The Payday Loan Industry Is Bastards All The Way Down

boils and in lansings of boils. Uh, Sophie. Sophie brought that info to me last week, so we're trying to play to that demo. Yeah, I mean, I haven't thought about boils in a long time. I'm glad you brought that back to my to my attention. You know that they're they're disgusting. Make boils be on Sharine's mind again. I suppose we've kind of spoiled the fact that our guest today is is Sharine Lanna Units from the Ethnically Ambiguous podcast. Sharine, you've got any other plugs to plug

up at the start? That's me. That's all I got. Follow me on the socials and that's all about that's about it. Here six there we go, follow Sharine on the socials. Now Sharine, Today we're talking about the payday loan industry. Have you ever had to use a payday loan? Uh? Fortunately? No, good good, I have not either. Um. It's a it's a it's a pretty messed up thing. And today we're going to talk about it for like an hour or so. So I cannot wait for you to teach me all

about this thing I know nothing about. Excellent. Well, everyone buckling, strap your strap, your listening chairs on, throw on your you're here in goggles, and uh, prepare to be taken on a journey into the payday loan industry. That was That was beautiful. Thank you, thank'd The Magic school Bus. Yes, I like to think of every episode of this show as like an episode of the Magic school Bus. But Miss Frizzle is drunk and abusive. Um, are you saying

that you are drunken abusive? Yes? Oh, and you're imagine that Miss Frizzle is drunk abusive and just has a gun. Yeah, I mean I do, I do have a yeah, but no, yeah, I hope that the rest of the audience is kind of not the most informed about this topic because I kind of like being a pleab surrounded by pleabs, and you can be the misfrizzle, you know. Yeah, and I was. I was the pleab until about seventy two hours ago

when I started reading about this. So, yeah, exactly, this is the This is the slightly less blind leading the blind into the land of eyeglasses. I kind of lost the thread of that metaphor. We're in the magic school of us. Where are we going. We're going into a paid a loan We're going into We're going into a paid a loan store. Yeah. Yeah. So I want to start by asking people to think about how weird it is that workers have to wait weeks, if not months,

to get paid for the work that they do. Theoretically, your employer and benefits from your labor as soon as you do it, whether you're driving an uber, managing a bank, or using a drone to fire missiles and insurgents, or wedding parties in rural Afghanistan, but you, the laborer, don't actually get paid for your work until long after you

do it. This is such a normal, accepted part of our system that I don't think most of us ever really talk about it much, and this peculiarity in our labor market has led to the creation of an entire, mighty industry. The business of paid a loans short term lending, as it prefers to be called by its friends and family, got its start in the United States in the late eighteen hundreds. This was the dawn of what we today recognize as normal jobs, where people make a regular salary

and get paid on an intermittent basis. Prior to this point, it had been more normal for folks to make a daily wage. If you showed up and worked twelve hours on a farm or a building project, you're a factory. You walked home with cash in your pocket at the end of the day. Regular modern style jobs changed the norms,

and this caused problems for workers. Bank accounts didn't really exist for normal people in the late eighteen hundreds, and it was common for them to run out of money between paychecks because they'd have medical emergencies, or things would ache or whatever. Uh, and short term loans evolved as a way to keep the emerging blue collar working class

alive in the gaps between pay day. So it starts like you can see in kind of this normal space is like people are getting paid differently, so they need, you know, a little bit of money now and then to like help them help them bridge the gap between their pay cycles. Right, can I raise my hand? I'm raising my hand. Yes, raise your hand. I have a question. That means I have a question. Uh, where does the

money come from? Well, it comes from payday lenders. Um, So you would have like normal people wouldn't have credit and like wouldn't be able to get like a loan from a bank. Like a bank is not going to give you a loan if you need three hundred bucks to make up a hole in your in your in your like budget or whatever. So instead these companies come in and basically front you, you know, three hundred bucks. But so they're like private companies, their private private lenders,

private lenders essentially like a rich person. Yeah, that's that's literally how it was. In some cases. It's just like someone with enough money to like throw out loans. And because they're small loans, like a normal loan, like you know, six percent would be a lot of interest to pay um, But because these are small loans and they're very short term, they had like way higher rates of interest. So a onely week loan would regularly be somewhere between a hundred

and twenty and five a p r um. Yeah, so that now we're talking the eight hundred still and that seems insane, but those rates are actually really low compared to the modern equivalents and paiday loans, so like today's payday loans will regularly top five and interest um. Yeah, so that that seems like it might be a little bit abusive, right, yes, yes it would. Now. Uh, this is where we get the term loan shark. That's how these people came to be known, primarily because they got

essentially famous. If you would like, watch a lot of old TV shows from the forties and fifties that would show loan characters like you know you you've heard the story about, like the mob guy threatening to break someone's leg or whatever if they don't pay a debt. Right of course, yeah, of that happened from time to time, But the reality is that they more often relied on wage garnishment, public embarrassment, or what was called bawling out,

which is less fun than it sounds. It's basically screaming at someone to shame them into pay. What the fuck? Yeah, that's that's like just public humiliation. Yeah, that's exactly how most of the paid a loan industry worked in the late eighteen hundreds was if you didn't pay, they would try to humiliate you. That's like psychological torture. It's like psychological manipulation. It is psychological manipulation. But does it does

it change your opinion on this at all? Sharine to learn that this actually created a great job opportunity for women in the workplace slightly. You know, keep keep talking. I'm gonna quote from a scholarly Commons article. Quote to compel payments salary lenders pestered debtors incessantly at home, or sent ballers out to make a scene at work, or processed wage assignments, or use the hours of attorney they had taken to confess judgment for before justices of the peace.

They did not have to lay a hand on customers in arrears to do a profitable business. Indeed, many firms had a preference for hiring women as loan agents because, as one news story explained, they give an appearance of harmlessness to the lending establishment, and an outraged borrower is not so anxious to kick the manager out of a window if she is a woman. So so it wasn't necessarily for the benefit of women, but yeah, it was just because you wouldn't beat up a loan shark who

was a lady sick. Um. Well, as much as I really appreciate job opportunes for women, uh, I mean that's problematic as ship. Yeah, I would say problematic as ship is fair. Um. So, starting after the Civil War, what we're called chattel mortgage lenders became increasingly common. So these were paid a loans backed up by the debtors furniture

and family possessions as collateral. The explicit goal of the arrangements offered was to trap debtors in an endless cycle where they would never quite pay off their loan and thus would spend the rest of their lives racing to pay off the interest in order to avoid literally losing their beds. So people would like mortgage their furniture in order to make ends meet. For sad. That's like, I mean, I feel like it just boils down to a rich

person taking advantage of a poor person that's desperate. That's all it boils down to. Yeah, and that's so sad. Yeah, that is the rich person that must have I mean, the rich person must have better things to do. But they're just greedy. They want money and it's money. Yeah, but they already have it, they want more. So the term loan shark came up essentially because the very form of the deal trapped the barrower and an endless cycle. So you were essentially like always being like chased down

by the shark. You couldn't escape it. Um. The practice was almost immediately recognized as problematic by various state governments as well as the federal government, and they tried a number of ways to get a handle on the problem. States started by placing what we're called or recaps, and by the nineteen teens most states limited annual interest in

between eighteen and forty two. So this seems a lot fairer than a hundred and right, um, and it would stop people from getting trapped in sustainable cycles of debt, but it also kind of wiped out the entire short term loan industry. Um. See. The only way that these loans could work was by giving relatively small amounts of money to people with no credit. By definition, their consumer

base had a high default rate. A lot of people would just completely fail to pay their debts, so the only way the industry could be profitable was to charge these high rates of interest. When the government capped that, loan sharks didn't go away, but they did change. The endless debt cycles and ballings out were replaced by mafia men who would offer illegal loans and ensured repayment by beating the ever living ship out of clients who failed

to pay. So that's kind of problem, the solving the problem forever, um now, So so you're so you're saying this is all stemming from the fact that people don't get paid by the day as much as to you

every other week or every month or whatever. Yes, And that's like one of the things you have to remember at the core of this issue is that no matter how fucked up the payday loan industry is and seems, people still need them, um because like they you know, they have no money for nine or ten days and their kid has to go to a doctor or like

they have. Isn't that something that we should tackle? It seems like yeah, yeah, certainly, it certainly seems like it, um, But we're not, um, why would we tackle systemic problems in our economic system as opposed to covering up a band aid, or like, like your your knee gets gased open and you're just like worrying about the blood trickling on your ankle and not actually the wound. It's that's a gory sorry, Mr Fiddles, it is a gory situation. Now.

I started by saying that, like the mob guys would beat the ship out of people for not paying loans, and that did happen. But one of the weird things about this story is that the majority of evidence suggest us that mafia lenders weren't actually all that bad by the standards of paid a loans um like the more legitimate lenders. They made their money by locking people into an endless cycle of debt, but they like didn't actually

beat people up all that often. Uh, and their interest payments were kind of low compared to like when legitimate companies would offer paid a loans. So I found a great quote on exactly how sort of like physical violence in the loan industry really did work. You know, the stereotype is the mob guy breaking your legs from not paying a debt. That wasn't super common to happen. According

to scholarly comments, quote. The debt or is motivated to pay not only because his body has pledged as collateral, but also because he wants to preserve his only line of credit. The creditor, in turn, wants to avoid the

expense of hiring a nutcracker to collect the debt. As a nineteen sixties Chicago juice man that's what they called people who beat people up for loans explained the cost of hiring a thug to break a deadbeat's leg might exceed the sum he owned owed, and with a broken leg, it would be hard for the debtor to own money and catch up on his payments. Imposing a less stabilitating penalty usually made more sense. A finger deliberately slit open with the razor blade never kept anybody from working and

serves as a constant reminder of the next payday. But the best strategy this loan shark consisted was to select customers carefully and not load them with excessive debt. When business is good in a smoothly run operation, muscle is seldom needed for collections. One of the few empirical studies of a mob loan shark operation confirms this view, based on FBI case files. The study reported that interviews with a hundred and fifteen customers of the loan business turned

up only one debtor who had been threatened. None were beaten. So I mean, I feel like I've watched enough Sopranos to know that's not true, But um, I'm just kidding now. I think it's also very interesting that it went from psychological manipulation and torture to the complete opposite, just like pure physical Yeah, isn't that fascinating? That's fascinating, Like it's

weird how that happens. How Like when the businesses are completely legal and the lead system allows them, they psychologically torture you in charge utterly ruinous rates of debt or of interest, and then when the business is illegal, the interest rates go down, but they have to slice open your finger to get you to pay sometimes, and like that's that, like you you have to pick one of the two, like, because people are going to get these

loans either way. I mean it's a little bit still psychological because you said something like, um, cutting a finger, like it will be a concert reminder of your debt because it's like on your hand. So yeah, that's so fucking manipulative it is. I mean I gotta say, I kind of I'm more on the mob's side than the

legitimate lenders. Same here, no, same here, I think I think ultimately, even though the mobsters are probably better off, like financially, I feel like for the majority of the time, mobsters kind of came from lower class or like middle class or like you know what I mean, people are understanding. Yeah, they they're the they have a better understanding of maybe the desperation they feel or like the trials and gup relations of not having a lot of money. And also,

I mean, Tony Soprano is a complicated character. You know, um, this is going to turn into this as apparents episode, Tony Soprano put in a forty hour work week every week. You know. Yeah, he wasn't. He wasn't slacking off like certain unnamed presidents. I mean like he was working around. Sure he was sucking around and like whatever. But at the same time, he's a busy man. And I think

I think that's a difference. I think that's a difference because, uh, legal operation is usually run by rich people that usually don't lift a finger for their money. Maybe they don't anymore, maybe they have in the past, where their daddy did

or whatever. But tony soprano working guy. Yeah, that's why I have a lot more respect for like a drug dealer than one of these guys who worked at like a mutual fund or whatever scanning people out during the financial crash, someone who was like, we're going to as fargo selling people bad loans. Like, at least the drug dealer, Like there, you know, for one thing, it's an honest transaction.

You want some heroin, you get some heroin. And for another thing, like they're out there pounding the ground, they're working, working, working the floor, so to speak. They're putting on some risk. I I gotta respect that more than you respect the financial criminal. So I feel the same way about the mafia mafia in this case, Like, yeah, maybe you're cutting open some people's fingers, but at least that's honest finger cutting work. Yeah, that's honest finger cutting work. Honest finger

cutting work. Now, by the nineteen sixties, it was not uncommon for mafia lenders to offer annual aprs of under two for their short term loans. FBI studies also reported surprisingly low rates given the industry, often around a hundred and fifty a p R in many cases, mob loans were less than half as expensive as modern payday loans. UH. Now, as I stated, violence was not the norm, but cases did occur that we're shocking enough to spark public outrage.

In one incident in nineteen thirty five, a young clerk was beaten within an inch of his life for welching on a debt. This launched a series of investigations by Thomas Dewey, the governor of New York. Twenty seven people

were arrested for violent collection of debts. Throughout the nineteen forties and fifties, U S. States cracked down on mafia loan sharks, and unfortunately, they did so by doing the opposite of what they'd done to kill the non violent loan sharks, raising ursurycaps and allowing legal lenders to charge

exorbitant interest rates once again. So by the nineteen seventies, deregulation of the paid a loan industry had largely starved the mob out of the business and allowed a thriving new industry of perfectly legitimate companies charging five and six interest for short term loans. UH. Individual states realized pretty quickly that this was even worse than letting the mob give people loans instead. They started to change their laws

back and reintroduced caps to interest rates. But the big banks had gotten a taste of how much money paid A loans could provide. They brought out their lawyers. In the nineteen seventy eight, the Supreme Court ruled on a case in Minnesota. That state had had imposed strict laws on the interest that could be charged on loans, but banks from other states with hired limits had started coming in and operating paid a loan businesses, charging the interest

rates of their state of origin. When the case hit the Supreme Court, the Supreme Court ruled that this behavior was totally fine, and from now on banks would partner with short term lending companies to charge outrageously high interest rates for short term loans, regardless of what the original individ or what the individual states themselves had on the books. As a result of this, certain states like Kansas and Nevada became the hubs for increasingly enormous paid a lending businesses.

So that's cool. What a twist, Yeah, what a twist? Twist. So, by the early nineteen nineties, the paiday loan industry was growing at an exponential rate. It had gone from the purview of shady but ultimately human mobsters to a multibillion dollar business run by gigantic, faceless corporations that hid behind the multitude of names and constantly moved across state lines

to make their questionably legal behavior harder to prosecute. Again, it's kind of a mark of where this story is going that we're going to look back on the old days of the mafia cutting up people's fingers, is yeah, the good old days of payday lending. Yeah. I mean it's crazy that throughout like basically over a century of this one's ever been like, let's just let's just get to the root of the problem, Like what why do people keep wanting money or needing money? Rather, it's because

of the the just the time between their paychecks. And that's infuriating that that hasn't even been addressed. It's just the payday loan fucking clusterfuck keeps getting more clusterfucking yeah, and nobody, nobody ever even talks about like, well, maybe we should reform how workers get paid because maybe people deserve to get their money the day that they earn it, because why wouldn't they, Like it's like the only reason it seems weird to suggest that change to us is

because it's not how it works. Um. But like if you try to think back on it, like, well, why does the company get the value of your labor immediately but you have to wait weeks or months to get the money that you know, when you put it that way, it's sucking bullshit. It's total bullshit. Like what if I what if I work an an immense amount of work and then I die the next day, I have no like you know what I mean, Like they have benefited, but I have not exactly you should be able to

and I'm owed on my deathbed. Yeah, that's bullshit. They got to bury a bunch of money in your casket, which isn't going to help you any and it'll probably I mean, like, I mean, okay, I'm freelanced. I've never actually had like a salary full time job. But the I like, I work on a day rate when I work in production or like whatever. As a filmmaker, you get like a standard rate sometimes, but even that, it's it's like weeks after the job is over that you

finally get paid. And I'm wondering, like maybe there are some things that are like, well the budget, Like I don't, I don't know, man, what's the I don't think there's no there's no solving this, there's no Oh my god. Yeah, there there are some companies there. There's one company based out of the Bay Area that's trying to like reform

the system. And the way they're trying to do it is by essentially, if you work for a company like uber or lift um, you sign up a thing with them and basically they pay you what you earn when you earn it, and they take like one percent, like a flat rate. Uh, and you get your money instantly, and then when the company pays you, the money goes to the company that has been giving you your money. So like essentially um. Yeah, So like there are attempts

like it also, is it because of taxes? I don't know, because I can't. It can't be in most cases because, like you, I've spent most of my working career as a freelancer, usually getting paid four to six weeks after I do the work, uh, and they don't take any

taxes out. That's like how freelancing works. So I think it's just a system that was set up because it really benefits the companies that employ us um and that has been going on for so long that most people don't ever think about how messed up it is that they've got to wait a month to get their money. Yeah, yeah,

you're right. But then at the same time, I'd like, I mean, maybe I've worked on too many indie indie film shoots, but like when I hire someone as a sound person or whatever, I try to pay them, like, if not after the workday, like within the next morning or the day after that. So it's like, I feel like when you're not married to the system, when you're not thinking this is the only way it has to be,

then you're more open minded. Like I've never had a salary job where I had to wait a couple of weeks. In my mind, I was like, well, they worked for me all for twelve hours. Today I will pay them, you know what I mean. So I think maybe we're just maybe the majority of people are just they think this is the way it has to be. Yeah, and that's true. We've got to break Freeman. It's not I mean to go back to the noble drug dealer. You know.

When I was when I was a very poor young man, the only friends of mine, who ever had cash on hand were the ones who made their living selling drugs, because you get paid as soon as you provide a service if you're if you're a drug dealer, yet another reason all of business should take a hand out of the leaf out of the book of dealing drugs. What if everything worked like drugs? Okay? But then The Wire to bring back television? I mean not, it doesn't end

well for a lot of people. I only watched the first episode of The Wire, but it seemed like it was going pretty well, you're wrong, Well, you're wrong. You need to watch the Does it does it go to a dark place that's unfortunate? Well, first of all, it's an amazing show, but also, like I understand, mean, I keep bringing up TV as because I think it's funny to like think of my only source of information about drugs or or the mafia are from television. But at

the same time not false. Um, but I do think it is a very insightful way to understand. I don't know, like, how else do we learn just from film and television? And that's how the the word gets out? Yeah, that's uh. I think this episode is just trying to tell you all that just give drug dealing a shot. I mean that that too. I was going to say, burn the system down, but you know what, our listeners shouldn't burn down, Sharine. Ad breaks the wonderful companies that support our our our

show with products and services, don't. What if a payday loan ad came on right after this, then I'm sure it's a completely ethical payday loan company, just like completely ethical company Coke Industries, who advertised on our show, Oh no, we love here. Sharine. You were just telling me the other day, Robert, I really have a lot of crude oil that I need refined. Do you know anyone who can refine my crude oil and put out more than twice as much carbon into the atmosphere as other crude

oil refineries? And I said, I said, I know exactly. And and Coke Industries that that's your that's your go to. You're not wrong, You're not wrong. You know what else isn't wrong? Products? We're back, we're talking about payday loans. When we when we last uh finished at least reading

into the script. We've gotten to the point where the Supreme Court in nineteen seventy eight ruled that banks could essentially charge whatever interest rates were legal in their states of origin, but extend the loans to people in other states that put on, you know, different caps on interest rates. Um. And this is sort of responsible for the meteoric rise of the modern payday loan industry. So by the late nineteen nineties, rates of between two hundred and five pent

had become the norm. Lenders began tacking on additional service fees to get around limits on the amount of interest they could charge. By the early two thousand's, eleven million Americans spent an average of five hundred dollars a year on fees alone. The situation was already out of control, but not so out of control that an extremely gifted grifter couldn't make it out of control. Here and this brings us to a little guy named Scott Tucker. You

ever heard of Scott Tucker? Shearine, it sounds like a motherfucker. Scott Tucker is a motherfucker. Uh. He was originally going to be the subject of this entire episode. Um, he's not the father of payday loans, but I think it might be accurate to call him like the stepfather who moves in when you're already sixteen and shares his Miller Tall Boys with you. He's the that guy of of feel like, look at you funny when you work shorts in the house and like yes, yeah, yeah, And he

never he never quite crosses the line. But in a way, just making the comments is crossing the line. But like you can't do anything actionable because your mom's really into him. He's that. He's that guy of the payday loan industry. Like you maybe like got some food on your next to your lip, and he like just us his thumb to take it off without saying anything to you. And yeah, you have goose bumps everywhere and you have to keep

it to yourself for the rest of your life. And then maybe they have a kid, and then that kid has no idea that his dad is a fucking creep. Yeah he that that you you really have a field for Scott Walker. Uh he said, he said Scott Walker, but Scott Tucker. Sorry, that's another piece of ship named Scott. Not a great name. Not a great name. Scott Freeze the Way to Beat. That's an advertising for tape. Scott was born on May fifth, nineteen sixty two, in Kansas City, Missouri.

He attended Rockhurst High School in Kansas State University, where he studied business administration. Two years into that degree, he decided he'd learned enough about business, so he dropped out of school and went into business for himself. In nineteen eight, he borrowed fifty thousand dollars from the American Bank of Kansas City, offering what he said was his new Porsche as collateral. Now, the reality is that Scott did not

own a Porsche. He had briefly, but he'd sold it in order to fund his scams and just lied to the bank that he still had it. Tucker's business plan was to use the money he acquired from this real

loan to fund a fake loan business. According to the Center for Public Integrity quote, while a partner in Oregon ran newspaper and magazine ads throughout the country offering commercial loans, Tucker posed as the president of a seemingly high powered investment bank in Overland Park called Chase, Morgan, Stearns and Lloyd. The operation was a fraud, collecting more than a hundred thousand dollars in advanced fees from at least fifteen borrowers

without providing any loans. So his first loan business doesn't actually give people loans. He's he's just stealing money, um and and kind of stealing the name of JP Morgan and Chase, as well as bear Stearns and Lloyd's of London. But I don't feel so bad about that because all of those companies are terrible. Um, but that is what he's doing now. Tucker wasn't only do you only have me on to talk about like shitty white men grifters. Yes, that's why I'm here. Yes, you're my You're you're you're

my shitty white men grifters. Get I mean, immediately after this episode, we're gonna take talk about Jacob wool again. So I cannot wait to bring up that motherfucker again. So Tucker wasn't only a major crimes kind of guy. In nineteen eighty nine, while he was in the middle of his stealing money from people and pretending to run a loan company business, he got in trouble for writing bad checks to a moving company he hired to move loads of used furniture for another one of his businesses.

This kind of sloppiness ensured that Tucker was quickly caught committing tens of thousands of dollars in fraud. He was convicted in nineteen ninety one and spent a year in prison. Now, the next five years of Tucker's life are a little bit of a mystery. He either kept his nose clean and obeyed the law for half a decade, or he got up to a series of smaller scale grifts and he wasn't caught for them. Whatever the truth, by nineteen ninety seven he was ready to get back into the

major crimes game. That year he met Charles Hallinan generally referred to as the godfather of payday loans, although that isn't quite true, as we've gotten over already. But Helenan was wildly successful at running a series of shady quasi legal companies operating under the lending laws of one state while offering loans in completely different states. Because Khan men

instinctively recognized their own, Halenan instantly liked Tucker. The two became fast friends, and Helenan saw the young man as a protege. He agreed to loan Scott Tucker five thousand dollars to create a payday lending company. Tucker would be president and run the business from Overland Park, Kansas. As part of a deal, Tucker signed a contract promising not to create any competing paid A loan companies. I'm sure

that that's gonna go. Well mm hmm, yeah, two con men just shaking hands there, so what a pure friends with a pure friendship. I am sure neither of them will take advantage of the other. Let's read the next paragraph. Helen and and Tucker inked their deal in September of nine. Tucker instantly started a new company see okay management and direct violation of the contract he just signed with his mentor. He began shuffling assets over from the company he created

with Helenan to his new business. Next, Tucker built up a network of dummy corporations based out of Carson City, Nevada, which he could use to receive money from the network of paid A lending businesses he established at the same time. Within a couple of weeks, Tucker was running through a convoluted series of businesses lending companies with names like Cash Advance,

Preferred Cash Loans, and United Cash Loads. For years, Tucker kept Helenan in the dark about the fact that he basically used the other man's money to build up a paid a loan Empire, the he was the soul beneficiary of. He called his friend every Saturday and gave him updates on their company, which was actually the fakest of his fake companies. He assured the other man that c Okay Management was just a part of their new lending service.

The reality, however, is that Tucker had done something new and completely unprecedented in the world of scammy payday loans. The standard for Helenan and other paid A lenders was to base your company in states like Nevada and Kansas

that allowed cripplingly high rates of interest to be charged. Then, thanks to the Supreme Court, they could offer loans to people in states like California was stronger laws in place, but even the states with the loosest ursory laws still had some laws about that kind of thing, and some laws was too many laws for Scott Tucker. He realized that Native American reservations offered a unique opportunity. They got to pass loan. Yeah, he's suffered enough by the hands

of a white man. No, no, they have not. Now they're getting sucked into one of his grifts. For literal he's on the dollar. Yeah, yeah, So Native American reservations could pass their own laws about like ursory levels and stuff. And Scott Tucker found that if he basically convinced reservations without laws about these things to let him operate companies out of their land and offered them a token bribe, well then he could really really get into fucking over

some poor people. So, yeah, he's an innovator. You love innovators. That's what built this country. I love innovators. I mean, I mean this country was literally built by innovative people finding innovative ways to take advantage of Native Americans. So like he's really, he's he's just following the steps of his ancestors. Really, yeah, yeah, Scott Tucker, the junior, junior, junior, the fourth and fifth or whatever. He's just following in

the footsteps of his shitty, fucking scum relatives. It's a noble tradition, a noble, noble, noble mr who I mean, look all Tucker is doing, like sharene p R is clearly not enough to be charging people for short term loans. So he had to find some way to get that number above se and using Native American Reservations was the only way to do it. Like that seems perfectly ethical to me. Um, I'll be right back. I'm just gonna go dump of this when they're really it's fine, I'm

just gonna dump out of the balcony. Yeah, and I'm just gonna set up a little business on a Native American reservation. But also, but also it's like, how much money is enough for these fox? You know what I mean? Like you're already rich, You're already benefiting and and profiting off of people that are so much less fortunate than you and less privilege than you. Look, how much is enough? Why can't these greedy fox just just well be fucking satisfied.

We'll get to why he couldn't be satisfied with the amount of money at a little bit charing. Because Scott Tucker's got got some big plans from the money he's grifting out of people. I don't wanna, don't want to make it think like he doesn't have he doesn't have some ambitions here, so investing in becoming a DJ or something or like getting kind of he's does the very rich person equivalent of becoming a dj. Um. But we'll get to that in just a second. So, according to

the Kansas City star. Tucker's businesses quote operated under brand names including a marilone Cash Advance, one Click Cash, United Cash Loans, and five hundred Fast Fast Cash. In addition to steep interest rates, authorities said consumers were tricked by the terms of the loan through renewals and fees. Five hundred dollar loan could result in the borrow we're owing

nineteen hundred and twenty five dollars. So that's the kind of like level of grift we're we're talking about, Like your kid gets a medical bill and you need five hundred bucks to cover the debt, and then you know, in a month or two, you wind up owing two grand to Scott Tucker because you don't know how to read a contract act as well as Scott Tucker's lawyers know how to write one. Um, and because he's operating out of Native American land, it doesn't matter what the

laws are in your state. UM. Yeah, so that's fun. Over the years, Tucker turned to five hundred thousand dollar investment into a two billion dollar a year business with more than four and a half million annual customers. This meant his companies accounted for roughly of the eleven million Americans who used paid A loans. Now. Tucker did, of course attract legal attention, but it wasn't immediately clear that

Scott Tucker was actually behind any of his companies. Regulators wound up fighting his front businesses, never realizing that they were all essentially disposable shell companies arms of the same octopus. Now. Kansas was the first state to attempt to do something about one of Tucker's companies, a paid A lender called

cash Advance back in the early aughts. They went after it for deceptive practices that led to Kansen's illegally being charged almost eight interest in short term loans, according to the Center for Public Integrity. Quote Danny Volpat, the lead attorney in the case for Kansas Bank Commission n says he never knew that Tucker, living and working in the same state, was actually behind the paid A lenders he

battled for more than two years. Will Pat settled with one of Tucker's shell companies in Nevada, a Shell but no longer exists. Tucker quickly abandoned the trade name cash Advance for these reasons. Bill Pat says it's unclear that Tucker would violate the settlement agreement if he started lending in Kansas again. So you see, because of the way all these shell companies are set up and where they're located, it's kind of impossible for anyone to go after him,

like state level governments. It's the same reason why like a drug enterprise, you would want to have people located in different states doing different things, because it disrupts law enforcement, like it, it just makes it impossible to catch. So Tucker did keep lending in Kansas, just under new companies

with new names. His businesses were all run from Overland Park in a massive six person office, but in order to keep up the illusion that these were Native American run businesses, Tucker's employees were given daily weather weather reports from the tribal lands where they were supposed to be based. This way they could more effectively lie to borrowers. It took until two thousand five for any state authorities to even learn that Scott to even learn the name Scott Tucker.

This is because yeah, well it's because he hired an actor to pretend to be the CEO of his business and to register all the show. Yeah yeah, now fucking love like the beginning of like well, actually no, JT. Lee Roy was nothing like that. But but what is it with I'm just mad? Yeah, well, I mean I always get so mad on your fucking show, Robert, I mean always mad. But Sharine, does it change your mind to know that it's not illegal to do that in the state of Nevada. I don't care about what illegal

or not in this fucking country. Obviously we're fucked. Yeah. Yeah, and his Tony Soprano. Yeah, it's always not real. Yeah, it's it's amazing that Tony Soprano was breaking the law. But Scott Tucker wasn't. I mean he was, actually, but at this point he wasn't. Um So when this con came to light in the color Colorado Attorney General subpoena and him, Tucker was not charged with any crime because it wasn't illegal to have a fake person pretend to be this CEO of the company. It was just some

guy he hired. Yeah, it was just some schmuck. He just needed a name. Would and what would he do? Whould just like appear at places that Tucker were supposed to be at. No, No, it wasn't even that detailed. He would just register, like sign his name when they were registering the new companies and like, yeah, like it was that simple, Like he just wanted a name that wasn't Scott Tucker on all this stuff, so it was that much harder to come after him. Yeah. So uh.

Years later, one of Tucker's former employees laid out under oath exactly how many of these shell businesses Tucker operated quote. In addition to owning one Click Cash, c Okay also owned or was affiliated with a marylan Us, Fast Fast Cash, United Cash Loans, Preferred Cash Loans, and Internet Cash Advanced Marketing. I understand that there were at least five hundred Internet based paid A lending companies that are currently affiliated with

one of the five companies mentioned above owned by clk um. So. This employee was witnessed to some of the unspeakable human cost ofers empire of debt. He later reported under oath, I often saw a customer loan of three hundred dollars turned into a nine hundred dollar debt in a very short period of time due to interest rollover in late fees.

He estimated that six of the money he brought in during a given month came from the interest rollover in late fees rather than the customer paying down the principal balance. So again, the business isn't people paying down their balance. The business is conning them into paying extra money through late fees and service charges and whatnot. And for a very long time, Tucker's paid a lending business did spectacularly well for him. He netted somewhere around four hundred million

dollars and that's just the money we can verify. He bought a one point three million dollar ferrari, an eight million dollar house in Aspen, and a one point eight million dollar house in Kansas. Most of his ill gotten riches, however, were spent on his true passion. You want, I guess you want to guess what it is sharing? You want to guess what what what this guy's equivalent of becoming a DJ is. Um let me think maybe it's gin or like sometimes or No. No, he wanted to be

a arcade master. No, I mean that is kind of close because a lot of arcades have racing games, and Scott Tucker wanted to be a race car driver. What that's the most That's the widest dream I've ever heard of. Yeah, if you look him up on Wikipedia, his name is even given as stop Scott Tucker parentheses racing driver um, and he wasn't you say it's the whitest thing ever. It's it's it's really not um because he doesn't get involved in the honest, god fearing beer soaked kind of

races that like NASCAR fans watch. He did prestige, fancy races and like Europe and ship like the Ferrari Challenge and the Rolex sports Car Series and the American Laman Series. Like he didn't even do like the honest, drunken NASCAR rally kind of races like he was. He was really in the stupid, fancy, rich guy multimillion dollar cars. Have a question, Yes, is this guy married or or with anybody? Or is he fun? Yeah? No, he was married to some broad What is humanity? What is now? So if

we just showed me a picture of him, he's gross. Yeah, he's a gross looking guy. He's a fucking dru by ass motherfucker. His face is like melting on either side. Yeah, he looks like like a young Jeff Gordon, if Jeff Gordon had wandered too close to a candle. Now, he does seem to have been a pretty decent race car driver, like at least he won some races, and he was Rookie of the Year at one point. I don't think he was like super good, but I don't have any

real ability to rate race car drivers. Um. He seems from what I've read, like he was sort of on the edge of where he might have been good enough to drive professionally if he hadn't had hundreds of millions of dollars um. But he probably wouldn't have ever established a racing career if he hadn't had hundreds of millions

of dollars. Now, the term used within the racing community for dudes like Scott is a gentleman driver, and that's essentially racing lingo for a rich guy who buys a really fancy car and is able to become a professional race car driver because they're rich for some other reason. Okay, so gentleman driver. Scott Tucker was well known within the

racing community, and he verged on being famous outside of Kansas. Curiously, he did no racing inside the state of Kansas and seems to have gone out of his way to avoid attracting any attention there. Articles I've read that interviewed people on the racing scene are mixed about Tucker. Some of his fellow racers said that he was very good, but Gunner Jannette, who finished runner up to Tucker in a twos and ten race, was less positive. Here's this American

Life quote. Jeanette said he didn't like the manner that Chucker Tucker chose to win the championship. He cheated really well inside of the rules, which maybe says a lot about his character, says Jeannette. Uh. He adds that Tucker was a detail oriented racer who found loophole's for the first time in series history. He got them to allow

him to get points in whichever car finished better. It was very difficult racing against him, where he would drive two cars and basically if one car had an issue in the other car finished better, he would get points for that, says Jeanette, whose team only fielded one car. Wow, So he was a continent in everything you did. That's the only thing he knows how to do is be a con man. How you doing? How you doing? Their sharing? Um My blood is boiling. Let's bring it back to

the boils. I am. I am going to guess that Scott Tucker spent at least as much money on his side racing career as it would have taken to replace the water systems in Flint, Michigan. When you put it that way, When you put it that way, it is disgusting what fucking these grifters do. Like, it's not how selfish and disgusting of a of a person do you have to be deep down to be that fucking greedy and selfish? And I'm just pissed. I mean, but the alternative sharene is that he wouldn't be able to own

multiple million dollar Ferraris. And can you imagine anyone being happy without that? I mean that is true. I guess anyone for every day of the week. So yeah, exactly, seen driving the same one on Monday and Tuesday. Yeah, like a poor person driving a Ferrari on two consecutive days. Now, yeah exactly, like some some kind of fu yeah dirt farmer. Now starting a two thousand eight, Tucker began dealing with increasing legal threats to his empire. One of them came

from his old mentor, Hallinan. Halenan claims that around two thousand six, Scott's weekly call stopped and we're replaced by occasional emails. Halenan sent an accountant over to look into their company and found that it had quote essentially been ransacked and substantially of all of its assets catch and

profits diverted. So we realized that this business he'd put half a million dollars into funding had basically been hollowed out by the guy he thought was his partner, and all of the money put into establishing an empire of scammy uh payday loan businesses. So helen and sued his former business partner, which had the unhappy side effect of drawing legal attention towards both men, who up until that point had mostly been insulated due to the structure of

their companies. In October of two thousand eight, and Olaf County, Kansas deputy sheriff ticketed Scott Tucker for going eighty six miles per hour and a sixty mile per hour zone. Here's how a joint investigation between CBS and I Watch

News described what happened next. Quote Two days later, Tucker's wife, brother, sister in law, and sister in law, as well as several businesses with ties to the payday loan mogul, suddenly donated a total of four thousand dollars to the campaign of a candidate for local district attorney, the office that prosecutes traffic tickets. Among the businesses that donated a thousand dollars to the campaign were to payday loan companies that

the Miami Tribe of Oklahoma claims to own. Weeks later, the ticket was reduced to a proper parking to the surprise of the deputy who ticketed Tucker. The charge kept Tucker's driving record clean. Wow. Cool cool stuff. Now cool stuff. The good news is that this lawsuit with Hallohan, his old partner, which was settled out of court, in this bribery of a district attorney candidate to get his charges reduced, these would wind up being the seeds of Scott Tucker's undoing.

But before we get to that, you know, we gotta get to right now. Um, I was gonna jump out of the window after that break or before after Okay, I'll do that after okay, Well we are about products. We're back. So I actually am really thrilled because I like that the undoing of this motherfucker was, in fact, it was just their greediness getting the better of them, you know what I mean. It's kind of how like Ted Bundy got caught because he was driving all times.

You know, Ted Bundy only got caught by police when he was driving stupidly because he doesn't know how to drive obviously. Yea. But I mean they're not they're not the same type of evil at all. But I'm saying, I like when they're undoing is done by them. Yeah, I like that too, because it's it's it's this kind of thing where like it's not even a serious charge, like going twenty six miles over the speed limit. If that's your only traffic crime, it's not going to get

your license taken away or anything like that. Um, you'll pay a heavy fee like like fine. But like Scott Tucker could afford that ship. Um, he just he just it bugged him to not have a perfect driving record because he fancied himself this great race car driver. So he Yeah, he essentially exposed everything for that, And it's that's funny. That's really funny. In two thousand eleven, I Watched News published an investigation that marked the first time

Tucker's fraudule loan Empire was laid out in the open. Now, by that point, the I R S and law enforcement were already interested in Tucker's business because of the lawsuit with hallinan Um and he'd started to claim in public that he no longer had anything to do with any of his paid a loan businesses. I watch his investigation looked into the structure of his bribes to the Kansas District Attorney and essentially used that to like lay out

the structure of his organization. So I'm gonna quote from their investigation. Among the companies that gave five dollar campaign donations to the prosecutor on the same day as several of Tucker's relatives were two tribal businesses, AMG Services and M and E Services. AMG Services operates out of an office complex and Overlent Park, the same office that Tucker lists his own and securities and Exchange commission filings. A MG Services pays the property tax on Tucker's eight million

dollar vacation rental and Aspen, Colorado. According to the county records, one of AMG services biggest vendors said in a lawsuit that Scott Tucker in two thousand nine was the owner and chief officer of A MG Services. Most revealing of all bank records showed that Tuck and his brother Blaine were the only two people able to sign for four

paid A lending businesses of one tribe. The tribes may only receive a sliver of the revenue from the paid A lending business, So all this sort of laid out the exact structure of his company, including the fact that he was basically bilking these Native American tribes for their

land and giving them pennies on the dollar. Another class action lawsuit from borrowers in California revealed that the exact amount that these tribes received was between one and two percent of revenue from the loans, which again raked in eight or more in interest. Over the years, twenty two different states took Tucker to court, with varying degrees of success, but a combination of years of lawsuits and dogged reporting

gradually revealed the true face of Tucker's business. In two thousand fourteen, facing increasing legal challenges, Scott's brother Blaine, committed suicide by leaping off the top of a parking garage. I should not make any jokes about jumping out of windows. I've learned well. I mean, a window is not a parking garage unless that parking garage has Winna why did he do I mean, obviously at this to be a questioned, but what was he involved in the business at all? Yeah?

He both of his brothers were involved in the business, and in fact, one of his brothers got in trouble because the money that they were making sort of legitimately through paid a loans wasn't enough, and so he just started buying people's information and uh calling them and telling them that they owed him money and having debt collectors threatened people who hadn't taken out loans um and one of the debt collectors that he hired to do this threatened to rape a guy's wife for not paying a

debt that he didn't owe. And so that guy started suing the pants off of Scott Tucker's brothers, and it was it was this whole big mess, um, So what the fuck? Yeah, they, like Scott Tucker, was mostly focused on the basic crimes of of running. So it's it's a fucking family of awful of evil. Yeah. Once Scott Tucker got successful, he brought his brothers in, and his brothers were even less disappointed than him. He had too I think two that were involved at least to too

many Jesus fucking Christ. Yeah, riddance whatever, way, too too many. This is the Tucker family is a great case for why condom should be free. Um yeah, yeah, I agree. Yeah. Uh wait, So after his brother committed suicide, did that change anything? Well, there were a number of federal lawsuits

and investigations underway at that point. So his brother's suicide like it ended his brother Blaine's problems, but Scott Tucker was still in hot water, and in September of two thousand sixteen, the Federal Trading Commission hit Scott Tucker with a one point three billion dollar civil judgment, the largest ever obtained in a litigated case. Tucker's home and his beloved race cars were all repossessed by the government. It's a real heartbreaker. Yeah. Yeah, he probably cried about that.

I'm sure he did. Now that makes me happy, Yeah, it does. I feel happy for the first time today. If you watch his race car being taken away and him crying in its garage, yeah, you get to see him be sad in the in Dirty Money, the first episode of that Netflix series, because it's like filmed right around when the from it was taking all of his ship, and it's it's pretty good. It's pretty good. Nice now, uh?

In two thousand sixteen is like that same year, a New York grand jury indicted Tucker and a bunch of his business partners for extending deceptive loans, unlawful debt collection, and racketeering. The case revealed that Tucker had actually been charging even more interest than had previously been known. Some of his customers paid upwards of a thousand percent interest on their loans. Tho thousand percent. I can't even compute that in my fucking plead brain. What the funk A

thousand percent? No? And it's it's weird that this sentence is something I'm going to literally say, But it's definitely more ethical to just cut people's fingers open. Like I agree with you. I've never agreed with you more. Yeah, yeah, wild that that's the case. So Tucker was sentenced to sixteen years in prison for running a three point five billion dollar criminal empire. That same year, Tucker's mentor, Helenan, was convicted of collecting more than four d two million

dollars in the legal debt. He was sentenced to fourteen years in prison. But Shrine, if you're thinking the bust of two major payday loan scammers meant the industry itself was in for hard times. Think again, were you thinking that? I mean, I know that there are still pay dalan companies that exist now, so I'm know I know that their end, or their demise or their fucking decade of vacation time in prison didn't mean the end of the

payday loan companies. But um, you would think, I mean, in in a world that is better than the one we live in, you would think that evil people in control of payday loan companies would at least learn from these evil people's mistakes, right, you would think that. But no, I mean they learned from their mistakes and that they don't commit as obvious of crimes, but they do continue

to do the same terrible things. So it didn't it didn't lessen It didn't lessen it at all, And no one, no one was scared, too scared enough to change their ways.

And in fact, the region of Kansas that Tucker worked in, specifically like around Kansas City, like the wealthy neighborhoods there, became sort of a haven for the payday loan industry because of local laws in that regard and suddenly, like anybody with enough cash to open up a business, UM was able to create online payday loan companies that just funneled huge amounts of money into neighborhoods like Mission Hill in Kansas, around Kansas City, where like the very wealthiest

people in Kansas lived. I found an article published a year after the FTC in Diet at Scott Tucker UM. It quotes several attendees at Catholic churches in wealthy areas, most notably Saint Anne's and Mission Hills, about sort of how the payday lending industry flushed the area with cash. Around two thousand and thirteen and fourteen, UM One Worship recalled quote. It was most obvious at the school auctions.

You'd see these clicks of people pulling up in limos acting wild, dropping a lot of money on exotic two week vacations and the other lavish items up forbidding, or all of a sudden, so and so has a brand new Range Rover, or so and so family is moving into some giant Mission Hills mansion. You see it enough times and you start to go, where is this money

coming from? And on one hand, it's St Anne. This is a school in a church that serves Mission Hills in Prairie Village, you expect to see nice cars in the parking lot, but there was something so sudden and so loud about this. It was this bizarre explosion of really extreme wealth. So David Hudnall is the journalist who wrote this story, and he pressed Reverend Keith Lunsford of St. Anne as to whether or not he thought taking money gotten from fleecing the poor was a very Christian uh

thing to engage in. And Reverend Lunsford responded, I don't have any firsthand knowledge of anybody at St. An involved in the paid a loan industry, So he didn't. It isn't. Isn't the church just one big giant paid a loan industry? Yeah? Sure, like yeah yeah, and and and a lot of the Pentecostal ones as well, um like Krefflo doll uh and some of those folks. So I have I have an unrelated question. When you have a sec yeah, my hand

is raised, absolutely, ask away. Okay, thank you, Mr Frizzle. Um, I want to ask A while ago you mentioned that Tucker worked at a building that had like six hundred employees. So the employees at these companies. Are they paid well? Are they basically like labor force that are like they might as well be factory workers that get paid the bare minimum and just to survive, or at the very least, are they paying their workers a decent amount to live?

You know what I mean? Some of them were paid very well, Like the ones whose job was to actually collect debts generally got a portion of those debts. And if they were bringing in tens of thousands of dollars a month, they lived very well. Um, As you know, when it came to people that weren't as critical to the business and weren't involved in as much as the shady stuff, I think Tucker probably paid them as little as he could get away with, because that's how most

of these people tend to work. You see. I was trying to give him the benefit of the doubt. That was like, maybe he at least gave some people job. But in the end, um, he is unredeemable, so keep going. Sorry for interrupting. I would call him an unredeemable asshole. Speaking of unredeemable assholes. After the payday loan industry exploded in Mission Hills, St Anne's church managed to meet an

eight million dollar fundraising goal. UM. One parishioner told the Pitch which is the site I found this article and that covers local Kansas City news. It presented a moral conundrum for St. Anne because there was all this money coming into the church through donations and through the auctions,

and I mean it was huge money. And gradually everybody realized that it was money that, if you trace it back to its route, came from poor people who were being taken advantage of who are being charged crazy interest rates. So there were a lot of behind closed doors, hushed tones, conversations happening about it. People on the finance committee, in the school board, we're talking about the morality of taking that money. But in the end, I think they just

looked the other way. Now. David huddon All, the journalist who wrote this story, also went over to a poor part of town and talked to a reverended a church whose clientele were the victims of rich people who funded the renovations at St. Anne. Because David huddon All is a good journalist, he talked to Reverend Ernie Davis, who told him, we've seen members of our parish who lost

their homes through the snowball effective paid a lending. It has absolutely ravaged the lives of people in our parish. There's no justification for it. In the faith we share, anything that oppresses the poor is condemned in both Jewish and Christian scriptures. People have a sense of what is right and fair, whether it's through scripture or through their hearts, and charging especially poor people, hundreds of percent and interest is oppressive. So that's fun. Yeah, but was this guy

still part of the problem. No, No, this guy. This guy led a church in a poorer part of town where like all of his parishioners were losing their houses because the loans. The people at St. Anne's were making millions of Yeah, because it's all churches, bullshit, Yes, some people, Okay, just rich churches. Yeah, okay, cool, um, keep going. Sorry, I bet you're wondering, sharene, how bad is the payday

loan industry? Really? Like? What? What? Like? What? What do we know statistically about the actual impacts that it has on poor people? Right? Like that? That that that's kind of what I have. I have a couple of questions that I've I've been saving up. But yeah, well have you dropped the questions and then I'll get I'll get onto my Well, well, okay, so I was thinking credit cards. So you have paid a loan industries that supply poor people or desperate people with immediate money. Then you have

credit cards. It's very easy to open a credit card as long as you have decent credit. I'm sure a credit card will give you credit. I mean, a credit card company is going to give you a credit card if you're just like passable. Um, so are paid a loan industries tackling those that have worst credit that can't have a credit card or that's exactly it. These are for people who can't get credit because they I mean oftentimes because they had credit cards and they like we're

really bad with them, um. But other times just because they've never had any sort of credit history, because they're very very poor and they've only ever worked. Like a lot of the people who get paid a loans have

never had a bank account, you know. They're the kind of people who grew up in the poorest parts of town, like like like a lot of them are like black and Hispanic people who grew up in very very poor circumstances and have only ever worked sort of cash in hand jobs and who just don't I've just I've just showed my privilege thinking that everyone can get a credit card. But obviously I forgot that it's a privilege to even

considering a credit card. Yeah, yeah, exactly, like the the the paiday loans are mainly for people who really like credit cards aren't even an option for them, because as bad as the credit card industry is, it's generally a lot less abuse of than the payday loan industry. Yeah. I was thinking about that. Yeah, I agree. Um, and I guess. I mean, my other one is not really a question, more of a statement, but I can save it. Okay, Well,

let's let's let's get onto some statistics. So I decided to look into I wanted to like find all of the research I could on how bad payday loans were and like how they actually impact the poor and communities. Um. I found a two fourteen consumer Financial Financial Protection Bureau study that they did on like, they evaluated twelve million

payday loans in three states. According to the New York Times, quote study discredits once and for all, the industry's portrayal of these loans is a convenient option for people who can easily repay the debt on the next payday, customarily in two weeks. In fact, only fifteen percent of borrowers in the study could raise the money to repay the

total debt without borrowing again within fourteen days. Twenty of these borrowers default on a loan at some point, which can result in credit damage and more bank fees, and sixty renewed a loans, sometimes more than ten times and had to pay fees that put them on a slippery slow towards death that we would be difficult to repay.

So Richard Cordray, the director of the Consumer Financial Protection Bureau, described the story of a woman in Pennsylvania who lost her job at a hospital and took out a short term eight hundred dollar loan to pay rent. As at the time she spoke to the CFPB, she had aid more than four hundred dollars on the loan and was still in debt. She was also still being hounded by

debt collectors. Ye In two sixteen, Christine dough Bridge of the Federal Reserve conducted a study that found paiday loans actually helped families in the wake of natural disasters and other singular issues. Quote in periods of temporary financial distress after extreme weather events like hurricanes and blizzards. I find that paid a loan access mitigates declines and spending on food,

mortgage payments, and home repairs in an average period. However, I find that access to pay day credit reduces well being. Loan access reduces spending on non durable goods overall, and reduces housing and food related spending particularly. So it's not an inherently bad thing to offer short term loans like this to people who have had a disaster hit them, like a hurricane funk up their house or what I mean.

I I understand that, But at the same time, if that happened, like if the natural for natural disaster did occur and a family or a person needed money immediately, in what in what world does the majority of these p well like Because they have to pay back the loan pretty much immediately or very short shortly after they borrow it, so they won't rack up interests. So if they don't have a hundred dollars a week ago, why would they have it the next week to pay it back?

You know what I mean? Like it feels like some they would have to borrow from other companies, even they would have to keep having loan after loan after loan, unless unless, unless, like they're they're truly just waiting for their paycheck, you know what I mean, and if that paycheck can can help them in the end. But I don't know, just it's a it's an evil cycle. It

is an evil cycle. And like I think, what what Doughbridge found is that like the only people for whom it wasn't an evil cycle, where the people with regular paychecks that just got delayed because like something fucked up happened, or like you know, the government shut down, Like a lot of people used payday loans, and I'm gonna guess those people were less hurt from it than like the

very impoverished tended to be. So like the primary communities preyed on what studies have found, the primary communities where paid a loans operate in our neighborhoods with higher minority populations, lower education levels, and more poverty. They're also particularly common in the families of U. S Service personnel um and in fact, studies have found that access to paiday loans reduces job performance of soldiers and lowers retentions levels of

of US military personnel as well. So that's fucked up. Yeah, it's super fucked up. Yeah that like, uh, we take advantage of the people that are trying to serve us. That that's like the like one of the number one uh like customer bases of the payday loan industry as soldiers who can't make ends meet. Yeah, kind of messed up, fucked yeah. I mean it's already fucked that they take

advantage of marginalized people. That's already fucked as it is because oftentimes communities that are impoverished are by default have a large marginalized community. Because that's just like the systematic racism at work. But it's that's just layers of fucked up after layers are sucked up. I wait, but are the interest rates any better now? Are they just as bad? They're better than like no one charges what Scott Tucker

was charging. You're not seeing thousand percent and interest rates, but like five to six something, seven hundreds sometimes percent is still pretty pretty normal. I think is more like that's a lot, Yes, that's a lot of money. Yes, that's not fair. Here's where things get really convoluted, shrine um, because as I how could it get worse because I was I wanted to end this with like a big dump of statistics I found on how bad uh paid A loans were, and I I put, I already read

a few of those to you. I definitely found some, but I also found a bunch of studies saying that they were good, uh, and that they don't hurt people, and that they don't primarily target minority communities and that so you mentioned the natural disasters, Yeah, so I you know, Like one place I wound up at was like a website called Journalists Research, which is an actually really useful

little site that summarizes research on a subject. And they had a bunch of links to like summaries of payday loan studies, about half of which said payday loans were bad and about half of which sounded like this quote. Uh. Chentel Desai at Virginia Commonwealth University and Gregory Ellie House and at Federal at the Federal Reserve found that a Georgia ban on payday loans hurts locals ability to pay

other debts. They conclude that payday loans do not appear on net to exacerbate consumers debt problems and call from more research before new regulations are imposed. So you run into a lot. I ran into a lot of stories like that. Um As I dug around more, I started to worry that I might have found made a mistake and focusing on the payday loan industry as a bastard.

I found a Freakonomics article titled our payday loans as evil as people say It's cited a lot of that same research, and came to the conclusion that actually, everything is fine in the payday loan industry, and the growing calls to have the government regulated are short sighted. Look at all benefits in some way. Give me, give me a moment, Give me a moment owned by the k brothers.

I dug around a little little bit more, and then I came across a Washington Post article titled how a payday loan industry insider tilted academic research in its favor. So the article uh starts in two thousand thirteen, when the Consumer Financial Protection Bureau under President Obama was preparing to lay out a sweeping series of regulations to make the payday lending industry less of an abuse of nightmare.

Henry Miller, who was an attorney who works in the payday lending industry, reached out to a professor in Georgia and asked if she'd be interested in testing the number one criticism of the paiday loan industry, which is that its customers are hurt by its loans, according to the

Washington Post quote. Over the next year, Miller worked closely with Jennifer Lewis Priestley, a professor of statistics and data science at Kinnesaw State University, suggesting research to site, the type of data to use, and even lecturing her on proofreading. Punctuation and capitalization are somewhat random, he said in a February email, responding to a draft of the report. You might want to have your maiden aunt, who went to

high school before nineteen sixty read this. So the fuck I know he was a man splaining fucking the English language. He sure was, and she let him do it because he was giving her a thirty dollar grant to publish the study. And this is a different Henry Miller than the one that wrote like tropic of cancer, right, Yes, this is not the Henry Miller. This is the Henry Miller who was a shill for the payday loan industry okay, cool, yeah our Hillary, Hillary Miller, Um Henry but one l

yeah um. Priestley's report ultimately concluded that taking out repeated payday loans did not and according to the emails, Miller discussed the results with a CFPB economist. It's unclear how it factored in the bureau decisions, but it has been repeatedly touted by paid a lending supporters. So basically, Priestley's report concluded that payday loans were actually not bad for people, and that that wound up going to the Consumer Financial Protection Bureau UH and and being weighed in and their

decisions as to whether or not to regulate the industry. Now, oh my god. Priestly's report is only one of the pro payday loan sources I ran into when I was trying to figure out how bad UH the industry was, and the post lays out a pretty damning story of

industry academic collusion here. In exchange for that thirty dollar grant, Priestly gave Miller and his payday loan industry bosses shocking control over her work, and one December email, Miller asked her to change the way she analyzed data about borrow where credit scores. Priestly responded, I am here to serve. I just want to make sure that what I am doing analytically is reflecting your thinking. The email ended with

a smiley face when the report was yeah. When the report was published, it noted that Miller's nonprofit, which was essentially a mouthpiece for the payday loan industry, did not exercise any control over the editorial content of her paper, But when The Post interviewed her, Priestly admitted that she offered to share authorship of the report with Miller, and

he declined. Now, one of Hillary Miller's goals for his pet academic was to have her attack the idea that payday loan's trapped people in an unending cycle of debt. Two fourteen Consumer Financial Bureau study found that most borrowers are forced to renew their loans so many times that they pay more in fees than the actual amount they borrow. In March of two fourteen, Miller sent Priestly an email asking her to avoid the term cycle of debt in general.

We do not accept the notion that a cycle of debt even exists, and I would appreciate it if you would delete all references to this term unless you are rebutting its existence. Oh my god, Priestley did as she was asked, who is this asshole? I mean that just trotted onto the scene like what she's where does? You could almost say she's kind of like the people who are being taken advantage of the payday loan industry, and that she needed a chunk of money quickly, and she was.

She was, she was caught in the cycle. Yeah yeah, and they I mean, I mean they're not charging her interest for the thirty grand I'll give them that. But well, that is still fucked shade. And that is a that's

in modern that's like recent, that's a recent thing. You were researching it the other day and you yeah, we're about to get some other person is going to be researching like whether or not the should take out a loan, and they're going to come across an article being like they're not that bad, and then they're gonna just it's going to continue. It actually gets a lot more infuriating than that. Oh my god. Okay, let's hear it. So, according to the Washington Post quote, as the publication of

the study neared, Miller congratulated Priestly on her work. Priestly study found that paid a loan customers who repeatedly borrow money over a long period have better financial outcomes than those who borrow for a shorter time. These borrowers also benefited from living in states where paid a lending wasn't heavily restricted. The report found, this is a terrific paper, he said in April email. When it is done, you're going to be famous and your phone will ring off

the hook. The group was developing a strategy for releasing the report. He said, we want them to believe that the results are honest, verifiable, and most portantly correct. Now sharene If this was just one cooked study, it would be damning, but not damning of all of the different studies that I came across that seemed to have positive things to say about the pay day loan industry. But

of course it wasn't just one study. The Huffington Post published an article in two thousand fifteen that discussed the payday loan industry interference into multiple studies, including a two thousand eleven paper do payday loans trapped consumers and a cycle of debt? One guess as to the paper's conclusions.

Here's the Huffington Post quote. The email show that the payday loan industry gave economics professor Mark Fussoro at least thirty nine thousand, nine twelve dollars to write his paper and paid an undisclosed sum to his research partner, Patricia Cerrillo.

In response, the industry received early drafts of the paper provided line by line revisions suggested deleting a section that reflected poorly end payday lenders, and even removed a disclosure detailing the role paid a lending played In the preparation of the paper. Fusaro cut two critical findings from his paper at Miller's behest. First was a finding that payday loan borrowers tended to have freequent debt over drafts and

the debit overdrafts in the period before their loan. This looked bad for the industry because one of their chief claims that most borrowers could afford the loans they were stable people dealing with emergencies. Obviously, if people were failing to pay their debts prior to getting a paid a loan, then it makes it seem like the paid a loan industry is just taking advantage of people who are having

financial difficulties. In an email, Fusorrow's coofered author told him quote Hillary called me the other day for an update. I told him about where we were in data collection and also this other finding. I suspect he isn't too happy about that finding and pointed out it wasn't the original objective of the study. I acknowledge that they cut this finding. Miller also had them cut a chunk of the author's note, which would have disclosed that paid A

lending companies had helped to write the study. Here's a quote from Miller in an email he sent to them. The unnamed paid A lenders and the unnamed blind reviewers do not need or want your thanks. It will actually undermine the lenders objectives and participating in the study. If you do so, so, that's cool. I I think just the phrase objective of the study is already just like does not make any sense. You don't make a study with an objective. You study too to find the correct response.

You know what I mean? Like, if you go into a study quote unquote with an objective, you're already skewing it. Yeah, it makes no sense. The objective of science is to arrive at the truth through the testing of like observable phenomena. Not that's what I'm saying exactly, it's you don't have an objective going in that doesn't make any fucking sense. Yeah, it's frustrating. It's the same people that like fact check

fucking scientists when it comes to climate change. They just make up their own definitions of what the words facts mean, what the words study means, and then people just buy into it because they haven't learned this new definition that's incorrect. Now, dream you may not remember from way back in two thousand eight, but one of the things that President Obama ran on when he was first running for election was

that he was going to reform the paid a loan industry. Uh. And he spent years and years and years as president having the Consumer Financial Protection Bureau figure out a list of rules that they could kick into place to essentially wipe out the payday loan industries it currently exists. Uh. And near the end of his term, they finally like hit upon exactly what new restrictions they needed to put

in place. Um. Now, they announced these restrictions in two thousands seventeen, and they were expected to reduce paid A loan volume by sixty UM. So this would have been

a massive hit to uh an incredibly slimy industry. However, a couple of months ago that the new restrictions should have hit in August of two thousand nineteen, but very recently the Consumer Financial Protection Bureau under President Trump changed course and scrapped most of the proposed changes the Obama administration it's spent years putting together and preparing to implement. According to the Motley Fool quote, the CFPB will get most of the rules that previously sought, leaving only modest

changes to paid A lending practices. The one rule that remains impacts lenders collection of loan payments. Most borrowers pay by automatic bank drafts. Under the new rule, after two failed withdrawal attempts, lenders would have to get authorization for any additional withdrawal attempts, and that's it. Everything else gets

to stay. The article. Also, so the things that Obama tried to implement since he was elected in two thousand and eight were it was gonna be like until last August, like like eleven years later, like well, I mean it took like it took Uh, yeah, it took a long time, um,

like long enough for Trump to overturn it. Basically, yeah, exactly. Um. And it's it's worth noting that in April of two thou eighteen, not that long before the CFPB changed its rules, the paid a loan industry trade group, the Consumer Financial Services Association, held its annual conference. You want to guess where they held there, two thousand eighteen annual conference? In my butt hole? I don't know. No, not not in your butth hole, but in the Trump National Dooral Golf

Club in Miami. That's that's the same place. Yeah, yeah, it is. It is a butt hole, that's for sure. It's now all of our buttles. Ah. How you feeling sharing? I mean, more therapy is what I'm feeling. But you know, there are moments where you have such little faith in humanity that you're just like, what's the point? Why why am I still here? Um? And I'm glad that coming onto your show really makes me think of my life as such a meaningless blip in in a white man's game.

So thank you for that. Robert, Well, you're welcome sharene I. You know, hope is as toxic as cigarettes. According to uh to most World Health Organization reports. So is that in a recent study, was that their objective to find? Okay, yeah, it was actually funded by the paid a loan industry. Um,

so you know it's good. But if this entire episode was just like a huge ad for like the payday loan, Like what if like you were sponsored actually at this point, I would be nothing would surprise me if you were actually, if you were actually like Scott Tucker, Sun or some ship well you know, Sharine, if you really do need a short term loan, Americash can can leave you a thousand dollars, no questions asked and interest rates less than

you know, and that's that's pretty low. Nine hundreds of smaller number than a thousand, So you're kind of making bank. Those are numbers that that are smaller than the other you know, those are numbers. Those are numbers. That's actually

the motto of Americash. You know. You know, um, you know, like when you strain too hard on the toilet and like maybe pop out of hemorrhoid or two, and your asshole becomes unredeemable, an unredeemable as that is Scott Tucker, he is an unredeemable asshole, and he's just a you can't go back after that. You can't. You can maybe you could tuck in a hemorrhoid or two on a good day, but most of the days they're just like, have you have a little tag, just just flopping in

the wind. I might say, I might say that Scott Tucker, like the whole payday loan industry is an unredeemable asshole, and Scott Tucker is one particularly flappy hemorrhoid. Yeah, yeah, I like that metaphor. And then on the next episode of The Magic School Bus, We're gonna go straight into the asshole. We're gonna be the enema, the enema going right in before a really uh rigorous uh, just a night of really crazy strap on pegging. Um, I'm pissed.

When I'm pissed, I talked about, butts you talk about when you're pissed. I'm starting to realize this, which is pegging, is not don't don't, uh don't. It's a fun it's a fun time. I'm sure. I'm sure you. I'm sure you'd be open to it. I think if I know anything about you, you'd be open to pegging. I have I have no issues with pegging. Pegging is much more ethical than, for example, the payday loan industry. I agree.

And if can we get sponsored by pegging the concept of pegging, Yeah, we'll just try to just get a strap on sponsor. I will. I'm just trying to make myself feel better. I'm trying to make myself feel better after this awful decision I had to come on your show again. So, um, I'm thinking of pegging. Well, I'm thinking that next we should talk about Jacob Wohl for like an hour. How does that feel A nice palate cleanser, Yeah,

nice palate cleanser. I mean those of you have that have been following the show probably remember me from being on the other Grifters episode. Um, and like last week or something, the tweets about there are first episode together there with Jacob Ball and the Grifters started getting a lot of like retweets and comments again, so I was like, Oh, I guess he's like in the news. So I'm curious what you have for me today for update me on this on this fucker's life. Well sharene you and I

will have that conversation in a manner of minutes. But for our listeners. It will happen on Thursday when they hear the next episode Behind the Bastards. So before we break for that, do you want to plug some plug doubles which is different from pegging pegables? UM, you know, anal plugs are also a thing, but not today. Today, I'm going to plug the podcast. I co host Ethnically Ambiguous. It's a fun time. UM. I co hosted with my friend uh Anna Hosni. I was gonna say Anna, but

we can call her both um. And we talked about Middle Eastern experience in the US, being daughters of immigrants, and we also have fun guests on just like me that I'm a guest on this one. UM, that's what podcasting is, okay. Anyway, you can follow us on Ethnically am am B on Twitter, Ethnically am B, Ethnically am Big, m B I G on Instagram, and I'm Shiro Hero on instagram s h E e r O h E r O and Twitter at Shiro Hero six six six.

I hope you guys enjoyed this episode more than I did, and I hope that you enjoyed this episode more than I enjoyed. Reading about paid a loans Um. You can find me on Twitter at I right, okay. You can find this podcast on the twin Instagram's at Bastards pod. You can find our website with all the sources for

this at behind the Bastards dot com. I have another podcast called it Could Happen Here, and it's about the Second American Civil War, which, after an episode like this, seems almost more optimistic than just letting some of this continue. But it's not. It can happen here, can happen? It could happen here? Aspirationally? Um, but no, it's a super big bummer. It's very sad. Uh. That's oh. You buy T shirts on t public dot com. You can also

get some pay day loans from t public dot com. Um, enter the code Robert Evans and you'll get like a nine h yeah versus a thousand percent. Yep. We'll knock a p off of that interest rate for you. That's all I got for today, Sophie, would you toss some bagels angrily against the wall for me? Just at that it ricocheted off the wall and landed right back into her lap. It was a beautiful thing. Physics is a

real Fantasysics is fantastic. That was the first remote bagel throwing that I think anyone has ever engaged in, so you know we're This is a ground breaking show, ground breaking show, and until next week's groundbreaking episode. I loved about