Can anyone explain why we should look up to him? I've never heard of this guy before today, but I'd venture to defend an honest loan agency. Simply, loans are

Can anyone explain why we should look up to him? I've never heard of this guy before today, but I'd venture to defend an honest loan agency. Simply, loans are only profitable for lenders if they get back more money than they lend out. As a lender there are two ways you can recover the money you lend -- you get your money back in the negotiated payments or you can accept a security (the lien on a car or house) and repossess/foreclose on it if the terms for repayment are not made. Because there's some chance that the security would be insufficient to cover the debt (house is trashed or loses value, or car is neglected/destroyed), the difference is made up in interest, calculated by the probability of failure (represented by credit score) and the financial exposure if failure occurs (this fed into the feedback cycle where banks were basically giving money away, assuming houses were always going to appreciate). Any remaining delta is operational expense (salary for the lady behind the counter, rent for the buildings) or profit for the lender (presumably where the "exploitation" is). Paycheck loans are not securitized, in that there's no asset the lender can recover if the paycheck draw doesn't clear -- this means it's down to interest. Paycheck loan shops (AFAIK) don't check your credit, and their very existence (withdraw repayment on payday) assumes that the customer has bad spending habits (otherwise the customer could get more favorable terms from credit cards) -- high probability of failure to pay * high exposure = high interest rate. But how high is too high? I honestly don't understand the modern notion of usury. It looks like any other business exchange to me: if you need the service and nobody will provide it for less, the prevailing rate is that high, even if it feels like a screw. If it truly is a screw there are generally other businesses who want to get in on it and capture some of the profits. To the extent that this guy was profitable, it was down to either a lack of competition (this can be a bit of a tautology, but he did have competitors, including the one that eventually bought his business), reduced cost structure (yes -- online only), or better actuarial discipline (perhaps marketing to people likely to pay -- unsure in this case). The article doesn't talk about how much money he made from the operation of the business itself, rather it was focused on the $70m proceeds from the sale of the business. They seem like two different sources of income to me: if the valuation was way off he exploited Cash America instead of his customers. In summary, I feel that it's not exploitative: while paycheck loan houses have high interest rates and often a poor clientele, they serve an underserved market (as evidenced by the popularity and profitability), and are often a loan of last resort for certain people. They don't operate any other businesses that eventually coerce you into using their loan services. They're certainly a better choice than the criminal "loan shark" element that some people suggest they replace.