Never Send A Republican, To Do The Job....

[Mr. Shaman]

....a WOMAN can do!!



Cleanin'-up, after BUSHCO, requires competency. (January 31, 2008)

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Our Credit-Economy

"What's changed is [that] when credit was deregulated in the early 1980s, the contracts began to shift. And what happens is that the big issuers, the credit card companies who have the team of lawyers, started writing contracts that effectively said, "Here are some of the terms, and the rest of the terms will be whatever we want them to be." And so they would loan to someone at 9.9 percent interest. That's what it said on the front of the envelope. But it was 9.9 percent interest ... unless you lost your job, or 9.9 percent interest unless you applied for a couple of other credit cards, or 9.9 percent interest unless you defaulted on some other obligation somewhere else that doesn't cost me a nickel. And at that moment, that 9.9 percent interest credit suddenly morphs to 24.9 percent interest, 29.9 percent interest, 36.9 percent interest. Well, you know, ... nobody signs contracts to buy things that say, "I'm going to pay you $1,200 for the big-screen TV unless you decide, in another month or two months, that it should really be $3,600 or $4,200 or $4,800." But that's precisely how credit card contracts are written today."​

 

[Andy]

....a WOMAN can do!!



Cleanin'-up, after BUSHCO, requires competency. (January 31, 2008)

****

Our Credit-Economy

​

Although I actually support reigning in credit, I hope people understand that in doing so, availible credit will be reduced. The reason lending company have such high insterest rates is specifically because there is higher risk of default. When you legislate the interest rates that a bank or lender can charge, you will inherently reduce the amount of risk a lender is willing to take on.

The result will be that fewer people will get loans. In Ohio, we recently passed a new lower max interest rate that can be charged, and of course several pay day loan places, and Check Smart places have closed. Now I'm perfectly fine with this. I hate Check Smart and Payday Loan sharks.

But it's always funny to see people crying about the need for more low income loans, and then enact policies that hinder them.

 

[Mr. Shaman]

Although I actually support reigning in credit, I hope people understand that in doing so, availible credit will be reduced. The reason lending company have such high insterest rates is specifically because there is higher risk of default.

Well......that's the common-rhetoric, anyhow.........​

David Brancaccio: But the credit card companies would probably say that they increased interest rates because the customer's so-called risk profile changed?

Elizabeth Warren: That is what the credit card companies will say because I think it's probably pretty unpopular to say: "We did it because we could. We did it because we put it in the contract and we have the power and what are you going to do about it?" The notion that these credit card companies are pricing for risk is a public relations sham ... What the credit card companies are doing is maximizing their profits. The way they figured out to maximize their profits—thanks to the laws we have right now—is to draw in as many people as they can.

Every credit card for a credit card company is like a lottery ticket. They're just waiting to see who's going to maybe stumble a little. Maybe get into trouble on a car loan. Maybe nothing at all except they just look vulnerable. They're just in the right zip code. They're just the right profile for people who won't be able to run any place else. And those are the ones you slam. Those are the ones you hit with the 29 percent interest rate, the 35 percent interest rate, the new fees. And then, because of course if you can't pay it, then you get hit with a fee for not paying or for paying late, for going over limit. And the game is afoot. With any luck at all from the credit card company's perspective, these people will become little annuities that will just keep generating profits for the credit card companies for months, for years, maybe foreverhttp://www.pbs.org/now/shows/501/credit-traps.html."

 

[Mr. Shaman]

But it's always funny to see people crying about the need for more low income loans, and then enact policies that hinder them.

Lemme guess......that's another bank sob-story....right?​

"Of course the banks are up in arms about any legislation that would turn off the usury spigot they've milked for decades.http://crooksandliars.com/bluegal/obama-pushes-credit-card-reform"​