A 700% APR Lending Business Tied to Dr. Phil’s Son Is Dividing an Alaska Tribe

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Key Points of the Report

Community Division: A Native lending enterprise in Minto, Alaska, is generating essential income but also causing a split in the community due to ethical concerns and debates on who is benefiting. Legal Troubles: Two lawsuits claim that the majority of the lending revenue in Minto goes to the partners, including Jay McGraw, the son of Dr. Phil, who is associated with a company aiding the tribe. Dissatisfied Borrowers: Minto’s lending activities have faced numerous complaints from consumers, who are dissatisfied with interest rates much higher than what most states allow.

This recap was prepared by the journalists and editors working on this article.

Dr. Phil, the well-known TV figure, has long given practical financial advice to viewers. Despite this, his son, Jay McGraw, has been implicated in the issue, as discovered by ProPublica and the Anchorage Daily News. McGraw, a TV producer, has been involved in the payday lending industry for over a decade, recently launching a company that sells used cars online at high interest rates and targets Texans with poor credit.

McGraw settled a federal lawsuit earlier this year accusing him of playing a significant role in a firm facilitating high-interest online loans through a company owned by a Native American tribe in Alaska. The tribal lending operation, Minto Money, has brought in revenue for the community since its establishment in 2018 but has also caused division within the tribe due to concerns about the impact on vulnerable individuals.

The lending activities of Minto Money have led to numerous consumer complaints, with borrowers expressing frustration over excessive interest rates. A federal lawsuit filed in Illinois alleges that McGraw provided capital for the loans, with CreditServe Inc. handling the loan operations. McGraw and other defendants have denied the allegations in the lawsuit.

There is no public record linking Dr. Phil to the lending businesses. A lawyer for Dr. Phil mentioned that the allegations against Jay’s business do not align with Dr. Phil’s advice and show.

The Minto tribe ventured into the lending business in hopes of creating jobs and generating revenue for the community, which faces economic challenges. The lending operation has experienced significant growth, providing financial benefits to the tribe and enabling them to support various community projects.

Despite the positive impacts, there are concerns within the tribe about transparency and the distribution of funds. Some members are calling for audits and federal investigations to ensure fair practices and equitable distribution of profits. The lending business in Minto has also faced legal challenges and criticism for its high-interest rates and alleged exploitation of borrowers.

The tribal council has recently taken steps to oversee the lending business more closely, but internal disputes persist over the allocation of funds and benefits. While the lending operation has brought financial gains to the community, questions remain about its long-term impact and the distribution of profits among tribe members.

The lending business in Minto has faced legal challenges and criticism for its high-interest rates and alleged exploitation of borrowers. The tribe has defended its operations using arbitration agreements and tribal immunity, but legal risks persist, with ongoing lawsuits and regulatory scrutiny.

Several states have issued warnings about Minto Money and Birch Lending, cautioning consumers against predatory lending practices. Despite the financial benefits, the lending business in Minto continues to face scrutiny and calls for greater transparency and accountability.