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Broke, USA: From Pawnshops to Poverty, Inc. - How the Working Poor Became Big Business

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From the author of the New York Times Notable Book of the Year Drive By comes a unique and riveting exploration of one of America’s largest and fastest-growing industries—the business of poverty. Broke, USA is a Fast Food Nation for the “poverty industry” that will also appeal to readers of Barbara Ehrenreich (Nickel and Dimed) and David Shipler (The Working Poor).


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From the author of the New York Times Notable Book of the Year Drive By comes a unique and riveting exploration of one of America’s largest and fastest-growing industries—the business of poverty. Broke, USA is a Fast Food Nation for the “poverty industry” that will also appeal to readers of Barbara Ehrenreich (Nickel and Dimed) and David Shipler (The Working Poor).

30 review for Broke, USA: From Pawnshops to Poverty, Inc. - How the Working Poor Became Big Business

  1. 4 out of 5

    Will Byrnes

    Rivlin has pulled together a lot on information on several types of enterprises that exist to exploit the poor people of our country. Although pawnshops are noted in the sub-head, they receive little attention. Of far greater concern here are check cashing stores, (tax) Return Anticipation Loans, or RALs, rent-to-buy shops and predatory sub-prime lending. It is quite clear that small loans make huge profits. You will be shocked when you learn what actual APRs are being charged. I was not unaware, Rivlin has pulled together a lot on information on several types of enterprises that exist to exploit the poor people of our country. Although pawnshops are noted in the sub-head, they receive little attention. Of far greater concern here are check cashing stores, (tax) Return Anticipation Loans, or RALs, rent-to-buy shops and predatory sub-prime lending. It is quite clear that small loans make huge profits. You will be shocked when you learn what actual APRs are being charged. I was not unaware, in general, of the issues Rivlin covers, but he goes into this range of businesses in serious detail and I learned a lot. He interviewed many players from businesses to consumer advocates to clients. I was reminded of the recent Michael Lewis release, The Big Short. Here also we get to meet people who had the prescience to see what was possible, on both sides, before the enterprise became mega. There are heroes and villains in Broke, USA, and some who shade towards gray, but you will never look at your neighborhood check-cashing place the same way again. I was most intrigued by a section in which Rivlin shows that at the same time that a major bank was denying loans in a particular neighborhood, and closing its branches, it was buying up sub-prime lending shops in the same area, without attaching the familiar corporate logo to them, so was more than willing to lend, but only at usurious rates. Rivlin demonstrates that there is no economic basis for the extreme rates charged to poor people for loans. Lenders can make money by charging only a modest amount above the rates available to people with good credit. This is a hard-hitting and important work, and deserves a prominent place in every discussion of the Consumer Financial Protection Bureau, and a hearing in every state and locality with an interest in protecting its citizens from the jaws of predators. It will make you angry. It should. =============================EXTRA STUFF January 24, 2012 - Another way in which predators feed on the poor and middle class in my owed private Idaho - Zombie debt creeps onward in Idaho courts May 17, 2012 - A Barbara Ehrenreich article on how local governments and the private sector are squeezing the poor. Dickens would find 21st Century America far too familiar. October 22, 2014 - A NY Times report on the increasing impact of foxes in hen-houses, States Ease Interest Rate Laws That Protected Poor Borrowers January 24, 2018 - Barbarians inside the gates - The CFPB Is Now the Predatory Lender Protection BureauThe Consumer Financial Protection Bureau (CFPB) was once an agency dedicated to preventing banks and credit-card companies from scamming ordinary Americans. Now, it is an agency dedicated to protecting potential financial scammers from legal penalties.February 7, 2019 - Truthout - Trump Moves to End Consumer Protections From Payday Lenders - by Jake Johnson - The sort of horror we know to expect from this administration April 16, 2019 - Mick Mulvaney’s Master Class in Destroying a Bureaucracy From Within - By Nicholas Confessore - As so often happens at the NY Times, the headline offers a tilt that is a bit misleading. Use of the buzzword bureaucracy in the title suggests that Mulvaney is out to reduce that other oft-cited, rarely-justified bête noire, waste and mismanagement. The article is actually a blow-by-blow look at how Mulvaney is dismantling the agency that was set up specifically to protect consumers from predatory financial institutions. Mulvaney is more than happy to side with wolves over sheep. It is well worth checking out how the destruction of our democracy is being implemented.

  2. 5 out of 5

    Mehrsa

    Great journalism on a really shady industry. I write about this industry also, but I focus on the structures. Rivlin focuses on the humans. It was a great read for me.

  3. 4 out of 5

    Miriam Rozian

    Given the plethora of books with lofty top-down stories about the 2007 - 2008 financial crash, this book comes as a welcome reality check. It's a ripping yarn of greed, injustice, debt slavery, white knights and dark knaves... without, so far, a happy ending. Rather than focusing on the glamorous boardroom battles of the 0.001%, it dwells on the financial affairs of the bottom 75% - those who meet some or all of the following criteria: wages have fallen; make less than the median income; have poor Given the plethora of books with lofty top-down stories about the 2007 - 2008 financial crash, this book comes as a welcome reality check. It's a ripping yarn of greed, injustice, debt slavery, white knights and dark knaves... without, so far, a happy ending. Rather than focusing on the glamorous boardroom battles of the 0.001%, it dwells on the financial affairs of the bottom 75% - those who meet some or all of the following criteria: wages have fallen; make less than the median income; have poor credit or no established credit; live paycheck-to-paycheck or have fixed incomes; stuck in depressed communities; burdened with medical expenses and school loans; unemployed, erratically employed or underemployed; lack decent education and marketable skills; have unfavorable skin colors, gender, age, disabilities, etc... If you're wondering why the Obama administration is choosing to spend its scarce political capital on a Consumer Financial Protection Agency, most of your answers lie within these pages. There are some manipulative anecdotes, and the patterns of exploitation in each specialized loan industry (payday lending, pawnshops, tax refund loans, sub-prime mortgages, etc.) get repetitive, but Rivlin draws a clear picture of a financial system that exists to help only those who don't need more money. A $500 payday loan or emergency second mortgage, taken by a family with no other means of securing credit, multiplies into tens of thousands over a few years based on usurious interest and falsely assessed fees, resulting in a foreclosure that (in a rising real estate market) could be quickly turned around for even greater profit. Shady store-front lenders, as parts of large national franchises, wage legal and PR wars on community organizations and successful non-profit lenders to block restrictive legislation. The franchised store-front lending chains are so profitable that they get bought by the big national banks, who previously couldn't be bothered to maintain branches in depressed communities. The banks, in turn, enlarge the "innovative" practices of these small lenders, and work to distort the legislative and regulatory processes even further. The big national banks start selling the collateralized debt from the store fronts... which goes sour when workers lose jobs in financially starved communities, and foreclosed homes can't be sold profitably any more. And the next thing you know, it's the fault of those irresponsible poor people [and the middle class, when the predators discovered that the suburbanites could be exploited just as easily in the absence of any laws to the contrary]. It will become much harder to give credence (let alone moral suasion) to those who blame families facing home foreclosures. Rivlin builds the historical narrative from the Reagan era onward to the present, laying the foundations for blame along the way. It's going to take a long time, a fundamental rethinking of American small finance (third-world microloans, anyone?) and the removal of the responsible political factions to fix.

  4. 5 out of 5

    Stephany Wilkes

    I don't know why I can't stop reading books about the financial meltdown, but I can't. This one, though, is much richer and really gets going in the late 1980s. The historical depth is refreshing, and the author's style keeps it engaging. The history of legislative efforts to place interest rate caps on payday loans, for example, is comprised of statistics on rates, defaults, and testimony, but also extensive interviews with a few people who were heavily involved on both sides of an issue or bat I don't know why I can't stop reading books about the financial meltdown, but I can't. This one, though, is much richer and really gets going in the late 1980s. The historical depth is refreshing, and the author's style keeps it engaging. The history of legislative efforts to place interest rate caps on payday loans, for example, is comprised of statistics on rates, defaults, and testimony, but also extensive interviews with a few people who were heavily involved on both sides of an issue or battle at the time. I was impressed and grateful for the sheer number of people Rivlin managed to find and interview at the depth he did. I am biased, because I'm a huge fan of books that rely on primary sources (like former payday loan store employees, transcripts, old 60 Minutes interviews and quotations, government statistics, and so on), but it lends weight to the story and, without the author having to even try to convince you, speaks for itself: you cannot read this book and walk away thinking that a 391% APR (no, really) is unintentional or "helps consumers." The book is, like many others about our current crisis, stomach-turning for the myriad warning signs it contains that were ignored. Rivlin introduces us to people like Kathleen Keest, who picked up her first predatory mortgage case in 1984, what she calls "wave one" of the subprime debacle. Yes, 1984. As in The Big Short, Rivlin has found numerous harbingers who tried to save us from ourselves and were ignored but, worse than that, fought tooth and nail and, two years later, saw the president, Ronald Reagan, give lenders the latitude to sell "creative home loans," including adjustable rate mortgages. Fortunately, Rivlin has also found some heroes who, as in any satisfying narrative thrust, succeed just often enough to keep us from giving up on the book or slitting our wrists. I was particularly inspired by the story of Ohio's victory over payday lenders, a true David vs. Goliath situation starring a Democrat and two Republicans who actually get together to act in the best interests of their constituents. Current members of Congress, you can learn from this chapter!

  5. 5 out of 5

    Ann Litz

    This book is a compelling account of the subprime mortgage lenders, payday-advance outfits, check-cashers, rapid-refund tax preparers and other multibillion-dollar industries that comprise what the author calls “Poverty, Inc.” (which would have been a more fitting title). But Broke, USA doesn't really offer any governmental, social or economic solutions to the dilemma of what an "unbanked" (because there are often no "real" banks in low-income neighborhoods) working-class person should do when, This book is a compelling account of the subprime mortgage lenders, payday-advance outfits, check-cashers, rapid-refund tax preparers and other multibillion-dollar industries that comprise what the author calls “Poverty, Inc.” (which would have been a more fitting title). But Broke, USA doesn't really offer any governmental, social or economic solutions to the dilemma of what an "unbanked" (because there are often no "real" banks in low-income neighborhoods) working-class person should do when, say, their car breaks down or their kid gets sick between paydays. The payday-loan outfits actually come off seeming like not so bad an idea. Should lower-income workers be paid more often? Paid more, period, since their incomes obviously haven’t kept up with necessary expenses? I docked my review a star for the author not posing any even vague solutions like these to a very well researched problem.

  6. 4 out of 5

    Emily

    The info in this book deserve 4 stars, but my oh my it was such a dry read that I had to give it 3 stars. It would have been juicier if the stories ahd been about the people caught in the web of sub-prime and pay-day lending, but it was mostly about the actual industries. The people who run these businesses to "serve" poor and low income argue that they are providing services that no one else will. And yes, they sure do. They provide quick, short term loans that sometimes go to feed a family or p The info in this book deserve 4 stars, but my oh my it was such a dry read that I had to give it 3 stars. It would have been juicier if the stories ahd been about the people caught in the web of sub-prime and pay-day lending, but it was mostly about the actual industries. The people who run these businesses to "serve" poor and low income argue that they are providing services that no one else will. And yes, they sure do. They provide quick, short term loans that sometimes go to feed a family or provide heat. A lot of people, myself included, can afford to give themselves a quick, short term loan by just charging something on a credit card. Not everyone has that luxury. And banks don't help people in those situations. If you want a loan it takes a week or two to apply and get approved and blah blah blah. I used to work at a small, community bank and we "helped" people by providing a service called "Bounce", which was automatically put on your account. Bounce meant that the bank would let you go in the hole up to $300, but you paid $19 for each transaction. So, if you bounced 10 checks/debit card swipes for $10 each, you would be in the hole not just the $100 for stuff you bought, but also $190 for fees. And we were told to explain how "helpful" this could be to our customers. I'm embarrassed to say that I was ever involved in that. In those situations my customers really would have been better off to get a pay-day loan for $300 and pay $25 or $50 in fees. I know that large banks have had similar programs, but with much higher fees. So, these "sub-prime" businesses are not soley to blame, but they do target people who can least afford things and they charge them out the wazoo. Oh my. I just thought of another sub-prime thing I was involved in. I am super ashamed. Right after high school I got a job at a call center taking credit card applications for the 'Revelation Mastercard'. I wish that I had realized the damage that I was helping to inflict on people. The Revelation Mastercard was somehow affliated with a church, hence the 'revelation' reference. My job was to take their application over the phone and give them the "good news" that they had indeed been approved for a $350 credit limit. Most callers were overjoyed at that point because they had actually been approved for credit, so no one ever listened to the rest of the script in which I told them that there was a $249 application fee and a $50 annual fee which would automatically be charged to the card and would immediately begin accruing interest. Did you just do the math and realize that they were getting a credit card with $1 of available credit and with interest already growing? Sickening. At the time I laughed at their stupidity. Now I am just totally embarrassed that I was too stupid myself to stand up and point out that this was a completely unethical thing to do. I am embarrassed that I was so blinded because they were willing to pay me a whopping $8.50 per hour. I hope the minister of the affiliated church enjoys his limo and furs and various other riches now, because he is going to burn in hell.

  7. 5 out of 5

    Joe Maristela III

    May be a bit much, but you can chase the book with Michael Moore's film, Capitalism. May be a bit much, but you can chase the book with Michael Moore's film, Capitalism.

  8. 5 out of 5

    Tie Kim

    The book didn't change the general disdain I already had for those engaged in predatory lending (e.g. payday loans, refund anticipation loans). However, this knowledgeable book provides readers with numerous facts to support their positions rather than relying on emotions. For example, a $100 payday loan that carries a surcharge of $15 over a 2-week duration is equivalent to an APR of 391%. And though there may be some merit in the lenders' argument that payday loans help the working people who The book didn't change the general disdain I already had for those engaged in predatory lending (e.g. payday loans, refund anticipation loans). However, this knowledgeable book provides readers with numerous facts to support their positions rather than relying on emotions. For example, a $100 payday loan that carries a surcharge of $15 over a 2-week duration is equivalent to an APR of 391%. And though there may be some merit in the lenders' argument that payday loans help the working people who cannot otherwise obtain a short-term loan (e.g. from a bank) get back on their feet in times of an emergency, do they really need to charge 391% interest, especially when studies indicate that over 50% of its customers rollover their loans to subsequent months? I'd like to believe that in the court of public opinion morality is more important than legality. I had a hard time understanding people's attraction to "refund anticipation loans" - the payment of tax refunds by firms such as H&R Block and Jackson Hewitt 2 to 4 weeks sooner at an APR of 100% to 200% - until my 8-year-old made the case for its seduction this weekend. He wanted to spend some of his money to purchase a Wii video game at Target rather than buying from Amazon and saving himself about $5. Why? Instant gratification. I was going to calculate the APR for giving up $5 for a 4-day period for him, but even if I succeeded in explaining to him that such a large percentage is bad for him, he's 8-years-old and the brain is wired differently at that age ;) By the way...it works out to an APR of 1,825%.

  9. 5 out of 5

    Siobhan

    If the information in this book had been available earlier, the economic mess of the past few years could well have been avoided. That's one lesson from this book. Another is that while rich people have been gorging on an ever larger share of the pie, they have been doing so not merely by cutting wages, shipping jobs overseas and making sure their taxes reach ever lower levels. They've also acheived their goals by making money off the poor through loan sharking in a variety of forms. Gary Rivlin b If the information in this book had been available earlier, the economic mess of the past few years could well have been avoided. That's one lesson from this book. Another is that while rich people have been gorging on an ever larger share of the pie, they have been doing so not merely by cutting wages, shipping jobs overseas and making sure their taxes reach ever lower levels. They've also acheived their goals by making money off the poor through loan sharking in a variety of forms. Gary Rivlin brings a cool eye to his subject. It could have done with somewhat tighter editing, but overall, it's quite good. It's no secret that the subprime loan situation combined with the housing bubble to bring the US to its economic knees. He demonstrates quite clearly that there is no end to their greed. Unchecked by regulations thanks to 30 years of trickle-down economics, the unscrupulous financiers pushed more and more people out of their homes and into poverty. What next? It's hard to imagine that the US can once again become a prosperous country when one in four children are growing up in poverty and when the American dream has become the American nightmare. As for those who foisted this tragedy on the rest of us, one would hope that they can stop thinking only of themselves and whether to vacation in the Caribbean or Tahiti this year and instead focus on undoing the damage they've done.

  10. 5 out of 5

    Anita

    The stories of how industries the poor utilize often lead them to financial ruin. Payday loans, car title loans, subprime mortgages, check cashers, pawn shops and their exorbitant interest rates. It's also a story of the organizations trying to help the poor by loaning them money at reasonable rates and trying to get the legislative branch to care. The problem is a combination of financial illiteracy and outright fraud against people who can least afford it. Kind of a bummer of a read. Books abou The stories of how industries the poor utilize often lead them to financial ruin. Payday loans, car title loans, subprime mortgages, check cashers, pawn shops and their exorbitant interest rates. It's also a story of the organizations trying to help the poor by loaning them money at reasonable rates and trying to get the legislative branch to care. The problem is a combination of financial illiteracy and outright fraud against people who can least afford it. Kind of a bummer of a read. Books about poverty are almost always bummers to read. I can't think of any that I've read that weren't.

  11. 4 out of 5

    Desiree

    Timely book on more ways to get rich by screwing the poor! Excellent review of the people behind the pawnshops, check cashing and payday loan industries. We used to have usury laws, but these industries have been able to get around them and charge unbelievably high apr rates on short term loans! How's 391% sound to ya????? The perfect customer for a subprime lender "would be an uneducated woman who is living on a fixed income - hopefully from her deceased husband's pension and Social Security - w Timely book on more ways to get rich by screwing the poor! Excellent review of the people behind the pawnshops, check cashing and payday loan industries. We used to have usury laws, but these industries have been able to get around them and charge unbelievably high apr rates on short term loans! How's 391% sound to ya????? The perfect customer for a subprime lender "would be an uneducated woman who is living on a fixed income - hopefully from her deceased husband's pension and Social Security - who has her house paid off, is living off credit cards and having a difficult time keeping up with her payments." "It may sound like loan sharking, but in most of America, it's perfectly legal." "A typical loan shark only charges an APR of around 150 percent." Hmmmmmm, if you are ever tempted to use one of these predatory businesses, RUN down to your local library and borrow a copy of this book instead! Our government should be ashamed of itself!

  12. 4 out of 5

    Michael Webb

    Written shortly after the financial fallout of sub-prime, this book covers the wide gamut of "poverty inc." businesses like payday lending, rent to own, and sub-prime lending. Rivlin lays bare the shady practices that these firms engage in; not only providing a service but in many cases actively entrapping people in cycles of use where they end up paying hundreds to thousands of dollars in annual fees. As should be expected for anyone who knows the details of the crisis, only the credit unions en Written shortly after the financial fallout of sub-prime, this book covers the wide gamut of "poverty inc." businesses like payday lending, rent to own, and sub-prime lending. Rivlin lays bare the shady practices that these firms engage in; not only providing a service but in many cases actively entrapping people in cycles of use where they end up paying hundreds to thousands of dollars in annual fees. As should be expected for anyone who knows the details of the crisis, only the credit unions end up coming out at the end looking anything like reasonable. The problem, stated but still not totally resolved even now, is finding a middle ground that allows people who are higher financial risks to access critical funds without also creating the potential for abuses that create cycles of debt that leave them in a worse place than they started.

  13. 4 out of 5

    Tylerlhsmith

    A book on the creation of the payday loan industry and the proliferation of the subprime loan industry, generally from the point of view of the victims of these industries and the people trying to represent them. It covers an important topic, and does a good job of personalizing issues that some people may not otherwise be able to identify with. There were a number of times, however, where I was hoping the book would go into more depth with the societal impacts and consequences of the different i A book on the creation of the payday loan industry and the proliferation of the subprime loan industry, generally from the point of view of the victims of these industries and the people trying to represent them. It covers an important topic, and does a good job of personalizing issues that some people may not otherwise be able to identify with. There were a number of times, however, where I was hoping the book would go into more depth with the societal impacts and consequences of the different industries. However, it did a good job of a setting a timeline and identifying a number of important people and organizations.

  14. 5 out of 5

    Kathleen (itpdx)

    Rivlin does an excellent job of bringing to life the people who have made money in the poverty business-pawnshops, check cashing, pay day loans, subprime mortgages and debit cards and their opponents--nonprofits trying to protect poor, and increasingly, middle class people from predatory lending. He profiles the businessmen, the victims, and the crusaders as well as some who fall in grey areas with a sharp eye to their personalities and foibles. He subtlety lets some provide some prescriptions f Rivlin does an excellent job of bringing to life the people who have made money in the poverty business-pawnshops, check cashing, pay day loans, subprime mortgages and debit cards and their opponents--nonprofits trying to protect poor, and increasingly, middle class people from predatory lending. He profiles the businessmen, the victims, and the crusaders as well as some who fall in grey areas with a sharp eye to their personalities and foibles. He subtlety lets some provide some prescriptions for solutions. This book was published in 2010 and from my viewpoint reform has not moved ahead much since then.

  15. 4 out of 5

    Damon Glassmoyer

    This book takes a potentially dry, economic topic-the subprime lending behind the Great Recession of 2008- and turns it into a fascinating morality tale of how entire industries exist to make money off of poorer Americans. An excellent history of the crisis, and some thought-provoking commentary along the way. It'll make you mad, and make you examine your thinking about how the poor should be protected financially, perhaps even from themselves. This book takes a potentially dry, economic topic-the subprime lending behind the Great Recession of 2008- and turns it into a fascinating morality tale of how entire industries exist to make money off of poorer Americans. An excellent history of the crisis, and some thought-provoking commentary along the way. It'll make you mad, and make you examine your thinking about how the poor should be protected financially, perhaps even from themselves.

  16. 5 out of 5

    Kathleen

    Gary Rivlin has written an interesting book about poverty and the businesses that have arisen to feed on it. He tells compelling stories, and he profiles the people who own and run these businesses (in addition to those who have suffered) in a sympathetic way. He seems to intuitively recognize that the issue is complicated.

  17. 5 out of 5

    Sally

    For years we've been hearing about the welfare queen and all the reasons why poor people just need to "pull themselves up by their bootstraps. This compelling book explains (in part) why we need poor people. Because without the poor who would these businesses exploit. Important reading For years we've been hearing about the welfare queen and all the reasons why poor people just need to "pull themselves up by their bootstraps. This compelling book explains (in part) why we need poor people. Because without the poor who would these businesses exploit. Important reading

  18. 5 out of 5

    Susan Olesen

    Slightly old now (2010) the information holds true today nonetheless. Rivlin investigates what he calls Poverty, Inc, the predatory lending practices that eventually broke not just people, but the entire country, through endless greed in 2008. You heard the names, but unless you used them, you had no idea. They’re as familiar as your television: Phil Rizzuto for The Money Store, Champion Mortgage (when your bank says no, Champion says Yes), City Corp, Rent a Center, H&R Block, Household Finance, Slightly old now (2010) the information holds true today nonetheless. Rivlin investigates what he calls Poverty, Inc, the predatory lending practices that eventually broke not just people, but the entire country, through endless greed in 2008. You heard the names, but unless you used them, you had no idea. They’re as familiar as your television: Phil Rizzuto for The Money Store, Champion Mortgage (when your bank says no, Champion says Yes), City Corp, Rent a Center, H&R Block, Household Finance, CheckNGo, Cash America, Check Into Cash, Jackson Hewitt, and so many more – every last one a ripoff artist who preyed relentlessly on people who could not afford to pay, had poor credit, lived on fixed income, or fell on bad times, charging rates as high as 400% APR. Yes, Four Hundred Percent. And they got away with it for years, until some states, and then Congress, started stepping in, but too late to avoid the catastrophe of 2008. Most of them arose as usury check-cashing schemes, though as they saw it (and rightfully so, if you paid back on time) they were cheaper than a bounced check – charging upwards of $20 for every $100 borrowed. But not everyone could, out of work, underemployed, or hit with a mega health or car bill. They looked for neighborhoods that were struggling, poor to lower middle class, and they’d set up check-cashing stores, and pawn shops, and instant-tax-refund (yes, that H&R Block scheme is really a payday loan at exhorbitant rates because you can’t wait 2 weeks for that cash). Then they started on home loans, seeking out elderly who had paid off or nearly paid off their houses, were on fixed incomes, and gouged them with fees, insurance-addons, “equity” loans on top of what they were borrowing, and when actual vs. payments came in, they were often $400 more than agreed on, and within months people would lose their homes to the agency – which also owned the collection department, and the insurance collector, and the home inspectors, a streamlined machine for robbing people of their homes. All of this got rolled in with the sub-prime mortgage fiascos as banks tried to cash in on poverty services, selling risky loans through crooked means meant to defraud people and take their homes, then sell them again, through higher interest rates, balloon mortgages (after two years, the payments ballooned to rates the people couldn’t afford), and adjustable-rate mortgages (the mortgage payments fluctuated with the stock market). “Sub-prime” meant anyone with a credit rating under 630, and many times people who qualified for lower-interest rate mortgages of traditional means were sold sub-primes anyway, to reap more money off them. The crookedness and usury and plain monstrous feeding on the people barely scraping by will make your hair stand on end. You want to punch someone. I’m thrilled to never have been suckered into any of it, and that we steered clear of such tricks, though I know some who fell for it. It’s digusting, immoral, and just plain mean. And, like every type of decomposing of America, it seems to have started in Ohio, a place I’m liking less and less and less. Part of it is Ohio was heavily industrial, and all the jobs up and left, leaving a lot of people with no jobs and no hope (and hooked on Oxycontin), places like Dayton and Columbus, which were hit with the worst rate of foreclosures in the nation in 2007. Add in a ridiculous affinity for libertarianism, and there’s a whole lot of homeless and destitute people scratching their heads. The book is thorough, but not dull. It’s easy to follow if a bit repetitive, simply because of the sheer numbers of predatory lenders, and how easy and fast it was to start one up with as little as 10,000$ in cash. No matter what your situation or income level, you will be a much wiser person for reading this book. Now I’m going back and rewatching The Big Short to see if any of it is mentioned there, and so far I’ve found one crossover, acknowledging Countrywide Financial as one of the worst of the offenders.

  19. 4 out of 5

    Jerry Peace

    Every which way to stiff the poor and the working poor is here-subprime mortgage loans, payday lenders, check cashing storefronts, auto title loans, rapid tax refunds, and rent-to-own joints. Chapter eleven-The Great What-If- is a great primer on the subprime predatory travesty of the early 2000's. Banks- Wells Fargo, Bank of America, etc- closed shop in Atlanta's black sections, then reopened with their subprime subsidiaries. They trolled for poor and old homeowners and sold them refinances for Every which way to stiff the poor and the working poor is here-subprime mortgage loans, payday lenders, check cashing storefronts, auto title loans, rapid tax refunds, and rent-to-own joints. Chapter eleven-The Great What-If- is a great primer on the subprime predatory travesty of the early 2000's. Banks- Wells Fargo, Bank of America, etc- closed shop in Atlanta's black sections, then reopened with their subprime subsidiaries. They trolled for poor and old homeowners and sold them refinances for home repairs that were never done. And these refinances were infected with outrageous fees, predatory- and lied about- interest rates and hidden credit insurance that accrued that same interest. Georgia passed a partial predatory lending bill, but a Republican governor-Sonny Perdue (now our Secretary of Agriculture), along with legislators frightened by dire predictions of credit rating companies (the same companies that for a price later gave AAA ratings to toxic mortgage bundles and thus was a major player in the 2008 recession) gutted the law. Thus, foreclosures skyrocketed in those Atlanta areas. Triple digit apr's (391 to 680), the inaction of Ayn Randian Alan (the Sgt. Schulz "I see nothing" of the Federal Reserve) Greenspan, the refusal of other federal regulators to regulate, state Republican legislators who not only did nothing for the most vulnerable of their citizens but prevented cities from legislating themselves, all are discussed. And the toxicity of the other predatory schemes-payday lenders, check cashing, etc- Rivlin examines, primarily through interviews. Greed is everywhere, but what struck me most is its combination with shamelessness, heartlessness and pure meanness. And as one person says, if you try to screw the rich, they have friends. If you try to screw investors, they also have friends. But you can always screw the poor, because nobody cares about them.

  20. 5 out of 5

    Manish Sinha

    It's expensive to be poor, not just because you lack resources, but the system is set up to keep you afloat forever. Imagine you are drowning and someone offers you a lifejacket for a price. They didn't tell you that if you don it, it limits your ability to swim to the shore. Additionally, the life jacket only works for 4 hours and you need to buy it again to keep yourself from drowning. If you ever heard of such a business you would be alarmed and would push for legislation to get such exploitat It's expensive to be poor, not just because you lack resources, but the system is set up to keep you afloat forever. Imagine you are drowning and someone offers you a lifejacket for a price. They didn't tell you that if you don it, it limits your ability to swim to the shore. Additionally, the life jacket only works for 4 hours and you need to buy it again to keep yourself from drowning. If you ever heard of such a business you would be alarmed and would push for legislation to get such exploitative tactics banned. Next up the businesses would run ads accusing you of being against lifejackets "Jimmy Stallone wants the government to ban handing out lifejackets to drowning people". Not exactly what you were championing. The profits would be so handsome that honesty doesn't exist and lies swamp the news cycles. You would claim such a thing can't happen. Enter, Poverty Industry. Poor people need credit, they need check-cashing services, they need a lot of financial industry services. Nothing inherently wrong with subprime loans, as poor people need money at the last moment just like all of us, in fact, their urgency is more severe than the rest of us. The problem is when the subprime industry becomes predatory and exploitative. The issue is when subprime loans' primary goal is to keep the people stuck in poverty and milk them dry. I still gave a three-star review since the book is a tad too verbose. Sometimes I was confused if it was a story of characters or story of the society. Reading till the end it was indeed the story of our society and the superfluous explanations of characters were just a waster of time. The book could be just 2/3rd of the current length. Overall a good book if you want to understand what goes on outside our prime lending bubble and how the topic is lots of nuances and probably the last place where you can ever draw a sharp black-white line,

  21. 5 out of 5

    Brice Karickhoff

    I absolutely trudged through this book, but it’s hard to rate it, because I’m not sure that my trudgery was the book’s fault. It was a mistake to read a book about lending money to the poor while writing a thesis about lending money to the poor. I read this book 5 pages at a time and didn’t retain too much. The book is mostly a story of the industry that makes money off American poverty: pawn shops, pay day lending, subprime mortgages, etc. It was interesting on several fronts. First, it was int I absolutely trudged through this book, but it’s hard to rate it, because I’m not sure that my trudgery was the book’s fault. It was a mistake to read a book about lending money to the poor while writing a thesis about lending money to the poor. I read this book 5 pages at a time and didn’t retain too much. The book is mostly a story of the industry that makes money off American poverty: pawn shops, pay day lending, subprime mortgages, etc. It was interesting on several fronts. First, it was interesting because of how it relates to the 2008 financial crisis - how did the loans contained in all this MBSs actually come to be? Second, it makes you think about the ethics of lending to people in poverty. Should lenders be expected to have compassion and forgiveness when they are truly running a business. Should interest rates be capped if it decreases access to credit when the borrowers are willing to borrow at the original rates? Third, it makes you realize the importance of financial literacy, and challenges you to not take it for granted. So many people have their lives ruined because they don’t understand how a loan works. Yes, we should regulate what loans are offered and how they are advertised, but at the end of the day, someone will always be out there trying to exploit someone for a dollar. It’s better to prepare the traveler for the road than the road for the traveler. Obviously this book was thought provoking and informative. I simply give it 3 stars because I never really enjoyed reading it. Much like this genre tends to do, several characters were followed through the book to tell the story, and I never wound up caring about the characters. Maybe this wasn’t a very good book, or maybe I just didn’t feel like reading it. Tough to say!

  22. 4 out of 5

    Katie

    “Increasingly, mainstream banks were revving up profits by purchasing or starting a subprime subsidiary. Unlike during waves one or two, the lenders were offering first mortgages as well as refinancings. Rather than holding the loans they wrote, they began selling off the mortgages to third parties that would in turn bundle and sell them on Wall Street. They were still frequently selling people loans more expensive than their incomes could handle, but they gambled that home prices would continue “Increasingly, mainstream banks were revving up profits by purchasing or starting a subprime subsidiary. Unlike during waves one or two, the lenders were offering first mortgages as well as refinancings. Rather than holding the loans they wrote, they began selling off the mortgages to third parties that would in turn bundle and sell them on Wall Street. They were still frequently selling people loans more expensive than their incomes could handle, but they gambled that home prices would continue to rise at a brisk rate. The homeowner wanting a new mortgage could easily refinance as the home appreciated in worth and, in the event of a foreclosure, the bank would have repossessed a property that had grown in in value. Of course, the gamble would prove disastrous if housing values were to fall.” (58)

  23. 5 out of 5

    Bryan D.

    Challenge 17 on the BookRiot 2019 Read Harder Challenge list is "A business book." For this challenge I read Gary Rivlin's Broke, USA: from pawnshops to Poverty, Inc,: how the working poor became big business. Published in 2010, the book documents many of the factors that led to the 2008 recession, but, of couse, could not predict what has happened in the ten years since. Certainly the hardest read I have experienced in these challenges, the book is a depressing tale of preditory lending practic Challenge 17 on the BookRiot 2019 Read Harder Challenge list is "A business book." For this challenge I read Gary Rivlin's Broke, USA: from pawnshops to Poverty, Inc,: how the working poor became big business. Published in 2010, the book documents many of the factors that led to the 2008 recession, but, of couse, could not predict what has happened in the ten years since. Certainly the hardest read I have experienced in these challenges, the book is a depressing tale of preditory lending practices including pawn, payday loans, car title loans, instant tax refunds which should more properly be known as refund anticipation loans, and the subprime mortgage loans that by 2008 virtually all major banking institutions were supplying.

  24. 5 out of 5

    Ken Saunders

    "Cash America, with 139 stores in the state, hired 2 lobbyists. Rent-A-Center, with 53 stores in Ohio offering payday loans, hired 4." If you can't get enough of stuff like that, then this is the book for you. Here we have a case of interesting material on an important topic, stretched thin by packing in way too much useless detail. By the third court battle or ballot inititative you have already read the same arguments and seen them repeated, so reading a new batch of quotes doesn't really add a "Cash America, with 139 stores in the state, hired 2 lobbyists. Rent-A-Center, with 53 stores in Ohio offering payday loans, hired 4." If you can't get enough of stuff like that, then this is the book for you. Here we have a case of interesting material on an important topic, stretched thin by packing in way too much useless detail. By the third court battle or ballot inititative you have already read the same arguments and seen them repeated, so reading a new batch of quotes doesn't really add anything. This one was underwhelming after reading sharp, exciting books like LOWER ED and HOW TO KILL A CITY. My advice to casual readers is to "advance" to the lively epilogue whenever deja vu starts to set in, and call it a win.

  25. 5 out of 5

    Adam

    DEVIL OR NEIGHBORHOOD HERO? Your answer will reveal your credit score. My 👂 picked up on.... 👇 sold...but we have others I sowed a seed and harvested a diamond Woman are meant to loved not understood It's very expensive being poor Cadillac Rich Fringe financial sector It's a nickel and dime business but the good news is there's a lot of nickels and dimes to be had I have figured out how to get very rich off those with very little What you can't do yourself you can hire to get done Blue sky potential Cou DEVIL OR NEIGHBORHOOD HERO? Your answer will reveal your credit score. My 👂 picked up on.... 👇 sold...but we have others I sowed a seed and harvested a diamond Woman are meant to loved not understood It's very expensive being poor Cadillac Rich Fringe financial sector It's a nickel and dime business but the good news is there's a lot of nickels and dimes to be had I have figured out how to get very rich off those with very little What you can't do yourself you can hire to get done Blue sky potential Couch payments, when the repo man accepts sex in lieu of payment I make money the old fashioned way, I beg for it You live in a perpetual state of financial uncertainty I'm in the poverty business Poverty industry Particularly galling I do financial cosmetic surgery

  26. 4 out of 5

    Carol Palmer

    “The problem with reporting on the poverty business is that it’s so broad and multifaceted”. It was hard to figure out if I should give this book three or four stars. It was good but so depressing. These people taking advantage of the poorest in this country. All the fees and outrageous interest rates. I know they are credit risks but seriously, 391% interest rate. Borrowing $3000 to fix the roof but with interest and fees the person soon owes $20,000? The bank determining that you can only be e “The problem with reporting on the poverty business is that it’s so broad and multifaceted”. It was hard to figure out if I should give this book three or four stars. It was good but so depressing. These people taking advantage of the poorest in this country. All the fees and outrageous interest rates. I know they are credit risks but seriously, 391% interest rate. Borrowing $3000 to fix the roof but with interest and fees the person soon owes $20,000? The bank determining that you can only be eligible for a sub-prime mortgage just because of your skin color. This book was informative, but it left a bad taste in my mouth.

  27. 5 out of 5

    Brian Shell

    Accurate. Having used payday loans and then ghostwriting for a payday lender, the cycle of debt is a very real reality. Thus, I really enjoyed the analysis Rivlin presents in this book. I have the paperback and the audiobook, and listening to it presents its content with regional accents (such as using a southern drawl) for the people who the author interviewed. Not my cup of tea. Understanding predatory lending though has helped me save money and stay away from the vortex of drowning in incredi Accurate. Having used payday loans and then ghostwriting for a payday lender, the cycle of debt is a very real reality. Thus, I really enjoyed the analysis Rivlin presents in this book. I have the paperback and the audiobook, and listening to it presents its content with regional accents (such as using a southern drawl) for the people who the author interviewed. Not my cup of tea. Understanding predatory lending though has helped me save money and stay away from the vortex of drowning in incredibly expensive debt. Again, very accurate book.

  28. 4 out of 5

    Dan Fanaselle

    You can tell from the title this isn’t going to present an unbiased perspective, but it goes a bit over the top in demonizing the “poverty industry.” It’s also all over the place, and couples industries that have absolutely no relation (i.e. payday lending, mortgage lending, and securities). Nonetheless, it does provide some interesting insights into these industries, and introduces readers to some of the big players on both sides of the aisle.

  29. 4 out of 5

    Dennis Normile

    I listened to this book in audio format, and I did not like the narrator's voice, so it may have shaded my overall opinion of the work. On the whole I think it was interesting, and opens the readers eyes to how unscrupulous companies engage in questionable to downright fraudulent behavior in their interactions with America's poor. However I also felt that many of the businesses involved were not given any chance to defend themselves in a meaningful way. I listened to this book in audio format, and I did not like the narrator's voice, so it may have shaded my overall opinion of the work. On the whole I think it was interesting, and opens the readers eyes to how unscrupulous companies engage in questionable to downright fraudulent behavior in their interactions with America's poor. However I also felt that many of the businesses involved were not given any chance to defend themselves in a meaningful way.

  30. 4 out of 5

    akhivae

    Aside from the fact that the author couldn't choose a title for his book so he chose three I enjoyed this extremely through history on the pay day loan/sub prime industry. This book however focusses more on the history of pay lending and other financial legal scams targeting the poor. Their rise, their stagnation and the history of their opposition. I mistook it going in for being more along the lines of books like 'Evicted' which focus more on the ground realities of those impacted. Aside from the fact that the author couldn't choose a title for his book so he chose three I enjoyed this extremely through history on the pay day loan/sub prime industry. This book however focusses more on the history of pay lending and other financial legal scams targeting the poor. Their rise, their stagnation and the history of their opposition. I mistook it going in for being more along the lines of books like 'Evicted' which focus more on the ground realities of those impacted.

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