arbitration. The lender also greatly reduced the penalties it charged for early payment on a loan. “It only took them five years to do the right thing,” Eakes said. Goliath had not been killed, but he had also not emerged from the competition unscathed.
Among those noticing Eakes as he fought with Citigroup while simultaneously doing battle against the payday lenders were Herbert and Marion Sandler, who ran the World Savings Bank, one of the country’s largest savings and loans. In 2002, Herb Sandler started phoning Eakes in the hopes that he could convince him to create a national organization to build on the work he had been doing fighting Citi in North Carolina.
The Sandlers were hardly the first to broach the idea, but Eakes always offered the same stock answer when anyone proposed this idea of broadening Self-Help’s scope beyond the state’s borders. “We’ll look at other places,” he would say, “when the job has been completed in North Carolina.”
Yet the Citigroup fight had forced Eakes onto the national stage, and Self-Help’s fight against first the predatory subprime mortgage lenders in North Carolina, and then the payday lenders, had raised its profile to the point where people were expecting them to act like a national advocacy organization. “Basically, we realized we [at Self-Help] were spending all this time on these requests anyway, so why not get some help?” Mark Pearce said. One key turning point, Mike Calhoun said, occurred while he was reading through a predatory lending bill that activists were championing in Alabama. “It copied verbatim our bill, down to the references to North Carolina statutes,” Calhoun said.
Still, Herb Sandler needed to phone several times before Eakes finally decided to get serious about launching a national organization. “He’s been calling and calling,” Calhoun said, “until finally he has to say to Martin, ‘I really mean it, I’ll provide you some money. So would you goddamn send us a proposal?’” Sandler had looked at others but, to him, “Martin was the only one up to the enormity of the challenge,” he said. “He was the only one with the capability and the passion and the strategic ability and the leadership quality to get his arms around a challenge of this size.”
Inside Self-Help, they huddled to figure out how much money they might need to start such a group. It was Eakes, Pearce said, who suggested asking for a number large enough to provide an endowment sufficient to remain independent and not constantly fret over raising money and uncertainty about next year. “Are you fucking crazy?” Sandler cried out over the phone, or something to that effect, when Eakes told him of the tens of millions of dollars he thought he needed to start a national Center for Responsible Lending. Sandler remembered Eakes telling him he wanted an endowment big enough to generate $8 or $9 million per year: a sum well over $100 million. In time, however, it would become clear that money would not be a problem for Herb and Marion Sandler.
Allan Jones had inherited his father’s debt collection business; Jared and David Davis had a wealthy father who served as the chief executive and president of Cincinnati’s second-largest bank, a publicly traded corporation. And there were all those executives from Citigroup, First Union, and other financial behemoths who had stooped down to see the riches that could be made operating on the fringes of the economy. They had near-limitless access to whatever capital they might need to move aggressively into a new business.
By contrast, Fesum Ogbazion, who would also find his fortune in the poverty industry, began with nothing. His parents had been born in a tiny farming village in Eritrea, a small country on the northeast tip of Africa sandwiched between the Sudan and Ethiopia. His father had been taught to read and write by Christian missionaries who opened a school in his town in the 1950s. His mother attended school there as well. Back then, Eritrea was under the rule of Ethiopia, a communist-ruled country that didn’t have much tolerance for people preaching the gospel. His parents were jailed several times, Ogbazion said, and nearly killed “for being Protestant, for speaking out, for not being happy with Ethiopian rule.” Ogbazion was nine years old when the family moved to Florida to join their father, who had gone ahead to study at Hobe Sound Bible College, and then to Ohio, where the senior Ogbazion earned a master’s degree at Cincinnati Christian College. His father found work as a pastor at an area church while his mother settled into the role of pastor’s wife. They no doubt had a great deal to contribute to their eldest son’s moral and spiritual development but they could offer little in the way of working capital.
Allan Jones describes himself as a born entrepreneur. So eager was he to learn the collections business while he was still a teenager that, after his freshman year, he secured a summer job at another collection agency—and sat in his car for three hours on his first day of work, waiting for the office to open. Jones, however, had nothing on Ogbazion, who held two or three jobs through high school. He hawked snacks as a vendor at Riverfront Stadium, where the Reds and Bengals played, and at different times worked the mailroom at two of Cincinnati’s larger corporations, CIGNA Insurance and Procter & Gamble. When he was nineteen and still a freshman in college, he wrote in his diary that he felt depressed because he still hadn’t started his own business.
“I didn’t drink a single beer in college,” Ogbazion told me when we met in Dayton. “I was that focused.”
I met Ogbazion, whom everyone calls Fez, shortly after the check cashers’ convention in Las Vegas. The roster of attendees at the convention—we all received copies in our goodie bags—included a woman representing a Dayton-based company called Instant Tax Service. That sounded promising. H&R Block, Jackson Hewitt, and Liberty Tax Service were the Big Three in next-day tax refunds, a product that generates more than $1 billion in annual revenues, but I thought it might be interesting to talk with a smaller player seeking to strike it rich in this corner of the poverty economy. I wrote her a note proposing that we meet the next time I was in Dayton and she suggested I talk with Ogbazion, whom she described as the company’s founder and chief executive. Their offices, she said, were downtown, at the corner of Third and Main.
That made sense. Third and Main is a major transfer point on the Dayton city bus system—an ideal locale for a business catering to the working poor. Spotting the Instant Tax Service sign, I peeked inside. It was a run-down storefront with walls pleading for a new coat of paint. Founder and CEO—the dual titles seemed a bit much. I imagined myself sitting in a banged-up folding chair while Ogbazion sat behind a battered metal desk like one you might find in a county welfare department or a homicide detectives bullpen while outside a large plate-glass window half of Dayton milled about waiting for the 41 crosstown bus.
I began to suspect I was wrong when I found a human-interest article in the
It wasn’t until the day I was scheduled to meet with Ogbazion, though, that I looked more closely at the address. It was located across the street from the Instant Tax Service storefront I had perused a few days earlier, in one of the town’s marquee buildings, a brown granite structure grandly dubbed One Dayton Centre. I took an elevator to the fourteenth floor. The waiting room was richly appointed, with blond wood paneling and handsome wingback chairs. When I was ushered in to see Ogbazion, he gave me a choice between a leather couch or the seat opposite him at the handsome wood desk where he worked.
Instant Tax Service’s archetypal customer, Ogbazion said, is the assistant manager at a McDonald’s earning $19,000 a year. Yet clearly business was booming. There are well-regarded law firms in town that can’t afford the rents at One Dayton Centre but Ogbazion leased the entire fourteenth floor and much of the fifteenth. At thirty-five, he was running a business with 1,200 stores and kiosks scattered across thirty-nine states, ranking it just behind the Big Three in a listing of the largest tax preparation firms in the country. It was an enterprise he built using another element of the fringe economy: the subprime credit card.
In Silicon Valley, young upstarts generally innovate and the big boys play catch-up. The same can’t be said of Ogbazion’s business: H&R Block first started offering its customers the “refund anticipation loan” (RAL), more commonly (and not quite accurately) known as the “instant tax refund.”
A taxpayer opting for an instant tax refund is not receiving his or her refund any faster than anyone else.
