Gary Rivlin's Broke, USA tells the story of the birth, growth, and

flourishing of fringe lending, the business of extending credit to the

working poor. Beginning in the 1980s, and accelerating in the 1990s and

2000s, fringe lenders sprung up in gas stations and pawnshops across

America, and by loaning small sums at high interest rates, ultimately

created a multi-billion dollar consort to CitiBank, Bank of America, and

other major financial institutions. While payday outlets, rent-to-own shops,

and check cashers are now fixtures of the urban landscape, this was not

always so. Through interviews with the entrepreneurs behind one of the

fastest growing industries of the last twenty years, Rivlin gives readers a

terrifying glimpse into the origins of what Rivlin dubs "Poverty, Inc."

Rivlin is particularly fascinated by the de facto villain of the book, Allan

Jones, the father of the payday loan industry. He also introduces us to the

people who made fringe lending a success, namely, the working poor,

many of whom become ensnared in loans whose terms are outrageously

unfavorable. Their stories read like parables of financial mismanagement.

Lillie Mae Starr, a retired factory worker, is sold a home loan with a 23.3%

interest rate and comes to owe $63,000 on an initial loan of $5,000. David, a

retired General Motors worker, spends almost all of his modest pension

juggling payday loans from seven different stores. In these and other

cases, the consumers of fringe lending - often elderly, frequently minority,

always poor - sign up for loans it is difficult to imagine a reasonable person

(or, at least, a person who is not extremely desperate) agreeing to.

Rivlin's book leaves one with more questions than answers: why, the

reader wonders, do people agree to such a short-term loan with a 3910%

annual percentage rate ("APR")? How will people who cannot live

without a payday advance or a tax refund today be able to return these

loans on top of shocking amounts of interest tomorrow? And perhaps most

importantly: how can this be legal?