Broke, USA

May 17, 2012 Will Byrnes rated it 5 of 5 stars

Shelves: non-fiction, economics, brain-candy

UPDATE - 5/17/2012 - see link at bottom

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 AP...more UPDATE - 5/17/2012 - see link at bottom

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 proposed 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.

UPDATES

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.(less)

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Aug 03, 2010 Stephany rated it 4 of 5 stars

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...more 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!(less)

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Jan 15, 2013 Charles Allan rated it 5 of 5 stars

Shelves: economics

Broke USA: How the Working Poor Became Big Business chronicles the recent rise of predatory lending institutions such as payday loan stores, check cashing outfits and the misleading mortgage. Downwardly mobile people using these product find themselves trapped with unpayable debt and the sudden loss of equity in their homes.

Very often, these businesses spring up near economically distressed populations: rustbelt communities with high unemployment, rural communities left behind in the global econ...more

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Dec 14, 2011 Miriam Rozian rated it 4 of 5 stars

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...more 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.
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May 25, 2011 Jay rated it 3 of 5 stars

Shelves: business, audiobook

I worked my way through this book - it took some doing. Not because it was a difficult read, but because it covers the way people enslave themselves for cash - a difficult subject. It walks through payday loans, instant tax rebates, pawn shops, subprime mortgages, and more, but the stories behind these different financial instruments common in poor areas are very similar, and the sheer number of unbelievably high interest rates quoted in this book, especially in the later chapters, is overwhelmi...more

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Mar 16, 2011 Siobhan rated it 4 of 5 stars Recommends it for: Everyone who cares about the future of our countryl

Shelves: 2011, nonfiction

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...more

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Jan 06, 2011 Libby rated it 5 of 5 stars

Shelves: finance-and-credit, policy

Really well put-together exploration of characters and issues. Love that there is attention to policy, organizing strategies, personal motives and trends over decades.

Broke USA p. 58
"Brennan's message remained consistent throughout: The Fed must aggressively crack down on lending that bears no relation to a borrower's ability to repay."

A light bulb just went off. Public regulation, legislation without fiscal notes, means saying "that's not allowed." What I can do in the private sector - whether...more Really well put-together exploration of characters and issues. Love that there is attention to policy, organizing strategies, personal motives and trends over decades.

Broke USA p. 58
"Brennan's message remained consistent throughout: The Fed must aggressively crack down on lending that bears no relation to a borrower's ability to repay."

A light bulb just went off. Public regulation, legislation without fiscal notes, means saying "that's not allowed." What I can do in the private sector - whether non- or for-profit is irrelevant - is create options. The various forms of predatory lending is around becaue it provides a service. As long as your customers understand your product and the pros and cons as it compares to the market, it's fair game to sell it?
P.63 " Where payday's critics such as Eakes live in the realm of theory, he said, his customers live in the real world, where a quick cash advance can mean the difference between the kids going to bed fed or hungry.
"They try and stop check-cashing operations," Jones said of the consumer advocates he's battled over the past few years. "They try and stop the tax refund business. They try and stop the rent-to-own industry. They try and stop the auto title loan industry. I guess as far as Martin Eakes is concerned, it doesn't make a difference if regular people have access to cash when they need it."

P.86 "Eakes and Self-Help started making home loans in the mid-1980s to African-American families and others of modest means. As if targeting the kinds of neighborhoods other banks expressly avoided weren't enough of a challenge, Self-Help deliberately sought borrowers with a credit score below 620 "because we wanted to prove that this number says as much about the lack of wealth in a family as it does the lack of character, which was the dominant stereotype at the time," Eakes said. Over the years, nearly half the homebuyers who have received financing through Self-Help have been black or Latino and nearly half were single mothers at the time they took out a loan. Its borrowers paid an interest rate around a percentage point above the going conventional rate and a fixed 1 percent in fees and points. That was more than enough, he found, to compensate him for the additional risks he took lending to those of modest income."

P.97 " (a household wasn't eligible for a Self-Help loan if its occupants earned more than the area's median income.) But Self-Help's borrowers were purchasing $30,000 or $50,000 homes and receiving loans almost as favorable as their prime counterparts. The key, Eakes said, was to find people who had proven themselves to be hard workers and then make sure they weren't buying a home beyond their means."

Mission bleed
P.110 ""It really hit us in the face," Mike Calhoun said. "We recognized that if we don't do something about predatory lending, we're kidding ourselves that we're really achieving something by putting people in homes." This organization that had always viewed its core mission as helping families build wealth has come to the conclusion that it was equally as important to help families protect the wealth they had already attained. The solution, as they saw it, was for North Carolina to become the first state in the country to pass an anti-predatory lending bill aimed at reining in the most audacious practices of its subprime lenders."

Some real gems from the check cashers' convention
P. 272 "Coleman couldn't bring himself to even use the term "unbanked." ... His preferred term, to the delight of the crowd, was "the bank free."

"Saunder told the group. "People out there have a very negative impression of our industry," he said. "It's really scary. Our data shows that we rank just below prostitutes and politicians in terms of popularity.""

And inspired by last page or two with Loftin - arguing that why issue anything subprime if it takes 6 months to improve credit, that's what you need to learn better behaviours anyway!(less)

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Aug 04, 2010 Kathleen Gilroy rated it 5 of 5 stars

This is one of the better books I've read on the financial crisis. While the others have focused mainly on Wall Street, Broke USA looks at "sub-par" main street: the industry that has sprung up to profit/prey on the working class poor who need credit but who don't have access to the banking system or credit cards. I was amazed at the size of the payday loan business and the stratospheric rates that are charged (APRs of almost 400%). The tax refund loans are equally predatory. Many poor people de...more

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Aug 10, 2010 Desiree rated it 5 of 5 stars

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...more

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May 21, 2011 Marcin Wrona rated it 3 of 5 stars

Broke, USA is a fairly exhaustive - and sometimes exhausting - look at the industry of poverty in the US. It's primarily concerned with subprime mortgages and payday loans, though other institutions pop in to make an appearance now and again - pawn shops, loans against tax refunds, etc.

The book is written in standard feature journalese - here's a human interest, here are some responses to interview questions, let's go meet the people our focus is badmouthing - and some of the featured industry p...more Broke, USA is a fairly exhaustive - and sometimes exhausting - look at the industry of poverty in the US. It's primarily concerned with subprime mortgages and payday loans, though other institutions pop in to make an appearance now and again - pawn shops, loans against tax refunds, etc.

The book is written in standard feature journalese - here's a human interest, here are some responses to interview questions, let's go meet the people our focus is badmouthing - and some of the featured industry players really are rather interesting. And Rivlin (mostly) treats them fairly, though he's not above handing out enough rope for a hanging now and then.

Still, it's a very bleak picture he paints. The story of the industry is not without its minor regulatory victories, but the book's crusaders frequently find themselves bemoaning just how little they've been able to accomplish in the grand scheme of things. The journalism is even-handed. While Rivlin addresses the many problematic elements of, for instance, the payday loan, he doesn't gloss over the uncomfortable facts: such as that for many working poor, these exploitative financial infrastructures are the only ones that can be called on in case of emergency.

Broke's biggest problem is its repetitive structure. On the one hand, it's unfair to blame the author for the fact that all of the institutions designed to squeeze more money from the poor later in return for loans today work basically the same way; that all the fights around regulation are functionally similar; that all the industry players start to look alike after a while. On the other hand, fair or not, it doesn't make the book any easier to read.

Broke, USA is an informative book, and an important one, and even people who have followed the developments it recounts can learn something from it. It takes a bit more effort to get through than I might like, and some consolidation could have helped, but I still recommend it. It's more homework than pleasure, but that's probably to be expected given the subject matter.(less)

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Jan 07, 2013 Alkek Library rated it 5 of 5 stars

Shelves: economics

Broke USA: How the Working Poor Became Big Business chronicles the recent rise of predatory lending institutions such as payday loan stores, check cashing outfits and the misleading mortgage. Downwardly mobile people using these product find themselves trapped with unpayable debt and the sudden loss of equity in their homes.

Very often, these businesses spring up near economically distressed populations: rustbelt communities with high unemployment, rural communities left behind in the global econ...more

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May 04, 2011 Janet rated it 4 of 5 stars

I got caught in the subprime mortgage trap not once, but twice. In 1980, Savings & Loans were deregulated, so they could act like banks but didn't have to follow the same rules. Did we learn from that? Apparently not, since the mortgage industry was deregulated in 1998. Some of the same people who got rich in the S&L schemes went directly into the mortgage industry. I can say I don't feel as stupid as I used to for being taken in, because it was pretty clear that the strategies used are...more

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Jan 24, 2011 Tie Kim rated it 3 of 5 stars

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...more

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Sep 10, 2010 Robert rated it 4 of 5 stars

Disturbing account of the explosive growth in the last decade of the "poverty industry" - that is, of the large class of businesses that provide "financial services" to the "unbanked", those without credit cards, the people with marginal means - businesses that found incredible riches simply by grinding down the poor, harvesting what little money they had by filling cities and towns with chains of "Rent-to-Own" stores - filling the strip malls with those "financial service" storefronts, the "Pay...more Disturbing account of the explosive growth in the last decade of the "poverty industry" - that is, of the large class of businesses that provide "financial services" to the "unbanked", those without credit cards, the people with marginal means - businesses that found incredible riches simply by grinding down the poor, harvesting what little money they had by filling cities and towns with chains of "Rent-to-Own" stores - filling the strip malls with those "financial service" storefronts, the "Pay Day Advance", "Check Cashers", "Title Loans", "Instant Tax Refund" places - places where desperate folks pay large fees to cash checks or make small loans at exorbitant interests and with crushing upfront fees. Rivlin tells this story by means of extensive interviews with those involved - the victims, their advocates, and with their predator's. The latter are just average business men, men who found a niche business, a little seedier than most - they are the entrepreneurs who were "in at the start", who recognized the cash potential of the poor, who opened the stores, expanded them into chains, and, by giving heavily to the right politicians, kept "the industry" free of government regulations. The most destructive sector of this poverty industry is the "home equity loan" providers - those who actively solicited borrowers in mass mailings, mailings especially targeted to the home of the elderly - or those had made "arrangements" with building contractors - here the victim interviews are particularly depressing. The homeowner is approached by a "contractor" who advises them that they need a new roof, or new siding - offers to help them find a loan - and then delivers them into the hands of the equity loan company, where, through exorbitant upfront fees and usurious interest, whatever equity the homeowner had, is hollowed out and family home lost through foreclosure. The profits from these loans were so great that large banks, even the most prestigious nationwide institutions, were envious. Wanting similar high returns on investment, they entered the subprime mortgage business - joined the "poverty industry" - began offering loans to folks unable to repay them. And to increase the capital available for these loans, began securitizing them, bundling them, selling them as "mortgage back securities". This had disastrous results not only on the housing market, but on the financial health of our country. This is a depressing book. Reading dozens of victim interviews, all of which are so sad, so enraging, one begins to think that the people responsible for all this misery are moral monsters - inhuman. Course, the real problem is cultural. It is the almost religious belief in the magical power of free-wheeling capitalism - in the "invisible hand" of the market" that miraculously turns greed into "blessings" for all. The problem is a culture that has identified freedom as free markets, that values freedom from regulations more than he does freedom from exploitation. This book would be unbearably depressing if it were not for the interviews with the few, the very few consumer advocates who fought this poverty industry - consumer advocates like Martin Eakes who drove much of the industry out of North Carolina - men who served as secular prophets crying out for social justice - often ignored, often defeated, but who are the only bright spot in all this darkness.

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Jul 20, 2011 Samantha Koller rated it 3 of 5 stars

Very good account of the sub-prime industry. I learned a lot about the history of the various products (pawn shops, payday loans, mortgage adjusters, tax return advances) and got a much better sense of the breadth and scale of the industry, as well as the background of the financial crisis.

I didn't rate it more highly because, while the story was interesting to read, the overall trajectory was kind of confusing, bouncing between different people and markets and across different time periods.

St...more

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Sep 21, 2010 Joe rated it 3 of 5 stars · review of another edition

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

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Apr 25, 2012 Heather Denkmire rated it 3 of 5 stars

Before reading this book I never thought much about the Liberty Tax store around the corner from my house, or the fancy Money Store type of place over by the mall. This definitely opened my eyes to the ways businesses take advantage of people without many other options, or people who don't realize they have other options.

The only criticism I have of the book is that it frequently relies on the outrageous profits the businesses pull in. As a progressive, I understand the point is that if there ar...more

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May 27, 2012 Don rated it 4 of 5 stars

Poor people need financial services and it is a shame that too many businesses that are in this field end up putting profits before ethics so that they hurt people more than help them. To many stories of this industry charging people thousands of dollars in fees for borrowing just a few hundred dollars or forcing people into foreclosure by aggressively promoting home refinances at exorbitant rates. The worst story was the finance company to put a blind elderly couple into a bad loan. The finance...more

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Sep 25, 2010 Schnaucl rated it 4 of 5 stars

Shelves: library, non-fiction, read_2010, september, recommended_reading

A really fascinating look at some of the poverty, inc. businesses.

I knew there were predatory lenders but I had no idea just how horrific their practices really were. They deliberately targeted the most vulnerable people and inundated them with offers for refinancing or home equity loans. I was never one who thought that the victims of these crimes "got what they deserved" but if you are one of these people I urge you to read this book.

Several other areas of the poverty, inc. business are also...more

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Jan 11, 2011 Nan rated it 4 of 5 stars

Shelves: non-fiction

Similar to Schlosser's Fast Food Nation, Rivlin writes about the big business of lending money and credit to the working poor (payday lenders, rent-to-own shops, check cashers, auto title lenders, money-wiring, tax preparers offering instant tax refunds,etc.) He discusses how the deregulation of the finance industry and the collusion between these businesses and large financial instutions contributed to the subprime mortgage meltdown. In 2008, the combined revenues of the "poverty business" (als...more

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Jan 22, 2013 Kristen rated it 2 of 5 stars

This book gave me an opportunity to explore a topic I hadn't been able to think about deeply, the various ways in which we have made a business out of providing financing to the poor or high risk. It was interesting (and shocking) however I felt there was too much detail on the lives and personalities of the various entrepreneurs in payday loans, check cashing and sub prime mortgages. By the end of the book, all the stories started to blend together and distracted from some of the bigger issues....more

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Aug 30, 2010 Toni rated it 4 of 5 stars

Shelves: sociology

Unfortunately, I had to return this book to work before I could finish it, but I really liked it. The subtitle sums up everything. All of the businesses that rise up where poor people congregate: check-cashing stores, title loans, pawnshops, rent-to-own furniture stores, etc., are discussed. And, yes, for those of us who haven't had to use these services (yet), it seems like these places are designed to take advantage of the people who patronize them. But this book gives you the other side of th...more

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May 21, 2012 Dawn rated it 4 of 5 stars

Shelves: 2012-books, economics, audio-books, sociology

This was well done. I like the way the book presented the situation with financial businesses in impoverished areas. I appreciated the unbiased nature of the payday loan, furniture rental scams, and the sub-prime mortgages. The author did a great job with the fine balance between individual responsibility and being taking advantage of. I found it interesting that there is a lot of truth to why these payday places existed in the first place and there is a need for small short term loans. In Broke...more

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Oct 25, 2012 Angel rated it 3 of 5 stars Recommends it for: readers interested in poverty issues, financial meltdown 2008 information

Shelves: business-and-economics, current-affairs, politics-and-political-science, social-sciences

I did like this book, but I am not rating it higher because, well, "I liked it" but I did not "really like it." It is not because the book is bad. Far from it. If a list is ever compiled of the books that must be read to understand the 2008 financial meltdown, this book has to be among the top two or three. Also, the book is required reading to understand why the poverty industry-- those who profit from the plight of the poor-- are thriving in the United States. So, why only rate it "three stars...more I did like this book, but I am not rating it higher because, well, "I liked it" but I did not "really like it." It is not because the book is bad. Far from it. If a list is ever compiled of the books that must be read to understand the 2008 financial meltdown, this book has to be among the top two or three. Also, the book is required reading to understand why the poverty industry-- those who profit from the plight of the poor-- are thriving in the United States. So, why only rate it "three stars"? Because the book is exhaustive, but it is also exhausting.

Rivlin takes us on a gran tour of Poverty Inc. He covers just about every player: payday loans, rent-to-own, those tax refund loans, pawn shops, subprime mortgages and a few others I cannot recall at this moment. He delivers human interest stories, interviewing a lot of victims, but he also sits down with some of the tycoons of these companies. Though Rivlin strives to be fair, in the end, the tycoons pretty much hang themselves. As we read, it is clear that what they do is far from noble, and we are reading a tale of greed gone awry. The damage these companies caused is such that it will be felt for years. And even if you are tempted to feel bad about one of these tycoons, once you learn of their trade conventions, where they trade secrets on how to squeeze the poor even more, their lobbyists, and their underhanded tactics, you won't be left feeling too much sympathy for them.

The thing is that there were very early warning signs, signs that many people either failed to see, or they refused to see them because the money being made was very good. In the end, the companies may be bruised, but they are not totally out yet. We can only hope more education can help the poor find better options. Because in the end, these companies thrive because society and businesses have simply enabled the erosion of a solid middle-class turning it into a working poor class with no other choice than to fall into the trap of the subprime lender or other poverty exploitation merchant. Rivlin, in addition to telling the story, raises some very good ethical and moral questions that we as a society really need to consider if we want to move forward.

The book includes a good set of notes for documentation for those who may be interested in learning more. The only catch, as I said, is that Rivlin strives to cover so much that after a while reading these tragic stories of exploited people just becomes too exhausting. Add to it you may get angry (as a decent human being) when you read about these predatory lenders and their deceptions, and you have to read this book a little at a time. However, it is an important book, and I think it is one more people should read. Plus, in an election season, it may be a relevant one as well.
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Dec 30, 2011 Du rated it 4 of 5 stars

Shelves: planning

So this is a book that we all need to read, but what a downer. It is a well written and intensly researched, but it is so depressing. The topic of subprime mortgages and check cashing and payday loans should be required reading for those that want to ensure we don't hit the same financial times we are exiting. The financial calamities of the previous decade have been written about quite a few times, but this take offers the perspective of those that have been hit hardest, the people who earn 25...more

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Mar 20, 2012 Trena rated it 3 of 5 stars

Recommended to Trena by: Washington Post

Rivlin provides some mind-blowing statistics on the economic size of Poverty, Inc.--the collective payday lenders, check cashers, rent-to-own stores, sub-prime mortgage lenders, auto title holders, refund anticipation loan tax preparers, and pawn brokers of the world--comparing the size of the industry to the movie industry (dwarfs) and the liquor industry (exceeds). It is eye opening.

The book covers in-depth the invention and spread of payday lending, the fight against sub-prime mortgage lendin...more

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Jul 04, 2011 Skylar Burris marked it as sampled-abandoned

I think I get the picture from the sample. Predatory lending (i.e. getting financially ignorant and generally already indebted people to sign bad-idea loans) is not nice and not good for our nation, and we need government intervention to stop it. (Just not the same kind of government intervention that encouraged so mamy people to get in over their heads in the first place, I guess...)

It looks like the book is going to be heavy on anecdotes that perhaps do not tell us the entire story and may se...more

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Oct 25, 2010 Emily rated it 3 of 5 stars

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...more 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. (less)

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Sep 08, 2010 Rachael rated it 3 of 5 stars

A good look at predatory lending at all levels: from payday loans, check cashing shops, pawn shops, and subprime mortgages. The narrative kept switching between payday and subprime mortgage lenders and it could be distracting to follow all the activists he mentions throughout the chapters, back and forth from this one to that one. I wouldn't say that it ties together well, but it does illuminate the dirty business of getting rich off other people's misfortune and/or lack of financial know-how.

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Apr 02, 2011 Kier O'Neil rated it 4 of 5 stars

Shelves: finance

This book details the history of the 'Poverty Industry' such as pawn shops, check cashing places, and title loans.

I'm about one-third through it and it is very readable, informing, and even-handed.

In some cases such as the sub-prime mortgage market you will see that while the mortgage lenders and brokers who made loans to people that couldn't re-pay them were deeply immoral, their practices were not illegal.

In others, such as payday loans you can argue that an APR of 300% for a one week loan of...more

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title link	preview: Broke, USA: From Pawnshops to Poverty, Inc. - How the Working Poor Became Big Business
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BBCode	[url=http://www.goodreads.com/book/show/8098389-broke-usa?utm_medium=api&utm_source=blog_book][img]http://d.gr-assets.com/books/1347915712l/8098389.jpg[/img][/url] [url=http://www.goodreads.com/book/show/8098389-broke-usa?utm_medium=api&utm_source=blog_book]Broke, USA: From Pawnshops to Poverty, Inc. - How the Working Poor Became Big Business by Gary Rivlin[/url]

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

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