Thursday, November 19, 2009

Neither a borrower nor a lender be

And he said unto them that stood by, Take away from him the pound, and give it unto him that hath the ten pounds.

-Luke 19:24-

Once upon a time there were people who would lend you money at high rates of interest. We called them loan sharks and we put them in jail if we could catch them. We had usury laws to protect the public from being forced into ruinous transactions. We were just inches away from Marxism.

Then came the deregulators who told us that it was toxic government interference and was depriving us of our "freedoms" to apply the same laws to that class of supercitizens known as corporations and so now we are free to borrow at rates Don Corleone wished he could have charged. Sure, some states jumped in and capped payday loans and the government "protected" the military from being charged more than 36%, but of course that's an outrageous assault on our "freedoms" and sure enough, the lobbyists came out of the woodwork and bought themselves a House subcommittee which went to work legitimizing loans with a 391% APR. For many in the payday loan business, that's not enough.

H.R. 1214 introduced earlier this year by Congressman Rep. Luis "dances with jackals" GutiƩrrez [D-IL4] is still in committee. Yes, Luis is a Democrat, let's give credit where it's due and Luis, who rose from poor Hispanic roots in Chicago promising to help others like him is now the champion of legalized juice loans and the big banks that screw the little guy in a big way.

The congressman got into trouble last year for getting a $200,000.00 loan from a contractor for whom he had intervened with the zoning board, but I'm sure he isn't paying 391%. A competing bill from Congressman Joe Baca would prevent States from capping rates at all and would allow much larger add-on fees and charges, but the really great feature would allow you to roll over the loan indefinitely, racking up that 400% or so until you're forced to commit suicide.

Meanwhile, for the rest of us who aren't desperate enough with trying to pay medical bills and mortgages we can't afford, the Credit companies are out to protect our freedom too. Faced with having to warn us they're tightening the screws in the near future, they're tightening them now without warning. I got a letter yesterday from my friendly MasterCard folk ( I won't mention the name but it rhymes with Citibank) informing me that since I've been such a good customer for 25 years and always paid the full balance on time, they would raise my interest rates to over 20%. Well to tell the truth there was a time or two when I got the un-postmarked bill on or after the due date although the last two times they tried that I'd switched to e-bills and had documentary proof that they sent the bill too late to be paid on time. They refunded the charges which would have amounted to nearly 100%, but I never got an apology for their attempt at petty larceny and I don't expect a letter of appreciation for my part ( and yours) in bailing them out when they choked on their own greed.

Yes, I know, when the Republicans justify their crimes by insisting the Democrats aren't pure at heart either, they don't avoid the guilt, but they're not always lying.

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