That’s A Lotta Loan!

I am astounded this loan product exists. How could someone take these terms? How could someone offer them?

Jon Stewart and Colbert are off. I’ve had too much cable news. The Internet is dead tonight. I’m clicking.

If you would have told teenage Geoff his TV would have Channel 1407 he would have laughed!

OMG — Smokey and the Bandit II is on. It’s like Smokey and the Bandit I, but with less attention to quality and detail.

Burt Reynolds’ buddy, ex-stuntman Hal Needham, was the director. The movie serves as the Stuntman’s Full Employment Act of 1981. Unfortunately, by today’s standards it is ridiculously cheesy!

I looked away for a moment. When I came back there an attractive woman was onscreen offering unsecured loans up to $10,000.

“…in your bank account by tomorrow, based on trust in you.”

The company is Western Sky Financial. Text at the bottom of the screen explained,

“100% Native American-owned business operating on a Native American Reservation.”

I read mouse type. That’s the little text sometimes seen in advertisements. It’s often too small to easily read and on the screen too little time to finish.

I hit pause. This was going to take a few minutes.

First to the web and Western Sky’s homepage. The on-screen proclamation of Native American ownership is further parsed.

WESTERN SKY FINANCIAL is owned wholly by an individual Tribal Member of the Cheyenne River Sioux Tribe and is not owned or operated by the Cheyenne River Sioux Tribe or any of its political subdivisions. WESTERN SKY FINANCIAL is a Native American business operating within the exterior boundaries of the Cheyenne River Sioux Reservation, a sovereign nation located within the United States of America.

Now back to the TV screen. Mice type midscreen says $10,000 will cost 84 monthly payments of $743.99. That’s an APR of 89.68%! Paying the note to its full term requires $62,495.16… for $10,000.

Other loans with shorter terms have APRs as high as 342.86%!

Growing up I lived in New York which had usury laws limiting interest rates. Quaint concept. They’ve been gone for decades.

I am astounded this loan product exists. How could someone take these terms? How could someone offer them?

7 thoughts on “That’s A Lotta Loan!”

  1. OMG! I saw this on TV the other night and couldn’t read the small print for the details. I thought interest was capped at a certain rate but I guess I was wrong as well! Desperate people will agree to almost anything — and people who don’t know any better (the housing crash was one of them)… I’m surprised Geraldo or somebody else hasn’t taken this up and investigated it… GOOD IDEA FOR HARTFORD’s FOX TV to investigate as a consumer protection issue!!!

  2. When I read the fine price I almost had a heart attack..loansharks would be embarrassed at those rates !!! And there are several other “outfits” out there like that Montel Williams has one too!!! God help the poor fool who uses it to try to get out a deep hole he’s in !!

  3. At the risk of starting a firestorm (and my apologies, Geoff, if it does that here on your blog) it’s the whole “sovereign nation” portion which will tie the hands of any regulatory issues a business outside those borders but in this same great nation of ours would have to deal with.
    It is past time to eliminate all “sovereign nations” which exist within our borders. Their time and necessity has long since passed.
    On the other end of that is the fact that there truly is a sucker born every minute and someone will bite at this.

    1. I have seen these ads and noted the high interest rates in the fine print and it made my jaw drop. Hard to imagine anyone falling for this highway robbery; a sad commentary on the desperation of some people, I guess. One comment that stood out from the article referenced by Greg, made by a tribe member/defender of this practice – “The fact is our tribe — and tribes nationwide — benefit from the positive economic impact from these and other business activities . . . .” Ya think? Who would NOT personally benfit from lending their money out at 500% or higher interest?! What ever happened to integrity?

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