Friday, January 26, 2007


Credit or Blame

I'm watching C-SPAN right now, the beginning of a Senate hearing on the credit industry. The Banking committee members are making their opening speeches. The majority seem to think that the problem with the credit card industry is that low-income people — college students in particular — get credit cards and use them, and then they can't make the payments. The focus has been on credit-card holders using their cards responsibly. I'm waiting, but I'm not going to hold my breath, for somebody to mention the shame of credit-card companies raising the interest rates far beyond the borrowers' ability to meet the payments, much less pay down the debt. We used to call it "usury", and it used to be a crime. [edited to add:] I should have given the committee chair, Senator Dodd (D-CT) some credit. The first witness, Elizabeth Warren of Harvard Law School, is talking about predatory charges and fees. ...It certainly does look like the Democrats are going after the Bankruptcy Factory that the credit industry has become. [now that the broadcast is over] It certainly was interesting to listen to representatives of Big Banks claim they didn't impose predatory interest and penalties, and then hear the consumer advocates cite examples where they most certainly did.

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