Say It Ain’t So Magic

April 9, 2009 by Marc Lamont Hill

For the past month, Magic Johnson’s face has been back on our televisions screen. This time, however, the retired basketball superstar isn’t providing his usual blend of malaprop-filled color commentary. Instead, the legendary point guard is the prime pitchman for Jackson Hewitt’s “Money Now Loan,” which provides instant loans to people in anticipation of their income tax refund. Similar to Billy Dee Williams’ endorsement of malt liquor in the late 1980s and early 1990s, Johnson is lending legitimacy to a product that has had a deleterious impact on the lives of the urban poor.

Over the past few decades, unscrupulous corporations have exploited the economic desperation that pervades many black and brown communities. With the steady decline of living wage jobs and an increasing unwillingness to provide traditional loans to people of color, products like pay day and refund anticipation loans have gained traction in the hood. Rather than provide assistance, however, these loans come with unconscionable strings attached. For example, pay day loans, which are a staple in many poor communities, typically come with annual interest rates in the neighborhood of 400 percent. The Jackson Hewitt loans, also known as refund anticipation loans, offer an APR between 136 and 140 percent. With these Mafia-style lending programs, many borrowers end up rolling over their lends, placing them in a perpetual cycle of borrowing that drains hundreds of millions of dollars from poor communities. “Money like magic?” Hardly.

Since retiring from the NBA, Magic Johnson has committed himself to economic development and urban renewal in some of our country’s most underserved areas. For this reason, I’m willing to give him the benefit of the doubt. In all likelihood, Johnson was unaware of the predatory character of Jackson Hewitt. Instead, like many people who haven’t examined their evil nuances, he probably saw the loans as a mildly uncomfortable option for people with troubled financial histories.

Now that he has been notified, however, he has a moral responsibility to help repair the damage done. First, he must immediately and publicly denounce the Jackson Hewitt campaign. He must also lend support to financially literacy programs, which would provide valuable and viable alternatives to predatory lenders. Finally, he must help lobby state and federal legislators to place sensible and humane restrictions on predatory practices. If he does not do this, he will place his legacy, and the financial future of our most vulnerable neighbors, in serious jeopardy.

Categories: MLH
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9 Comments

1. DCI74 wrote:

Yes this is troubling and Magic has proven himself to be too astute a businessman to not have known about Jackson Hewitt’s practices before going into business with them. I wish part of his marketing deal with them included credit counseling and education services.

April 9, 2009 @ 12:38 pm

2. Tanya wrote:

Excellent piece Marc! You are exactly right. And I had no idea the interest on those things were 400%. The only word I can think of to describe that, is evil. Yet another way the black community is exploited.

April 9, 2009 @ 1:26 pm

3. Mrs. Rivers wrote:

great piece Marc! I agree 100% percent. Magic knows what those loans are all about. I just hope he hasnt sold out his community and main clientele (of his businesses) for an extra check to endore Jackson Hewitt.

April 9, 2009 @ 2:17 pm

4. ~JJG~ wrote:

I was baffled when I first saw the commercial. Marc, you hit the nail on the head with this one. The mental manipulation used in slavery is still present. Using us, to get us. He should KNOW better, thus DO better. I am disappointed in Magic.

April 9, 2009 @ 4:28 pm

5. R.oB. wrote:

The sad truth is these “exploited” folks prefer these services even when given the choice of legit services is available. Heard a great piece on this on my fag radio network, National Pinko Radio. Really disabised me of my preconceptions. For example, you can’t be exploited when you know you are paying usury rates but still use the service because “it’s convenient.”

April 9, 2009 @ 10:27 pm

6. Marc Lamont Hill wrote:

Robm

I’m assuming that you meant to say your “FAV” radio network… As far as choosing to pay usury rates, there is some truth to the “laziness”/”convenience” factor. That said, many people need the money urgently and have no choice but to pay the “convenience tax” because other institutions systematically exclude them. Also, with the absence of financial literacy training, many people don’t appreciate the true stakes of exorbitant tax rates and perpetual debt . This isn’t excuse-making. I simply laying out the work we have to do!

April 10, 2009 @ 9:36 am

7. Chanel Graham wrote:

Thanks for sharing Marc. I would love to see more financial literacy training in the black community. Now is a more opportune time than ever. As the recent stats from the Center for Labor Market Studies show, black men are being the hardest hit in this recession, as they experience the highest rate of unemployment. The last thing we need is greater financial ruin by these corporate schemes. This would be a phenomenal time for organizations, like Kevin Powell’s latest efforts with mentoring black men, to come in and educate the community.

April 10, 2009 @ 2:29 pm

8. R.oB. wrote:

Yes, NPR is my “fav”. Damn iPhone auto correct! Excuse me if I laugh at it though. No dis to my gay brothers.

As far as the literacy training, they don’t need it. They know the deal. They are just cool paying the convenience tax even when there is no more convenience vis-a-vis using a bank. It’s really a trip.

April 10, 2009 @ 6:36 pm

9. Mocha wrote:

Magic also represents Rent-A-Center, what a shame!

April 18, 2009 @ 3:19 am

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