Sen. Bernie Sanders: Stop Wall Street Loan-Sharking

[marmar]

from HuffPost:




Sen. Bernie Sanders
Posted March 14, 2009 | 10:33 PM (EST)
Stop Wall Street Loan-Sharking


There is a huge sense of outrage in our country today at what Wall Street has done through greed, recklessness and, likely, illegal behavior. The "Masters of the Universe" have plunged our nation, and much of the world, into a deep recession which has caused millions of Americans to lose their jobs, their homes, their savings and their hope for the future. In order to fully understand the cause of this fiasco, I have introduced legislation calling for a thorough investigation of the financial meltdown and the prosecution of those CEOs who might be guilty of illegal behavior. The culture of greed, fraud and excessive speculation must come to an end.

As I talk to Vermonters about this crisis one of the great frustrations that I hear is that while taxpayers are spending hundreds of billions of dollars bailing out major financial institutions, and while these big banks are getting near-zero interest rate loans from the Fed, these very same financial institutions are now charging Americans 20 percent or 30 percent interest rates on their credit cards. In fact, one-third of all credit card holders in this country are now paying interest rates above 20 percent and as high as 41 percent - more than double what they paid in interest in 1990. Recently, some major institutions, such as Bank of America, have informed responsible cardholders that their interest rates would be doubled to as high as 28 percent, without offering any explanation or excuse why the increase was taking place.

Let's be clear. What Wall Street and credit card companies are doing is really not much different from what gangsters and loan sharks do who make predatory loans. While the bankers wear three-piece suits and don't break the knee caps of those who can't pay back, they still are destroying people's lives.

The Bible has a term for this practice. It's called usury. And in The Divine Comedy, Dante Alighieri's epic poem, there was a special place reserved in the Seventh Circle of Hell for sinners who charged people usurious interest rates. .........(more)

The complete piece is at: http://www.huffingtonpost.com/rep-bernie-sanders/stop-wall-street-loan-sha_b_175023.html

[dkf]

1. 41%? Good grief.

How bad does your credit have to be to get charged 41%? Sounds like it would be a good thing to cut these guys off anyway.

The Government should offer low cost loans to these people. Since you can't really default on Government Loans, the risks should be lowered.

[Mnemosyne]

3. It usually isn't bad credit, but poverty income they are using to justify such rates.

I have a 692 fico rating. I was in a terrible state of depression/mania cycling. I wanted to help my daughter with school. Rate went from 12% when I arrived, up to 27.15% by the time they got me to sign. $5100 turned into $9300 payback. "Because your income is low and aren't carrying much credit."

After 16 months of early payments I asked to refinance at a lower rate. Told no can do.

I was/am so embarrassed when I realized I had been had, I only told my daughter, who is helping make the payments. I used $2000 of the loan to make payments and paid on tuition with most of the rest.

Criminal, imo.

[The River]

2. Part Of Why

I quit using credit cards in 2000. All
those former interest payments to the bank
now go into savings and the bank pays me instead.
It really makes a difference.