Broke USA Part 12

Two.

A quartet of reporters did stellar work investigating Fleet Finance: Mitch.e.l.l Zuckoff and Peter S. Canellos at the Boston Globe, Boston Globe, Jill Vejnoska at the Jill Vejnoska at the Atlanta Journal-Const.i.tution Atlanta Journal-Const.i.tution, and Mike Hudson, then a research fellow for the Alicia Patterson Foundation. The work of all four helped to inform my reporting on Fleet. Profiles of Bruce Marks that appeared in BusinessWeek BusinessWeek (by Geoffrey Smith) and the (by Geoffrey Smith) and the Wall Street Journal Wall Street Journal (by Suzanne Alexander Ryan and John R. Wilke) shortly after the Fleet fight helped in my characterization of his role in that battle. An article by James Greiff in the (by Suzanne Alexander Ryan and John R. Wilke) shortly after the Fleet fight helped in my characterization of his role in that battle. An article by James Greiff in the Charlotte Observer Charlotte Observer at the start of 1993 provided me with a snapshot of Chrysler First at the time of the NationsBank purchase and alerted me to the two-hundred-plus lawsuits this subprime lender faced at the time. at the start of 1993 provided me with a snapshot of Chrysler First at the time of the NationsBank purchase and alerted me to the two-hundred-plus lawsuits this subprime lender faced at the time.

Three.

Allan Jones was my primary source for information about the early days of Check Into Cash but the "red herring"-the S-1 every company must file with the Securities and Exchange Commission when announcing its intentions of going public-it filed at the end of the 1990s also proved a rich source of information. It was while reading the company's S-1 that I discovered that Jones paid himself $360,000 a month for use of his own jets (plus extra for flying time), for instance, and also found many details, financial and otherwise, of Check Into Cash through the 1990s. At Check 'n Go, Jared Davis would give me as much time as I wanted but David Davis, his brother, would not so much as say h.e.l.lo to me even when he walked into the room to ask Jared a question. Daniel Brook wrote a lively account of James Eaton and the earliest days of payday in Harper's Harper's in an article t.i.tled "Usury County: Welcome to the Birthplace of Payday Lending." Rodney Ho auth.o.r.ed the early profile of the payday lending industry that appeared in the in an article t.i.tled "Usury County: Welcome to the Birthplace of Payday Lending." Rodney Ho auth.o.r.ed the early profile of the payday lending industry that appeared in the Wall Street Journal Wall Street Journal.

Four.

The Marshall Eakes quote about his brother's refusal to give up appears in a terrific profile of Eakes by Jim Nesbitt of the Raleigh News & Observer, Raleigh News & Observer, published when the paper named him its 2005 "Tar Heel of the Year." Eakes's "we beg for it" quote appeared in the published when the paper named him its 2005 "Tar Heel of the Year." Eakes's "we beg for it" quote appeared in the Durham Herald-Sun Durham Herald-Sun. Any number of publications, including the News & Observer News & Observer, the Winston-Salem Journal Winston-Salem Journal, the Triad Business Weekly Triad Business Weekly, and Southern Exposure Southern Exposure, which all published early profiles of Self-Help that also proved helpful. Also notable was the column that Tony Snow wrote about his old friend in USA Today USA Today in 1996. in 1996.

Five.

Freddie Rogers's case was featured in articles appearing in both the Durham Herald-Sun Durham Herald-Sun and the and the Raleigh News & Observer Raleigh News & Observer, written respectively by Christopher Kirkpatrick and Carol Frey. Jeff Bailey wrote the 1997 Wall Street Journal Wall Street Journal article about Bennie Roberts, the retired quarry worker who ended up owing $45,000 on a $1,250 loan. An in-depth account of the fight Peter Skillern and his allies waged against NationsBank appeared in 1998 in the article about Bennie Roberts, the retired quarry worker who ended up owing $45,000 on a $1,250 loan. An in-depth account of the fight Peter Skillern and his allies waged against NationsBank appeared in 1998 in the Independent Weekly Independent Weekly, based in Durham. That piece was written by Barry Yeoman and proved helpful in my depiction of Skillern, as did a profile of him written by Frank Norton that appeared in the News & Observer News & Observer in 2006. The tidbit about Eakes handing out seven thousand copies of a.s.sociates videotape appeared in an entertaining and informative profile of Eakes written by Chris Serres for the in 2006. The tidbit about Eakes handing out seven thousand copies of a.s.sociates videotape appeared in an entertaining and informative profile of Eakes written by Chris Serres for the News & Observer News & Observer in 2000. in 2000.

Six.

As was the case with Allan Jones's Check Into Cash, Advance America's S-1 offered up a trove of information about the company's early growth and its financials. Also helpful were Susan Orr's lengthy profile of Billy Webster that appeared in the Spartanburg Herald-Journal Spartanburg Herald-Journal in 2005, and C. Grant Jackson's profile of George Johnson in the in 2005, and C. Grant Jackson's profile of George Johnson in the State State, Columbia's primary daily newspaper. "Strife inside the family": Eventually the tensions between the Davis brothers and their father prompted Allen Davis, in February 2005, to sue his sons for control of the company. "Pa.s.sed the 10,000-store mark by 2001"-that is according to a study of the payday industry conducted by the Federal Reserve Bank of Philadelphia. Mark Anderson was the Sacramento Business Journal Sacramento Business Journal reporter who noticed all these cash advance stores in his midst in 1998. reporter who noticed all these cash advance stores in his midst in 1998.

Seven.

The Dayton Daily News Dayton Daily News proved an excellent resource in the re-creation of the fight over subprime lending in its city. At the end of the 1990s, reporter Marcus Franklin wrote an excellent piece on the impact of the payday loan business on Dayton. Franklin also reported on the hearing where Pam Shackelford and Suriffa Rice both spoke. Jim Bebbington's in-depth profile of Dean Lovelace in the proved an excellent resource in the re-creation of the fight over subprime lending in its city. At the end of the 1990s, reporter Marcus Franklin wrote an excellent piece on the impact of the payday loan business on Dayton. Franklin also reported on the hearing where Pam Shackelford and Suriffa Rice both spoke. Jim Bebbington's in-depth profile of Dean Lovelace in the Daily News Daily News helped me round out my profile of Lovelace, and Bebbington, among others at the helped me round out my profile of Lovelace, and Bebbington, among others at the Daily News Daily News, did a commendable job covering the debate over Lovelace's proposal to curb high-cost home loans inside the city limits. That list also includes Eddie Roth, who, in the late 1990s and early 2000s, wrote a series of editorials for the Daily News Daily News decrying subprime abuses and calling on elected officials at all levels of government to do something about this festering problem, and Ken McCall, who wrote about the Gloria Thorpe case. decrying subprime abuses and calling on elected officials at all levels of government to do something about this festering problem, and Ken McCall, who wrote about the Gloria Thorpe case.

The University of Dayton's Center for Business and Economic Research conducted the study that found that at least 30 percent (and as many as 40 percent) of all refinancings had been initiated by the lender and also provided the data showing that subprime home equity loans had quadrupled in the Dayton area between 1997 and 1999. Lee Schear declined several requests for an interview, though in 2002 he sat down with Caleb Stephens of the Dayton Business Journal Dayton Business Journal for a profile under the headline "Cla.s.sic Entrepreneur." for a profile under the headline "Cla.s.sic Entrepreneur."

The best account I found of Senator Gra.s.sley's hearing into predatory lending was written by the New York Times New York Times's Richard W. Stevenson, which is where I first learned about Ormond and Rosie Jackson of Brooklyn and Helen Ferguson of Was.h.i.+ngton, D.C. Critical to my portrait of Phil Gramm was the terrific piece Eric Lipton and Stephen Labaton wrote for the Times Times in 2008 as part of "The Reckoning" series the paper ran that year. The in 2008 as part of "The Reckoning" series the paper ran that year. The Times Times article was my source for the revelation that the country's banks gave Gramm more in campaign contributions than any other senator and it was through this impressive in-depth piece that I first learned about Florence Gramm. article was my source for the revelation that the country's banks gave Gramm more in campaign contributions than any other senator and it was through this impressive in-depth piece that I first learned about Florence Gramm.

Eight.

Richard A. Oppel, Jr., wrote that great piece investigating a.s.sociates for the Dallas Morning News Dallas Morning News-and then, after moving to the New York Times New York Times, he did an admirable job (along with fellow reporter Patrick McGeehan) covering the ongoing battle over Citigroup's decision to purchase this controversial subprime lender. Julie Flaherty was the reporter who interviewed Eakes for the Times Times's Sunday business section and Robert Julavits was the author of the American Banker American Banker article that accurately predicted that Citigroup was going to have an enormous fight on its hands with its proposed purchase. Also useful were reports by Kathleen Day in the article that accurately predicted that Citigroup was going to have an enormous fight on its hands with its proposed purchase. Also useful were reports by Kathleen Day in the Was.h.i.+ngton Post Was.h.i.+ngton Post and Paul Beckett in the and Paul Beckett in the Wall Street Journal Wall Street Journal. At the website of the Inner City Press, run by activist-lawyer Matthew Lee, I first learned about a pair of former CitiFinancial employees named Michele Handzel and Gail Kubiniec and also about Kelly Raleigh, who went to work for Commercial Credit in 1990.

There are any number of good sources on Sandy Weill, including a terrific and memorable profile written by Roger Lowenstein that appeared in the Times Times's Sunday magazine in August 2000-just weeks before the a.s.sociates purchase. Monica Langley, the author of Tearing Down the Walls Tearing Down the Walls, a lively and informative account of Weill's rise to the top, was the source for two anecdotes in this chapter: the displeasure expressed by Weill's personal a.s.sistant, Alison Falls, when she learned her boss, postAmerican Express, was thinking of getting into the consumer finance business, and the reaction of James Calvano, the former president of Avis, who also expressed his incredulity. Weill, it turns out, was one of the few subprime lenders who declined to speak with me. Also of note: Mike Hudson's piece appearing in Southern Poverty Southern Poverty, in the summer of 2003, "Banking on Misery: Citigroup, Wall Street, and the Fleecing of the South," winner of the prestigious Polk Award. And Lawrence Richter Quinn's 1998 article for Mortgage Banking Mortgage Banking doc.u.menting the purchase of subprime lenders by brand-name banks. doc.u.menting the purchase of subprime lenders by brand-name banks.

Nine.

In a 2007 interview with Jonathan D. Epstein of the Buffalo News Buffalo News, John Hewitt spoke at length about getting into the refund antic.i.p.ation loan business. He described the working poor as "low hanging fruit," and described himself as a mathematician so good "I was the best I ever met." The homegrown Virginian-Pilot Virginian-Pilot did a diligent job covering Jackson Hewitt and served as the source for Keith Alessi's quote about needing to "find ways of attacking entire metropolitan areas." Details about Jackson Hewitt's tax loan business-the costs a.s.sociated with a RAL and its revenue figures in 1997-were culled from a well-done feature by Jerry Knight at the did a diligent job covering Jackson Hewitt and served as the source for Keith Alessi's quote about needing to "find ways of attacking entire metropolitan areas." Details about Jackson Hewitt's tax loan business-the costs a.s.sociated with a RAL and its revenue figures in 1997-were culled from a well-done feature by Jerry Knight at the Was.h.i.+ngton Post. Was.h.i.+ngton Post. Also helpful was a Jackson Hewitt feature written by Len Strazewski for Also helpful was a Jackson Hewitt feature written by Len Strazewski for Franchise Times Franchise Times.

The Dayton Daily News Dayton Daily News profile of Fesum Ogbazion and his company, Instant Tax Service, was written by Jim Bohman. Geert DeLombaerde profiled Ogbazion in 2001 in the profile of Fesum Ogbazion and his company, Instant Tax Service, was written by Jim Bohman. Geert DeLombaerde profiled Ogbazion in 2001 in the Business Courier of Cincinnati Business Courier of Cincinnati shorly after he sold his first business. And for the brief section about Andrew Kahr and the birth of the subprime credit card, I'm indebted to my former colleague Joe Nocera for his wonderful book, shorly after he sold his first business. And for the brief section about Andrew Kahr and the birth of the subprime credit card, I'm indebted to my former colleague Joe Nocera for his wonderful book, A Piece of the Action: How the Middle Cla.s.s Joined the Money Cla.s.s A Piece of the Action: How the Middle Cla.s.s Joined the Money Cla.s.s.

Ten.

The Ohio Department of Commerce generously provided me with a town-by-town, store-by-store listing of every payday enterprise in the state that included the date each was granted a license and each one's location.

Eleven.

Again, the Atlanta Journal-Const.i.tution Atlanta Journal-Const.i.tution proved an invaluable resource. Especially impressive was the work of Maureen Downey, a columnist and editorial writer who for my money deserves a retroactive Pulitzer for her outrage over subprime mortgage lending in the early 2000s and the lengths the lenders went to foil the state's attempts to check their mortgage business. The proved an invaluable resource. Especially impressive was the work of Maureen Downey, a columnist and editorial writer who for my money deserves a retroactive Pulitzer for her outrage over subprime mortgage lending in the early 2000s and the lengths the lenders went to foil the state's attempts to check their mortgage business. The Journal-Const.i.tution Journal-Const.i.tution was my source for historical foreclosure data in Atlanta. Glenn R. Simpson, one of the was my source for historical foreclosure data in Atlanta. Glenn R. Simpson, one of the Wall Street Journal Wall Street Journal's star investigative reporters wrote about Ameriquest and Wright Andrews at the end of 2007, and Clark Howard was the consumer reporter who declared Atlanta under siege by predatory lenders. Newsweek Newsweek's Michael Hirsh wrote a nice coda about the Georgia bill that almost was, and BusinessWeek BusinessWeek took John D. Hawke, Jr., to task in a memorable piece written by Robert Berner and Brian Grow, published in October 2008. took John D. Hawke, Jr., to task in a memorable piece written by Robert Berner and Brian Grow, published in October 2008.

Dennis Hevesi of the New York Times New York Times wrote a revealing and in-depth 2002 feature looking at predatory lending in New York City. That piece included data from the Federal Reserve showing a sevenfold jump in subprime mortgages between 1993 and 2000 and the 68 percent spike in foreclosures. John Sugg was the author of the wrote a revealing and in-depth 2002 feature looking at predatory lending in New York City. That piece included data from the Federal Reserve showing a sevenfold jump in subprime mortgages between 1993 and 2000 and the 68 percent spike in foreclosures. John Sugg was the author of the Creative Loafing Creative Loafing article, also appearing in 2002, that featured the Iveys of Atlanta and quoted Fort. article, also appearing in 2002, that featured the Iveys of Atlanta and quoted Fort.

Twelve.

The annual reports on the payday industry produced each year by Stephens, Inc. were my source for the growth of the payday lending industry through the decade. The 2005 "like bears on a trout stream" study was conducted by Steven Graves, an a.s.sistant professor of geography at California State UniversityNorthridge, and Christopher Peterson, an a.s.sistant professor at the Levin College of Law at the University of Florida. There were several good sources on subprime credit cards, including a study by Chi Chi Wu and Rick Jurgens at the National Consumer Law Center t.i.tled "Fee-Harvesters: Low-Credit, High-Cost Cards Bleed Consumers."

The BusinessWeek BusinessWeek article about what the magazine dubbed the "medical debt revolution" ran on its cover in November 2007 and was written by Brian Grow and Robert Berner. At the article about what the magazine dubbed the "medical debt revolution" ran on its cover in November 2007 and was written by Brian Grow and Robert Berner. At the American Banker American Banker, Jeff Horwitz's research into World Savings, the Sandlers, and option ARMs proved invaluable. Victoria McGrane wrote the Politico Politico profile of the Center for Responsible Lending that declared the organization the main intellectual engine driving the Democratic response to the housing crisis, and a profile of the Center for Responsible Lending that declared the organization the main intellectual engine driving the Democratic response to the housing crisis, and a BusinessWeek BusinessWeek writer named Eamon Javers wrote both the "pit bull of public relations" profile of Eric Dezenhall and the piece examining the stealth sponsors.h.i.+p of commentators such as Tom Lehman of Indiana Wesleyan University. An article by Jenny Anderson at the writer named Eamon Javers wrote both the "pit bull of public relations" profile of Eric Dezenhall and the piece examining the stealth sponsors.h.i.+p of commentators such as Tom Lehman of Indiana Wesleyan University. An article by Jenny Anderson at the Times Times as well as as well as Alpha Alpha magazine-and of course Gregory Zuckerman's writings about John Paulson in the magazine-and of course Gregory Zuckerman's writings about John Paulson in the Wall Street Journal Wall Street Journal and his book, and his book, The Greatest Trade Ever The Greatest Trade Ever-were the sources for John Paulson's extraordinary success.

Thirteen.

Dayna Baird, the chief lobbyist for large lenders like Household and CitiFinancial, was quoted as praising the Ohio legislature's 2002 bill in a Dayton Daily News Dayton Daily News article written by Laura A. Bischoff. The article covering the Predatory Lending Study Committee's visit to Dayton was written by the article written by Laura A. Bischoff. The article covering the Predatory Lending Study Committee's visit to Dayton was written by the Daily News Daily News's Ken McCall. The lengthy profile of Faith that the Cleveland Plain Dealer Cleveland Plain Dealer ran when naming him its 2003 "Ohioan of the Year" was written by Bill Sloat. In that piece I found the quote from Barb Poppe, Faith's wife, about her husband's intensity and ability to get into "the zone." I found the Joy Padgett quote in the August 2007 volume of ran when naming him its 2003 "Ohioan of the Year" was written by Bill Sloat. In that piece I found the quote from Barb Poppe, Faith's wife, about her husband's intensity and ability to get into "the zone." I found the Joy Padgett quote in the August 2007 volume of Stateline Midwest Stateline Midwest, a newsletter published by the Council of State Governments.

I spoke with Martha Clay and Rachel Robinson, the attorney who rescued the Clays before they lost their home to foreclosure. The Columbus Dispatch Columbus Dispatch's Geoff Dutton and Doug Haddix also wrote a terrific profile of the Clays while the state legislature was debating a hard-hitting predatory lending bill. Reporter Bobby Warren told Peggy Daugherty's story in the Wooster Daily-Record Wooster Daily-Record, and a report written by the attorney general's office, along with interviews with attendees, served as the foundation for my write-up of the hearings into payday lending sponsored by the attorney general around the state. Aaron Marshall is the Cleveland Plain Dealer Cleveland Plain Dealer reporter who broke the story about Otto Beatty, the husband of Joyce Beatty, the House minority leader, and his ties to a payday lender. Data on registered lobbyists and their affiliations are listed at the website maintained by the Joint Legislative Ethics Committee and the Office of the Legislative Inspector General. Particularly useful in my depiction of the legislative fight over payday was Jim Siegel's coverage of the wrangling, which appeared in the reporter who broke the story about Otto Beatty, the husband of Joyce Beatty, the House minority leader, and his ties to a payday lender. Data on registered lobbyists and their affiliations are listed at the website maintained by the Joint Legislative Ethics Committee and the Office of the Legislative Inspector General. Particularly useful in my depiction of the legislative fight over payday was Jim Siegel's coverage of the wrangling, which appeared in the Columbus Dispatch Columbus Dispatch and the political blog he maintains, and Laura A. Bischoff's coverage of state politics in the and the political blog he maintains, and Laura A. Bischoff's coverage of state politics in the Dayton Daily News Dayton Daily News.

Fourteen.

Matt Fellowes, founder and CEO of a new company called h.e.l.lo Wallet, is a former scholar at the Brookings Inst.i.tution who studied the high cost of being poor; it was Fellowes who calculated how much the typical cash checking customer pays in fees over a year. The estimated size of the unbanked in the United States comes from the FDIC, via Fellowes.

Sixteen.

The country was collectively $19.5 billion in credit card debt in 1975 compared to $587 billion in 1998, according to the Federal Reserve. Elizabeth Warren told the story of her meeting with bank executives in the 2006 doc.u.mentary Maxed Out Maxed Out, James Scurlock's entertaining investigation of debt in America.

At the Dayton Daily News Dayton Daily News, Lynn Hulsey and Ken McCall wrote a fine series of articles about the area's foreclosure problem. An article by the Los Angeles Times Los Angeles Times's E. Scott Reckard was the source of the revelation that Roland Arnall and his wife gave $12 million to Republicans between 2004 and March 2008, and it was Reckard and Mike Hudson, in the terrific piece they wrote exposing Ameriquest's business practices, who checked on the volume of customer complaints to the Federal Trade Commission between 2000 and 2004-and discovered that Option One didn't even make the top three.

Connie Bruck wrote a great piece, published in 2009, about Angelo Mozilo and Countrywide for the New Yorker. New Yorker. That built on a series of prize-worthy articles about Countrywide written the previous year by my former colleague Gretchen Morgenson at the That built on a series of prize-worthy articles about Countrywide written the previous year by my former colleague Gretchen Morgenson at the Times Times. For rankings of the top subprime lenders, I relied on data provided by Inside B&C Lending Inside B&C Lending. Glen Pizzolorusso was featured in an award-winning radio broadcast called "The Giant Pool of Money" by Alex Blumberg and Adam Davidson, broadcast on This American Life. This American Life. (A longer version of the interview appeared in (A longer version of the interview appeared in GQ GQ.)

Epilogue.

Sheryl Harris, a columnist for the Cleveland Plain Dealer Cleveland Plain Dealer, wrote at length about the ways payday lenders tried to repackage the payday loan so it remains legal under Ohio law, despite a legislative fight and a ballot initiative, as did Bob Driehaus in the New York Times New York Times. Larry Hauser, the payday entrepreneur who has his employees call customers every thirty days, explained his policy in an interview with the Wall Street Journal Wall Street Journal's Easha Anand, and I found Alan Greenspan's 2000 statement to the National Community Reinvestment Coalition in Shortchanged Shortchanged, a book published in 2005 and written by Howard Karger, a social policy professor at the University of Houston. An article by the Times Times's Stephen Labaton in mid-October 2009 was the source for the claim that the financial services industry had spent $220 million lobbying against Obama's proposed financial oversight board. Also at the Times Times, Peter Goodman and Sewell Chan kept close tabs on the federal government's efforts to help homeowners facing foreclosures and Eric Dash kept tally of Citigroup's post-crash job losses and selloffs. The data about the lucrative world of student loans was gleaned from a terrific article by Kathy Kristof appearing in Forbes Forbes in 2009 and called "The Great College Hoax." in 2009 and called "The Great College Hoax."