LENDING
LENDING INDUSTRY, BAN+@KS. >> STEAK AND ALE WAS A NICE
RESTAURANT+@.
RESTAURANT+@. I TOOK MY WIFE ON DATES THERE.
DECENT FOOD, NOT TO MENTION AN
OPPORTUNITY FOR EMPLOYMENT, AND
NOW, PEOP+@LE WHO ARE DESPERATE
THOUGH THERE TO GET -- GO THERE
TO GET X -- ECONOMICALLY
EXPLOITED AND PREYED UPON.
>> IN OUR INVESTIGATION, WE HAVE
PRESENTED EVIDENCE THAT BANKS
MAKE RELATIVELY FEW LOANS TO
PEOPLE WHO LIVE IN T+@HE LARGELY
MINORITY COMMUNITIES BELOW I-30
IN DALLAS.
IN DALLAS. IT TURNS OUT SOME BANKS ARE
QUIETLY MAKING BIG LOANS IN
THESE SAME +@NEIGHBORHOODS, JUST
QUIETLY MAKING BIG LOANS IN THESE SAME +@NEIGHBORHOODS, JUS@
NOT THE KIND YOU WOULD EX+@PECT,
AND MAY BE THE KIND THEY
WOULDN'T WANT YOU TO KNOW ABOUT.
>> IT WAS SCARY.
I WAS+@ WORKING FROM TEMP AGENCY
I WAS+@ WORKING FROM TEMP AGENC@ TO TEMP AGENCY.
THERE WERE TIMES I COULDN'T MAKE
RENT.
RENT.
RENT. SO
RENT. SO I WOULD HALF TO GET A PAYDAY
LOAN TO PAY RENT.
>> LEON KNEW HE NEEDED $500.
WHAT HE DIDN'T KNOW WAS HOW
DEARLY IT WOULD COST HIM.
>> PAYDAY LOANS ARE NEVER WORTH
IT.
IT.
IT. YOU
IT. YOU WILL GET $500 AND END UP
PAYING MAY BE $1500 +@BACK.
>> WERE YOU SURPRISED BY HOW
MUCH YOU HAD TO PAY FOR THAT
$500?
$500?
$500? >>
$500? >> OF COURS+@E.
>> B+@ANK LOANS MAY BE HARD TO
FIND IN MINORITY NEIGHBORHOODS,
BUT HIGH-COST LENDERS ARE NOT.
RECORDS SHOW BELOW I-30 IN
DALLAS, THERE ARE 88 STOREFRONT
LOCATIONS.
LOCATIONS. ACCORDING TO THE ADVOCACY GR+@OP
TEXAS APPLESEED, IN 2019 PAYDAY
+@
+@ AND
+@ AND AUTO TITLE LENDERS CHARGED
TEXANS MORE THAN $2 BILLION IN
FEES.
FEES.
FEES. WH+@ILE BLACKS AND LATINOS MAKE
FEES. WH+@ILE BLACKS AND LATINOS MAKEP
WH+@ILE BLACKS AND LATINOS MAKE@ 45% OF TEXAS HOUSEHOLDS, THEY
MAKE UP 71% OF AUTO TITLE
CUSTOMERS AND 74% OF PAYDAY LOAN
CUSTOMERS.
CUSTOMERS. >> DO YOU THINK THEY FULFILL A
ROLE IN SOCIETY?
>> THEY DO, THEY+@ KEEP YOU DOW.
I MEAN -- IT IS THE OLD CLICHE,
THE RICH GET RICH+@ER AND THE PR
GET POORER.
GET POORER. >> OUR REVIEW OF RECORDS FILED
WITH THE SECURITIES AND EXCHANGE
COMMISSION REVEAL ALMOST 20
BANKS ARE FUNDING OR HAVE
RECE+@NTLY +@FUNDED PREDATORY
LENDERS.
LENDERS.
LENDERS. SOME +@ARE BIG BANKS LIKE WELLS
FARGO AND BANK OF AMERICA.
OTHERS ARE BASED IN TEXAS, LIKE
TEXAS CAPITOL, BANK OF TEXAS,
VERY TAX, TBK, AND INDEPENDENT
BANK.
BANK.
BANK. WE
BANK. WE REACHED OUT TO SEVERAL
INDUSTRY GROUPS THAT PRESENT
HIGH COST LENDERS.
THEY SAY THEIR FEES ARE
REASONABLE GIVEN THE CREDIT
+@HISTORIES+@ OF CUSTOMERS, AND
REASONABLE GIVEN THE CREDIT +@HISTORIES+@ OF CUSTOMERS, ANDY
ARE HELPING PEOPLE GET LOANS IN
COMMUNITIES THAT BANKS HAVE
ABANDONED.
ABANDONED. >> IT IS A HORRIFIC CYCLE.
IT IS A SYSTEM THAT AGAIN, IS
DESIGNED TO ENSURE THAT SOME
THRIVE +@AT THE EXPENSE OF OTHE.
>> PASTOR FREDDIE HAYNES IS A
VOCAL CRITIC OF HIGH COST
LENDE+@RS.
LENDE+@RS. >> IN APRIL, HE TESTIFIED
AGAINST INDUSTRY PRACTICES AT A
U.S. SENATE.
U.S. SENATE. >> THAT DEBT TRAP, IT DOES SO
MUCH DAMAGE TO THE COMMUNITY.
>> HE SAYS IT IS HYPOCRITICAL
FOR BANKS MARKET THEMSELVES AS
CARING ABOUT THEIR NEIGHBORS
WHILE ALSO FUNDING PREDATORY
LENDERS.
LENDERS.
LENDERS. >> IT BECOMES ALMOST IMPOSSIBLE
TO DEVELOP A COMMUNITY ONCE YOU
DISCOVER A+@ BANK IS BASICALLY N
BED+@ WITH EXPLOITING THOSE WHO
ARE ALREADY ECONOMICALLY
IMPOVERISHED.
IMPOVERISHED.+@ >> LET'S GET INTO THE RESEARCH.
FIRST CASH, BASED IN F+@ORT WOR,
OPERATES AL+@MOST 2800 PAWNSHOP.
UNDER TEXAS LAW, A POND DEALER
CAN CHARGE UP TO 240 PERCENT
INTEREST.
INTEREST.
INTEREST. FIRST CASH SAYS ITS OPERATIONS
ARE LICENSED, REGULATED AND
OPERATED IN ACCORDANCE WITH ALL
FEDERAL, STA+@TE AND LOCAL LAWS.
ONE OF ITS CREDITORS IS WELLS
FARGO.
FARGO.
FARGO. WHEN IT COMES TO THE PERCENTAGE
OF LOWER INCOME LOANS WELLS
MAKES IN DALLAS COUNTY, IT IS ON
THE LOWER END OF BANKS+@.
ALONG WITH BANKS THAT INCLUDE
TEXAS CAPITAL AND BANK OF TEXAS,
WELLS SHARES IN A $400 MILLION
LINE OF CREDIT TO FIRST CASH.
WE ASKED THESE BANKS WHY THEY
CHOOSE TO FINANCE A HIGH COST
LENDER.
LENDER.
LENDER. BANK +@OF TEXAS +@AND TEXAS CAPL
BOTH HAD NO COMMENT.
WELLS FARGO SAYS THE COMPANIES
IT WORKS WITH HAVE DEMONSTRATED
A STRONG ONGOING COMMITMENT AND
CAPABILITY TO COMPLY WITH
APPLICABLE LAWS AND REGULATIONS
TO THEIR BUSINESS OPERATIONS.
SOUNDS LIKE WELLS FARGO
CONTINU+@ES TO BE THE LARGEST
PLAYER IN THIS SPACE.
WHAT IS THEIR HISTORY?
>> WELLS FARGO HAS A LONG
HISTORY OF BEING A CREDITOR TO
AUTO TITLE LENDERS.
>> SHE IS AN ADVOCATE FOR FAIR
LENDING PRACTICES.
LENDING PRACTICES. >> IT IS OBJECTIONABLE TO ME
PERSONALLY.
PERSONALLY. IT IS LIKE I SAID, IT IS LEGAL.
I CAN'T TELL THEM NOT TO DO IT
BUT IT IS ABOUT VALUES AND
BUILDING COMMUNITIES.
BUILDING COMMUNITIES. >> LET'S TALK+@ ABOUT ANOTHER HH
COST LENDER, ENOVA, AN ONLINE
PLAYER THAT MAKES PAIN IT --
PAYDAY LOANS.
PAYDAY LOANS. +@IT DOCUMENTS ANNUAL PERCENTAGE
RATES OF 400 9%-600 64%, AND
HELPS -- WHO HELPS FINANCE THEIR
+@
HELPS -- WHO HELPS FINANCE THEIR OPERATIONS?
OPERATIONS? IN PART, VERITEX AND T
OPERATIONS? IN PART, VERITEX AND TBK, BASED
IN TALUS.
IN TALUS.
IN TALUS. -- BASED IN DALLAS.
WE ASKED THESE BANKS WHY THEY
CHOOSE TO FINANCE A HIGH COST
LENDER.
LENDER.
LENDER. VERITEX HAD NO C+@OMMENT AND TBK
SAYS IT ENSURES CUSTOMERS'
BUSINESS ACTIVITIES COMPLY WITH
THE LAW.
THE LAW.
THE LAW. IN A STATEMENT FROM ENOVA, THEY
SAID ONLINE SERVICES REACH
PEOPLE AND+@ BUSINESSES ALL OVER
THE U.S. INCLUDING PLACES WHERE
BANKS NO LONGER HAVE BRANCHES.
AND ONE MORE COMPANY.
WO+@RLD FINANCE HAS 1200
STOREFR+@ONT OFFICES AND OFFERS
INSTALLMENT LOANS, WHICH UNDER
+@
INSTALLMENT LOANS, WHICH UNDER TEXAS LAW CARRY 80-100 13%
INTEREST PLUS FEES AND CHARGES.
THEIR OPERATIONS ARE FINANCED IN
PART BY WELLS FARGO WITH A
COMMITMENT AS HIGH AS $200
MILLION AND TEXAS CA+@PITAL, AT
COMMITMENT AS HIGH AS $200 MILLION AND TEXAS CA+@PITAL, ATP
TO $30 MILLION.
>> WE+@ WOULDN'T BE HAVING THESE
CONVERSA+@TIONS ABOUT PAYDAY LOS
IF FINANCIAL INSTITUTIONS HADN'T
SO LONG AGO ABANDONED OUR
COMMUNITIES.
COMMUNITIES. >> PREDATORY LENDING ECHO'+@S BK
TO AN OLDER PROBLEM TO REP --
CALLED REDLINING WHERE BANKS
REFUSED TO LEND IN MINORITY
NEIGHBORHOODS.
NEIGHBORHOODS. THE COMMUNITY REINVESTMENT ACT
IS A LAW MEANT TO REPAIR THE
DAMAGE.
DAMAGE.
DAMAGE. IT SAYS BANKS ARE REQUIRED TO
MEET THE CREDIT NEEDS OF THE
ENTIRE COMMUNITY AND REINVEST IN
NEIGHBORHOODS THEY HAVE LONG
IGNORED.
IGNORED.
IGNORED. PASTOR HAYNES SAYS WHEN BANKS
FINANCE PREDATORY LENDERS, THEY
VIOLATE THE SPIRIT OF THE LAW.
>> IT IS TIME FOR REGULATORS TO
STEP UP AND SAY WE ARE SERIOUS
ABOUT THIS ISSUE AND WE WANT TO
ENSURE THAT JUSTICE IN BANKING
IS A NORM.
SO I THINK IT IS NOT JUST TIME,
IT IS PAST TIME.
>> SOME BANKS HAVE BEGUN TO
CHANGE THEIR POLICIES.
CAPITA+@L ONE SAYS IT+@ WILL NOT
FINANCE PAYDAY AND AUTO TITLE
LENDERS.
LENDERS.
LENDERS. CHASE BANK HAS STOPPED, SAME FOR
KEYBANK IN OHIO.
BANK OF AMERICA HA+@D BEEN A LOG
TIME LENDER TO WORLD FINANCE
WITH A LINE OF CREDIT UP TO $150
MILLION.
MILLION.
MILLION. THE BANK SAYS IT TERMINATED THE
RELATIONSHIP LAST YEAR.
BANK OF AMERICA ALSO OFFERS A
NEW PRODUCT CALLED BALANCE
ASSIST.
ASSIST.
ASSIST. FOR A FIVE DOLLAR FEE, EXISTING
CUSTOMERS CAN BORROW UP TO $500.
THAT IS FAR BETTER THAN ANY
PAYDAY LENDER +@IN AN INDUSTRY
THAT IS FAR BETTER THAN ANY PAYDAY LENDER +@IN AN INDUSTRY+@
+@
+@ THAT
+@ THAT BANK OF AMERICA+@ SAYS RUNS
CONTRARY TO OUR VALUES.
>> IT IS ENCOURAGING TO ME TO
SEE A LARGE FINANCIAL
INSTITUTION TAKE TO HEART ALL
+@
+@ THE
+@ THE FEEDBACK THAT HAS BEEN
THE FEEDBACK THAT HAS BEEN+@ AROUND FOR A LONG TIME ABOUT THE
FINANCIAL SERVICES NEEDS OF
COMMUNITIES AND REALLY START TO
DO SOMETHING ABOUT IT.
>> BANKS THAT FINANCE PREDATORY
LENDERS DEFEND THEMSELVES BY
SAYING THE PRACTICE IS LEGAL.
BUT PASTOR HAYNES SAYS IN
AMERICA'S MOMENT OF RACIAL
RECKONING, THE QUESTIO+@N ISN'T
WHETHER IT IS LEGAL.
THE QUESTION IS WHETHER IT IS
RIGHT.
RIGHT.
RIGHT. >>
RIGHT. >> IT CREATES A PERMANENT
UNDERCLASS, PERMANENT GHETTOS,
+@
+@ AND
+@ AND IT
+@ AND IT IS BEING FINANCED BY
AND IT IS BEING FINANCED BY+@ BANKING INSTITUTIONS,