Former banking executive Shailesh Mehta, who helped run Providian bank into the ground, has gone on the record with Frontline to detail just how he operated his business.
Hint: it involves targeting low-income demographics for maximum profitability:
Buffalo News: Mehta tells how the game is played to entice lower-and middle-income people with low rates that can quickly rise to loan-shark levels if a payment is missed or if a bank just decides it wants to raise rates.
Mehta tosses around terms like “stealth pricing” and “the unbanked” to illustrate how easy it is to destroy vulnerable Americans who are a job loss or a medical issue away from financial ruin. The stories of several credit card victims are told, serving as cautionary tales for viewers.
Mehta’s arrogance is the stuff of legends as he eggs on both consumers and regulators:
“Because none of you are smart enough,” concludes Mehta. “You make the stupid laws and I’ll comply and I’ll make money. . . . There are always some desperate people who will take the product. Lending money to people is never a difficult exercise. OK? People will take money if you’re willing to give it to them.”
Below, an excerpt of the Frontline program “The Card Game” with Mehta: