If you want to take a stand against special-interest influence... (4.00 / 2)

You can join the Change Congress donor strike!
http://Change-Congress.org

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by: AdamGreen @ Wed May 13, 2009 at 22:47:39 PM CDT

Youd' be surprised at how many bank apologists there are... (4.00 / 1)

...on the left.  The unfounded fears of "banks pulling credit 'cos they can't charge 30%"...

Well, a bank loan with 30% interest isn't a loan, it's a gouge, and our country would be better off without "credit" like that!

REID: Voting against us was never part of our arrangement!
SPECTER: I am altering the deal! Pray I don't alter it any further!
REID: This deal keeps getting worse all the time!

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by: lord_mike @ Wed May 13, 2009 at 23:17:39 PM CDT

Do you prefer Mastercard or Mafiacard? (4.00 / 1)

Well we have a Pope who worked for Hitler...and he's going to Heaven.  What else is new?

A Democratic President who "wants" to close down Guantanmo, Keep Bagram open, continuing kidnapping people and holding them indefinetly...

What's so bad about credit card companies doing what the Mafia does....at least it's legal....

If credit card companies didn't make 30% loans we'd have to go to Rocco. Do you want to borrow your money from Rocco or Mastercard. Mastercard is keeping a lid on the growth of the Mafia.

At least Master Card doesn't beat you up physically, they just shake you down.

They won't legalize drugs though....we'd better off if General Mills could package those cheerios along with a snack o' smack. That would stop the drug lords dead in their tracks.

You should be thankful.

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by: Stu Piddy @ Wed May 13, 2009 at 23:25:33 PM CDT

. (0.00 / 0)

Normally I'm completely against anything that regulates pricing. But in this case the result is simply less credit to go around. I don't think I can be mad at a world with less credit cards

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by: NeonBlack @ Thu May 14, 2009 at 00:01:59 AM CDT

And in the case of Small Biz credit (0.00 / 0)

a state bank could step in and satisfy that need.

Meanwhile, municipal loans/bonds would also be serviced by state banks, and student loans and infrastructure loans would cease to be loans at all, but be grants by the federal government.

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by: glacierpeaks @ Thu May 14, 2009 at 01:43:26 AM CDT

[ Parent ]

Fire your bank (4.00 / 4)

join a credit union.

Montani semper liberi

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by: Sadie Baker @ Thu May 14, 2009 at 06:04:03 AM CDT

"Stop paying our credit cards"...what a GREAT idea! (4.00 / 1)

All that would happen would be that, after a few months of increasing harassment from collection agencies, those agencies would go to court and get a "default judgment" against you, which would entitle them to a) take all your belongings, b) seek out and seize any of your assets being held in banks, and c) garnish an allowable percentage of your paycheck.  Oh, and, by the way, although they can only legally take a portion of that paycheck, you better not deposit the rest of it in a bank, because then it becomes "assets" and can be seized under point b) above.  Which means that you have to work on a cash-only basis, which means good luck with landlords, utility companies, etc., that demand "check or money order" only -- you'll have to buy a money order for each bill, with a hefty service charge for the privilege.

And you'll have to keep living this way until every cent of your debt is paid off.  Except that, while collecting this debt, the agency will continue to charge you late fees, collection fees, interest on those fees, etc., etc., so that the end result will be that you'll never be able to pay off the balance.  So, go ahead...have fun!

You work sixteen hours,
And what do you get?
Another day older
And deeper in debt.
St. Peter, don't you call me, 'cause I can't go,
I owe my soul to the Citibank store...

 

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by: regnaD kciN @ Thu May 14, 2009 at 06:17:21 AM CDT

I don't condone not paying bills (0.00 / 0)

but much of your argument is fundamentally wrong.
Yes, if you stop paying your credit cards, the banks can indeed go to court to get a judgment against you. However, they cannot arbitrarily seize belongings, balances with other institutions, or garnish wages. It largely depends on where you live. In my state and in many others, wages cannot be garnished by creditors by law except for unpaid taxes and child support. If you stop paying a car loan, the car can be repo'd, but a bank cannot take your car for not paying a credit card bill. And even if they could, most creditors would not bother due to the cost and logistics involved. Most of your possessions would be safe.

Eventually  - usually within a few months - the banks charge off the debt. If you do not seek bankruptcy protection, they can attempt to collect by sending collection notices, phone calls, etc. And your credit reports will take a massive hit. But in 7 years, the collection accounts and court judgment come off by law. So if you want to play a waiting game and have 7 years to spare, maybe that's an option.

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by: Helzapoppin @ Thu May 14, 2009 at 08:19:18 AM CDT

[ Parent ]

Playing their Game (0.00 / 0)

Credit card companies know the game won't change so long as they have most people intimidated into faithfully paying. The Credit granting system is immoral because it's theft. That's clear to anyone who studies economic fundamental.

The only way to change the game, is for us to change it; they wont, then we will.  

A National Progressive Alliance, the viable solution.
http://www.openleft.com/diary/...

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by: boldhawk @ Mon May 18, 2009 at 07:20:58 AM CDT

[ Parent ]

It's not merely the rate of interest (4.00 / 2)

that is the problem, although there should be some formula for usury.

Two things have changed over the past decade.

First, very few people have knowingly signed on to a 30% interest card.  Credit cards have always charged high fees and interest when a cardholder defaulted.  This made economic sense - the credit had become very risky, and the possibility of bankruptcy and collecting nothing high, so the high fees made up for the losses on defaulting borrowers.

But, the high fees and interest were charged only to those who had failed to fulfill their obligations to the credit card company.  Now, these fees are being charged to people who started out with a market rate of interest, and have paid their bill faithfully every month.  If they default on another card, the rate goes up.  If they have too many auto accidents, the rate goes up.  If they have too much outstanding credit, the rate goes up.  If the credit card company cuts their credit line without reason or notice, and they can't pay it off in a month, the rates goes up.

As I understand it, part of the reason these schemes didn't occur in the past was that credit card practices were subject to state law.  Apparently, some time during the Bush administration, regulation became the sole province of the federal government - which meant no oversight, no protection.

Now, credit card terms are governed by one-sided Calvinball rules.

Second, it was easier to wipe out credit card debt in a bankruptcy.  Now, more consumers are going to be forced into payment plans where they pay off a large portion of this ridiculous debt.

These thirty percent unregulated interest rates destroy anything left of the notion that the free market produces rational or efficient results.  If credit card companies wanted, collectively, to insure that consumers in trouble would pay, they wouldn't charge 30% interest without notice.  That sort of hike in rates won't cause the consumer to pay - instead they will probably default on other loans, and file bankruptcy sooner than they otherwise would. The net result could be negative for the card companies.

The combination of unregulated collection and interest practices, more restrictive bankruptcy laws, and a major economic downturn may do more to enlarge a permanent underclass and increase inequality of wealth than anything that has happened in the past thirty years.  That may be one of the Obama years' enduring legacies.

How did ideas like "market rate of interest" "market rate of interest" or "usury" become radical or controversial concepts?

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by: kanzeon @ Thu May 14, 2009 at 09:29:26 AM CDT

This is wrong: (4.00 / 1)

"As I understand it, part of the reason these schemes didn't occur in the past was that credit card practices were subject to state law.  Apparently, some time during the Bush administration, regulation became the sole province of the federal government - which meant no oversight, no protection."

Credit cards are still subject to state law.  What happened was, sometime in the 80s or 90s, there was a court decision that merely required that the credit card companies be based in some state, regardless of where the creditor lived, and then, the company would be subject only to the law of that state.  And the states subsequently began enacting a series of race to the bottom laws in order to avoid losing the tax revenue of the creditors.

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by: Valatan @ Thu May 14, 2009 at 09:53:01 AM CDT

[ Parent ]

I'm not sure that (4.00 / 1)

I said anything effectively different.

There are no usury laws in South Dakota, where most credit card issuers are located.  

http://resources.lawinfo.com/e...

Hence the default is federal law, which under Gramm-Leach-Bliley is zip.  The federal government, however, does have the power to regulate credit cards.

State courts were deprived of jurisidction over credit card transactions by a court decision in 1999:

http://findarticles.com/p/arti...

So, theoretically, if South Dakota passed a law limiting credit card practices, people in South Dakota could enforce it, as long as the credit card issuers stayed in South Dakota.  Meaning that the cards are subject effectively only to federal regulation.

It does appear this was a late Clinton era development.

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by: kanzeon @ Thu May 14, 2009 at 14:35:29 PM CDT

[ Parent ]