Submitted by New Jersey Bankruptcy Attorney, Lee M. Perlman.
READING, Ohio — The last time Brian Page had to file the paperwork to evict a tenant from a rental property he and his wife own, he noticed all the check-cashing services and pawn shops on his drive home from the courthouse. A clerk tipped him off to what was going on: Every day, lots of people leave court with checks they’ve received in legal settlements. They often stop to cash their checks right away, paying a big fee for the privilege, and then go shopping with the money.
By day, Mr. Page teaches personal finance and economics to high school students, and as the stores disappeared from his rearview mirror he had an idea. “I wanted my students to feel how dirty it is,” he said. “You can talk about these places and show them the math on the fees, but I wanted them to feel it.”
Some of them already know what it means to struggle. Mr. Page teaches at Reading High School, which is pretty representative of America, with students who have occasionally ended up in jail or had children of their own or reckon with relatives who have stolen their identities. Still, they’re at the beginning of their financial lives, and he’s constantly looking for ever more visceral ways to reinforce the importance of good savings habits, great credit scores and low fees.
“So I figured I’d get some kids, throw them in a bus and go take a walk down the wrong street,” he said. “I was just going to take them to these places and hope that I didn’t get punched in the face by one of the managers there.”
Mr. Page, 37, did not learn about personal finance in school. As a child, he had a near-death experience in a tornado that ultimately left his mother too injured to work. She had decent disability insurance, however, and his parents were frugal. His parents took the living room furniture from the destroyed house and kept right on using it until two years ago.
The landlord habit was one that Mr. Page picked up from his father, who bought and sold mobile homes and other rentals and eventually bought an apartment building. Today, the younger Mr. Page, his wife and their three children are doing well enough to offer a $500 bonus out of their own pockets to students opening a Roth individual retirement account.
None of the students have taken them up on it for the last two years, but 40 or so turned in their permission slips in time to make the field trip last Friday. They brought a work sheet with questions about loans and their terms. At the top, it said: “Today’s goal is to arm you with the resources and information to defend you against predatory lenders.” Out loud, he reminded them to be respectful of the employees at the places they were going to visit.
Stop 1 was at LoanMax, which allows people who own their cars free and clear to use them as collateral for loans. “Take charge of your life,” said business cards sitting on a counter. A half-dozen students entered the store with Mr. Page, who asked about interest rates. The person at the counter said that the annual interest rate would be 24.99 percent and that one missed payment could lead to repossession of the vehicle, a fact that shocked the rest of the students on the bus when Mr. Page debriefed them on the visit.
A different group of students spilled out at the next stop, CheckSmart, where they hoped to learn more about payday lending and tax refund anticipation loans. There, they met the coolest reception of the day. Three people were behind the counter, but one of them said that the manager was not in and that no one there had time to explain the loans because Fridays were very busy. Mr. Page relayed this to the full group on the bus, noting that the students had been the only people in the store. Much laughing and sarcastic applause ensued.
At CashAmerica, the store was teeming with people making loan payments. Others browsed the collection of tires, air-conditioners, jewelry and the signed Pete Rose jersey that borrowers had left behind as collateral when they did not or could not repay their pawn loans. Still, the staff seemed to enjoy the fact that a teacher would bring students on a field trip there.
Standing behind the counter, Tonya Webster addressed the assembled students. “Life happens,” she said. “It does. Try not to live beyond your means. If you do, we’re here to help.” She also made a pitch for the bargains behind the jewelry counter, wondering aloud why anyone would ever pay retail when they could just come there.
After 20 minutes or so, the students turned to leave. “So what are we going to protect?” she said to them as they walked out. “Your credit scores!” she shouted, answering her own question.
“I was taken aback by her honesty,” Mr. Page told the students who had stayed behind on the bus. “She said that this is where you go when you’re in trouble, and she worked there! Everything in there had been taken from somebody.”
At the last stop, a Rent-A-Center rent-to-own store, things quickly got personal. An employee greeted one student warmly, noting that her daughter was about to marry his father. Mr. Page was not completely surprised at the coincidence, given the size of the community. Did his students’ families also patronize these stores? Yes, it turned out. Another student mentioned this to him on the way out of CheckSmart.
And would any adult in one of the stores who knew the students take offense by his wrong-street depiction of these establishments? The future stepgrandmother seemed not to, and she began an explanation of how at $15 a week, a washing machine would improve the quality of life for a mother who would otherwise be hauling her children to the coin laundry and feeding the machines with quarters. That machine would cost $1,124.25 if the mother paid for it on a weekly basis but just $730.76 if she paid upfront.
The students seemed to get the message, without Mr. Page having to make it explicit. One of them, 16-year-old Casey Celender, looked at a 60-inch LCD television with a rent-to-own price of $3,603.97 and considered other entertainment options. “I can sit on my porch and watch the cars go by,” he said. The upfront price was $2,162.38.
The day ended back in the school library with a visit from representatives of the General Electric Credit Union. In the past, Mr. Page had invited community bankers in to address his students as well.
Representatives of bigger banks might not be as welcome, though. One of the first questions from a student for the credit union employees came from Jared McCarthy, who had received a letter from U.S. Bank the day after his 18th birthday informing him that he’d now have to pay a $4 fee on his low-balance savings account. The credit union has no such fees. “So I’ve been looking for some new options,” he said. Mr. Page offered a few points of extra credit on their overall grade to students who opened both checking and savings accounts. He was agnostic on the question of where they set them up.
By the time the group was breaking up, the day’s lessons seem to have sunk in for Ciara Meinking, 18. “It’s just crazy how expensive all of this is and how they con you into stuff, and you don’t ever get a lot of the money,” she said.
As you might imagine, this isn’t quite the lesson that the Ohio Consumer Lenders Association, which represents many establishments like the ones on the tour, wants students learning. “I think it’s a little troubling that a teacher is going out and criticizing these legitimate businesses,” said Patrick Crowley, the group’s spokesman. “I hope he tells them about other types of short-term credit, like credit card debt and overdraft fees.”
Indeed he does. I’ve put a link to many of the class’s lessons and readings in the online version of this column. Despite how it may appear, Mr. Page is not a fire-breathing acolyte of Ralph Nader or Elizabeth Warren. In fact, he’s never voted for a Democrat in a federal election.
“I’m a strong advocate for capitalism, and I’m O.K. with choice,” he said. “I just want to make sure that they know exactly what those choices are and that if they ever walk back in there, that they’re going to be able to do the math and figure it out.”
Originally posted here in the New York Times.