Predatory lending bill
Our state legislature is looking to pass baby steps toward cracking down excessive fees and other predatory lending practices.
Most of these issues could be avoided if people actually learned to read contracts and understand them. However, most people don’t. I think it’s a good step toward some serious reform even if it is a token gesture. What’s next? Hopefully credit card vendors on college campuses. I’m sure a lot of graduates get out of school with thousands in credit card debt, at 24% effective interest, and make only minimum payments.
April 16th, 2004 at 9:22 am
How many of the “instant loan” checks have you received from Citibank lately? I got my third one this year in the mail yesterday. I’m good for up to a 5k “loan”…of course the small print states that I will be paying 18% interest per year. I dont have any compassion for credit card companies or banks that have debtors default on them.
April 16th, 2004 at 3:12 pm
I guess I am on both sides; I don’t think it is predatory lending, but I don’t have any compassion for the lenders, either. It is business. People who have crap credit can get loans, but they have to pay a huge interest rate. Lenders can loan money out to people and get a huge return, but they take a big risk that they are never going to be paid back. To me, that is just the free market in action.
The worst part is that if they pass these laws, the only thing that is going to happen is that when a poor person has a rough spot, the only way for them to get out of it is to get a loan from a loan shark rather than MBNA, because MBNA won’t able to “prey” on them.