What lenders can learn from borrowers, with Nicole Lapin

Nicole Lapin, Host of Money Rehab with Nicole Lapin, is “the only financial expert you don't need a dictionary to understand”.

And sure, you may not need a dictionary to understand lending anymore, but that’s because you work in the industry. I’m going to guess that most of your borrowers don’t. And I’m also going to guess that most of your borrowers don’t want to spend their days reading dictionaries, which is why Nicole is where they are going to learn and to vent about their credit troubles.

I have worked in consumer lending for twenty-one years but, if I’m honest, I fell into it. Like most students, I assume, I applied for pretty much every role in my university’s graduate handbook and took every interview that was offered. And then, I took the one firm offer I got: from CapitalOne, who I’d never heard of, working on credit cards, something I’d never paid much mind.

Now, I did have a finance degree at that point, so I knew what an APR was, in theory, but I still I had to learn many concepts I now take for granted - concepts that I sometimes forget others aren’t familiar with. And that’s a problem. As lenders, even with our best intentions we sometimes talk past our borrowers, we describe products in confusing terms or build them in ways that may allow customers to work against their own best interests.

That is why I think it is so important to have a channel to those grassroots experiences. With a new episode out every weekday, a handful of New York Times best-selling books, and her own experience of being in debt and out of control, there is no better channel today than Nicole Lapin - so I was absolutely delighted to have her on my show, talking about how and where consumers are feeling the pinch, and how and where consumers are going astray with their credit products.

You can, and really should, find Nicole’s books, courses, and other insights on https://nicolelapin.com/. You can even follow Nicole on LinkedIn

While Money Rehab with Nicole Lapin, her chart-topping daily show, can be found wherever fine podcasts are followed, or via its home on iHeart

You can learn more about myself, Brendan le Grange, on my LinkedIn page (feel free to connect), my action-adventure novels are on Amazon, some versions even for free, and my work with ConfirmU and our gamified psychometric scores is at https://confirmu.com/ and on episode 24 of this very show https://www.howtolendmoneytostrangers.show/episodes/episode-24

If you have any feedback, questions, or if you would like to participate in the show, please feel free to reach out to me via the contact page on this site.

Regards,

Brendan

The full written transcript, with timestamps, is below:

Nicole Lapin 0:00

Yeah, every story goes back to money, follow the money trail, you get to the heart of every story. I believe it's that taboo conversation, whether it's, you know, drinks with your friends not being able to talk about money, but talking about everything else.

Brendan Le Grange 0:20

Welcome to How to Lend Money to Strangers with Brendan Le Grange. I've been working in consumer lending strategy for 21 years delivering projects in over a dozen countries spread across Africa, Asia and Europe. There's a lot to be said for that sort of broad experience. Certainly, it's how I've been able to source many of the guests for the show. spending so much time within an industry's walls can also be isolating. And the fact is, many borrowers are simply unaware of credit mechanics that I and you may take for granted. That's why from time to time, I think it's worth hearing the borrower's point of view. Today's guest Nicole LePen has a massive audience who are not afraid to talk to her about their money problems and concerns money rehab with Nicole lap and it's now one of the most popular business podcasts in America with daily discussions of all aspects of personal financial management, including for us insights into borrowers struggles and successes with a credit products.

Nicole Lapin Welcome to How to Lend Money to Strangers. I'm delighted to be chatting to you, not least of all, because you've very quickly established yourself as one of America's top finance podcasters while my own show on its very best days might poke his head into the top 10 charts Money Rehab with Nicole Lapin is seemingly entrenched right near the top of those. So you already had a career in TV, what got you into podcasting in the first place?

Nicole Lapin 2:04

Wow. Well, thank you. I was a total podcasting novice until a couple of years ago, I started as you mentioned in television, and I'm old. So back in the day, I went to local news markets and sort of worked my way up and ultimately got to CNN and CNBC and Bloomberg. And, you know, the network's and I had reached a lot of goals early in life, which is high class problems, because you come up with new goals, or you just decide, You know what, the rest is just gravy, I might as well make a difference with my life, which is kind of what I did, I left my cushy anchor job. And I wanted to speak to people who weren't watching shows with a ticker on the bottom that felt intimidated by those types of news outlets and try to reach my former self, you know, somebody who was so clueless with money who grew up in an immigrant family got in a bunch of debt, you know, if I could do it, anyone could do it. I started as a poetry major in college. So I didn't have the formal training or expertise. But I found this void in a market that was really underserved. And it definitely beat all of my expectations, I thought I would write one book, one book turned into two turned into three turned into four now, which will turn into 10. By the time this next deal is done.

And you know, I don't say that to brag I say it because there is an audience of young women in particular who have felt left out of this conversation for so long. And so I avoided the podcast world to be honest, for quite some time. I probably in hindsight, should have put my stake in the ground earlier on. But I was writing books and doing other mediums. I ultimately started with a show with the editor in chief of Entrepreneur Magazine, Jason Pfeiffer called hush money. And the reason I did that, actually, I was drunk in Cannes, during Ken lion on Rosae. And the idea just came to me one of the I heard execs was also there. And I said, Well, you know what, I talked to young women primarily. And with books in particular, you can't be all things to all people or I believe you're nothing to anyone. So you really need to choose your audience know who she is, or he is and speak directly to them and no one else. But with this type of medium. I thought, you know, I don't really talk dudes a lot. I kind of live in this microcosm or echo chamber, have, you know, women talking to women and what guys might think and so look, let's just ask a dude. And Jason has a million projects. He did not need another one. But thankfully, he said yes. And we did hush money for a couple of seasons and then the pandemic hit. And it became the biggest story of our time, of course, health and wealth being the most important and I begged the executives to give me an do a show not knowing that I was getting into actually having been to do a daily show? It is a lot. But again, it is such an honour and I hope that I am doing better with the podcasting space or with the audio space, I always tell my team like, please tell me, I don't feel like this is my native medium. So I definitely have a lot to learn. But don't we all?

Brendan Le Grange 5:23

If we do indeed, and I think it's that idea of echo chambers. That makes you an exciting case for me on the show. Because I've worked in lending for 20 years, I started the show when I stepped out of corporate to stay connected to the industry. And I largely leveraged my network at the start. And so it's all people who've worked in the industry 1020 years, and we can really forget what it feels like to be that outsider. And it's very easy to forget that and to think 20 years later, everybody knows how to handle their credit, but it's not the case. And I think you are able with your show, because his daily lots of conversations happening, you're able to really get a much closer sense of what real people are feeling, perhaps and what they struggle with, with credit, which could be obviously just the credit burden, but also the complexities of credit as we sell it to the market. So I'd love to hear some of what you're hearing.

Nicole Lapin 6:10

It's so interesting that I'm doing this show today. Just last night, I was on a panel with the CEO of FICO will Lansing and Scott Sandberg and CEO of Lending Club, and they were talking a lot of like very b2b, wonky lending stuff, and you know how to score people and alternate scores, and you whatever the regulations coming out of Washington and particular. And, you know, I really just said from my perspective, as someone who used to leave her credit reports, once I finally got the courage to even request a credit report on the counter for weeks, because I was too scared to even open it from my perspective. And what I'm hearing on the flip side is that there's just not enough education around what lending even means, or what interest rates, even our or how that affects you. I just did a segment for Good Morning America, where I was breaking down interest rates, and they said, Oh, we didn't know that just because interest rates go up on credit cards, it's not all bad. It also goes up at the bank. That's cool. And, you know, all of these folks went to college as did I didn't learn any of this stuff in college, you know, my college degree and 350 will get me a latte. It's just so maddening, that there's not a curriculum for this. And even if you go to college, or university, or even business school, I've been speaking to business schools over the years that I'm like, I'm gonna get escorted out of the building, like, what am I doing here? Why are you guys listening to me, you guys are paying $100,000 or more for your brain. And I'm teaching you this basic personal finance stuff. And so I think there's just a lack of education at every level. And you wouldn't be lying to yourself, too, if you thought it wasn't in the financial services industry as well. I think companies that provide loans that are banks that aren't in any sort of financial service, their employees are really clueless. And they're the most shameful to admit that they don't know what's going on. And so I think that the biggest thing from a consumers perspective now is just understanding these products that are just framed in a really complicated way. Last night, during the panel, we spoke about overdraft protection, that's crap, the way we describe it, right? Because it's not protecting you. It's, it's ultimately a bad thing to sign up for our for our consumer. And that sucks. That's not fair. And so I think that explaining to consumers more of what this is, in plain English will help everybody.

Brendan Le Grange 8:59

You mentioned their shame. And I think one of the key messages I've seen in your, in your show is this idea that talking about money still to this day remains kind of one of the last taboo talking points and leaving it as a taboo subject means we all suffer. And what I really like is that you fully embody this philosophy of let's talk about at least stop making it awkward. You have got yourself negotiating a rental deal with your landlord, you've got yourself phoning a friend, trying to get back some money they owe you. You're not afraid to be the subject of your own show. If I may assign you a spokesperson for all consumers out there for a moment. What can lenders do to try and get rid of that shame and that feeling of shame and to make these discussions easier to start because you think of a bank. It's a big imposing building with marble and a bulletproof glass window that you're trying to shove through that's not really conducive to having a conversation that's difficult to have how Could lenders maybe think about reframing the attitude or their processes that consumers do feel they can talk to them? Do you feel they can raise up problems? Before it's six months too late,

Nicole Lapin 10:10

I do love to put my money where my mouth is. So thank you for checking out some of those episodes. I think those conversations are the thing that stumped people the most, I think in theory, you know, there's a desire to do well, for yourself, for your family, take care of yourself to grow wealth. But I think you can get people down with that pretty quickly. But then you say, Okay, well, how do I have that conversation? I think, you know, women know they should negotiate for more, but they're like, Oh, shoot. Now what I do, what do I actually say? What's the blocking and tackling? And so in my books, I provide scripts, like sample scripts of what you can say when you're having these conversations, because they think it's that taboo conversation, whether it's with, you know, drinks with your friends, not being able to talk about money, but talking about everything else, let you use your imagination, or it's, you know, having these conversations with like, seemingly scary, right marble clad banks, or the IRS or you know, even your own accountant, these fantastical stories, we tell ourselves come out of fear, and shame, and guilt, I'm gonna go to jail if I talk to the IRS, right? Like, we will have this deep rooted trauma in one way or another. And I've had very deep rooted financial trauma myself from my family. But we all have right even in a macro sense, if you lived through the housing crisis, or you saw your family's house be foreclosed on, like I did, like my fiancee did, that will change how you act as an adult until you deal with it. And so I think that the lenders, in order to ultimately win the war, not necessarily the battle, I think like the overdraft protection thing, or like, you know, trying to get a little bit more off the top here or there is just myopic. It's really short sighted, it's basic business, right? You want customers for the long run. And ultimately, you'll get more from customers, if they're able to get a mortgage, if they're able to get to a better place. And so that's not idealistic, like pollyannish of me, that's capitalistic, right? If you want to grow a business, you want customers for the long run, you don't want them to say, Oh, well, fu you screwed me on like this $35 or $50, you know, late fee. And so those types of tactics suck, they suck for everybody. And I think they keep people who would be in a place to have greater borrowing potential and also have a greater likelihood for ultimate financial success. And thus, in the more financial products, it kind of, you know, boot them out of the system too early.

Brendan Le Grange 13:01

Yeah. So here in the UK, there was a big scandal, a big case action lawsuit, one on the missselling of purchasing protection, essentially very similar idea where you were sold insurance on your credit card that would cover your debts if you went delinquent - but essentially, that insurance, just paid the credit card company, because you weren't getting any of that money. It just meant the card company were paid off if you defaulted, and you had been paying that insurance the whole time. And the industry was taken to court and lost and had to pay out a lot of money to consumers. And still to this day, you're right, it's keeping people away, and it's keeping people at the margins away.

I think, again, returning to some of the episodes you've done, you've mentioned a few of these here already, but , you encapsulate some of the core things that consumers should be thinking about to to get their credit in order in your five credit do's and don'ts. If you think about those things that you're recommending consumers doing or using consumers trip themselves up with what are those kind of main behaviours that you see that are causing problems for consumers?

Nicole Lapin 14:02

Well, something that I also just discussed in this deeper dive conversation about this very topic was the idea of potentially even offering consumers little financial quizzes or little bootcamp educations and then giving them something in return - like higher credit or some sort of reward from that institution for actually educating themselves . We see this happen at the DMV or when you get a ticket, you go through driving school, and then you you know, get rewarded from the system. Why are we not doing that in the financial system? We can very easily.

A lot of behaviours that we see tripping customers up are easily explained. If we just stay away from the jargon. I think that we hide behind this jargon. And we won't fix it until we - hello, Captain Obvious - actually just start using real English. So yeah, overdraft protection, you know, what is APR, what's a credit limit or utilisation score all this stuff that I just know from my former self who was scared, who broke out into hives thinking about any of this stuff would just be like: don't want to hear it, I don't want to deal with it.

I think that we do two things, we sort of hide behind this jargon, or we talk down to people which is offensive to, which is also why I've tried to speak to women without shrinking it, and pinking it like I'm really offended by this idea that somehow I need like a woman app. No, like, I want to go my Schwab account or my Fidelity account, like I don't need a woman app.

No.

So we need to find that middle ground where you're not talking down to people, you're underestimating people. And I think it is a real Trickle Up effect. If you help the people that are struggling among us, you're helping people who are working paycheck to paycheck ultimately have enough wherewithal and ability to get a house or get a business loan or whatever else, you know, ultimately help society ultimately helps the country that you're in, and it floats all boats. And sometimes we lose sight of that for short term profits.

Brendan Le Grange 16:31

The shame, the reluctance to talk, the inability to understand and the unwillingness to to want to stand in front of a banker in a suit and tie and say, 'I don't understand this' means it gets pushed out, someone takes a payday loan, all of a sudden $1,000 becomes $10,000 and now it's unavoidable. But it's also not fixable.

And I think a cleaner, smoother system for everybody is also just a cheaper system for the banks. It's expensive to try and recover debt that's in trouble. And that's something that it's about time that we see some investment in. And yeah, I mean, I've worked in banks for 20 years. If I look at my credit card statement, and it says you've got a debit of 500 and you've got a credit of 300. Well, which one's way is the one that just says last month you paid me this? This month, you should pay that?

So of course, this is turning people away. So I think this sort of show is fantastic talking at a human level neither patronising nor avoiding the topic. And yeah, it's been great chatting to you and I've seen on Money Rehab with Nicole Lapin, - which is available, obviously, where all fine podcasts are downloaded - you do cover all aspects of money management as well. So we're talking lending here, but you also look at investment and budgeting and the credit side and in bite size, no jargon episodes, which I think are very appealing.

You incorporated that obviously, as we've sort of touched on some lending products. We've talked about some of the main ones, but I've seen it as those were sort of controversial topics like car loans are a mistake before I let you go, what other loan top tips are you seeing or top strategies our consumers having to put in place to navigate this world that us in the lending industry have created?

Nicole Lapin 18:13

It's true, I don't love a car loan. And I also think art based NFTs could be a front for money laundering. So I just say what a lot of people are thinking, because I think that these misconceptions have been told to people once and they stick and they just assume that it's gospel, by the way, or whatever I say whatever you say whatever anyone says is ultimately just opinion.

There's only a couple of truisms on Wall Street, one being buy low, sell high and other benig, it's better to have low expectations. But beyond that, it's all just opinion.

So maybe a car loan is good for you. I don't know, I don't know your personal situation. And maybe you love NFT's and are making a lot of money or whatever. But I just really encourage listeners and readers or any of my audience, across all the beautiful, beautiful mediums to think for themselves to ultimately understand that none of this stuff is gospel. If you get a car loan, or you don't have a mortgage and you rent, the financial gods are not going to come down and beat you up.

That's not a thing.

There is a different course for everyone. But you have to get to a place of empowerment to understand that there is a moment this happened to me when I became a vegetarian. I grew up in a household that ate meat. And at some point I said to myself, self, do I like meat? That moment where you ask yourself just because it's been done a certain way or just because I've heard it's supposed to be done a certain way. Does that mean it's the way it needs to be moving forward? For me, that is a really empowering place to be. And I think that when you empower people to make those best decisions, then everybody wins. They're just going to continue to do more and it's better business for them. And, and for you as a lender or a financial institution.

Brendan Le Grange 20:04

Yeah, indeed. And we've seen that across industries where you think about the car sales in the old days of the famous sort of crook who is selling you a secondhand car versus the environments now where you can buy a car online without all the high pressure sales people will go there then who want all that difficult situation they will transact more in an environment they trust and environment they understand. So you said this is good all around for borrowers and for lenders.

Nicole, thank you again for your time. I think it's great to have a voice like yours and a place for hearing the voices of your audience and sharing that so I'm sure lots of people listening to me now would also like to tune in and hear you on money rehab, where can they go to find that show? Or to find more about your books, we didn't touch about your book, so maybe we should do that as well?

Nicole Lapin 20:48

Well, I liked the way you put it. And as a podcaster you often have to say this should be all of you know, get it up the iHeartRadio app Apple podcasts or wherever you get your favourite shows. You know you say that a lot during different ad reads. I think you said were all fine podcasts are downloaded. I really liked that. So I'm gonna borrow it. So yes, you can find Money Rehab, wherever you find all find podcasts downloaded. No, I even mess it up. It's available where you know, I messed it up again. You can you do it?

Brendan Le Grange 21:21

Wherever find podcasts are downloaded.

Nicole Lapin 21:23

Perfect. That's it.

Brendan Le Grange 21:25

And your books and casing web where I stole the phrase from originally. I'm sure your books are also available, we will find books. So that's right. Where can people learn more about that side of you?

Nicole Lapin 21:34

Yeah, you can find me on www.NicoleLapin.com, wherever fine social media is served. And I tried to react to news of the day and help guide listeners and viewers through some of the headlines that we've been seeing in there are really scary headlines inflation and interest rates and recession and all this stuff, so you can find me there.

Brendan Le Grange 21:57

And thank you all for listening. If you enjoyed that, please do rate and review on your preferred podcast platform and share widely including on LinkedIn. And while you're there, send me a connection request. The show is written and recorded by myself Brendan Le Grange in Brighton, England and edited with assistance by Kane Hunter.

Show Music is by and weak and you can find full written transcripts, show notes and more content at www.HowtoLendMoneytoStrangers.show

And I'll see you again next Thursday.