I was reading an article about loans to the poor and I was appalled at what happens to these people.
Apparently lending money to people who don’t have any is surprisingly profitable. In states where such stores are legal, such as Missouri, they are more common than McDonald’s franchises.
There are 15 states where such stores are against the law, but there are millions of desperate people willing to pay for fast cash and no one to give it to them. Remember banks are not your friend.
One moralless individual pioneered what he thought was a clever legal loophole that would give him access to that market: He created websites that were owned on paper by an American Indian tribe, which could claim sovereign immunity from regulators. Those sites charged as much as $150 interest on a two-week, $500 loan an annualized interest rate of about 700 percent.
The loophole was ridiculously lucrative. The operation generated $2 billion in revenue from 2003 to 2012. The owner bought a private jet and spent more than $60 million to start his own professional Ferrari racing team. Around 2005, they split to start a company that would allow anyone to get into online payday lending (think franchise); supplying software to process applications and loans and offering access to a steady stream of customers. All the clients had to bring was money and a willingness to bypass state law…
It was surprising how long truly illegal operations can go on before the authorities get involved. To clean up this case, it was a private individual who had been put on the list of the deadbeat clients and was harassed repeatedly but got feed up and tracked them down in his spare time. It took his years, and the authorities were not overly interested in assisting.