Americans are terrible with money, says a new infographic that landed in our inbox. About 29 percent of us have less than $1,000 in savings; a staggering 42 percent of us live paycheck to paycheck. But that’s not what interested us about the infographic; what was more interesting is its origins: a Native American-owned loan company.
Here is the infographic in question.
Great Plains Lending, the bottom of the infographic informs us, was responsible for its creation. Great Plains is an online loan company that is owned and operated by the Otoe-Missouria Tribe, which has a reservation in Oklahoma and is therefore a sovereign nation. The Otoe-Missouria operate casinos, a cattle ranch, a propane company, and convenience stores. And as a sovereign nation its loan company is not regulated by Oklahoma’s state consumer lending laws (which don’t appear terribly rigid anyway), but is instead certified by the Otoe-Missouria Consumer Finance Services Regulatory Commission. Because it’s online, however, it can lend to anyone in the country — inside of or outside of Oklahoma, tribal lands, etc.
What’s impressive about Great Plains Lending is their products. Or rather, what’s impressive is how terrible these loans really are. To its credit however, Great Plains Lending makes it incredibly clear just how bad its products are. A $900 loan, for example, will be repaid in 24 bi-weekly payments of $127. Sound like a lot? That’s because it comes out to a staggering $3,048 — a 349.04% APR, according to Great Plains’ site. The lowest APR on offer is a $1,500 loan for just 199.44% annually: 30 bi-weekly installments of $129.12.
Great Plains claims, however, to offer much more competitive products than typical payday lenders. It says that it offers loans at substantially lower APRs than competitors. That’s true in one sense: according to the Consumers Union, the average payday loan has an APR of 485%. On the other hand, a typical payday loan is secured by a check that arrives two weeks from the date the loan is issued, so consumers pay a staggeringly high rate when it’s annualized, but they never actually pay four times the amount they borrowed. Loans from Great Plains, with their staggering APRs and snail’s-pace payback terms, manage to look friendlier than the average emergency loan, but are far more dangerous for the fact that you actually hold onto this loan for almost a year.
A story from last December on iWatch News helps shed light on the strange legal world that these Native American-owned online loan companies occupy. Apparently, some unscrupulous lenders enter into agreements with also-unscrupulous tribes who “take ownership” of the company in name only, so that it may benefit from the “sovereign immunity” that tribes are entitled to. This way, they can abuse their customers and face no legal or regulatory consequences.
This doesn’t seem to be the case with Great Plains Lending — we have no reason to believe the Otoe-Missouria don’t actually own and operate the outfit. But it does help shed light on why it might make a seemingly helpful infographic: it’s probably for search-engine optimization, or SEO. As a lender that would like to make guaranteed revenues off of maliciously designed financial products, Great Plains must be ranked as high as possible on Google search results in order to originate as many loans as it can, to whomever in whichever state in the union, regardless of local consumer-protection laws. The marketing firm that sent us the infographic has a page dedicated to its impressive results making infographics for clients. Infographics, should they generate enough links and mentions of Great Plains around the web, will boost rankings for certain search terms on Google, and therefore get their website in front of more desperate eyes.
As with all information online, it’s best to know where you’re getting your personal finance information from.