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Pawn and loan stores aren’t doing great in the Covid-19 economy

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Perry Lewin has been in the pawn industry for 28 years, but he’s never quite seen a year like this one. Sales have skyrocketed at his store, Decatur Jewelry and Antiques, in central Illinois. Early on in the pandemic, people were scooping up TVs, guitars, gaming systems, laptops, whatever they could to stay occupied and educated at home.

“We couldn’t keep a bicycle in the stock to save our life,” Lewin said. Tools were flying off the shelves, as many households decided it was the “perfect time for a honey-do list.” He estimates his gun and ammunition sales are up by 500 percent. “You know what it was like back in March and April, scared as hell,” he said.

But that doesn’t mean the pawn business has been good in 2020. Even the Pawn Stars pawn stars are struggling. This, at its core, is a money business, not a stuff business. The bread and butter is in loans.

“What happened is our inventory started depleting rapidly, and that was the result of consumers not needing the services of a pawnshop,” Lewin said, explaining that his central loan operation has been way down for much of 2020. “They were not bringing items in to us either to sell or get a loan on, but they were mining everything from us.”

Pawnshops are a longtime fixture in the capitalist economy — one pawnbroker told me pawning is the second-oldest industry in the world. (He asked me if I knew what the oldest was; I assured him I did.) But they remain relatively misunderstood by much of the public, especially those who don’t use their services.

I spoke with pawnbrokers across the country about what the business has been like in this unprecedented year, and the picture that emerged was a microcosm of the economy that flies under the radar for many. Pawnshops, which were deemed essential during the pandemic, experienced panic-buying trends — guitars, guns, and gold — in real time. They also felt the impact the CARES Act had in getting money into people’s pockets and small businesses’ cash registers because it meant people didn’t need their loans.

“We have loans where customers who have been with us for a very long time — 10 years, 20 years even — are now redeeming stuff completely, which they’ve never done before,” said Eric Modell, president of Modell Financial, which owns a chain of jewelry stores and pawnshops in New York. “And they don’t say, ‘I have money from the government, here I am,’ but 20 years you’ve been paying interest.”

But now that much of that support has ended, loans are ticking up again. People are heading back to the pawnshop.

Guitars, gold, and guns

When the pandemic hit, a lot of people had similar ideas on how to pass the time at home and what they needed to buy to do it. They turned to Amazon, sure, but also pawnshops. Brokers say they couldn’t keep at-home entertainment items, musical instruments, laptops, and tablets on the shelves.

But people haven’t just been making their purchases to stay entertained and educated. They’re also buying to ease their panic.

Gun sales have been through the roof in 2020, and some of the pawnbrokers I spoke to said they’ve truly never seen such a sustained boom in gun and ammunition sales as they have now, especially among first-time buyers.

Troy Farr, who owns Texas Pawn & Jewelry outside of Austin, recalled going to one of his stores on a Saturday during the spring to see how things were going and discovered 42 guns had been sold, “which is a lot for a pawnshop.” Forty-one of them had been to new gun owners. “I don’t know why they wanted a gun for a virus that was spreading, but I didn’t ask them,” he said.

Supply chain problems in the pandemic have complicated what gun sellers would otherwise see as a pretty positive increase in firearms sales, especially when it comes to ammunition.

Rob Barnett worked at his family’s pawn operation in Huntsville, Alabama, before starting up his own shop in Fayetteville, Tennessee, and he has spent decades in the firearms business. He says he’s never seen supply in worse shape, and perceived hoarding has only made the situation worse. “Once people start perceiving there’s a shortage in the industry, people start to worry and start buying things they don’t want,” he said.

Guns aren’t the only thing people buy when they’re nervous — they’re also buying gold, the price of which has increased fairly steadily for much of the year.

“Even though the prices of gold had gone up on account of Covid, people still felt the stability of gold and were investing in gold,” said Jordan Tabach-Bank, the owner and CEO of the Loans Companies, a high-end pawn brand that operates in New York, California, and Chicago. When people think the world might be going to hell — and 2020 has given them plenty of reasons to think that — they buy gold.

“That is a trend that has happened since the beginning of time,” he said.

Loans are a much bigger part of the pawnshop business than you probably realize

Everybody knows the Hollywood pawnshop tropes — the creepy guy smoking behind the counter in a seedy corner store, taking a stolen television off someone’s hands, probably so they can go buy drugs. But that’s not the reality. For one thing, it’s easier to sell stolen items online because pawnshops are pretty heavily regulated. But in recent decades, the industry has also made an effort to remake its image.

Pawnshops are a collateral, non-recourse lender, which basically means loans are made not on someone’s credit history but on the value of an item — a TV, a ring, a hammer, whatever. The length of a loan and the interest rate on it often depends on the state.

For example, in New York, shops have to hold on to pawned items for four months and can’t charge more than 4 percent interest per month; in Texas, it’s one month at a 15 to 20 percent rate for most items. People can sell their items to pawnbrokers directly as well, but that’s generally not the business model and not what most people do.

Basically, you bring in your watch, get a loan on it, get a ticket for it, and come back to redeem your watch at some point in the future, paying off the loan plus interest. If you don’t come back to pay off your loan — or at least keep paying the interest payments (some people leave items with the pawnshop for years) — the pawnbroker gets to keep your watch and can sell it.

“Absolute worst-case scenario with us, you lose your ring, you lose your watch. We do not garnish your wages, we do not ding your credit, we don’t prevent you from owning a home,” Tabach-Bank said.

According to the National Pawnbrokers Association, there are about 10,000 pawn stores nationwide that employ about 35,000 people and serve about 30 million customers annually. The stores run the gamut from publicly traded pawn companies, such as EZCorp and FirstCash, to small mom-and-pop operations. Many pawn businesses are multigenerational not only in ownership but in customers.

Pawn loans are “like clockwork for a lot of our customers,” Modell said. “There are people who live and breathe with the pawnshop.”

The NPA estimates that pawn loans average $150 for 30 days and that about 85 percent of loans are redeemed. That can vary, depending on the item — people are likelier to retrieve a family heirloom than they are a buzzsaw.

Pawnshops generally serve people without credit or with bad credit, though there are exceptions. They get compared to payday lenders, which are often predatory and suck people into cycles of debt. Are the interest rates pawnshops charge great? No. But on the scale of options for people without a lot of options, they’re not the worst, either.

“Pawn loans are, of course, one of the more expensive forms of credit, but they are often less costly than a payday or car title loan and are far less likely to trap consumers in long cycles of debt,” said Charla Rios, a researcher at the Center for Responsible Lending. “You do have instances where people are bringing in items, and they’re on loan for quite some time.”

She also noted the industry hasn’t really been growing. “Prior to Covid-19, the revenues for pawn loans were kind of flat,” she said.

Financially underserved consumers spent an estimated $189 billion in fees and interest on financial products in America in 2018, $9.2 billion of which went to pawnshops. By comparison, $25.4 billion went to overdraft fees.

“It’s a mixed story,” said John Caskey, an economist at Swarthmore College and the author of Fringe Banking: Check-Cashing Outlets, Pawnshops, and the Poor. “It’s not a complicated transaction where people are being swindled.”

Covid-19 has not been great for pawnshops

Whenever Tabach-Bank, the high-end pawnbroker, runs into people lately, they ask him about what they assume must be a boom in business this year. “People are like, ‘Business must be amazing, you must be crushing.’ But for most pawnbrokers across the nation, it’s been quite the contrary,” he said.

According to Cyndee Harrison, director of marketing and public relations at the National Pawnbrokers Association, members have reported loans falling by as much as 40 percent this year, and some shops have been forced to close down altogether. “When you have a 40 percent decrease in the core area of your business, that’s going to pinch,” she said.

There’s no single answer for what’s going on, but most pawnbrokers and experts have a two-pronged explanation. One is that people are staying home and spending less — they’re not going out to restaurants and bars, they’re skipping vacation, etc. The other is that the CARES Act, the $2.2 trillion stimulus package signed into law in March, got money to a lot of people by way of stimulus checks, expanded unemployment benefits, and Paycheck Protection Program loans to small businesses. Eviction moratoriums and forbearance on mortgages and student loan payments are also factored in.

In other words, people and businesses had more money, and they didn’t need to resort to the pawnshop to pay rent, float their payrolls, or even just go to the bar on Friday night. And it’s not just that they weren’t taking out new loans; they were also able to pay off their existing loans and redeem their stuff.

Kerry Rainey, board president of the NPA and owner of Bayou Pawn and Jewelry in Louisiana, described the situation as “complete madness and a complete change of our business structure.”

“Our pawns went way down, our redemptions went way up,” he said. And with all the extra cash, pawners turned into buying customers. “Now we’re having a hard time restocking the store and getting our inventory back up because of all of the sales that we’ve done.”

It’s an experience shared across the industry, among high-end shops and more typical operations, in blue states and red states.

“The way it’s turned out has been quite different than what we had anticipated, not only for us, but from some of the discussions we’ve had in other pawn stores in Las Vegas,” said Andy Zimmerman, the general manager of Gold and Silver Pawn in Las Vegas, made famous by the television show Pawn Stars.

Zimmerman said in their case, it’s not just about the stimulus and savings; it’s also the decline in casino traffic, especially earlier on in the pandemic. In Las Vegas, it’s not uncommon for gamblers to pawn items for money to bet with.

“When we’re at normal times … especially when big events happen in town and people are well-to-do, they have expensive jewelry, and they’re not very lucky at the tables. Because we have a pretty decent-sized bandwidth to take in expensive items, during those times, the loans would typically pick up,” he said.

Many of the measures from the CARES Act have ended or are about to. The extra $600 in weekly federal unemployment ended in July, PPP loans have been used up, and rent and mortgage payments put off are coming due. Pawnbrokers say that’s started to show up in their business now, too, as customers old and new are again in need of their services.

The publicly traded pawn company FirstCash reported that loans fell by 60 percent in the month of April, and while they began to improve, pawn balances were still down 30 percent at the end of September from the prior year, meaning people are still pawning things less and able to pay off existing loans more. In its third-quarter earnings report, the company indicated it expects the rebound to accelerate.

“We are starting to see people who are in need of short-term cash,” Hyde said. “The big question, of course, is what happens next, and none of us has a crystal ball.”

The negative effects on lower-end financial services aren’t limited to the pawn industry. The payday loan industry has seen a steep decline in business, too.

Pawnshops are an outgrowth of capitalism. If people had more money, they wouldn’t need them.

When asked, most pawnshop owners acknowledged that they were in an awkward position: Many people have been better off financially, at least when government stimulus was flowing, and that’s been bad for business. But shop owners countered that business overall is generally better when the economy is doing better than it is when it’s doing poorly, an assertion that experts backed up.

While the impression of pawnshops is that they are only there for people in moments of desperation, that’s not always the case. People will also pawn an item to buy a concert ticket or get that last bit of money they need for a vacation. And in good times, they tend to feel more optimistic they can pay it off.

“A pawnshop tends to do best when the economy is good and rolling and people feel safe and secure with pawning their extra item — a laptop, jewelry, television, a watch — something like that so they can just get the temporary loan because they know they’ve got their next payroll check coming,” Barnett said. A one-time government loan doesn’t provide the same kind of future assurances.

For many people, the pawnshop is just a part of their financial lives, and some of their possessions are just a part of their budget. They build up relationships with brokers and will come in to get a loan time and time again.

Lewin, the Illinois pawnbroker, told me about a widow in her 70s who has been coming to him every month for years, getting a $200 or $300 loan on a nice piece of jewelry to tide her over before her next Social Security check comes in. When she comes to pick up her jewelry, they clean it for her, give her a cup of coffee, and catch up.

Yes, pawnshops charge high interest rates that more traditional financial institutions don’t. But they are also a lifeline for people who often don’t have access to more traditional financial institutions or just need to figure out a way to get by.

Wendy Woloson, a historian at Rutgers University and the author of In Hock: Pawning in America From Independence Through the Great Depression, noted that throughout history pawnshops have been vilified in an effort to downplay the broader flaws their existence exposes. “The exploitative practices that capitalism relies on would not have worked if it were not for the pawnbroker to help people get by week-to-week,” she said.

If people had more money in their pockets, if the capitalist system worked better, then they wouldn’t need pawnbrokers as much in the first place. 2020 has been a case study showing just that. But while more help is not on the way from the federal government, it’s still going to be there from the pawnshop.

“There would be a lot of people in a world of hurt if pawnshops didn’t exist,” Farr said.

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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?

Inside the Highly Profitable and Secretive World of Payday Lenders Source link Inside the Highly Profitable and Secretive World of Payday Lenders



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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 [email protected]; you also can follow her on Facebook (https://www.facebook.com/nevergobrokeinc) and Instagram (@nevergobrokeinc).

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