APR on a RAL still worked out to more than 60 percent on the average sized return.
Ogbazion didn’t know the names Wu and Fox before I sat down in his office, but he wants to argue with them. “Sometimes when I hear people like that putting the industry down, it really bugs me,” he said. “It’s not like me or any of these franchisees would be the people who would climb through the ladder at a Big Four firm even if we were to become CPAs. You go with the hand that you’re dealt and you make the best of it.” Looking out the window of his fourteenth-floor office, he asked, “What else was I supposed to do?”
An agitated Jared Davis paced the top floor of the prosperous looking offices he and his brother built for themselves a few years back on a glitzy edge of Cincinnati. The 1,300 or so Check ’n Go payday loan stores they operated then, at the end of 2008, may share strip mall space with low-rent cousins such as Rent-A-Center and Jackson Hewitt but the bosses work down the street from a Nordstrom, a Restoration Hardware, and other establishments that suggest that the poverty industry is far away. With slate floors and the sleek modern furniture in the conference room where we met, the Davis brothers seemed to have spared little expense in the building of what rival Allan Jones described as a “fancy monument.”
Jared Davis is a large man standing around six feet, five inches tall with a pear-shaped body and a big lump of flesh under his chin. The day I visited he was wearing a salmon-colored dress shirt open at least one button beyond modesty. His hair was unkempt and his face was covered with stubble. A “big old goofy-looking dude who always needs a shave” is the way Allan Jones described him. Jones then blinked one of his eyes rapidly as if sending a Morse code message. By that time I had met Davis and knew Jones was doing a crass imitation of his competitor. During our time together Davis was a bundle of movement. He pulled on the leaves of a nearby plant; he kept jumping out of his seat as if the point he was making got him so worked up that he physically needed to move. But mainly what one couldn’t help notice was the uncontrollable tic that caused one of his eyes to blink spastically. Davis later referred to it as his Tourette’s. The more voluble he grew, the more vigorously he blinked.
I was in Cincinnati primarily to talk about the early days of payday lending and a specific store that Check ’n Go has operated in Mansfield, Ohio, since 1997. Davis, however, was spoiling for an argument with all those who question the way he and his brother make their money. In the old days, Davis said, the town druggist or Walt over at the general store would let you run a tab when money was tight. “What used to happen, if you needed eggs or milk, the basics, the local grocers let you buy it on credit,” Davis said, pacing back and forth. Try that today at your local Kroger, he said, throwing his hands into the air, “and they’ll throw you out of the store.” That’s where the payday lenders come in. But try explaining this to a media hopelessly biased against you and with frauds like Martin Eakes donning a cape as if Supermen. “Anyone with half a brain,” he said, “can see that the reason Self-Help and Eakes are against us is because they’re our direct competitor.”
Eventually Davis began talking about the early days of payday when the country seemed one giant opportunity to explore and conquer. He lost his share of races, like the time he thought he had found a choice storefront in the center of one modest-sized town in Kentucky and then learned from the real estate agent on the property that Check Into Cash had gotten there a few hours before him. But he lucked out in Mans field, a small city of fifty thousand in an otherwise rural stretch of Ohio that had no doubt been a happier place before its largest employer, Westinghouse, shut its plant, as did Tappan and a depressingly long list of other manufacturers.
“You wanted to be the first or second chain to discover some new town because once those two or three good spaces were taken, the game was over,” Davis told me. Billy Webster had beaten them to Mansfield but the Davis brothers were second and they leased the perfect spot, a storefront just off the main highway into town. There, next to a Mr. Hero sandwich shop, they installed a woman named Chris Browning to open and manage their fifth store in Ohio and around the seventieth overall. Browning, who had spent the previous fourteen years working collections for various car dealers around town, was a minor payday miracle. The turnover rate among store managers at the big chains exceeds 50 percent a year yet Browning lasted for more than ten years before being fired in the middle of 2007.
Chris Browning knows she can be difficult. But what are you going to do when you’re surrounded by idiots and fools? “To me what’s right is right, what’s wrong is wrong, and why mince words?” she told me in a voice just a little too loud. “I’m pretty straightforward, bold, and vocal. I tell it like it is.”
Inside Check ’n Go, Browning’s direct supervisors didn’t always appreciate her brassy demeanor. “Chris has a management style that is extremely hard to supervise,” the regional manager assigned her area wrote of her early in her tenure. “She constantly berates her direct superiors and shows little confidence in corporate personnel. Chris has a tendency to feel everyone is against her.” But there was no denying she was very good at what she did. A well-run store in a choice location back then might bring in $150,000 or $170,000 in fees each year; a strong store maybe $200,000. Browning, managing a store in a remote outpost two hours from the nearest big city, generated $247,000 in fees her first full year on the job and $251,000 in her second. “I wish I had eight of Chris,” the same manager wrote, running the eight stores under his control.
“As long as she continues to put up the numbers,” he added, “I will continue to work towards a better understanding between us.”
Browning is a short, stout woman who lives in a small ranch house surrounded by soybean and wheat fields. She and her husband chose a home in so remote a location thirty miles from Mansfield, she said in a scratchy smoker’s voice, because they wanted to insulate the kids from “a town gone to hell in a hand basket.” She was a few months shy of her sixty-second birthday when we met in the fall of 2008. She greeted me at the door wearing a red Ohio State Buckeyes sweatshirt and jeans. She wore her hair in a short gray bob and when she smiled I noticed she was missing a front tooth. Within minutes of my entering her home, she was practically yelling. It was more than a year since she had been pushed out but she was still smarting from the way she had been treated.
“They fired me because eventually their policy became, if a body walks in the door, you loan ’em money, and I wouldn’t do that,” Browning said. That’s no doubt too facile an explanation, but sitting behind her counter every day, staring out a plate-glass window onto a street populated by the Big Lots, Subways, and Wendy’s that litter the edges of any city, Browning had a perfect perch for watching the rapid rise of a new industry and its impact on the people of the community. Increasingly she found she didn’t like what she was seeing. And as her attitude toward payday soured and the competition grew more heated, Check ’n Go decided it had little use for a store manager with the fighting spirit of a longshoreman posting only average numbers.
The Ohio legislature said no the first time they were asked to legalize payday lending within the state’s borders. But then the Ohio House of Representatives switched from Democratic to Republican control in 1994 and the enabling legislation, championed by the state’s check cashers’ association, passed at the end of 1995, without anyone really noticing. “It really flew below the radar,” said Bob Lambert, who was a lobbyist for the state’s pawnbrokers, a group already in the small-denomination loan business. As Lambert remembered it, he was the only person to testify against the measure.
Around one year later Chris Browning spotted the classified ad Check ’n Go ran in the local paper for a branch manager of the new store they would be opening in town. Branch manager: She liked the sound of that title. The starting salary was lousy, only $21,000 a year, and the benefits mediocre (three vacation days that first year), but they also told her she could earn as much as $6,000 more a year in bonuses. She didn’t know what a payday loan might be when she first saw the ad but once it was explained to her it made immediate sense. Her husband had worked as a welder who more than once had been laid off. In time, Browning confessed, they would use a payday loan to help make ends meet.
“There was a need for something like this for working people around here,” Browning said. “The credit unions weren’t licensed to make small, short-term loans. The smaller finance companies were closing up and getting out of Dodge.”
Browning straightened her back proudly and peacocked a bit while talking about her early days with Check ’n Go, when she was something of a star inside the company. A typical store could take six or more months to break even but hers was profitable after just two. She told me about the calls from David Davis to tell her what a good job she was doing and to ask her for ideas. She helped develop some of the early training materials the company
