Moneytree

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Moneytree, Inc.
TypePrivate
IndustryFinancial services
FoundedOctober 31, 1983 (1983-10-31)
HeadquartersTukwila, Washington, United States
Number of locations
121 stores
Area served
United States
Key people
Dennis Bassford (CEO)
ServicesFinancing
Number of employees
980 (2013)
Websitewww.moneytreeinc.com
Footnotes / references
[1][2]
A Moneytree store in Everett, Washington

Moneytree, Inc. is a retail financial services provider headquartered in Tukwila, Washington, with branches in Washington, California, Colorado, Idaho, Nevada, and British Columbia. Moneytree offers payday loans, installment loans, prepaid debit cards, money orders, bill payment, Western Union transfers, auto equity and title loans. In 2013, Moneytree won "Best Place to Work in Colorado" in the small business category.[3]

Origins[]

In the early days, Moneytree used a gorilla suit in their advertisements.

Moneytree first opened on October 31, 1983 in Renton, Washington as a check cashing store. Over the years, the business expanded its product lines to what it offers today. Dennis Bassford, an Idaho native and Boise State University alum, has been the CEO and owner since the inception, along with his brother David Bassford and his wife, Sara Bassford.

Regulation and influence[]

As a retail financial provider, Moneytree is subject to laws as defined by the Consumer Financial Protection Bureau (CFPB) as well as applicable state and local laws. While Moneytree has not done much lobbying at the national level outside of donating to presidential campaigns, they have made several efforts to influence laws at the state level by lobbying legislatures in Nevada, Colorado, and their home state of Washington.

Washington RCW 31.45[]

In 2009, Washington passed RCW 31.45, which enacted stringent reforms on payday lending in the state, including the stipulation that a short-term loan "may not exceed $700 or thirty percent of the gross monthly income of the borrower, whichever is lower".[4] Before the passing of RCW 31.45, the payday loan industry in Washington was worth $1.3 billion per year operating out of 603 locations across Washington state. By 2014, those numbers had dropped to 173 locations generating $331 million.[5][6] In that same time, Moneytree and its executives pledged more than $200,000 in political contributions to state and national officials in the 2010 election cycle, with over half coming directly from CEO and Owner Dennis Bassford, Vice President David Bassford, and his wife Sara Bassford.[7][8]

In 2013, Moneytree hired Sound View Strategies, a well-connected public-affairs and lobbying firm, to help create and pass SB-5312, a bill that proposed raising the maximum amount a borrower can take out at one time from $700 to $1,500 with an interest rate up to 36 percent.[9][10] The bill would allow lenders to charge a $225 "origination fee" plus a monthly 7.5 percent maintenance fee on the loan.[9][10] Critics pointed out that these fees "could push the effective annual rate above 200 percent, according to a calculation by the state Department of Financial Institutions".[11]

According to documents sourced by the Seattle Times, Sound View Strategies was retained for an $8,000-per-month “lobbyist's fee" with a $15,000 “wrapping up fee” if the legislation was approved by March 5th of that year.[12] The bill made it through the Senate, but was unable to make it through the House before expiring at the April 19th deadline.[13]

Moneytree again tried to change the laws in Washington in 2015. This time, a bill sponsored by Rep. Larry Springer and Sen. Marko Liias -- both of whom had previously received donations from Moneytree[5] -- proposed creating a “small consumer installment loan” system that would allow lenders to offer 6-month to 12-month loans with effective interest rates up to 213 percent.[5] The bill, known as HB-1922, stalled in committee and never made it into law.[14][15]

Oregon Chapter 725A[]

In 2007, Oregon made Chapter 725 — Consumer Finance into law. These changes capped interest rates at 36% as well as placed other restrictions on businesses like Moneytree that operated within the state.[16] As a result, Moneytree withdrew from the Oregon market, and as of 2020, there are only seven licensed payday lenders in Oregon.[17]

Colorado Proposition 111[]

In 2018, Colorado voters passed Proposition 111 by a margin of 77% to 22%.[18] It stipulated that all loans must be repayable over an extended period of time (longer than two weeks) and capped their interest rates, effectively eliminating payday loans. As a result, Moneytree began offering installment loans which can be paid back over six months.

Nevada SB 201[]

A 2018 audit of Nevada's Financial Institutions Division (FID) found nearly one in three high-interest lenders in the state of Nevada failed compliance reviews during the previous five years;[19] it's unclear how many of these faults applied to Moneytree. Sen. Yvanna Cancela claimed that a loan tracking database would have “significant value to the Division, its licensees, and Legislators.”

On February 18, 2019, the Nevada state legislature introduced SB 201, a bill that codified provisions of the federal Military Lending Act and required the Commissioner of Financial Institutions to "develop, implement, and maintain a database storing certain information relating to deferred deposit loans, title loans, and high-interest loans made to customers in [Nevada]."[20] SB 201 would require lenders to record not just loan details, but also "any grace periods, extensions, renewals, refinances, repayment plans, collection notices, and declined loans".[21]

Lobbyists for retail financial providers, including Moneytree, claimed that the proposed law was "unfairly targeted" and that the measure could lead to more “underground non-regulated short-term loans". Despite this, the Nevada State Senate voted to approve the bill on April 19, 2019. After a delay due to the COVID-19 pandemic,[22] the database was officially created in December 2020.[21]

Katsam LLC[]

Moneytree and its executives have also used intermediary companies such as Katsam LLC (misspelled as Katsum LLC in the filing) to donate extra money to political campaigns, a practice made possible in part due to the passing of the Citizens United ruling. Officially, Katsam LLC operates in the repair services industry within the miscellaneous repair services sector.[23] But according to the Los Angeles Times, Katsam LLC "lists no employer or occupation on the form submitted to the Federal Elections Commission",[24] is registered to Dennis and David Bassford in the state of Washington, and lists their main address on their FEC filings as the Moneytree corporate office in Tukwila.[24]

Through this company, the Bassfords have made extra donations to pro-lending political candidates, most notably donating $35,000 to Restore Our Future, a super PAC which supported Mitt Romney's efforts to repeal the Dodd-Frank Act during the 2012 US Election cycle.[25]

Controversy[]

A poster from 2016 showing loan Moneytree products in Idaho.

Criticism of the company and their practices are commonly based the fact that several of Moneytree's products fit the description of a "debt trap". A debt trap is a loan that is difficult or impossible to repay due to high interest payments; Moneytree charges 430% APR on payday loans in Nevada,[26] 460% in California, and 482% in Idaho.[27] The second charactistic of a debt trap is that they're commonly targeted mainly at low-income borrowers.[28][29] In 2005, the Seattle Post-Intelligencer and the University of Washington completed a demographic analysis which concluded payday-loan stores (including those run by Moneytree) were predominantly found in largely-black and low-income neighborhoods.[30]

Bassford has stated that Moneytree's products are not predatory in nature, but instead that "for the most part, they are [a] responsible business" and "there are people who misuse all kinds of products in society."[31] The company also claims to promote financial literacy for customers, with Bassford saying he sponsors a group of students at the University of Washington who "deliver financial literacy in schools" though he could not recall any specific programs. Asked whether he works to improve financial education among potential clients, he said, "We're not conducting programs with our customers."[32]

Fines and non-compliance[]

In 2010, Moneytree was accused of "skirting" consumer laws which prohibit borrowers from taking out more than eight payday loans in a 12-month period. When pressed by the Kitsap Sun, Moneytree CEO Dennis Bassford responded by saying that Moneytree and Washington State Department of Financial Institutions “just interpret[ed] the statute differently.”[33]

In March 2016, Moneytree fell victim to a CEO Email scam. A scammer impersonating Bassford send an email to the payroll department requesting names, home addresses, social security numbers, birthdates and W2 information of employees.[34] In a letter to employees detailing the breach, Bassford said the following:

"Unfortunately, this request was not recognized as a scam, and the information about current and former Team Members who worked in the US at Moneytree in 2015 or were hired in early 2016 was disclosed. The good news is that our servers and security systems were not breached, and our millions of customer records were not affected. The bad news is that our Team Members’ information has been compromised."[34]

In 2016, the Consumer Financial Protection Bureau fined Moneytree $505,000 for deceptive advertising and collections practices.[35] The fine consisted of a consumer refund of $255,000, and a civil penalty of $250,000.[36] The CFBP alleged that Moneytree broke the law twice: in 2014 and 2015, Moneytree sent out mailers that threatened to repossess the cars and trucks of 490 customers who were delinquent on loans. The next year, in March 2015, Moneytree left a percent sign off of an advertisement for their check cashing services in what the CFBP called "misleading," though Moneytree insisted it was an isolated incident and purely accidental.[37]

Impact of COVID-19[]

In 2020, during the COVID-19 pandemic, Dennis Bassford stated in an interview that the company was facing dire straits. He told KUOW, Seattle's public radio affiliate, that business had decreased by 75% saying "We laid off 160 people this week. I laid off 35 people at the end of March. I'm closing over 20 stores."[38]

See also[]

References[]

  1. ^ "BBB Business Review: Contact Information". BBB. Retrieved 8 February 2012.
  2. ^ Myke, Folger (July 2009). "Treating Them Right". Seattle Business Magazine. Retrieved 8 February 2012.
  3. ^ "Best Companies to Work for 2013"
  4. ^ "Making small loans—Endorsement required—Due date—Termination date—Maximum amount—Installment plans—Interest—Fees—Postdated check or draft as security". Washington State Legislature.{{cite web}}: CS1 maint: url-status (link)
  5. ^ a b c Mar 5, Jimmy Lovaas •; Pm, 2015 at 3:44. "The Payday Loan Rule Changes That Only Payday Lenders Want". The Stranger. Retrieved 2021-09-04.
  6. ^ "Payday lender Moneytree hit with $500,000 in fines and refunds". The Seattle Times. 2016-12-21. Retrieved 2021-09-04.
  7. ^ "Campaign Finance - Money, Political Finance, Campaign Contributions". www.campaignmoney.com. Retrieved 2021-09-04.
  8. ^ Corbit, Fred (2013-01-08). "Op-ed: Payday-lending law works in Washington state". The Seattle Times. Retrieved 2021-09-04.
  9. ^ a b "Washington SB 5312 - 2013-14". Washington State Legislature.{{cite web}}: CS1 maint: url-status (link)
  10. ^ a b www.bizjournals.com https://www.bizjournals.com/seattle/blog/2013/02/moneytree-asks-for-law-change-to-allow.html?page=all. Retrieved 2021-09-04. {{cite web}}: Missing or empty |title= (help)
  11. ^ "Payday Lenders Evading Rules Pivot to Installment Loans". Bloomberg.com. 2013-05-29. Retrieved 2021-10-27.
  12. ^ "Moneytree leads push to loosen state's payday-lending law". The Seattle Times. 2015-03-03. Retrieved 2021-09-04.
  13. ^ www.bizjournals.com https://www.bizjournals.com/seattle/blog/2013/04/legislative-bill-favoring-payday.html. Retrieved 2021-09-04. {{cite web}}: Missing or empty |title= (help)
  14. ^ "Washington State Legislature- HB 1922". Washington State Legislature.{{cite web}}: CS1 maint: url-status (link)
  15. ^ "Washington State Legislature - SB 5899". Washington State Legislature.{{cite web}}: CS1 maint: url-status (link)
  16. ^ www.oregonlegislature.gov https://www.oregonlegislature.gov/bills_laws/ors/ors725.html. Retrieved 2021-09-04. {{cite web}}: Missing or empty |title= (help)
  17. ^ "Division of Financial Regulation : Licensed payday and title lenders : Payday loans : State of Oregon". dfr.oregon.gov. Retrieved 2021-09-04.
  18. ^ "Colorado Proposition 111, Limits on Payday Loan Charges Initiative (2018)". Ballotpedia. Retrieved 2021-09-04.
  19. ^ "Payday lending opponents, industry clash in charged hearing over loan database". The Nevada Independent. 2019-03-21. Retrieved 2021-09-04.
  20. ^ "SB201 Overview". www.leg.state.nv.us. Retrieved 2021-09-04.
  21. ^ a b "Lawmakers grant final approval to payday lending database plans, over industry concerns". The Nevada Independent. 2020-12-28. Retrieved 2021-09-04.
  22. ^ "Technical issues cause cancellation of payday lending database meeting". The Nevada Independent. 2020-04-29. Retrieved 2021-09-04.
  23. ^ "Katsam, LLC". www.buzzfile.com. Retrieved 2021-10-27.
  24. ^ a b "Payday lenders support pro-Romney 'super PAC' Restore Our Future". Los Angeles Times. 2012-03-20. Retrieved 2021-10-27.
  25. ^ www.bizjournals.com https://www.bizjournals.com/seattle/blog/2012/05/romney-pac-a-seattle-law-firm-50000.html. Retrieved 2021-10-27. {{cite web}}: Missing or empty |title= (help)
  26. ^ "Moneytree® | Nevada Payday Loans, Cash Advances, Money Loans & Online Loans". www.moneytreeinc.com. Retrieved 2021-10-27.
  27. ^ "Moneytree® | Idaho Online Payday Loans, Cash Advances, and Online Money Loans". www.moneytreeinc.com. Retrieved 2021-10-27.
  28. ^ ogosenseadmin (2018-04-05). "Stop the Debt Trap: Preserve the Consumer Financial Protection Bureau's Payday Loan Rule". National Consumer Law Center. Retrieved 2020-07-18.
  29. ^ "Moneytree asks Washington state legislators for new payday-lending product". www.bizjournals.com. Retrieved 2020-07-22.{{cite web}}: CS1 maint: url-status (link)
  30. ^ Valdez, Angela. "The Color of Money". The Stranger. Retrieved 2021-10-27.
  31. ^ "Meet Payday Lender Dennis "Shell Game" Bassford of MoneyTree, Inc". Payday Lending Facts. 2016-06-21. Retrieved 2020-07-18.
  32. ^ Valdez, Angela. "The Color of Money". The Stranger. Retrieved 2020-07-18.
  33. ^ "State accuses Moneytree of skirting new law". The Columbian. Retrieved 2020-07-18.
  34. ^ a b "Thieves Phish Moneytree Employee Tax Data — Krebs on Security". Retrieved 2020-07-18.
  35. ^ Hayashi, Yuka (2016-12-16). "CFPB Fines Payday Lender Moneytree for Deceptive Advertising, Collection Practices". Wall Street Journal. ISSN 0099-9660. Retrieved 2020-05-04.
  36. ^ "CFPB Takes Action Against Moneytree for Deceptive Advertising and Collection Practices". Consumer Financial Protection Bureau. Retrieved 2020-05-04.
  37. ^ "Payday lender Moneytree hit with $500,000 in fines and refunds". The Seattle Times. 2016-12-21. Retrieved 2020-07-18.
  38. ^ "Payday lending falls off a cliff as pandemic continues in Washington state". www.kuow.org. 2020-06-01. Retrieved 2020-07-18.

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