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I don't have much to say on this, but sometimes it's important just to bear witness:
In November 2002, when Melvin Bevels was short of money for groceries and rent, the elderly man visited a Small Loans store in Sylacauga, Ala., and borrowed money -- he thinks it was $200. Small Loans is part of a sprawling network of more than a hundred lenders in four states, including Georgia, Florida and Louisiana, owned by Money Tree Inc., a closely held Bainbridge, Ga., firm.Mr. Bevels, who can't read, says a clerk helped him fill out papers that instructed Social Security to send Mr. Bevels's $565 monthly benefits to an account at an out-of-state bank, which transferred the money back to Small Loans or its parent, usually within a day. As is often the case, Mr. Bevels's bank earned no interest and didn't come with either ATM cards or checks.Every month for nearly four years, Mr. Bevels, who is known around town as "Buckwheat" because of his thatch of yellow-white hair, rode his motorized mobility scooter to Small Loans to pick up his "allowance," which was sometimes as little as $180 a month, he says.In a written statement, Money Tree's general counsel, Natasha Wood, declined to comment on Mr. Bevels's case but said: "Anyone who sets up a direct deposit arrangement with Small Loans Inc. does so completely voluntarily."Mr. Bevels, who believes he's 80 but isn't sure, quickly lost control of his finances. When his utilities were shut off, a neighbor gave Mr. Bevels water in a plastic jug and ran an extension cord to Mr. Bevels's trailer a few hours a day to power his nebulizer, which delivers aerosol medication to people with chronic lung conditions. Mr. Bevels was facing eviction when his trailer burned down, leaving him homeless.A county social worker arranged for Mr. Bevels to move to public housing and got his Social Security benefits redirected to a local bank. When Small Loans sued Mr. Bevels for repayment in small-claims court in Talladega County, Ala., a legal-aid attorney headed to court. The judge threw out the case when the lender failed to appear with documentation for the loan."It just isn't fair, what they do to old people," says Mr. Bevels, crying quietly. "It isn't right."The problems Bevels encuntered were simple and structural: Namely, he needed money much more than the bank needed to give it to him, and he knew much less than the lenders he dealt with. His desperation and financial illiteracy were both used against him, and the result was a $200 loan that was still garnishing most of his Social Security check five years later -- repayment looks to have been in the thousands -- and was being run by a banking company which wouldn't produce the documentation that Bevels couldn't read in the first place. Yet somehow, our political system has been much more worried about individuals cheating the mega-profitable credit industry by declaring bankruptcy than about the financial industry's tendency to exploit the weakest among us.
