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But when I received an email telling me that Montel is now doing commercials for Money Mutual, a company that offers short-term loans with no credit check, I found that to be quite interesting.
No, Montel is not a crook. And neither are Magic Johnson and Russell Simmons, two other people who have loaned their names to companies (Rent-a-Center and The Rush Card) that want to give us access to capital. Instead, they are pure, hardcore capitalists: individuals who are willing to endorse the idea of charging you a very high price to give you something you very desperately need. Many people in America right now are cash poor: they don't have bank accounts, or their financial literacy is low and they have trouble making it from paycheck to paycheck. Then Russell, Magic and Montel come along touting products that help people to solve their problems, the same way that a Good Samaritan offers a thirsty man a drink.
The challenge, however, is that one has to wonder if it is right to offer the thirsty man a drink for $50 dollars? Should we take advantage of the fact that he needs water in order to live or does that make us exploitative? All the while, even if we charge the man $50 dollars for his drink, we can still argue that we are helping him out. That is the dilemma of payday loan companies and those who endorse them: they charge incredibly high interest rates to people who really need the money and may not necessarily be able to understand the fine print.
Magic Johnson, Montel Williams and Russell Simmons can sell these products mainly because they are brown skinned, easily-recognized figures in urban America. Let's be clear: they are selling these products to people who are often poor and Latino or black. Increasingly members of all communities are in need of such expensive loan products. Should we be offended by their actions and activities? It depends on where you stand.
Personally, I'd like to see another brown-skinned person get involved: Barack Obama. President Obama, in the midst of his quest for stronger consumer protection laws, should create competition for companies that are accused of imposing usurious interest rates on the poor in exchange for helping them receive basic banking and access to capital. He should impose stronger laws to keep companies from earning a profit that exceeds that which should be earned in a competitive market. He should support programs to increase financial literacy within urban communities and nation-wide, so that consumers know they have a choice.
It's OK for these guys to go out and make their money, but unregulated capitalism in poor communities is almost never a good thing. Perhaps their collective conscience will kick in and get them to reconsider, but I seriously doubt that will happen. That's why President Obama needs to step in.
Dr. Boyce Watkins is the founder of the Your Black World Coalition. To have Dr. Boyce commentary delivered to your email, please click here. 
Comments: (201)
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By: paul on 2/08/2010 5:43PM
I saw that ad with MW pedaling payday loans and thought the same thing. How can he endorse something that is so stereotypically stupid? He should be ashamed of himself for being such a sellout.
On the other hand, no one is putting a gun to the heads of these financial illiterates that use these services. I walked into a Rent-a-center to rent a tv for a month long job that had myself and a couple others in a rental house. It was going to cost more than the TV was worth just to rent it for a month. I just laughed at the guy in disbelief and walked across the parking lot to buy one at walmart. No-brainer.
Anyone who uses a payday loan for anything other than a life/death emergency is beyond help. You can't legislate stupidity, and when you do you end up with Big Brother squeezing the freedom and liberties that we fought so hard for.
Payday loans are a luxury item. As such it would make sense to put a special tax on them to discourage their use. This is America, and if stupid people want to buy a $50 drink, why is it the government's concern? Should there be a mandated margin set on designer clothes to keep people from getting ripped off? No. Their value is in the status and luxury, not in their usefulness or practicality. It's the same with payday loans. People that need to have their money before they've earned it should have to pay a premium for the luxury.
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By: Hannah on 2/11/2010 9:06PM
You know, I hate discrimination. But the thing is, in my experience I just don't see it any more. I see a lot of different corporate people in my job...not one of the companies I work with seems discriminatory in any way, shape or fashion. All of the people I work with have found a way to get an education...some their parents paid for, others on scholorships for academics or athletics. It's hard work, but I've seen every race, creed, and religion be successful because those people had something in common...
They have a desire to rise above their cirumstances and make a better life for themselves and their families.
But young people can't do those things if they start having babies when they are still babies, or doing drugs, or joining gangs. THAT is the cycle of poverty that must be broken and THAT doesn't have a thing to do with race or ethnicity does it? White, Black, Hispanic, Indian...all the same when it comes to this type of poverty.
If you don't have an education you can still strive to get one. It doesn't matter if you graduate from high school when you are 18 or 20. It doesn't matter if you graduate from technical school or college when you are 25 or 30. Just keep chipping away at it and you will so proud of yourself when it's done. Pride is good here...you can build a life on that kind of pride and knowledge.
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By: Jeff on 2/11/2010 9:37PM
Fact is, the people borrowing money at that rate probably have no intention of paying it back. "Celebrities" hawking these services are total hypocrites. On one hand they say they're for their community, yet for a buck they'll push ripoffs like this. Pretty pathetic. Then again, what else can we expect from these people?
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By: Renate Paquette on 2/11/2010 10:51PM
Do you recall the last time you were out of a job, being a single divorced mother with 3 children? The landlord threatening you to put you on the street with your children, doctors refusing to treat the kids, and your car having been repoed? Only an ingnorant man like you can expell so much garbage out of one spout. Montel should be hung upside down by his toes. To exploid those in desperate need for help is dispicable.
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By: Elizabeth on 2/11/2010 11:29PM
This is not a luxury. Please humble yourself. The money is always used for emergencies. By placing an additonal tax you are again, Ms. REPUBLICAN, taking from the POOR.
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By: Bobby on 2/12/2010 12:19AM
He is a skank, always was, always will be. So is Silvia "skank ass" Brown, wonder if she could see that she was gonna be so freaking ugly? False prophets just like Oprah, James "murder me in a steaming tent" Ray formerly of The Secret, Joel Osteen, and numerous others. Why almost as many false prophets as earthquakes. The sky is falling!
Ha ha ha.
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By: Michael Karste on 2/15/2010 2:06AM
Fraud has always been illegal and is defined as "deceit or trickery, perpretated for profit or to gain some unfair or dishonest advantage." I believe it would be an easy argument to say that these companies engage in fraudelent business tactics, for the simple reason that their clients, ALWAYS (not predominantly, as I hear people say in these comments) are poor, and are, by nature of their economic status, less educated than people of any means. State usury laws used to protect us from exorbitant rates, but corporate lobbying has taken away those safeguards over the years. I'm sure that what these companies do is perfectly legal, but exploiting those who have the least is immoral at it's base and should be ilegal. We have a large and growing population that is incapable, for a variety of reasons, of "pulling themselves up by their bootstraps." We need to help those with less resources, not punish them. Please be a part of the solution.
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By: Matt on 2/12/2010 3:01AM
We don't need a highly regulated capitalistic market-that's socialism where the govt regulates everything and makes all the decisions. What people who are running these types of companies need to do is to only charge a small profit margin so that MORE people can afford to do business with them that way the companies make A LOT of money. If a company were to only charge a small fee, more people could afford to pay for the product or service the company is offering therefore making the company MONEY! It's just amazing how Montel Williams supports Obama and his socialist policies (I'm not kidding!) about more govt regulations, and MW even goes so far as to help these sleezy companies prey on blacks and browns in lower socio-economic classes to where they can't climb up the ladder and get into a better life for themselves and their families.
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By: georgetta underwood on 2/12/2010 4:30AM
I can agree with what you're saying, however, there are alot of illiterate people out there that have no idea of what they'll ending up paying. These businesses are set up just to take advantage of people like that. There should be more truth in lending laws to make people aware of what's going on. As far as big brother, they can't take on the world. As you say, we have to be accountable for our own stupidity and actions.
Also, for those who don't want 'more government'; it's strange to me that these same people will be the ones that hollar for gov't help when they have a real emergency. Heard one person say after people lost their homes at the coast during a hurricane that the government should have to replace every one of the homes. What a joke!! This same person is against the government raising taxes, etc., etc., but is in turn saying "When I have a problen the government should help me". Makes me sick!! Talks out of both side of their mouth!
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By: dxxy4u on 2/12/2010 6:00AM
Please people, stop acting like these PD loan places have people out on the streets dragging people in to make a loan. Florida once closed these kind of loan places. Now they have reopened. It's on the wall how much interest you pay, from 400% upward. But for two weeks, who cares? Guess who got these PD, and Car Title loan places back? The very ones whom you say are being exploited. They cried, "closing these places are HURTING the poor". Montel should be buying a franchise into this business. That's the reason why whites are waaaaaaay ahead of blacks. They are more business minded than we blacks are. Where there is money to be made, they are there. Right now, Montel or any black that has the capital, should be trying to get a franchise into that company, and make money hand over fist. Who are making the money in our neighborhoods? Koreans, Middle Easterners, and Whites. My Pastor was just preachers that this week. Where have all the Black entrepreneurs gone? As for Pay Day loans. When I was working, making money hand over fist, I would ride by those places and turn my nose up at them and the people that used them. Not being a good "steward" of my money, I find myself now using what I once laughed at. Although the interest is sky high, but standing between you and the loan is your lights not being turned off, this place is a God send. People, get a 401k or some retirement investment vehicle, and start investing. Years later you won't be like be. Those that are doing all this outcrying, do you have an investment portfolio? If not, I'll see you in one tomorrow. Don't burn the bridge that you WILL be crossing.
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