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Perspectives On Profiting From The Poor

"The poverty business" (Special Report, May 21) failed to note a key player in the refund-anticipation loan business: the IRS. By providing these lenders with a "debt indicator," the agency essentially pre-screens potential customers for them. The debt indicator tells lenders whether a taxpayer's refund is almost certain to be paid within 10 to 14 days or withheld, delayed, or paid only in part because of back taxes, child support, or student loans. This keeps these lenders' losses to a minimum.

Congress is now considering the Taxpayer Protection Act of 2007, which would prohibit the IRS from providing debt indicators to predatory refund- anticipation lenders. As a tax-preparation professional, I would prefer to see such loans banned outright, but this would at least be a step in the right direction.

David Fazio

West Bridgewater, Mass.

Your coverage of CompuCredit Corp. leaves a mistaken impression of our company. CompuCredit provides opportunity to restore credit for the millions of Americans of all income levels who are without prime credit scores.

Today, for a variety of reasons, one need not be "poor" to have credit challenges. And many credit-challenged Americans with incomes above that level are our customers.

Your story also failed to recognize CompuCredit's specialized role in providing valuable services to low-credit-score consumers who remain underserved by typical banks and financial institutions. There are two specific points we want to address: First, contrary to your report, the national average annual percentage rate for a credit card is about 18%, not far from our customers' average APR of 21%, even though they typically have lower credit scores. Second, the terms of the cards you note are for people with very low credit scores. We provide a wide range of products, including lower-interest-rate offers without the terms you mentioned.

Unlike others, we report all payments to credit bureaus so customers can build prime credit scores. Very significantly, we also graduate customers to better terms as they make payments. Voluminous studies and data demonstrate the need for sound access to credit products and services that foster financial recovery.

Denise Harrod


Compucredit Corp.


Credit unions have long been, and will continue to be, at the front lines in the battle to eradicate unscrupulous lending practices. The Defense Dept. Noted in an August, 2006, report that credit unions have demonstrated particular vigilance in their efforts to combat predatory lending on military bases. And Federal Deposit Insurance Corp. Chair Sheila Blair has applauded credit unions for developing short-term alternatives to payday loans.

The men, women, and families that make up the subprime lending market desperately need financial services, but they also need to be treated fairly and with dignity and respect. It's up to the financial-services industry to create products and services that do that.

Fred R. Becker Jr.


National Association of Federal

Credit Unions

Arlington, Va.

The University of Florida recognizes the importance of getting basic science out of the hands of inventors and into the skilled development efforts of companies ("MIT, Caltech--and the Gators?" Innovation, May 21).

Years ago, when I was licensing the technology of British Technology Group (at that time a Crown corporation) to U.S. companies, our goal was to get the university faculty out of the loop as fast as possible and back into research so that both innovation and commercial development could proceed.

The prime problem with most university licensing (technology transfer) activities is that research scientists want to use their licensing operations to attract and extract research monies from the companies.

Dr. Martin J. Cooper

Irvine, Calif.

The University of Florida's jump into licensing income is an impressive example of the time-honored model of technology transfer in academia, in which the results of faculty research are patented and licensed outside the university. But the 20th century model enabled by the 1980 Bayh-Dole Act has pretty much run its course. The number of patents from universities has leveled off starting in 1997 and continuing through 2005, the most current year for which national data are available. Moreover, the number of high-tech initial public offerings in the U.S. declined from 170 in 2000 to 35 in 2006.

The U.S. needs new strategies to meet the challenges posed by Asian nations. It's time for academic, business, and government leaders to debate alternatives to the traditional technology transfer model for our research universities.

Dr. Hal Raveche


Stevens Institute of Technology

Hoboken, N.J.

In "The Six Sigma Shotgun" (The Welch Way, May 21), Jack Welch argues that Six Sigma should be applied everywhere. In doing so, he violates one of the core concepts of Six Sigma--the vital few vs. the trivial many. A wall-to-wall, floor-to-ceiling approach to Six Sigma invokes the dark side of the 80/20 principle: 80% of the effort is wasted on 20% of the benefit. This is one of the main reasons companies abandon Six Sigma after a few years.

The bright side of that rule: As little as 4% of any business causes half the waste, rework, and lost profit. So let Six Sigma identify the 4%, then focus on that 4%.

General Electric Co. (GE) has deep pockets and can afford to waste money on corporate change, but most businesses cannot. For most organizations, the shotgun approach is not only silly and wasteful, but dangerous. A Six Sigma rifle with a high-powered scope would be a better use of scarce resources.

Jay Arthur

KnowWare International Inc.


After working at GE Finance, I felt fortunate to be asked to implement Six Sigma within the advertising and marketing world. The "you are here to do what?" and "are you sure you got off at the right train stop?" questions I got on arrival made it clear that I would have to do a lot of convincing fast.

But showing ad execs that they have processes turned out to be easy. Evidence wins. The hard part was driving successful process improvements in an industry with operations that aren't big enough to support blasting Six Sigma into "every nook and cranny" of those operations. If you see any blasting under such conditions, it is Six Sigma being blasted out.

We were more effective using the diagnose/surgical approach: Diagnose challenges in the ad-development process that are causing delays, frustrations, errors, long cycle times, and client dissatisfaction, then surgically insert specific solutions that remove those problems.

Results include greater client satisfaction, improved agency-client relationships, happier employees with better work/life balance, reduced operating costs, improved margins, and clients who get more for less.

Ben Nneji


SigmaWorks Group

New York

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