Showing posts with label predatory loans. Show all posts
Showing posts with label predatory loans. Show all posts

Saturday, June 25, 2022

October 29, 2017: A For-Profit College Hires the "Sluttiest Girls" to Recruit

 

10/29/17: Now that the story has leaked (good work, free press) Puerto Rico scraps the Whitefish Energy contract, which is sad for both full-time employees. Rumor has it, employees gathered at a Whitefish tavern, where they filled two seats at the bar, to drown their sorrows. 

 

For-profit college hires the sluttiest girls. 

Otherwise, it’s a fine fall Sunday. We assume Secretary of Education Betsy DeVos, a true Christian lady, is enjoying a day of rest. DeVos needs it. She has been spending an inordinate amount of time on the road, visiting America’s elementary and secondary schools. At least the ones run by for-profit charter operations. She’s a huge fan of vouchers, charter schools and corporate education. She believes in her heart that if we put the future of education in the hands of Big Business we’ll get “business efficiencies” in schools and all our children will live happily ever after. 

What could go wrong???? (See: Whitefish Energy; 10/28/17. See also: 8/20/17; 9/8/17; 9/18/17; 10/17/17.) 

Last, but not least, by a few billion, Secretary DeVos has been working hard to keep students in higher education safe from the predatory practices of the for-profit college sharks. She has done this by making it harder to hold those SAME crooks accountable for those same practices. Her handpicked choice to guard against fraud in the for-profit college industry is Julian Schmoke Jr. 

What was Mr. Schmoke’s previous job, which fit him to ferret out fraud? He worked for DeVry University, which settled a $100 million lawsuit for perpetrating fraud upon students. 

Robert Eitel is another top adviser. His experience with for-profit colleges includes working with another pirate organization, one forced to refund $23.5 million to students related to bogus loan deals.

 

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NONE OF THIS CROOKERY is to be confused with famed Trump University (forced to repay $25 million to bilked students). 

Nor are we talking about Corinthian College (fined $30 million for deceptive practices, now defunct, leaving taxpayers on the hook for $183 million in student loans that must be forgiven). 

We also do not intend to link the fine enforcement policies of Secretary DeVos to stories about Education Management Corporation (forced to pay a $95.5 million fraud settlement and later ordered to offer $103 million in restitution in a second case), Career Education Corporation (which paid a $10.25 million fine) or Ashford University (fined $7.25 million after recruiters lied to students). 

We do not mean to say that the Secretary would turn a blind eye to the misdeeds of Charlotte School of Law (forced into bankruptcy in the wake of a fraud scandal), Chester Career College (fined $5 million after students complained courses were a “sham”), ITT Educational Services (forced to close 130 locations after students filed a class action lawsuit alleging predatory lending practices) or Le Cordon Bleu ($40 million settlement in a suit filed by students).

 

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LET’S FINISH OUR LIST with a for-profit college bang! Consider the trials (many) and tribulations of Alejandro Amor, founder of FastTrain College in Florida. Business was good for a time. Amor bought a 54-foot yacht. He had his own private plane. He could afford a $2 million home on the beach. 

What went wrong at his fine institute of learning? Investigators found FastTrain had enrolled 1,300 students who lacked high school diplomas and lied about their eligibility to win federal loans. 

My favorite part of the story comes by way of the Miami Herald: 

Ex-employees told investigators that Amor boosted enrollments by hiring former strippers as recruiters, some of whom wore “short skirts and stiletto heels” to work. Amor told one employee to “hire some hot mommas” and “hire the sluttiest girls he could find.”

 

And, lo, it came to pass. The courts ruled. FastTrain went off the trestle and smashed up in a ravine. The school closed and Amor went to jail. And the slutty recruiters went back to doing what they did best. 

Stripping.


Kind of the look they were going for.


Wednesday, June 8, 2022

April 24, 2018: Money Talks Loud and Mick Mulvaney and the President Are Ready to Listen

 

4/24/18:  In a talk to hundreds of Wall Street bankers, Mick Mulvaney, Acting Director of the Consumer Financial Protection Bureau (CFPB) tells his audience how they can help the Big Orange Buffoon drain the swamp. The bankers can throw bags of money at him, and he will fill the swamp and displace the water. (See: 4/23/18.)

 


Scott Tucker got sent to prison.

 

Annual interest rates as high as 950 percent. 

“We had a hierarchy in my office in Congress,” the former congressman explains. “If you’re a lobbyist who never gave us money, I didn’t talk to you. If you’re a lobbyist who gave us money, I might talk to you.” 

Money talks loud. 

Mulvaney listens. The payday lending industry donated $60,000 to his campaigns while he was in Congress.

 

Now, as acting head of the Consumer Financial Protection Bureau (CFPB), he is to protecting consumers, as E.P.A. Administrator Scott Pruitt is to protecting children from toxic chemicals in their drinking water. Pruitt wouldn’t care if a chemical company mixed pesticide into a child’s pudding. Not if he could cut regulations on pudding! Mulvaney wouldn’t protect a consumer if two bank executives started beating him or her over the head with bags of quarters in the bank lobby. 

Mulvaney recently dropped sanctions against one online payday lender, NDF Financial Corporation. NDF operates out of Canada and makes illegal loans now and then – in all 50 states. NDF has a slick system to milk customers of every penny. It’s part of an 11-company operation, all playing different roles in bringing in desperate consumers and shaking them down. 

Suppose you need $500 to pay off unexpected medical bills. (Not that anyone in the GOP would care.) NDF and associated companies will lend you the money for fourteen days and charge you a fee of $134.90. You’re a poor guy. After fourteen days you can’t pay back the loan. You take out a new 14-day loan. That means another fat fee. If you get stuck in this cycle the annual interest/plus fees rate you pay can reach 700%. 

Under Mulvaney’s leadership-in-reverse, CFPB also dropped a lawsuit aimed at a group of Kansas payday lenders accused of stealing millions from accounts of consumers who failed to pay debts that…well, to be honest…they didn’t owe. You can tell these lenders were legit because they operated out of a call center and made cold calls to people, to suck them into their web. 

Kansas officials couldn’t stop them because they incorporated on an Indian reservation in California.

 

The Kansas City Star explained the beauty of this predatory scheme: 

The business model used by the four companies mirrors what’s referred to as the “rent-a-tribe” structure, where a payday lender nominally establishes its business on American Indian reservations [emphasis added], where state regulations generally do not apply.

 

Some payday lenders favor the model because they can charge interest rates higher than what states allow.

 

How high? According to a complaint originally filed by CFPB (before Mulvaney took over) interest rates could range from 440 to 950 percent annually. 

In the good old days, when President Obama was in office, the feds brought a successful case against one Kansas operation, like NDF, incorporated on an Indian reservation. Scott Tucker, head of the company, received a seventeen-year prison sentence for fraud. His lawyer got seven years. His brother, Joel, got nailed for a $4 million fine. 

Fellow Kansan Tim Coppinger also took a hit when CFPB was run by a Democratic appointee. He was forced to pay $54 million in restitution in a class-action case.