...pawnbroking operations, as evidenced by the popularity of reality shows such as “Pawn Stars” and “Hardcore Pawn.”2 Television viewers’ curiosity about an old credit institution may be due to the fact that 7% of all U.S. households have used pawn credit.3 Although pawnshops predate biblical times, researchers know surprisingly little about this ancient form of banking and its customers.4 We fill this gap by documenting detailed information on pawnshop loan repayment and default, and by discussing how pawnshop borrowers’ behavior is consistent with various behavioral economics phenomena. Pawnshop loans are small, short-term, collateralized loans typically used by low-income consumers. The borrower leaves a possession, or “pledge,” as collateral in exchange for a loan, typically of $75–$100.5 Interest rates vary by state and range from 2 Assistant Professor, Office of Economic and Manpower Analysis, United States Military Academy. susan.carter@usma.edu. The views expressed in this paper do not necessarily represent those of the United States Military Academy, the United States Army, or the Department of Defense. ** Associate Professor of Law, Vanderbilt University Law School. paige.skiba@vanderbilt.edu. We would like to thank Margaret Blair, Anna Skiba-Crafts and Kip Viscusi for valuable feedback. 1 JOHN P. CASKEY, FRINGE BANKING: CHECK CASHING OUTLETS, PAWNSHOPS, AND THE POOR 13 (1994). 2 Pawn Stars, THE HISTORY CHANNEL, http://www...
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...Sub-Prime Mortgage and Payday Industry Andrew Huppman Bloomsburg University Author Note This paper was prepared for Markets and Institutions, Finance 323, taught by Professor Geyfman Abstract Predatory lenders are growing at an alarming rate; in this paper I will provide an examination of predatory lending patterns and the effects on the markets and consumers. Predatory lending is defined as the practice in which a loan is made to a borrower in the hope or expectation that the borrower will default. (Predatory, N.D.) The market for short-term loans have only been around for the past twenty years, however, has expanded at such a rate that there are now more short-term lenders in America than there are Starbucks and McDonald’s. (Center, 2011) Borrowers of this financial service lack necessary information to choose financial products, do not see themselves as having any other financial options, and are enticed by the ease of approval. Predatory lenders are not concerned with the risk. A subprime loan can be approved with as little as proof of a pay stub and requires no credit checks. Most loans are short term which tricks consumers into believing their costs will be minimal. In reality, these short-term rates force borrowers to pay annual percentage rates (APR) exponentially larger than anticipated. In today’s market there is a wide variety of predatory lending practices. The main culprits are predatory mortgage lending practices and payday loans. Predatory Mortgage Lending ...
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...pawnbroking operations, as evidenced by the popularity of reality shows such as “Pawn Stars” and “Hardcore Pawn.”2 Television viewers’ curiosity about an old credit institution may be due to the fact that 7% of all U.S. households have used pawn credit.3 Although pawnshops predate biblical times, researchers know surprisingly little about this ancient form of banking and its customers.4 We fill this gap by documenting detailed information on pawnshop loan repayment and default, and by discussing how pawnshop borrowers’ behavior is consistent with various behavioral economics phenomena. Pawnshop loans are small, short-term, collateralized loans typically used by low-income consumers. The borrower leaves a possession, or “pledge,” as collateral in exchange for a loan, typically of $75–$100.5 Interest rates vary by state and range from 2 Assistant Professor, Office of Economic and Manpower Analysis, United States Military Academy. susan.carter@usma.edu. The views expressed in this paper do not necessarily represent those of the United States Military Academy, the United States Army, or the Department of Defense. ** Associate Professor of Law, Vanderbilt University Law School. paige.skiba@vanderbilt.edu. We would like to thank Margaret Blair, Anna Skiba-Crafts and Kip Viscusi for valuable feedback. 1 JOHN P. CASKEY, FRINGE BANKING: CHECK CASHING OUTLETS, PAWNSHOPS, AND THE POOR 13 (1994). 2 Pawn Stars, THE HISTORY CHANNEL, http://www...
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...Article Presentation Paper : Money Mutual Payday Loans HRM587 Managing Organizational Change Keller Graduate School Management, DeVry College of New York Professor Shashon Miles Introduction The main issue that necessitated the need for the article to be written was the lack of marketing ethics by Money Mutual. Money Mutual failed to provide proper information to its customers and went a step further to hide behind Montel Williams who was their celebrity endorser. They used the goodwill gathered by Williams over the years to convince the individuals that their payday loans were legitimate. It is important to note that Money Mutual were not the actual lenders, they just connected the lenders to customers who they captured from their lead capture pages. Payday loans can be beneficial to its consumers because it affords them access to emergency loans that they may not be able to obtain from the mainstream lending institutions. Unfortunately, the companies that offer payday loans exponentially overcharge their clients with total disregard to state laws. This is categorized as unethical practice and should be shunned by the government and other lending institutions. Selling Source does business as Money Mutual an online marketplace that matches interested consumers to potential lenders in the specialty consumer finance industry. Selling Source has a portfolio of five industry-leading companies which provides extensive, customizable solutions to develop and manage...
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...COMMENTARY ON CFPB REPORT: DATA POINT: CHECKING ACCOUNT OVERDRAFT G. Michael Flores, Bretton Woods, Inc. Todd J. Zywicki, George Mason University School of Law George Mason University Law and Economics Research Paper Series 14-45 This paper is available on the Social Science Research Network at http://ssrn.com/abstract=2499716 Commentary: CFPB Report Data Point: Checking Account Overdraft September 2014 G. Michael Flores and Todd J. Zywicki About the Authors G. Michael Flores is CEO of Bretton Woods, Inc. (www.bretton-woods.com) and is a researcher and business adviser who has studied financial services companies and consumer credit in general for over 30 years, with a particular focus on “alternative” credit programs for the last 10 years. Since 1995 he has been actively involved in advising banks seeking to establish their overdraft programs. He has written and published research papers on consumer credit in the United States and the United Kingdom, as well as papers on payments, including general-purpose reloadable and payroll prepaid cards. Based on these studies, he has testified before several House and Senate subcommittees and spoken to industry groups. He has also authored articles for industry publications. He is a faculty member with Pacific Coast Banking School at the University of Washington in Seattle. Todd J. Zywicki is George Mason University Foundation Professor of Law and a senior scholar with the Mercatus Center at George Mason...
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...Benefits Associated with Bad Credit Loans Bad credit loans are a blessing in disguise for those suffering from bad credit history. People unable to pay their bills or loans on time suffer from a bad credit score that affects negatively on their credit history. There are a number of reasons behind a bad credit history including financial crises, bankruptcy, inability to pay bills on time and many others. Recession is one of the major factors behind bad credit history of the people as they suffer from financial crises due to poor economic conditions and by loosing their jobs. Inflation is another solid reason that leads to poor credit scores. Bad credit loans help you enjoying the privilege of enjoying loans even if you suffer with poor credit history. Bad credit loans provide you financial assistance in a number of critical situations such as paying a sudden and unexpected medical bill, meeting the financial crunch at the end of the month, coping sudden personal financial needs when you run short of money. Bad credit loan is a perfect solution for all the above-mentioned problems as it let you get instant cash in order to fulfill your financial requirements. There are a number of lenders over the Internet and in the offline environment that offer ad credit loans to the people having no or poor credit history. The ultimate advantage of a bad credit loan is that you can instantly get the loan. You don’t need to wait for weeks to get your loan approved as you can get hot cash...
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...Economic Research Paper April 18, 2010 After two years after the financial crisis of 2008, the Congress is ready to step up and start implanting a new plan. The Senate Banking Chairman, Christopher Dodd, released the Restoring American Financial Stability Act of 2010 on March 15th 2010. This bill includes the revisions to the bill Dobb presented to the Senate in November of 2009. Some of the bill was improvements to The “Schumer Bill”, The Shareholder Bill of Rights, which was proposed by Senator Charles Schumer. Some things that The Shareholder Bill of Rights highlights is that the bill would put executive compensation into effect, shareholders will have the opportunity to reelect every single board member at the table, instilling independent directors to oversee each company's risk management practices are just some of the highlights. One of the differences is that the Dodd Bill leaves out things that should be left to state regulation rather than United States Regulation. The American Financial Stability Act of 2010 will create a new agency just for financial products and services, it will transform the derivatives markets that will make our economy come out of the crisis and more stable for the years to come. Some thought that the reason why Dodd released the bill when he did was to cause a debate with the Republicans in the Senate. Dodd, who is a Democrat, which caused many Republications, opposed the new bill. As of April 18, 2010, every single Republican...
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... Cubao, Q.C. Selected Pawnshop Businesses along Sumulong Highway, Marikina City: Factors of Success Submitted by: Leira Susana Arceo Escala Charmaine Santos Tesalona Mariel Navata Nieto John Michael Temporal Soria Ralf Louise Sauro Vico Submitted to: Dr. Carolina D. Ditan Table of Contents Title Page Acknowledgement List of Tables List of figures Chapter I Introduction Background of the study Theoretical Framework Research Paradigm Statement of the Problem Hypotheses of the Study Significance of the Study Scope and Delimitations Definition of Terms Chapter II Review of Related Literature Foreign Literature and Studies Local Literature and Studies Chapter III Research Methodology Research Design Sampling Design Research Instrument Data Gathering Procedure Statistical Treatment Chapter IV Presentation, Interpretation and Analysis of Data Chapter V Conclusion and Recommendations Summary Conclusion Recommendation Bibliography Appendix Appendix I. Letter to the respondents Appendix II-A. Questionnaire for customers Appendix II-B. Questionnaire for employee/staff Appendix III. Vicinity Map Acknowledgement We would like...
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...Ethics: Behavior, Sustainability and Social Responsibility 2 August 2013 Abstract Though there are business leaders and philosophers that object to the belief or need of exhausting time, money or resources for the welfare of its people, be it consumers or employees, data indicates that those who do recognize their noblesse oblige will prosper (BP, pg 149). Practicing ethical business operations has been a talked about subject since the eighteenth and nineteenth centuries. Whether it is sustainability or social responsibility, approaches to business ethics have yet to be standardized. At the peak of today’s ethical environmental dilemmas stands Monsanto, the organization that prides itself on the ability to create sustainable agriculture. There are also scandals with regard to scrupulous or fraudulent investors, such as Bernard Madoff, who prosper at the expense of trusting individuals. Lending institutions have also taken advantage of the financially ill-informed consumers who have lost their homes and in some cases their families and lives as a result of subprime lending practices (cite). Toyota, who was once known as one of the world’s fastest growing auto makers (cite) deliberately ignored the safety of its consumers in effort to continue maximizing its profits. Organizations lacking business morals must understand that responsibility does not rest on one source, but rather it should be a collaborative effort between the companies, governments, and individuals...
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...another for the past 3,000 years. They offer services similar to those of modern banking institutions including loans, consignments, and storage. A good pawn broker buys items for a reasonable price and sells them at a discount. The pawn industry is about making money, and that means repeat business and reasonable dealings. A good pawnshop will carry a variety of items including jewelry, tools, antiques, furniture, knives, guns, crossbows, camping gear, and everything and anything you could imagine being of value and sellable. Some pawn shops even buy and sell cars, motorcycles, and aircraft. In the Philippines Pawnshop Operation is guided/ covered by Presidential Decree No. 114 Sec. 1-2 as: This decree may be cited as the Pawnshop Regulation Act, which stipulated according to that: “ It is hereby declared the policy of the State to regulate the establishment of pawnshops and to place their operation on a sound and stable basis to derive the optimum advantages from them as an additional source of credit; to prevent and mitigate, as far as practicable, practices prejudicial to public interest; and to lay down the minimum requirements and standards under which they may be established and do business...” The word "pawn" comes from the Latin word "pignus," which means to pledge. When someone has an item of worth on which they would like to receive a monetary loan, they take that item to a broker who receives it as a pledge (aka collateral or pawn) in exchange for money. A pawn...
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...Important For Payday Lending Business Laquinta Denise Mason A Prospectus Presented to the Information Technology College Faculty Of Western Governors University In Partial Fulfillment of the Requirements for the Degree Master of Science in Degree Area 3/14/2014 Abstract The purpose of this project was to ensure the client is compliant with the requirements specified by the Grahm-Leach-Bliley Act. Information is what drives business today and if the information is not available or reliable then the business cannot function. Most customer’s information, financial records, medical records, and sales records are stored on computers today. Clients and the government expect business to maintain the availability, integrity and confidentiality of their information. The project was created to address the importance of Information Security Management and compliance for businesses in the financial sector. ABC Loans are a small independently owned payday loan company. The client was concerned about the recent penetration of local business networks and wanted me to perform an assessment on his network and determine the vulnerable areas of his networks and the recommendations for making it more secure and GLBA compliant; now that the assessment is completed the client is aware of the vulnerabilities and the areas where they are not meeting GLBA requirements. My capstone will focus on the steps that will assure compliance for (ABC Loans). Payday loan companies...
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...Netherlands Abstract Purpose – The purpose of this paper is to show how some of the assumptions about the current financial crisis are wrong because they misunderstand what takes place in the mortgage market. Design/methodology/approach – The paper discusses four wrong assumptions: one related to regulation, one to leveraging, one to subprime lending and one to predatory lending. It briefly discusses some policy implications. Findings – The role of the state in the mortgage market is more complex than suggested by those who blame the state for not doing anything. The concept of leveraging can explain, at least in part, why the losses in financial markets are bigger than the losses in the housing market. Many subprime loans were sold to prime borrowers. Subprime lending was not designed to increase homeownership rates, but to fuel profits by exploiting vulnerable borrowers. Practical implications – It is too easy to argue that everyone made mistakes; most borrowers cannot be blamed for being sold risky, overpriced loans. A rescue plan is needed for defaulting borrowers and those already in foreclosure. Originality/value – The paper does not present new research, but brings together research that demonstrates that the roots of the crisis in the mortgage market are in many ways different from what is suggested by professionals and journalists alike. Keywords Recession, Credit, Mortgage default, Loans, Regulation, United States of America Paper type Viewpoint 94 critical perspectives...
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...BACKGROUND AND PROBLEM IDENTIFICATION Table 1. Grupo Bimbo History |2 |Bimbo was founded on 2 December 1945 with five shareholders. They are all Servitje’s family member. Bimbo | |December 1945 |started with only one brand, 38 workers, and 10 trucks to deliver the bread made in one plant in Mexico City. | | |The first product were white boxed bread and toasted white bread and incorporated more products into its product| | |line for the next few years. | |1963 |Don Lorenzo Servitje took on the role of CEO of Grupo Bimbo and his brother, Roberto Servitje, became CEO of | | |Bimbo breads division | |1970’s |imbo opened the largest bread factory in Mexico and Latin Amerika | |1979 |Lorenzo Servitje handed over Grupo Bimbo’s presidency to his brother Roberto and he assumed the chaimanship of | | |the board. | |1980’s |Bimbo started to distribute products in Houston and Los Angeles. | | ...
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...Why a Harvard Professor Has Mixed Feelings When Students Take Jobs in Finance This is a bittersweet time on campus. Seniors are beginning to find jobs, and while their enthusiasm is infectious, some of their choices give me pause. Many of the best students are not going to research cancer, teach and inspire the next generation, or embark on careers in public service. Instead, large numbers are becoming traders, brokers and bankers. At Harvard in 2014, nearly one in five students who took a job went to finance. For economics majors, the number was closer to one in two. I can’t help wondering: Is this the best use of talent? Of course, these are intensely personal choices as young people chase their aspirations and dreams. But if a favorite student of mine comes up to me and says, “I just got an offer at this investment bank and I’m going to take it,” I want to know how should I feel about it. I will be happy for her individually, but still I wonder: Is this a good decision for society as a whole? As an economist, I look at it this way: Every profession produces both private returns — the fruits of labor that a person enjoys — and social returns — those that society enjoys. If I set up a shop on Etsy selling photographs, my private returns may be defined as the revenue I generate. The social returns are the pleasure that my photographs provide to my customers. A scene from “It’s a Wonderful Life” that presents two types of bankers. Mr. Potter, seated, played by Lionel...
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...CHAPTER 1 INTRODUCTION Brief Background of the Study The Philippines remains as the world leading supplier of traditional coconut products. The Industry is also finding new products and uses for the “Tree of Life”: Coco Peat, geotextiles, activated carbon and virgin coconut oil. The coconut industry is a dominant sector of Philippine agriculture composes of 12 Million Hectare of farm lands, 3.25 Million is devoted to coconut and 68 out of 79 provinces are coconut areas. One of the provinces that have an abundant supply of coconut is Tagaytay. Coconut industry gives an opportunity for the locals to create and develop a lot of products that is made from coconut. The coconut is known for its great versatility as seen the many domestic, commercial, and industrial uses of its different parts. Coconuts are part of the daily diet of many people, which lead to the reinvention of an ordinary Cream Pie into Coconut Cream Pie. The original ingredients of Coconut Cream Pie are package refrigerated pie crusts sugar, cornstarch, egg yolks, butter, sweetened flaked coconut, vanilla extract, and whipping cream. Marisol Amparo Habelito, an entrepreneur, comes up with the idea on how to make the procedures of the Coconut Cream pie become easier and affordable. Instead of using expensive ingredients, Marisol used crushed biscuits, filling of sweetened strips of coconut meat and heavy cream on top as alternative ingredients. The Coconut Cream Pie by Marisol Amparo Habelito was initially sold...
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