The Deeply Corrupt Country We've Become

I got a loan offer in the mail today from an outfit called Brookwood Loans, which wants to lend me up to $3,000 at an annual interest rate of 96%. I didn't forget the decimal point in that, in case you were wondering. The interest rate is 96% a year. On the upside, the solicitation promises that the rate will not change, and if I go to the website and fill out the online application I can have the money in my hands by noon tomorrow. That is, if I qualify. The solicitation reminds me that "We may refuse to approve a loan in your name if we determine that you do not meet our credit criteria." What possible credit criteria could they have?

Sorry sir, but if you're the kind of person who would consider a loan like this for even one second you're in too much financial trouble to ever pay it back.

The object of this kind of lending is, of course, to get that last little hit of money out of desperate people who are already on their way down the drain, or who are compulsive borrowers in the process of destroying themselves. Desperate and compulsive people can not be counted on to make rational decisions. All they can do is get deeper into trouble, especially with someone whispering in their ear, urging them to the next level of self-destruction. That someone used to be Satan; now it's Brookwood Loans.

Brookwood Loans is owned by Metabank of Sioux Falls, South Dakota, and Storm Lake, Iowa. MetaBank's website makes it look like what it likely was at one time: a respectable, home-town bank. There are nice pictures of the no-doubt-very-nice people who work at the local branches; there's happy talk about the bank's modest, hometown roots; and there's a Vision, Mission and Values page that explains that one of the bank's goals is to "be an asset and volunteer in the community." It makes me wonder if the very nice people of Storm Lake, Iowa, even know what their hometown bank is up to. It makes me wonder if they know that MetaBank is in the business of lending money to desperate people at loan shark interest rates?

MetaBank, in turn, is owned by Meta Financial, a publicly held company (ticker symbol: CASH) whose stock is doing very well. It's no doubt in the portfolio of a lot of very nice, very respectable people -- churchgoers, I'll bet, since regional banks are such a safe, homey investment. It's near it's 52-week high now, having risen 38% in the last year -- a year during which the financial sector as a whole dropped slightly, perhaps ironically under the weight of non-performing sub-prime loans.

MetaBank is a federally chartered institution and thus not subject to state usury laws. Not many states have usury laws anymore anyway, and the argument against them has been that setting a maximum legal interest rate -- something, presumably, below 96% -- would limit the credit available to relatively high-risk borrowers. And we wouldn't want to do that, would we? That would be like denying an alcoholic that last drink before he bottoms out, or taking the needle away from the heroin addict. Who wants to be that kind of buzzkill when there's money to be made?

I guess the problem I have with this is that there's no one involved who feels dirty. We've become the kind of country where perfectly nice people in a perfectly nice town like Storm Lake, Iowa, can make their livings based on compounding human misery and still feel just fine about themselves. The "people helping people," as they describe themselves on their Vision, Mission and Values Page, can capitalize on misery and not lose a moment's rest. The CEO of Meta Financial serves on the board of directors of the local YMCA, for example. I'm sure he thinks of himself as a very nice person even though he's getting rich on 96% loans made to people at rock bottom in their lives.

The thing I don't get is this: we don't let the heroin dealer off the hook because he was just supplying something for which there is a demand. Why do we think of people who operate businesses like this as pillars of the community?

Comments

[Trop]

Because as long as these upstanding financial rapists aren't gay or having abortions, nothing else matters.

[Conrad]

Why is it that liberals will defend, in the name of individual liberty, a person's right to engage in the most bizarre, ill-advised, potentially disasterous sexual practices and familial arrangements , but get their lacy knickers in a twist at the thought of those same folks making their own financial decisions?

[Tom]

Society has a long history of regulating transactions between people to make sure they're within some agreed-upon bounds of fairness and morality. We don't accept, for example, a consensual sexual relationship between a 30 year old man and a 9 year old girl, on the assumption that informed consent is not possible in that relationship.

My contention is that someone desperate enough to take out a 96% interest loan is probably not someone capable of making an informed, rational decision. I do not believe that that person is likely to be, as you put it, "making their own financial decisions" so much as they are going through financial death throes, during which they are doing nothing but making things worse.

Your apparent argument is that liberty demands that people in helpless situations have the right to be victimized by predators. You're correct in that, but I don't think that means we have to find the predators admirable.

You will note that I don't advocate anything but social opprobrium for the perpetrator of that loan. I don't want him arrested. I just wonder why a group of people who no-doubt think of themselves as solid citizens can live with themselves, depending for their income as they do on taking advantage of other people's helplessness.

There's nothing inconsistent about that. I don't think the government should put Larry Flynt, for example, in jail. I also don't think it's surprising that he's not a respectable member of society. That the CEO of MetaBank is a pillar of his community strikes me as interesting and indicative of a kind of money-based moral corruption. We'll put up with anything, as long as we've got a piece of the action.

You may, of course, disagree with that. It would be interesting to know why, except that all you seem to be interested in is demonstrating that I'm a hypocrite.

[Squidley]

Conrad, it's because liberals believe in the absolute autonomy of the individual from any group or "artificial" label; they believe in equality and non-discrimination. They get there by rejecting all larger truths, like gender, family, community, society, ethnicity, nation, and God. They reject these truths because they are seen as "causing" inequality and discrimination.

Now, how does one get to the liberal paradise of equality and non-discrimination? Through socialism, of course, where an unaccountable elite "knows what's best" and enforces "equality" through punitive and redistributive measures. Their socialist worldview is anathema to the indiviudual rights that our nation was founded on. Liberalism requires the removal of individuals' right to choose, and seeks to destroy actual peoples' ability to govern themselves.

So while the liberals wouldn't want to infringe on an individual's "right" to construct his own gender (for example), they also don't want the eeevil corporations to serve such a base cause as profit-making. If the corporation and its minions have more money than others, then that is, by definition, unequal, and inequality is the bane of liberalism.

[Tom]

This particular liberal believes that there is a moral component to how one profits. It would surprise me if you didn't believe that as well. What is interesting to me, and the point of this post, is the way in which our perception -- as a society -- of acceptable means of profit has shifted.

All that stuff about liberals believing profits are evil is ridiculous bullshit. It's valuable ridiculous bullshit to someone of your political stripe, however, because it enables you to imagine that every liberal who is something other than poor is a rank hypocrite.

However liberal I may be -- and by your definition, I'm very liberal -- I challenge you to find one thing in the three years of this blog that demonstrates that I think profits are by definition evil. Some profits, of course, are evil. Profit gained by giving the enemy information that enables an ambush of American troops would be evil, for example. But your self-satisfied generalization about liberals collapses based on your own assessment of me.

I like profits. My financial well-being is dependent on profits. I enjoy the fruit of profit and conspire regularly to devise ways to increase profits. But there are things I won't do for profit, and I only respect profits when they're gained in a way that's worthy of respect.

[Squidley]

I happen to agree with you that morality is an indispensible part of doing business, and that morally-realized profit is good. However, liberalism has infected our society to the extent that people can rationalize immoral behavior simply because it benefits the bottom line. This is part of why a traditional liberal arts education, one that emphasizes not only our culture but also our morality, is superior to business school training.

While you personally are pro-profit, do you really think that liberals who have shifted further left into socialism and other forms of leftism are as gung-ho about profit as we are? Look at the wealth-redistribution schemes (i.e., higher taxes, especially on the wealthy) that the current crop of Democrats are proposing. Look at the deleterious effect of high taxation on all facets of a country's economic development. Do you really think that liberalism and the anti-profit mindset are unrelated?

[Pursuit]

Tom,

Squid may be exaggerating to make a point, but when I watch Democratic debates and the candidates spend far more time talking about how they will take on pharma companies, financials, hedge funds, big business and others too numerous to mention than they do Islamic terrorists, it does give one the impression that they think profit is bad.

[John]

Wow, I just got the same offer in the mail, though now they are only promising up to $2,000 at $189.96 a month (still 96% interest). I guess they lost some money on those high end loans when people defaulted.

I had to Google what others were saying about this company, sadly this was about the only thing I could find, no horror stories yet.
Anyways I'm debating framing the letter, or some ritualistic cremation ceremony, not sure right now..

[Ann]

I got one of those letters today, and like the author of the article, I was shocked. 96%!! I took the letter under the light to make sure I wasn't missing a decimal point somewhere. A $1000 loan would cost 36 payments of $85.34. Are people stupid enough to actually go for this scam?

This letter is going straight to the shredder.

[Incognito]

Conrad,

Religion is and has always been used to control the masses. What religion should we follow? That is exactly why there should be a seperation of church and state. Don't try to force your beliefs on others.

[Stephanie]

How do you think I feel. I am between a rock and a hard place right now. I took out a loan with these people and they failed to discolose what the interest rate was before they had me sign everything. They rushed me threw the contracts telling me I did not have to read them the guy claimed "it is all just what I am telling you" and now that my first payment was due and I followed all there steps to stop the auto payments that they automatically sign you up for they claim they never got the documentation. So I did what I had to I closed my checking account and tried calling them literally 35 times today and every single time I got a recording telling me they were closed. So I sent a email very nicly worded and polite and got a one sentance message back telling me if I did not call them within 48 horus of receiveing this message that my account will be forwarded to the legal department. They people are spinless evil creatures.

[Charles Greenwood]

I too took out a 2,000.00 loan being desperate for Christmas money. I paid 7 payments @ 170.00 a month. I got my credit union to pay it off recently to find out that my pay-off balance was 1997.47. Please let me know if there is a class action suit.
After 7 months I have paid 2.53 toward the principle

[Mickey Brown]

My wife just got a letter from Brookwood Loans today and I was really pissed at what I read. Simple intrest of only 96%. Wow! What a bargain for the lender. A $500 loan for 12 months @ $66.35 per month equals $796.20. AND A loan of $3,000 for 36 months @$256.03 per month equals $9,217.08. Think about this: $300 intrest on a $500 loan and over $6,000 intrest for a $3,000 loan. What a scam. South Dakoda is the worse state in credit scam in America. I live in Arkansas and I am going to contact our attorney general, Dustin McDaniel, about this and I am also going to write a letter to the editor of Arkansas-Democrat newspaper about this scam. Don't be suckered.

The Micks Opinion

[JC]

My husband was dumb enough to take out this loan about 18 months ago because he is a compulsive spender. When I found out about it 6 months later, he still hadn't made a single payment to them and they were making threatening phone calls to him. We ended up having to settle by agreeing to pay $130/mo for 36 months, with no accrual of interest. (total of $4680 paid back, which is less than it would have been) Anyway when he called last month to make the payment, somehow they said we are a month behind... which is crazy. I am still very upset that they are even allowed to do business this way and they are preying on desperate people. And of course I have to deal with their crap because they sent an unsolicited offer to my husband. I wish there was a way to fight them with legal action!