Is the criticism hurled at CEO of Rush Communications and Hip-Hop impresario, Russell Simmons justified?
From what he told BlackVoices in a recent interview, I see a Black man striving to give back to the community in such a manner that quite frankly, just isn't afforded to millions struggling financially. Simmons receives praise on a frequent basis for launching careers of rapstars as Run DMC, Kurtis Blow, DMX and the like, then-unknown comic greats such as Bernie Mac, Martin Lawrence, Dave Chappelle and many more. Also well known for his Hip-Hop Summit Action Network whose mission in part is to "serve as a catalyst for education advocacy and other societal concerns fundamental to the empowerment of youth." Why would he switch gears and look to 'fleece the flock' now? In response to recent criticism of his pre-paid RushCard, here's what the Hip-Hop mogul had to say:
Although a recent NY Times article was not judgmental about the RushCard, I'm disappointed that they did not do any research when quoting critics who say the RushCard pushes people into debt. The RushCard is a prepaid card, NOT a credit card. It gives people the convenience of a credit card without the debt. Financial literacy month is when people should know the truth about options to manage their money, not when misinformation should be spread to keep the underserved communities suppressed.
I have watched with pride the way RushCard has changed the lives of hundreds of thousands of people giving them respect and dignity. It gives underserved communities the tools to get their money right.
The RushCard helps struggling Americans who find themselves without access to bank accounts or credit. They have to tackle difficult and expensive obstacles every day when they need to pay their bills. When they go to a check cashing place they are forced to pay a huge fee just to get their money and pay fees. Typically, 10% of their paycheck goes to these fees and they spend 8 to 10 hours a week to go pay bills in person. They cannot pay bills without standing in line, and it's difficult for them to rent a car or shop online. This separates them from part of the American Dream that other Americans are free to enjoy.
Some people pay a lot to have a bank account. The average US household pays over $340 a year in bank insufficient fund fees. In fact, most of these are paid by members of underserved communities totaling over $1,300 per year per household. I have read that we are somehow trying to take advantage of people by charging high fees. It¹s a very competitive space and even Walmart, the largest retailer in the world, has followed us with their own prepaid card.
We¹ve built many innovative tools to help people save money. Over half of the RushCard members who use these tools say they save more than $300 a year. 30% say they¹re saving $600/year. We¹re constantly adding new features to help people.
I needed to do something to help the underserved. It had to be an entrepreneurial venture to make it grow fast enough. In five years we have over 1.5 million members and the biggest source of new members is from current members talking about the card. The people who need the card and use it really understand its value. Our biggest advertisers are our members themselves, spreading its value by word of mouth to their friends and family.
In short, I have no interest in building companies that don't have empowerment components for communities in need. The focus of all my businesses will always be to serve. Scripture says, "do not forget the poor" so I will always make it my job to help relieve the suffering of others whenever possible. I am thrilled to see the RushCard is doing just that.
I invite critics to compete with RushCard in this space. This will help us all find better solutions for underserved communities.