Latest news with #predatorylending
The Independent
22-05-2025
- Business
- The Independent
Dr. Phil's son linked to tribal lender accused of predatory 700 percent interest loans
Jay McGraw, son of famed daytime talk show host 'Dr. Phil' McGraw, reportedly profited handsomely from a lending business targeting low-income people with high-interest loans, some with interest rates as high as 700 percent. Jay McGraw, a successful TV producer, was once listed as president and secretary of a company called CreditServe, which helps arrange small, high-interest loans through a company owned by a Native American tribe in Alaska, according to records obtained by an investigation from ProPublica and the Anchorage Daily News. Though records no longer list McGraw as a top officer in the company, a federal lawsuit filed in Illinois in November accused McGraw of providing 'tens of millions of dollars' in capital for the loans and serving as the 'principal beneficiary' of the business, only using the tribal corporation as a 'front.' (The suit settled confidentially in May.) The loans went out through a company called Minto Money, which is based in the tribal community of Minto, Alaska, a remote log-cabin village of about 160 people. The company's operations grew from $2 million in annual revenue in 2020 to roughly $12 million by 2024, according to the investigation, generating millions of dollars for the Minto community. Minto Money has been the subject of more than 280 consumer complaints to the Federal Trade Commission, according to the investigation, and holds an 'F' rating with the Better Business Bureau. 'What these people are doing should be illegal,' one individual wrote in an anonymous complaint to the Bureau in February. 'They're charging me over 700% interest. It makes it impossible to pay off the loan! They're taking $400 of my money every month and I only borrowed $725. After months of payments I've only paid $35 toward the balance!' The Independent has contacted Jay McGraw, CreditServe, and Minto Money for comment. Dr. Phil is not linked to the lending operation, and Merit Street Media, which airs his show, defended Jay McGraw in a statement to ProPublica. 'Dr. Phil knows his son Jay to be a smart, strong, caring human being, and while he does not know his business, Dr. Phil supports him 100%,' the statement said. Investors have been known to seek out tribes as business partners to avoid various forms of financial regulation, a strategy sometimes referred to pejoratively as ' rent-a-tribe.' While incomes in Minto are well below the state median, Jay McGraw appears to live a high-income lifestyle, with a lakeside mansion in Texas and trips to Paris, Palm Beach, and Napa.
Yahoo
18-05-2025
- Business
- Yahoo
This Vietnam vet, 91, took out a $900 loan online only to find out it was set at a shocking 682% interest rate
Alan Culbert just wanted to buy some presents for his grandkids and fix up his car. Since the Harvard-educated 91-year-old veteran and Bay Area resident didn't have the cash, he took out a $900 loan from Plain Green Loans, unaware that it would lead him toward potential financial ruin. According to a story from ABC 7News, the Montana-based lender Culbert borrowed from was one of a few companies that accepted his online loan application. Culbert was happy to see the lender advertise an easy borrowing process, with "better rates," and an "excellent" 5-star rating. He took the money, paid back the $900 within two months, and thought he would move on with his life — but that didn't happen. "I had no idea there was going to be an interest charge," Culbert said. Sadly, there wasn't just an interest charge — it was 682%, and Culbert was left with $2,646.69 in interest costs, accounting for more than half his monthly income. If you're wondering how this is legal, it's because the loan came from a native tribe. Here's why that simple fact left Culbert in a tough spot with no clear idea of what to do next. Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how I'm 49 years old and have nothing saved for retirement — what should I do? Don't panic. Here are 5 of the easiest ways you can catch up (and fast) Nervous about the stock market in 2025? Find out how you can access this $1B private real estate fund (with as little as $10) Culbert's loan came from the Chippewa Cree Tribe of Rocky Boy's Reservation, but it could have come from one of many native tribes that offer high-interest rate loans. The tribes argue that they have sovereign immunity and are thus governed by federal — not state — lending laws. That creates a problem because the federal government doesn't limit what rate lenders can charge outside of a 36% limit on loans offered to active-duty service members. This wouldn't have protected Culbert, who is a veteran, and, because tribal governments are independent of state governments, California's 10% cap on most consumer loans didn't protect him either. Some states have recognized this issue and taken steps to ensure their residents can't be charged so much to borrow. Connecticut, Arkansas, New York, Pennsylvania, Virginia and West Virginia have mostly eliminated tribal loans, and Minnesota put a 36% cap in place, while also making it impossible to collect excess fees. Minnesota's Attorney General Keith Ellison also filed suit against three separate entities, including officers of the tribal entities. "Sovereign entities, like states or tribal governments, generally you can't sue them under a theory of sovereign immunity. But you can hold them accountable if you name their leaders," Ellison said. "When we brought the lawsuits against three separate entities, we named the tribal entities' officer and said, 'You got to stop doing this.' And as a result, we were able to stop that lending." Read more: You're probably already overpaying for this 1 'must-have' expense — and thanks to Trump's tariffs, your monthly bill could soar even higher. Here's how 2 minutes can protect your wallet right now Ellison made clear he'd be happy to share his tips for ending these predatory loans with California. If the Golden State takes action and can achieve the success that Minnesota did, people like Culbert could be spared a lot of heartache. For his part, Culbert isn't sure how to proceed. He tried reaching out to the company and explaining he was a veteran, but Plain Green Loans wasn't sympathetic to his plight. In fact, Culbert said their response was: "'Sorry, too bad. You signed a loan agreement, and you owe all this money. It will ruin your credit history, and we will proceed with collections." With the media spotlighting his plight, Culbert will hopefully find some relief. Still, the veteran is wondering how this could have happened in the first place. "I don't see how that can be legal, and they can charge that much in this state," he lamented. Since tribal loans are effectively banned in only a small minority of states, vulnerable borrowers risk being contacted by one of these lenders when they apply for a loan of their own. If they take it, they could find themselves facing the same frustrations Culbert is experiencing. To avoid this fate, anyone borrowing should: Independently research the lender to determine if they are reputable View aggressive sales efforts on the part of lenders as a significant red flag, especially if the lender is offering tribal loans Insist on reviewing a written document that outlines the full terms and conditions of the loan before agreeing to borrow, including the interest rate and total payoff costs Hopefully, borrowers can avoid predatory lenders by doing this research. Still, vulnerable individuals, like Culbert, will continue to be at risk of such practices until more states (or even the federal government) implement greater control and transparency over tribal loans. Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan 'works every single time' to kill debt, get rich in America — and that 'anyone' can do it Rich, young Americans are ditching the stormy stock market — here are the alternative assets they're banking on instead Robert Kiyosaki warns of a 'Greater Depression' coming to the US — with millions of Americans going poor. But he says these 2 'easy-money' assets will bring in 'great wealth'. How to get in now Here are 5 'must have' items that Americans (almost) always overpay for — and very quickly regret. How many are hurting you? This article provides information only and should not be construed as advice. It is provided without warranty of any kind. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
10-05-2025
- Business
- Yahoo
7 Key Signs Your Mortgage Lender Is Ripping You Off
You could wind up paying more than you need to for a mortgage thanks to all-too-common predatory lending practices. A new report from Tomo Mortgage — which recently launched TrueRate, a free AI-powered tool that shows the real cost of mortgages — found that inflated rates, hidden fees and misleading pricing will cost U.S. homebuyers $11 billion in 2025. Be Aware: Read Next: To ensure you're getting the best possible terms for your home loan, keep an eye out for these key signs that your mortgage lender is ripping you off. Some lenders will use 'point traps' to get you to pay more than you need to for your home loan. 'Point traps are a deceptive tactic where lenders advertise seemingly low interest rates but require borrowers to pay exorbitant upfront fees, known as discount points, to obtain that rate,' said Will Begeny, VP of TrueRate, Tomo Mortgage. 'The 'trap' springs when borrowers, often first-time homebuyers or those under time pressure, focus solely on the attractive interest rate without fully understanding or calculating the significant added cost of these points.' To avoid point traps, it's important to be an educated consumer. 'Signs that a lender is deceiving you with point traps can vary, but the most common ones are extremely low advertised rates, or vague language like 'as low as,' which is a phrase often used to mask the fact that the lowest advertised rate is only achievable by paying a huge number of points,' Begeny said. 'Borrowers should also look out for a large discrepancy between the interest rate and the APR, or high loan origination fees.' Explore More: Some lenders won't give you the full picture of the price you'll have to pay for a loan until you get to closing. ''Sleight-of-estimates' refers to the tactic some lenders use to make their loan offer appear more attractive by underestimating certain closing costs on the loan estimate,' Begeny said. 'This misdirection focuses the borrower's attention on a seemingly lower estimated cash to close figure, while the lender's own fees in the origination charges section might be higher. 'The borrower only realizes the true cost at the closing table, by which point it's often too late to switch lenders without significant delays and potential additional costs,' he continued. 'Lenders consistently use this type of complex jargon to hide the real costs of a mortgage, leaving many borrowers feeling overwhelmed and cautious to apply.' To avoid falling victim to sleight-of-estimates, get loan estimates from multiple lenders at the same day and time. Mortgage loans often do come with fees that are legitimate and cover needed services, but some lenders will try to pass off additional unnecessary fees as being 'standard.' 'Borrowers should be particularly cautious of fees that are vaguely described or seem duplicative,' Begeny said. 'Some 'standard' fees that borrowers should keep an eye out for are any administrative, processing, underwriting or document preparation fees listed as separate charges. These fees often overlap and can be bundled into a single, more reasonable origination fee. Lenders might itemize these fees to make the total cost seem less daunting, but they essentially cover the lender's operational costs. 'Other lenders may even charge a 'satisfaction fee,' which is an unusual and unwarranted fee for the lender simply doing their job,' he continued. 'The key is to question every fee and understand its purpose. A transparent lender should be able to justify all charges.' If a lender offers you 'free refinancing,' this doesn't automatically mean the loan is a good deal. 'Some lenders lure borrowers in with the promise of a 'free refinance' if interest rates drop. However, the costs are often hidden in a higher initial interest rate or inflated fees during the refinance process itself,' Begeny said. 'Borrowers should focus on getting the best possible rate and terms upfront rather than relying on a potentially costly future refinance.' 'Some lenders may try to discourage borrowers from getting quotes from other lenders by claiming their offer is the absolute best or by creating a sense of urgency,' Begeny said. Never take a lender for their word — do your own research using online comparison tools or calling around for available loan terms. A mortgage lender may try to get your business by flaunting attractive-seeming terms, without actually disclosing the total cost of the loan. 'Some less scrupulous lenders may delay providing a loan estimate, hoping to keep the borrower engaged until they are too far into the process to easily switch,' Begeny said. 'Borrowers should insist on receiving a loan estimate as early as possible in the process, and even then, they should still shop around.' Taking out a home loan can be a daunting process, but you should know exactly what you are agreeing to before signing on the dotted line. 'The mortgage industry is rife with complex terminology,' Begeny said. 'Some lenders intentionally use jargon and confusing calculations to obscure the true cost of the loan. Borrowers should arm themselves with knowledge, ask for clear explanations in plain language and not hesitate to seek independent advice if needed.' More From GOBankingRates 5 Luxury Cars That Will Have Massive Price Drops in Spring 2025 4 Things You Should Do if You Want To Retire Early How Far $750K Plus Social Security Goes in Retirement in Every US Region 12 SUVs With the Most Reliable Engines Source Tomo Mortgage This article originally appeared on 7 Key Signs Your Mortgage Lender Is Ripping You Off
