Isaac Rodriguez:President & CEO, The Provident Loan Society

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Isaac Rodriguez is the President & CEO of the Provident Loan Society, one of the country's oldest lending institutions. Provident Loan is a not-for-profit organization founded by JP Morgan and Cornelius Vanderbilt during the financial panic of 1893. As CEO, Mr. Rodriguez leads the day-to-day operations of Provident Loan's network of loan centers, that serve 40-thousand people throughout New York City.

How did you get into the industry?

My father owned a dry cleaning store in the South Bronx during the difficult 60s, 70s and 80s. I remember asking him as a boy why he would go to the store even though he didn’t know if he would be robbed. His response was that he had to pay back the bank, as they believed in him and lent him the money to purchase his equipment.  It’s why I got into the finance industry. 

Any emerging industry trends?

Banks aren’t lending money to small businesses like they did in the past. It’s partially because of regulation, but also these small loans aren’t as profitable for them. As a result, many consumers and small businesses are turning to us for loans. Most of these loans are for shorter amounts of time, and for smaller amounts. We’re also seeing more Millennials borrowing money. This younger generation is credit averse. We don’t look at credit ratings for loans, so they’re turning to us for help.

I believe there will always be a need for pawning, but there is some anecdotal evidence that the younger generations are not purchasing gold watches or want their grandmother’s jewelry.  

Any industry opportunities or challenges?

We have many opportunities to advance technologically because our way of doing business hasn’t really changed since the nineties. We have upgraded our internal systems and we are now focusing on the best technology for us to adopt.  As a not-for-profit, we have limited resources and try to direct funds towards our lending business, often at the expense of infrastructure and other initiatives for-profit entities do as a matter of course.  

In terms of regulations, the Military Lending Act has provisions that will require pawn brokers to charge a maximum of 36% APR to members of the military and their dependents.  Among other challenges, the pawn industry feels that it will be difficult to determine our customer’s military status.  Provident Loan Society already charges less than the maximum on the majority of our loans. The challenge we have is the same as many industries:  how to demonstrate compliance with new government regulations.

Inspiration for the business idea, and your vision for the business?

The inspiration for Provident Loan Society of New York arose in 1893 when a group of famous financiers - Robert de Forest, JP Morgan, Cornelius Vanderbilt and Nathaniel Greene came together to create an alternative to loan sharks and pawnbrokers after the financial collapse of 1893.  Their concept was to create a business entity with a philanthropic purpose.  We predate the IRS but were categorized when the IRS was established as a 501(c)4 organization.

Our desired future is to continue to be an alternative to the pawn industry, but also to address the needs of the under-banked community: these people who are taken advantage of by the financial industry. People who have bank accounts that don’t meet minimum balances so they incur fees, or they may occasionally overdraw the account, creating more fees, or debit card fees that eat little by little the already small amounts they are earning.  Provident Loan Society is exploring how to use the resources we have now to expand and open more locations in New York State.

What's next for the business in the near future?

We are always looking to acquire jewelry loan portfolios from reputable pawn business owners that want to retire, or move on to other things with the assurance that their customers are in good hands.  We also are opening more locations and adding related community services in the offices, along with technical assistance material. Our goal is to become the true financial center of the community over time. Our vision is to create a place where New Yorkers can come to learn about how to budget, start a business, learn about the value of their jewelry, etc.  We want to provide knowledge and transparency to an industry that doesn’t always understand that.

Your key initiatives for the success of the business?

We want to continue a laser-like focus on the customer. We are constantly refining our process that we’ve honed over the last 122 years on a very discreet basis. Now, we are reinventing ourselves with innovative, targeted marketing. We strive to find vendor partners that understand our vision and want to be a part of it, as opposed to selling us their services.

Your most difficult moment at the business? (and what did you learn?)

Probably the most challenging was addressing our corporate restructuring. Many of our employees had been with the company for over 30 years. We found that we had more capacity than originally anticipated, and those individuals that were most resistant to change, were inhibiting the other employees from moving forward. We are now much more focused and streamlined.

Ideal experience for a customer/client?

We want to empower people with knowledge and serve with trust and empathy. Many customers are in a tight financial spot when they come in for a loan. We want them to know that we understand and empathize with their financial situation. We also want them to walk out feeling better. We had a situation where a customer was crying when she came in for a loan. She was borrowing against jewelry. We assured her how her jewelry was safe, how we store it, where it is stored. It made her feel more reassured that her jewelry was safe before she left.

How do you motivate others?

We spend a lot of energy making sure our employees are engaged, using the techniques of performing arts and improvisation. We believe it helps our employees better empathize with the customer, who is likely in distress, both financially and emotionally. This improvisation helps us all become more sensitive with what we do.

We’re also motivating professionals and aspiring entrepreneurs with a free monthly Speakeasy that educates New Yorkers on marketing, business and financing trends. Provident Loan Society brings in experts from business, advertising, PR and others to provide guidance to younger entrepreneurs who are trying to start their own business. It’s also a great networking opportunity.

Career advice to those in your industry?

Be a sponge with knowledge, skills and people. Cast a wide net and gather a lot of diverse experiences. Be humble. Take on any task. Sure you want to grow, but it's the journey, not the destination. You'll absorb transferable skills and knowledge by being a sponge and you can use it to fuel your passion.  Also, value your network and maintain contact with people who positively influence your career and personal development. And give back when possible. Give and you shall receive.