powers,” said Stephen Duvernay, a senior research fellow at UC Berkeley’s California Constitution Center.
But pro-tenant attorneys disagree, arguing Newsom has remarkable powers during public emergencies — powers they urged the governor to deploy in early March as the first reports of hospitalizations and deaths mounted.
Navneet Grewal, litigation counsel for Disability Rights California, said that there was nothing legally restraining Newsom from ordering sheriffs to stop performing evictions for cases that pre-dated the pandemic. Newsom had included such a provision in one of his executive orders, although it only applied to cases where tenants could demonstrate financial hardship because of the virus.
“I think part of the unique thing here really is that there is no precedent of the situation that we’re in,” Grewal said. “There’s clearly a lot of broad powers to deal with emergencies; we just haven’t had an emergency like this in our lifetime.”
The Newsom administration declined multiple requests for comment.
Tenant groups also approached Attorney General Xavier Becerra to intervene.
“The reports of ongoing evictions in communities across the state and in the midst of the public health crisis are profoundly troubling,” Becerra’s press office said in an emailed statement. “Our office does not have the authority to direct Sheriffs to refuse to comply with lawful orders issued by Courts hearing eviction cases.”
But pro-tenant lawyers say Becerra is constitutionally empowered to oversee how local law enforcement executes court orders.
“I think the attorney general seems to have some priorities that are focused on dealing with the Trump administration, which are obviously very important,” Howard said. “But some of these very important issues are not getting addressed.”
Sheriff choices
On the morning of March 19, Sgt. Lydia Montoya anxiously awaited an announcement from the governor. She had heard news reports that a shelter-in-place order was coming.
The civil unit she oversees at the Kings County Sheriff’s Department had performed three evictions already that day, which they believed they were legally obligated to carry out. But Montoya and other officers in the department harbored concerns about the potential health risks — to the community and the deputies themselves — of pushing renters onto the street.
When Newsom issued the shelter-in-place order that afternoon, Montoya believed she had the legal justification she needed to stop evicting people. Conferring with a county attorney and the publicly elected sheriff, the department decided to stop performing eviction lockouts except in emergency cases that threatened public health and safety. Six evictions on their calendar have been indefinitely postponed. If the shelter-in-place order had come a day earlier, so would the three performed the morning of the 19th.
“The (shelter-in-place) order implies that it is a public safety issue to have people out and about,” said Montoya, who also supplied her deputies with handmade masks before her department acquired personal protective equipment. “And certainly evicting people, them out and about looking for rentals or whatnot, or making them homeless, is not in line with his shelter-in-place order.”
But not every California sheriff’s department shared Kings County’s interpretation of the governor’s executive order. Without clear guidance from the state, individual sheriffs’ departments were left to choose whether to continue with evictions already on their lockout calendars.
Many did just that. According to data obtained by CalMatters, three counties in the Inland Empire and Central Valley led the pack: San Bernardino, with 135 evictions since shelter-in-place; Riverside, with 93; and Kern County, with 68.
“It was a combination of considerations looking at both sides, obviously with the stay-at-home orders as well as the other side of the actual landlords and the people that own the property and their ability to make rent, pay bills and things like that,” said Adam Plugge, a commander at the Kern County Sheriff’s Office that oversees its eviction unit.
After Kern County sheriff’s deputies paused lockouts in late March, Plugge said his department fielded phone calls and emails from frustrated landlords and attorneys, including those referred his way from local elected officials. The lockouts resumed in April.
Plugge said that an explicit directive from the state would have avoided considerable confusion.
“It would have made decisions a lot easier to decide whether or not something could be done, and I think it would have been clearer for the public as well going forward in any shape, fashion or form,” Plugge said.
Evicting without masks
On July 1, deputies from the Humboldt County Sheriff’s Department showed up at 7886 Myrtle Avenue in Eureka to tell Ernie Bull and Mary Wildman the two had to leave.
Bull, 59, had lost a dispute with his step-brother about who should inherit the property he had been living at with his late father and step-mother. Bull said he missed a key court date because he accidentally dialed into the wrong Zoom number for a remote court hearing. Humboldt County Superior Court stopped in-person hearings because of coronavirus.
A group of Wildman’s friends were there to help them with the move. While some of their friends wore masks, Bull and Wildman didn’t — and neither did the sheriff’s deputies who came to evict them.
“If we can socially distance six feet away, then we’re not going to wear a mask,” said Lt. Mike Fridley, who oversees the department’s eviction unit.
While he couldn’t speak to the specifics of Bull and Wildman’s eviction, Fridley said that his deputies carry masks with them, and can put them on at their own discretion. Wearing masks makes it difficult for the deputies to use their radios, he said.
Like most sheriffs’ departments, Humboldt County deputies typically perform multiple lockouts on the same day at different addresses. On the day they evicted Bull and Wildman, three other addresses were scheduled for lockouts, according to sheriff’s department documents.
Asked if he believed there was a health risk in performing multiple evictions on the same day, Fridley said “I wouldn’t see any more risk than five people going to the cashier’s line in Costco.”
Dr. Margot Kushel, director at the UCSF Center for Vulnerable Populations, said she knows of no documented case of sheriffs’ deputies spreading coronavirus through eviction lockouts. But she does fear a “nightmare scenario.”
“If you had a situation where there was a group of deputies going into different people’s households in a highly charged atmosphere, where people might be upset and might be yelling, I think you could potentially have risks for both the deputies going in and for the households being evicted,” Kushel said.
Other sheriffs’ departments interviewed for this story say they require deputies to wear protective gear while performing lockouts.
Neither Bull nor Wildman — who has kidney problems — have shown symptoms of the coronavirus since the eviction. Wildman has been staying at a friend’s place, while Bull has slept outside.
“I want to stay away from people. I’m scared,” said Bull. “I gotta admit, I’m scared.”
Landlord costs
Of course, keeping tenants in a unit for multiple months while they can’t pay rent has a cost. For Karen Clark, that cost is $10,000 — and the fear of falling behind on her mortgage.
Clark, who owns and lives in a triplex in walking distance from the University of Southern California, rents one of her units to a single father and his twin teenage daughters. She was charging $2,400 for the unit — a deal she said was well below market value for the three-bed, three-bath home near downtown Los Angeles.
“I just really liked them and I wanted to help them,” said Clark, who preferred the stability of renting to families instead of students.
Her tenant began to fall behind in his rent payments last fall when his catering business began to decline, according to Clark. Then COVID-19 hit this spring — evaporating most of what remained of her tenant’s income and, along with it, the rent.
Clark said she had seriously considered evicting the tenant in March, but never filed the necessary paperwork with a court. Now those courts are closed to new eviction cases, and Clark said she has been digging into her savings to pay for utilities and other costs. She has explored forbearance options on her mortgage, but was scared of the prospect of a lump-sum payment due at the end of the forbearance period.
“I don’t know what to do,” said Clark, who has kept her job working at City National Bank during the pandemic. “I’ve got to get my cash back. I went through some of my savings, now I’m robbing other bills. It’s just not gonna give forever.”
Clark helps financially support her son and grandchild in Oregon, and rents her other unit to her daughter and son-in-law. When courts resume eviction proceedings, she plans on filing.
Stopgap measures
While sheriffs’ departments across the state continue evictions for cases that pre-date the pandemic, Newsom and state lawmakers are scrambling to head off what experts say is a looming “eviction wave” of tenants who have lost their income because of COVID-19. A UC Berkeley analysis found that as of June, nearly 1 million renter heads of households in California lost their job because of COVID-19.
In the Coachella Valley, some cities like Palm Springs have put in place temporary eviction moratoria. Palm Springs adopted a moratorium in April and has extended it through Sept. 30. The ordinance prohibits landlords of residential and non-residential property from moving to evict tenants if tenants can demonstrate they have suffered financially due to the pandemic, according to the city. Other local cities that have passed moratoria include Cathedral City, Coachella, Desert Hot Springs, Rancho Mirage and Indian Wells.
Statewide, two proposals to compensate landlords and prevent more evictions are making their way through the Legislature, but both face daunting questions about how they’ll actually work.
California State Supreme Court Chief Justice Tani Cantil-Sakauye, who chairs the state Judicial Council, said the state court system could resume eviction proceedings as early as Friday. If tenants contest them, proceedings can take weeks. Because supplemental federal unemployment benefits of $600 per week expired last month, tenants groups fear swelling ranks of renters unable to afford a roof over their heads.
Unless the state intervenes or a new round of federal support is extended, 24-year old Gabriella Aldana is one of those at-risk renters, and could be evicted for the second time since the virus hit California.
Just before 10 a.m. on March 26, three Riverside County Sheriff’s deputies banged on Aldana’s front door. None of the deputies wore a mask, she said, and they told her she had to leave the premises with her two children, ages 6 and 3. The family was permitted to take only what they could carry.
Aldana, then two months pregnant, and her two children piled what they could into her 2013 Honda Accord and drove off into a pandemic at a time when public health officials didn’t know much about the virus.
She left her job at Walmart, she said, over fears of infecting her daughters or complicating her own pregnancy. The night of her eviction, she stayed in a hotel, then moved in for a few days with her parents. She eventually found a studio apartment for the April for $1170. After that, they moved into a two-bedroom duplex in downtown Riverside. The new place is beyond their current means, but also the only place that would accept Aldana, who said she has bad credit.
She has survived on unemployment benefits and, especially, the $600 weekly federal unemployment boost.
If the federal unemployment boost isn’t renewed by late August, Aldana and her children will likely once more be evicted. Even if she gets one of the jobs she’s interviewed for recently, her monthly take-home pay after taxes would be about $1,600. Her rent is $1,595.
“I have some savings to cover some of (rent) next month, I might look for a roommate if the job doesn’t come through and the (federal unemployment benefits) goes away,” Aldana said. “I have to start looking for all of that because now it’s just me.”
Ben Christopher contributed to this article.
This article is part of The California Divide, a collaboration among newsrooms examining income inequity and economic survival in California.
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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?
Inside the Highly Profitable and Secretive World of Payday Lenders Source link Inside the Highly Profitable and Secretive World of Payday Lenders
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:
- 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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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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