Prior to pursuing my MBA, I spent almost three years working at a steel mill in Gary, Indiana. Gary is a city that I would classify as an inverse trifecta: a banking desert, food desert, and opportunity desert, all in one.
In Gary, I got to work shoulder-to-shoulder with honest, hardworking, trustworthy men and women who had been victims of systemic racial discrimination. For the first time in my life, I learned from their stories what it was like to grow up in a town where the only access to credit was a predatory lender: payday loans, title loans, pawn shops. Speedy Cash, Money Mutual, and the hundreds of other payday lenders were able to prosper in the last century by filling the consumer credit void left from white flight and the subsequent flight of banks that chose to follow their most profitable customers out of redlined communities.
Today, in all 50 states, employees living paycheck-to-paycheck are forced to make ends meet with triple digit interest rate loans. For example, in 2021, the largest payday lender in Texas was offering payday loans with a 664% APR.
I headed to Cornell with the firm belief that this was not an unsolvable problem. We are blessed in this country to have incredible access to capital, technology, and innovation — so what was the solution to this awful industry that was preying on our most vulnerable communities?
It was at Cornell that I learned about the Employer-Sponsored Loan, during a presentation by Ted Castle of Rhino Foods, a Vermont B-Corp that took a progressive step by offering their employees this affordable credit benefit back in 2006. The numbers after 15 years of offering employer-sponsored loans speak for themselves — over 35% improvement in employee retention, in addition to eliminating any employees’ reliance on predatory lenders in the community. I was inspired by the Rhino Foods Foundation mission of spreading innovative workplace practices that champion employee financial stability and make good business sense.
With Ted’s help (and the help of a ton of other people, thank you to the village that raised me!) I founded Buoy. Our business adds value in a simple way — connecting the mission-driven lenders offering employer-sponsored loans with employers who’s employees need access to affordable credit.
If your employees are underbanked and living in communities serviced by predatory lenders, you can play a role in chasing these lenders out of your community.
Help your employees and heal your community with Employer-Sponsored Loans.
Peter Fraser is the founder of Buoy Holdings, an Ithaca-based benefits consultant on a mission to end predatory lending in America. He holds an MBA from Cornell University and a B.Sc in Mechanical Engineering from the University of Illinois at Chicago.
