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ProfessorPlum

(11,289 posts)
Mon Apr 25, 2016, 08:26 AM Apr 2016

Lending money to someone is an aggressive, dangerous act

When we think about loans, we often think about how we've all needed more money in the past, and how we were relieved to be able to get a loan to finance our plans - money for education, a mortgage for our home, money to start a business. And in that sense, having money available to invest in our future - the availability of credit - is a palpable good in society.

But when lenders are allowed to set their own terms on interest and repayment, the act of lending money becomes an aggressive, destructive force.

Imagine if someone walked up to you and handed you $100 and then said, "you now owe me $500 at the end of the month", because they get to set the terms of the loan and the repayment. What they are essentially doing is stealing $400 from you by loaning you the money.

You probably see where I'm going with this - the dangers of loan sharks, the dangers of the big banks controlling their (wildly climbing) interest rates for credit cards, the dangers of sub-prime home loans, the dangers of usury, which were recognized and condemned even in biblical times.

Without tight controls on interest rates for loans, for payday lenders and loan shark-like industries (read banking), providing credit just becomes theft - and theft from the very people who are desperate for money.

It's evil, it's destructive, and it is why Debbie Wasserman-Schultz's support for the payday banking industry is so terrible for the party.

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Lending money to someone is an aggressive, dangerous act (Original Post) ProfessorPlum Apr 2016 OP
Every debt I've ever entered into specified terms clearly upfront whatthehey Apr 2016 #1
that's bullshit ProfessorPlum Apr 2016 #2
I read all the fine print before I take on a loan. Squinch Apr 2016 #3
This only zentrum Apr 2016 #7
You don't know anything about me. Pay Day loans ARE usurious. And yes I have had to use them. Squinch Apr 2016 #9
And vice versa zentrum Apr 2016 #46
The payday loan that I was forced to take had high interest. It also saved me during a very Squinch Apr 2016 #51
Most people cannot read or understand legalese. Dont call me Shirley Apr 2016 #83
ok DustyJoe Apr 2016 #16
You make an awful lot of assumptions about people who disagree with you. AtheistCrusader Apr 2016 #17
Convenient? zentrum Apr 2016 #42
Convenient for you to dismiss the other poster's viewpoint. AtheistCrusader Apr 2016 #44
47% couldn’t come with $500 for emergency.. busterbrown Apr 2016 #27
It's $400 zentrum Apr 2016 #37
46% said they would not pay cash or cash equivalent Mosby Apr 2016 #54
no, you do not read all the fine print before you take a loan ProfessorPlum Apr 2016 #20
Thanks Professor Plum. zentrum Apr 2016 #49
Nonsense. WillowTree Apr 2016 #86
Not bullshit. Not privilege. Common sense whatthehey Apr 2016 #12
So, it's insulting to regulate the banking industry? kcr Apr 2016 #84
Credit cards aren't loans metroins Apr 2016 #14
They can not change rates on existing balances Travis_0004 Apr 2016 #18
You'd better read your fine print. ProfessorPlum Apr 2016 #22
sounds like you'd better read yours. unblock Apr 2016 #36
This message was self-deleted by its author rjsquirrel Apr 2016 #53
You're making all of my points for me. ProfessorPlum Apr 2016 #57
You are always free Sgent Apr 2016 #89
I agree, over 30 years, that's been my experience (with one exception) bhikkhu Apr 2016 #52
Yeah awoke_in_2003 Apr 2016 #87
How ironic that the only part of Shariah Law that Westerners want banned malaise Apr 2016 #4
I've seen a theory that that's what's behind the war with the Muslim world nxylas Apr 2016 #26
Muslims take out mortgages too Yupster Apr 2016 #34
Muslim banks buy the property and then sell it with an added "convenience" fee REP Apr 2016 #58
The good news is that it's all paper money anyway... Helen Borg Apr 2016 #5
The teachings of Islam and Christianity forbid interest. FlatBaroque Apr 2016 #6
Never-the-less... Adrahil Apr 2016 #8
Your language about the essential need for lending describes exactly why lending should be regulated Bluenorthwest Apr 2016 #10
Don't get me wrong, I do favor heavy regulation of banking. NT Adrahil Apr 2016 #11
Regulation should balance the protections melm00se Apr 2016 #77
Industrialization and Unions gave rise the the middle class. WDIM Apr 2016 #61
Muslim countries charge a loan fee, like me. ErikJ Apr 2016 #13
You're a bad friend. Stryst Apr 2016 #38
Loaning money to friends is a minefield Yupster Apr 2016 #40
Agree. n/t FSogol Apr 2016 #45
$30 is certainly a hell of a fee for a one week loan hfojvt Apr 2016 #56
Learned my lesson long ago. ErikJ Apr 2016 #66
I guess we have different definitions of friend. ohnoyoudidnt Apr 2016 #67
The fee was his idea not mine. ErikJ Apr 2016 #73
If they don't pay, do you send a couple of boys around to break their legs? FSogol Apr 2016 #43
Lending money is not condemned by the Bible Cryptoad Apr 2016 #15
exactly ProfessorPlum Apr 2016 #19
This applies to Joe Biden and his sponsorship of 2005's Bankruptcy Reform closeupready Apr 2016 #21
One of Biden's worst moments in government ProfessorPlum Apr 2016 #23
IMHO, his VERY worst moment. That act of treachery was MASSIVELY disappointing, and closeupready Apr 2016 #25
I would not say theft hfojvt Apr 2016 #24
Bullshit. I say it again ProfessorPlum Apr 2016 #30
it yuge, eh? hfojvt Apr 2016 #35
I have derision for your reply ProfessorPlum Apr 2016 #47
Victims are many times volunteers WDIM Apr 2016 #62
never seemed that way to me hfojvt Apr 2016 #69
It would take twice as long to pay off a $5000.00 loan. WDIM Apr 2016 #74
these are lovely options for people who have enough income and wealth ProfessorPlum Apr 2016 #76
saving for a home? hfojvt Apr 2016 #88
Convincing people that money is not a natural substance is near impossible. hunter Apr 2016 #28
One doesn't get a loan without agreeing, in writing, to repay it with interest. lumberjack_jeff Apr 2016 #29
no shit ProfessorPlum Apr 2016 #31
Glad we agree. lumberjack_jeff Apr 2016 #33
Ugh. Take your condescension and your abetting of fraud ProfessorPlum Apr 2016 #41
Patronizing them is inherently a harm to the customer. lumberjack_jeff Apr 2016 #59
at the point where they have been appropriately regulated ProfessorPlum Apr 2016 #63
we cannot do anything hfojvt Apr 2016 #71
I'm not asking you to do anything ProfessorPlum Apr 2016 #75
I come at this from the other direction Yupster Apr 2016 #32
That's a bad example The2ndWheel Apr 2016 #39
You can replace the numbers with any two numbers ProfessorPlum Apr 2016 #50
People would do a lot of things if they could The2ndWheel Apr 2016 #72
I'm asking you to use your little imagination and think of it from the bank ProfessorPlum Apr 2016 #79
Uh-oh. I bought a CD, aka I lent money to the bank. Nye Bevan Apr 2016 #48
You would be if you could change the terms of the ProfessorPlum Apr 2016 #55
when is the bank changing rates Travis_0004 Apr 2016 #64
I will point you to this study ProfessorPlum Apr 2016 #78
That is from 2006 Travis_0004 Apr 2016 #82
Especially when the banks are borrowing the money for nothing. WDIM Apr 2016 #60
If only you understood how it really works Travis_0004 Apr 2016 #65
You can't possibly even believe this. Maybe you are talking about payday loans. Yo_Mama Apr 2016 #68
I am talking about payday loans, among other things ProfessorPlum Apr 2016 #70
this would have been your clue ProfessorPlum Apr 2016 #80
It sets up an adversarial relationship, is what it does. bemildred Apr 2016 #81
No, but like you say it should be regulated. Warren DeMontague Apr 2016 #85

whatthehey

(3,660 posts)
1. Every debt I've ever entered into specified terms clearly upfront
Mon Apr 25, 2016, 08:29 AM
Apr 2016

Bruno Thumb-breaker may work differently, but banks do not and cannot.

ProfessorPlum

(11,289 posts)
2. that's bullshit
Mon Apr 25, 2016, 08:33 AM
Apr 2016

don't pretend that you read every line of fine print.

Banks are currently free to change the terms on their credit cards at their whim. They can make offers that seem attractive and then switch them.

There is a reason that Elizabeth Warren refers to "tricks and traps" when talking about banks and their consumer loan products. It is because banks do not, in fact clearly specify their terms up front.

I'm happy for you that you've never encountered that. But people who aren't so privileged as you have to deal with this chicanery all the time.

Squinch

(51,220 posts)
3. I read all the fine print before I take on a loan.
Mon Apr 25, 2016, 08:37 AM
Apr 2016

Also, though I have been offered a lot of predatory loans, I have never taken one. Because I realize that taking that money only gets me into more trouble and doesn't help anything.

If you KNOW that many lenders are aggressive, as many certainly are, don't borrow from them.

zentrum

(9,866 posts)
7. This only
Mon Apr 25, 2016, 09:09 AM
Apr 2016

…..means you aren't truly desperate.
People who have fallen into debt before have bad credit ratings. Do you? Because if it's low, it means non-predatory lenders won't lend to you.

Or people have terrible emergencies—maybe it's bail or maybe it's a rotten tooth and they have no dental insurance.
Or the landlord is about to evict them if they don't pay the rent by the end of the month.
Or they have an emergency car repair, that if they don't make, will mean they can't get to work.
Or between rent, medicine, transportation, school clothes for kids—they need a loan to tide them over enough to feed everyone for the rest of the month.

Or maybe you just have less dependents.

You speak, I have to say, from a certain level of economic privilege. Patting yourself on the back for the choice of making better decisions means simply you have the luxury of choice.

47% percent of our population can not come up with $400 in an emergency.
Could you?
What of you couldn't?

And that's what wrong with PayDay usury.

Wake up and smell the desperation that sends people, (maybe also with less information than you have), into desperate borrowing.

Squinch

(51,220 posts)
9. You don't know anything about me. Pay Day loans ARE usurious. And yes I have had to use them.
Mon Apr 25, 2016, 09:16 AM
Apr 2016

And when I have, I have known what I have been getting into. I have known, because I read the terms.

Wake up and smell the fact that poverty does not equal ignorance.

And the blanket statement that loaning money is an act of aggression is ridiculous.

zentrum

(9,866 posts)
46. And vice versa
Mon Apr 25, 2016, 11:31 AM
Apr 2016

…..You know nothing about me and how I come to my conclusions. I've not said anything about poor people being ignorant. Only that there are some people who are not informed about usurious lenders. Some first time borrowers who have no experience can be easily taken in by an aggressive salesperson. I've seen it happen to students. You are the one who attributed my comment as being only about poor people.

Also, I was responding to the economic profile of yourself that you created--that you have never taken a usurious loan and never would. Your tone was, IMO, dismissive of people who take these loans as their best or only option.

But now you say you have taken them too. You KNOW they are usurious and use them anyway and then argue in defense of usury so long as the borrower reads the small print.

You've never taken them, you have taken them—
Wow.

Have a nice day.

Squinch

(51,220 posts)
51. The payday loan that I was forced to take had high interest. It also saved me during a very
Mon Apr 25, 2016, 11:40 AM
Apr 2016

disastrous time. Did I wish the interest was lower? Of course. I didn't think the interest rate was fair, but it was all that was available to me. Was I fully informed about the ridiculous interest rate? Yes. Was I grateful for it at the time? Yes. Am I glad we have legislated against those ridiculous rates? Yes.

Do I think I was a dupe who was preyed upon? No, I don't. It was the best of bad choices. I knew what I was getting into. Because I made sure I knew.

DustyJoe

(849 posts)
16. ok
Mon Apr 25, 2016, 09:42 AM
Apr 2016

The obvious answer to it is free money for everyone that wants it, that's the ticket. /sarc

If desperation levels are as high as this post suggests then the SNAP/TANF safety net
is there. If my account is empty and kids are hungry, food bank and family members
will be hit up quickly, I won't expect a money fairy to toss a bag of money my way.

zentrum

(9,866 posts)
42. Convenient?
Mon Apr 25, 2016, 11:21 AM
Apr 2016

No. I simply feel that people need to have more compassion and empathy when they judge people who feel driven to take these loans. And that the business should be regulated, whether or not the loan is made to a person who reads the small print or not.

I'm on the side of the people, period. Not the loan sharks. If that's me being "convenient"—I'll take it.

AtheistCrusader

(33,982 posts)
44. Convenient for you to dismiss the other poster's viewpoint.
Mon Apr 25, 2016, 11:28 AM
Apr 2016

You dismissed his or her entire financial history as 'not desperate enough' right out of the gate. You don't know that.

You don't know shit. But your claim requires that you dismiss people like that poster, or it goes nowhere.

busterbrown

(8,515 posts)
27. 47% couldn’t come with $500 for emergency..
Mon Apr 25, 2016, 10:35 AM
Apr 2016

Wow!!!! that is freaking crazy.. Got a link?

Thanks..I would like to use this fact when arguing with my right wing acquaintances ...

Can’t call em friends anymore...

ProfessorPlum

(11,289 posts)
20. no, you do not read all the fine print before you take a loan
Mon Apr 25, 2016, 10:22 AM
Apr 2016

that is a lie.

Also, the banks have written legislation nowadays so that the fine print essentially says that they can change the terms of the loan at their discretion. So, when you see that piece of fine print, what do you do? Do you decide you don't need a loan after all? Do you look for a bank that _doesn't_ use that language in their loans (hint: there aren't any).

WillowTree

(5,325 posts)
86. Nonsense.
Mon Apr 25, 2016, 07:43 PM
Apr 2016

Banks cannot change the terms of an existing loan just because they want to. One presumes that you're probably referring to credit cards. If you carry a balance and turn out not to be a reliable payer, they can and usually will raise the interest rate on your card, but only for future purchases. They can't raise the interest rate on the balance already on your card. Don't believe me? Read that fine print.

Banks and credit card companies are already regulated. Should the regulations be more strict? Maybe. But your argument loses credibility when you make statements that just aren't true.

whatthehey

(3,660 posts)
12. Not bullshit. Not privilege. Common sense
Mon Apr 25, 2016, 09:25 AM
Apr 2016

No I don't, and don't have to, read every line of fine print. I look closely though for key words and clauses like "APR" and "penalty" and "variable", and for deadlines and grace periods. This takes a minute or two at the most. Those with literacy issues can ask these as questions and ask where they can be found on the contract. Infantilizing poor people with the implication that this is beyond their wit and ability is too condescending for me. If they choose not to exercise a moment's care that's a different issue, but to say they are incapable of doing so is insulting.

kcr

(15,341 posts)
84. So, it's insulting to regulate the banking industry?
Mon Apr 25, 2016, 06:19 PM
Apr 2016

Well, too bad. Hurt the feelings of people who side with banks or allow banks to rip people off? I know which one I pick. Get out the tissues.

metroins

(2,550 posts)
14. Credit cards aren't loans
Mon Apr 25, 2016, 09:31 AM
Apr 2016

They're revolving.

The terms can change because the limit is reinstated.

When you pay off your mortgage, they don't reinstate the credit line.

 

Travis_0004

(5,417 posts)
18. They can not change rates on existing balances
Mon Apr 25, 2016, 10:06 AM
Apr 2016

Sure, they can change rates on new charges, but they must notify me in advance. If I dont like it I can cancel or stop using the card, and pay off my existing balance at the same rate I always have.

unblock

(52,879 posts)
36. sounds like you'd better read yours.
Mon Apr 25, 2016, 11:09 AM
Apr 2016

generally speaking, the only thing credit card companies can change on *existing* balances is a variable rate if that was already agreed to. for instance, if your credit card rate is tied to the prime rate and the prime rate goes up 0.25%, then your credit card rate goes up 0.25%.

they *cannot* change late fees or the interest rate other than by the agreed formula without giving you the option to lock in the old terms by canceling the card.

unless they have violated the law, the fine print *always* tells you that you have the right to cancel the card and the old debt will continue under the old terms until it is paid off.

Response to ProfessorPlum (Reply #2)

ProfessorPlum

(11,289 posts)
57. You're making all of my points for me.
Mon Apr 25, 2016, 12:09 PM
Apr 2016

Usury _is_ theft. I'm all for fair rates for credit, that don't destroy the borrower. Credit _can_ be cheap these days, if you lucky and careful.

But let's make credit less dangerous for everyone, even the unlucky ones, with fair rates and consumer products that don't explode and destroy people's lives.

bhikkhu

(10,732 posts)
52. I agree, over 30 years, that's been my experience (with one exception)
Mon Apr 25, 2016, 11:43 AM
Apr 2016

...the exception being an auto lease, which had a restriction that the vehicle could only be registered on the west coast. Needless to say, I only found out about that restriction after my company transferred me to the east coast and I tried to register my car in my new state and wasn't allowed to. While I was wrangling with the company over options I got pulled over and the car impounded, as I answered the officer honestly that I had been there 3 months and he replied the requirement was to register the car within 30 days, so it was considered an unregistered vehicle. I never did get it released to me - the bank had it shipped back to WA and auctioned, and billed me for the difference of the lease pay-off, plus costs. I've always paid my debts before and since but that one stuck in my craw and I wasn't going to slave to pay them off for years (me being 20-something at the time), declared bankruptcy and the bank wrote it off.

Other than that no problems. A couple times I've had loans where the terms weren't comfortable, and I was able to refinance them to better terms with other banks. My brother was in a rotten home loan when the recession hit, he was able to take advantage of the HAMP program and get a very good new loan.

None of that is easy without a basic education in economics, but I don't know any legal way around assuming competence on the part of a borrower.

My ex wife is another example, who didn't have a job for many years while raising kids, and still doesn't. Yet during the heyday before the recession she was able to acquire $85,000 in credit lines (she told me once), and amassed about $60k in debts, with no income. At one time there was the possibility that I could have tried to help work out a repayment plan, but I wasn't legally entangled or even entitled to any accurate information, by either party involved. The whole mess to me showed a mutual incompetence, both lender and borrower, and I stayed out of it.

nxylas

(6,440 posts)
26. I've seen a theory that that's what's behind the war with the Muslim world
Mon Apr 25, 2016, 10:30 AM
Apr 2016

Not sure I altogether buy that, but I'm sure that Islam's ban on usury doesn't exactly endear it to our owners either.

Yupster

(14,308 posts)
34. Muslims take out mortgages too
Mon Apr 25, 2016, 10:45 AM
Apr 2016

There are two ways Muslims take out mortgages without calling it a loan. It's just a workaround that banks do to pretend it's not a loan.

Google sharia mortgages for details.

REP

(21,691 posts)
58. Muslim banks buy the property and then sell it with an added "convenience" fee
Mon Apr 25, 2016, 12:12 PM
Apr 2016

to get around to proscription against interest. This fee is often higher than conventional interest. Many less observant Muskims prefer to do business with a non-halal bank because it's less expensive (according to my Syrian, Turkish and Palestenian friends, at least).

FlatBaroque

(3,160 posts)
6. The teachings of Islam and Christianity forbid interest.
Mon Apr 25, 2016, 09:03 AM
Apr 2016

Debt slavery is the economic model for control of the population.

 

Adrahil

(13,340 posts)
8. Never-the-less...
Mon Apr 25, 2016, 09:11 AM
Apr 2016

the rise of interest-based banking enabled the rise of the middle class in the late middle ages.

Without interest-based banking, economic power remained concentrated in the hands of the landed gentry, and the feudal system.

Of course like any economic system, capitalism (of which interest-based banking is an essential element), is vulnerable to manipulation. Significant regulation and governmental intervention is warranted, IMO. But economic mobility is extremely difficult, maybe impossible, without access to financing.

 

Bluenorthwest

(45,319 posts)
10. Your language about the essential need for lending describes exactly why lending should be regulated
Mon Apr 25, 2016, 09:17 AM
Apr 2016

strongly in favor of the borrower, to protect not only the individual but the entire extremely important process of lending and repayment. If it is a vital element to our economy it should not ever be left in the hands of pirates.

melm00se

(5,013 posts)
77. Regulation should balance the protections
Mon Apr 25, 2016, 02:43 PM
Apr 2016

for both the lender and the borrower.

Tip too far in one direction or the other an unhealthy environment (like it is in certain economic segments today) is created.

WDIM

(1,662 posts)
61. Industrialization and Unions gave rise the the middle class.
Mon Apr 25, 2016, 12:21 PM
Apr 2016

Interest-based banking was used to own the middle class and their labor and to make the wealthy even wealthier. Debt is Slavery.

 

ErikJ

(6,335 posts)
13. Muslim countries charge a loan fee, like me.
Mon Apr 25, 2016, 09:25 AM
Apr 2016

When I have made loans to friends I charge like a $30 fee as long as they leave collateral worth more than the loan. Usually just small ones like $200 for a week with $230 at the end of the week.

Stryst

(714 posts)
38. You're a bad friend.
Mon Apr 25, 2016, 11:14 AM
Apr 2016

I have never, not once, charged interest on any loan to a friend. If their your friend, and they're already in a bad enough situation to need a loan, and then you press them for thirty dollars? My opinion is that you're a bad person.

Yupster

(14,308 posts)
40. Loaning money to friends is a minefield
Mon Apr 25, 2016, 11:18 AM
Apr 2016

Better to just call it a gift and if they pay you back, then thank them.

hfojvt

(37,573 posts)
56. $30 is certainly a hell of a fee for a one week loan
Mon Apr 25, 2016, 12:07 PM
Apr 2016

that's like being a personal payday lender. I used to lend money to a few friends, and didn't charge anything. I didn't really want to do it, but I had one guy who said that he was paying a "friend" back double what he borrowed. So I felt like I should lend him money to save him from his "friend". They all paid me back, but it became like a revolving fund. They paid me back on the 5th of the month and two weeks later they borrowed money again.

Actually only a couple of them were friends. Another one was just a guy I knew. In my experience, when you have a business downtown, you meet a lot of "street people".

 

ErikJ

(6,335 posts)
66. Learned my lesson long ago.
Mon Apr 25, 2016, 01:09 PM
Apr 2016

I've lost lots of money loaning to friends with no fee no collateral. So I said no more.
Then this one small biz friend always needs loans and said he'd pay me $235 for a $200 loan on Monday and leave a lot of his photos for collateral. So I agreed and we did that many times. He already had a $500 outstanding loan. He never missed the fee front loans. SO I did that with a couple other friends making me believe I should go into the loan biz. lol

ohnoyoudidnt

(1,858 posts)
67. I guess we have different definitions of friend.
Mon Apr 25, 2016, 01:34 PM
Apr 2016

I have friends and a acquaintances. I have no problem loaning money to any of my friends without fees or collateral. They have made paying me back a priority and always have paid back every dollar. There are people I consider acquaintances are people whom I don't lend money because I don't trust them to bay back and if I felt the need to ask for collateral to guarantee payback, they aren't friends.

 

ErikJ

(6,335 posts)
73. The fee was his idea not mine.
Mon Apr 25, 2016, 02:27 PM
Apr 2016

He already had outstanding loan to me but needed emergency loan so told me he'd give me $35 for $200 loan. THen I tried that with another friend and he promptly aid me back plus the fee. THese are small business friends so not quite the same as good personal friends.

Cryptoad

(8,254 posts)
15. Lending money is not condemned by the Bible
Mon Apr 25, 2016, 09:40 AM
Apr 2016

but charging interest on loans is! The Backbone of Capitalism !

 

closeupready

(29,503 posts)
21. This applies to Joe Biden and his sponsorship of 2005's Bankruptcy Reform
Mon Apr 25, 2016, 10:24 AM
Apr 2016

which erected obstacles to borrowers who are in financial distress from appealing for US government protection from creditors.

 

closeupready

(29,503 posts)
25. IMHO, his VERY worst moment. That act of treachery was MASSIVELY disappointing, and
Mon Apr 25, 2016, 10:27 AM
Apr 2016

I can NEVER forget it whenever I see him on the news. I still like the man - I think he has lots of good qualities - but it was a horrible act, and he never apologized for it.

hfojvt

(37,573 posts)
24. I would not say theft
Mon Apr 25, 2016, 10:27 AM
Apr 2016

after all, in this case, the victim is giving it away, not just having it taken. They seek out the loan shark.

It is taking advantage of either the desperate or the stupid, or some combination thereof. And often what causes the desperation is the first stupid payday loan.

Most bank lending is not of that type though.

ProfessorPlum

(11,289 posts)
30. Bullshit. I say it again
Mon Apr 25, 2016, 10:38 AM
Apr 2016

The reason Elizabeth Warren has her hair on fire about these issues is that people who are neither desperate or stupid are being fucked over royally by the banking industry. "Tricks and traps" means that the terms of the loan are deliberately hidden, obscured, and fraudulent. People take loans in good faith, knowing what they think the terms of the loan are, and then those loans explode and destroy them.

why are banks allowed to do this? Because they essentially write and approve of all the legislation that applies to them. they want to be loan sharks? There are hundreds of their bought lackeys in Congress ready to enact the changes that allow that.

This is a huge problem in the country, people are having their lives ruined, and the worst part is people like you who would shame the victims of these scams by calling them desperate and stupid. And when it happens to you, you will feel ashamed, stupid, and silent about it because after all, you accepted the terms. But fraud should never be abetted by victim-blaming.

I encourage you to continue to be careful and read your terms and fine print. Everyone should be as responsible for themselves as much as possible. But we shouldn't be allowing/encouraging fraud, usury, and theft.

hfojvt

(37,573 posts)
35. it yuge, eh?
Mon Apr 25, 2016, 11:08 AM
Apr 2016

Where's your data on that?

The worst part is people like you who cannot discuss things without a whole bunch of bombast and derision.

WDIM

(1,662 posts)
62. Victims are many times volunteers
Mon Apr 25, 2016, 12:24 PM
Apr 2016

Debt is slavery. It is used for the wealthy to suck the wealth to the top and leave the workers exploited and penniless and under their control.

hfojvt

(37,573 posts)
69. never seemed that way to me
Mon Apr 25, 2016, 01:54 PM
Apr 2016

Debt is less slavery than rent is. I've borrowed money four times. Once to buy a car, and three times to buy a home. Without that debt, I might be paying $600 a month for the house I am in now. Instead it costs me about $75 a month in property taxes. That would seem to have saved me about $50,000 over the last decade. Of course, I paid down all those loans as fast as possible. Paid off the car in three months, paid for one house in about two years (I bought it with about a 60% down payment) and the other one in four years and was about two years ahead when I sold the first house for break even.

What would you suggest? That I wait and save before I even thought about a decent home? Wait for what? Do you have any idea how long it takes for a working man to save $5,000?
http://www.democraticunderground.com/?com=view_post&forum=1002&pid=162723

WDIM

(1,662 posts)
74. It would take twice as long to pay off a $5000.00 loan.
Mon Apr 25, 2016, 02:33 PM
Apr 2016

Saving for purchases like cars and homes actually nets the consumer more money.

If you spend 5 years paying yourself for a car instead of spending 5 years paying a Bank for a car you can spend almost twice as much on the car you purchase after 5 years.

ProfessorPlum

(11,289 posts)
76. these are lovely options for people who have enough income and wealth
Mon Apr 25, 2016, 02:43 PM
Apr 2016

to buy cars with cash.

Indeed, you have discovered the secret that it is expensive to be poor, because you cannot save up money to buy a house, or to buy a car, you have to borrow for those things.

The rich, as the saying goes, get richer, and your post is a great example of why.

hfojvt

(37,573 posts)
88. saving for a home?
Tue Apr 26, 2016, 10:34 AM
Apr 2016

really? So instead of borrowing money and making $200 house payments, you would suggest I come out ahead by paying $600 in rent those years while I try to save money to buy a house?

I think your math is faulty there.

Whatever the cost there is in interest is far less than the cost of rent. Especially considering that the loan can be paid off quickly.

And there is a cost, maybe not in money, for not owning a car if you live more than two miles from work. Even my .7 miles to work is not gonna be fun in this pouring rain.

hunter

(38,473 posts)
28. Convincing people that money is not a natural substance is near impossible.
Mon Apr 25, 2016, 10:37 AM
Apr 2016

We are very well trained as a society to believe in money.

The entire system is rotten to the core. What we call "economic productivity" is a direct measure of the damage we our doing to the earth's ecosystems and our own human spirit.

 

lumberjack_jeff

(33,224 posts)
29. One doesn't get a loan without agreeing, in writing, to repay it with interest.
Mon Apr 25, 2016, 10:38 AM
Apr 2016

Yes, predatory lenders should be out of business. But people should not agree to predatory loans.

 

lumberjack_jeff

(33,224 posts)
33. Glad we agree.
Mon Apr 25, 2016, 10:43 AM
Apr 2016

Your solution to the problem of predatory lenders is to legislate them out of business. Mine (which in the absence of legislative consent is the only immediately useful approach) is to not patronize them.

The single mom who thinks that a payday loan is the only way to avoid homelessness is saved from their predation either way.

ProfessorPlum

(11,289 posts)
41. Ugh. Take your condescension and your abetting of fraud
Mon Apr 25, 2016, 11:19 AM
Apr 2016

and have a sad life. Nice image to imply that this applies to homeless single moms, instead of everyone who deals with the banking industry in their day to day life.

I wouldn't legislate lenders out of business. But I would legislate and regulate them to the point where interacting with them wasn't a harm to the customer.

 

lumberjack_jeff

(33,224 posts)
59. Patronizing them is inherently a harm to the customer.
Mon Apr 25, 2016, 12:12 PM
Apr 2016

You really don't do conversation very well, do you?

ProfessorPlum

(11,289 posts)
63. at the point where they have been appropriately regulated
Mon Apr 25, 2016, 12:37 PM
Apr 2016

they cease to be (as much of) a harm to the customer.

Or, if you'd rather, I agree with your statement that predatory lenders should be put out of business. but we can do that by legislating the predatory out of them.

hfojvt

(37,573 posts)
71. we cannot do anything
Mon Apr 25, 2016, 02:04 PM
Apr 2016

since your idea of winning friends and influencing people is to insult anybody who doesn't follow your almighty righteous ideas.

Yupster

(14,308 posts)
32. I come at this from the other direction
Mon Apr 25, 2016, 10:43 AM
Apr 2016

I'm an old guy that hasn't borrowed money in a lot of years.

On the other hand, I loan money to companies, cities, water districts, ISD's all the time. I loan $ 10,000 to the city of Indianapolis so they can repair their sewer system for instance.

It's a risky proposition. I loaned money to Lehman Brothers and GM. Both went bankrupt and forget the interest, I didn't even get all my principal back. I loaned money to a young person once to buy a car because he was too young to sign. He made one payment and I ended up paying the rest.

Loaning money to other people is a risky affair. It's even a risky affair loaning money to family or friends as there are two losses there. You may not get your money back and it may hurt your relationship with that person too.

It would be nice if there was a balance to interest rates again though. CD rates are just way out of line getting 1 % for a two year CD. At least you don't pay much tax since you don't make much interest.

The2ndWheel

(7,947 posts)
39. That's a bad example
Mon Apr 25, 2016, 11:17 AM
Apr 2016

Who is walking up to random people, giving them $100, and then asking for $500 back? Imagine some random person walking up to you, and asking for $100 that they promise they'll pay back next time they see you. Just going to hand money to them?

It's a two-way street. If you're going to loan out money, you want something for the effort, or the risk that you're taking, by giving money away to someone. The higher the interest, the less that person/institution wants to give you the money, or trusts that they'll get it back.

In an increasingly impersonal world, where everyone is either a nameless face, or a faceless name, numbers are all anyone has to go on.

ProfessorPlum

(11,289 posts)
50. You can replace the numbers with any two numbers
Mon Apr 25, 2016, 11:38 AM
Apr 2016

Where the second is sizeably larger than the first. My numbers were chosen to emphasize and illustrate the incentive for lenders to make predatory loans. Why wouldn't someone, or some bank, make those kinds of loans, and trickily hide the terms of those loans, if they could? With the force of law enforcement an government behind them, it's a license to steal.

The2ndWheel

(7,947 posts)
72. People would do a lot of things if they could
Mon Apr 25, 2016, 02:21 PM
Apr 2016

It's not your numbers I was talking about, it was the scenario. If someone randomly comes up to you, gives you $100, and then says you now owe them $500, nobody is taking that $100. If you ask someone for $100, and as a condition of getting that money, they say you owe them $500, that makes more sense as an example.

If you're going to regulate how much the person giving the money can charge in interest, then you have to also regulate how much the person getting the money has to pay by a certain time. Both sides take a risk in the transaction.

As you say, lending money can be dangerous, for all sides. If there's little to no upside for the lender, why are they handing the borrower money? Especially in the impersonal, distant reality that we live in, where we're all nobody to each other.

ProfessorPlum

(11,289 posts)
79. I'm asking you to use your little imagination and think of it from the bank
Mon Apr 25, 2016, 02:51 PM
Apr 2016

(or the person with a pile of money)'s point of view.

If you had a bunch of money, and could loan it to people and then take even more of their money back, and you had the full force of the courts and legal system to back you up, and you could set the terms of that loan - when a payment was late, what you could charge as fees, when and if you could change the terms of the loan, how you could sprinkle in penalties and extensions and surprise rate changes, etc. and you could hide all of that in confusing paperwork that no one read until it was too late . . .

why then, you might start to make predatory loans, too. After all, the people "agreed to the terms", so what's the problem?

ProfessorPlum

(11,289 posts)
55. You would be if you could change the terms of the
Mon Apr 25, 2016, 11:55 AM
Apr 2016

Cd at will and ruin the bank financially. Fortunately for them, they write the rules, not you.

 

Travis_0004

(5,417 posts)
64. when is the bank changing rates
Mon Apr 25, 2016, 12:56 PM
Apr 2016

I have a fixed rate mortgage and fixed rate auto loan. The bank can not change that rate. I also have a credit card. Yes its an APR, but the bank doesnt control the fed rate, and I agreed to it.

Also, I have CD's as well at a variable rate. So if rates go up the bank owes me more money

ProfessorPlum

(11,289 posts)
78. I will point you to this study
Mon Apr 25, 2016, 02:47 PM
Apr 2016
http://www.consumer-action.org/press/articles/new_gao_credit_card_study_highlights_anti_consumer_practices/

so that you may understand better the way that fees, penalties, rates, terms, and other bankster fuckery is hidden in mountains of undecipherable paperwork.

When you say "the bank can not change that rate" you may actually be surprised at what your bank can or cannot do, based on language and fine print that you haven't read and that professors of contract law can't make heads or tails of.

If you mean "I think it would be wrong for the bank to be able to change this rate", then I agree with you.
 

Travis_0004

(5,417 posts)
82. That is from 2006
Mon Apr 25, 2016, 04:28 PM
Apr 2016

As such, a lot of the complaints are not valid as they would be illegal under the card act of 2009.

WDIM

(1,662 posts)
60. Especially when the banks are borrowing the money for nothing.
Mon Apr 25, 2016, 12:17 PM
Apr 2016

The fed rate is less than 1%. The banks borrow at nothing and then lend it out at 5% and higher sometimes as high as 20% plus. It is complete robbery of the consumer. The Federal Reserve and the Banksters that run it and Wall Street are the biggest thieves in the history of the world.

But, their vaults are filled with silver that we all have sweated for.

 

Travis_0004

(5,417 posts)
65. If only you understood how it really works
Mon Apr 25, 2016, 12:59 PM
Apr 2016

Most money the banks loan is not borrowed, its created out of thin air. If I deposit 20k, the bank can use that deposit and write a mortgage for 100k. That extra 80k doesnt exist anywhere, it was created from nothing.

Yo_Mama

(8,303 posts)
68. You can't possibly even believe this. Maybe you are talking about payday loans.
Mon Apr 25, 2016, 01:49 PM
Apr 2016

But then why are people taking out payday loans? Because they are in trouble and think it is the best/cheapest way? It may be!

I don't like the payday loan industry, but the reality is that often they DON'T get their money back, so high interest rates are needed if people need payday loans. You can't regulate the interest rates very low without putting all payday lenders out of business, and if you did, you would get black market lenders with enforcers, which is the way it used to work. Vinnie the loan payment collector would be worse.

The solution, long ago, for which I advocated was that anyone could get small loans from their SS balance, and pay them back, with interest and a transaction fee (for bookkeeping) through withholding.

Gee, never met a politician who wants to hear about it.





ProfessorPlum

(11,289 posts)
70. I am talking about payday loans, among other things
Mon Apr 25, 2016, 01:56 PM
Apr 2016

including credit cards from big banks.

Yes, the poor payday loan industry. They just need those huge interest rates to survive.

Your idea about SS loans is a poor one, which is why no one wants to talk to you about it. There is no such thing as an "SS balance". Your money goes to people who are old, retired, widowed, orphaned, disabled. Then they spend it and it helps to keep the economy moving and them alive. There is nothing to borrow against.

ProfessorPlum

(11,289 posts)
80. this would have been your clue
Mon Apr 25, 2016, 03:35 PM
Apr 2016

"it is why Debbie Wasserman-Schultz's support for the payday banking industry is so terrible for the party"

bemildred

(90,061 posts)
81. It sets up an adversarial relationship, is what it does.
Mon Apr 25, 2016, 04:26 PM
Apr 2016

Which is why borrowing money from people who sell you stuff too is a mistake, they now have two ways to be adversarial, and they are not going to be so concerned with you not coming back either.

Warren DeMontague

(80,708 posts)
85. No, but like you say it should be regulated.
Mon Apr 25, 2016, 06:21 PM
Apr 2016

And the payday lenders take advantage of the most vulnerable. Yeah, give people payday loans, and turn a profit, but you dont need to totally hose people.

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