That's because they have no official association with a financial institution.
Maybe they don't want to pay ongoing bank fees for checking accounts.
Maybe they don't trust banks.
It could be that members of their network need to remain anonymous.
So, for cashing their checks, conducting financial transactions, wiring funds overseas, and borrowing money (usually between paychecks) they rely on the "paycheck lending" industry.
According to the FDIC, in 2015, 9 million households in the U.S. were unbanked. That includes 15.6 million adults and 7.6 million children.
Often those paycheck lending operations charge relatively high fees and high interest rates.
As lawyer-journalist Kathryn Rubino reports on Abovethelaw, AMG Services was likely unique in exploiting the unbanked. That series of payday loan affiliates charged up to 700% interest.
The former General Counsel Timony Muir and former Chief Executive Officer Scott Tucker at AMG Services were found guilty on 14 counts. They included:
- Money laundering
- Wire fraud
- Violations of federal racketeering and lending laws.
Just for the racketeering charges, each one can result in up to a 20 year sentence. For crimes involving lack of truth in lending, each one could incur a year in prison. They might also have to turn over property to the government. Tucker's lifestyle mirrored that of the Gilded Age.
Tucker said he will appeal. As yet, Muir's lawyers have no comment.
Nice Try, Guys
The two had been pulling that off by maintaining that the business, valued at about $3.5 billion, was owned and operated by Native American tribes.
However, members of the jury didn't buy into that positioning and packaging of their organizational structure.
The jury came to their decision before a full day of deliberations.
Technology to the Rescue
At the current time, "blockchain" is the magic word. Open source, it facilitates peer-to-peer low-cost, fast, and secure financial transactions.
Those include transferring funds across borders. IBM has gotten into that game.
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