So spooke you are basically saying that people are not smart enough to manage there lives and the government must do something about it.
If the bankers are being irresponsible by loaning to people who will default, that is between bank management and bank ownership. Of course they should be responsible when offering credit, that is, offering it in a manner that is safe and profitable for their investors.
I’m astounded that you think a guy making $11 an hour shouldn’t be able to exhibit enough self control to not run up $20K in debt. If he’s run up that sort of debt, it ain’t the terms that are the problem. The terms of the contract, by and large, are simple. Tell me that there are hidden terms causing these problems, rather than overindulgent spending, I’d like to hear what they are, and why the working class can’t understand them.
You don’t seem to understand that you’re really calling poor working class people feeble minded. They are unable to control their own urges, unable to manage a budget, and prey to the evil credit card companies who do the reprehensible thing of sending them credit applications. They’re just too weak to not be manipulated into singing contracts then buying all sorts of shiny toys that other evil corporations market to them. This may very well be the case, but I’m not interested in handcuffing another adult’s options because I “know better than they do.”
Yes Gazpacho, that is exactly what I’m saying. Thanks for paying attention.
The government steps in to protect the unsophisticated on a regular basis, and (sorry if it offends the Libertarian in you) this is a proper function of government in my view.
That is nothing but a giant strawman.
Can you show us where anyone on this board has advovacted that corporattions should be able to “use political influece to change the rules” regarding bankruptcy?
Well, we can all find any politically philosophy “morally bankrupt” by making shit up and attributing it to that philosophy. What’s much harder, and more intellectually honest, is to take the time understand the moral basis of a given political philosophy. But let’s save that for another thread…
I find that your ideas offensive. The idea that you need to pay for what you purchase is not a sophisticated concept.
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Can any corporation (or any group entity, including states, schools and churches) be “moral”? I think value-laden words like “immoral” and “blame” do not advance the conversation unless there is underlying agreement on what values entities “should” have. This is just a meta-quibble though.
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“Damaging to the nation” is a better standard to use–without deciding whether banks owe some “moral” duty to the public, we can still say that the nation is better off with more cc regulation, and we can discuss what that should be. That way we are not “legislating morality.”
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Contracts that are actually misleading can be addressed by class action litigation. What is more troubling to me is the tendency to write terms that, while perhaps not actionable, are unclear and obscure the financial terms. The level of complexity (multiple categories of fees for different situations) is also an issue–caused in part by existing laws but also by herd mentality and a reluctance to break the mold with contract language that has not been tested in court. (One wonders why the market has not responded with a “No Surprises” cc product–that makes me think the market is not functioning well–as is not unexpected where we’re dealing with contracts of adhesion.)
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Can we legislate clear contract language? Not really. Can we legislate marketing practices? This turns out to be difficult in practice (as the cigarette companies and the public have found) unless we can accept a total ban. We can however legislate items like maximum interest rates, age of majority, bankruptcy laws, debtors’ prison conditions and real property liens. Bright-line rules are clear, if not flexible.
Massive strawman. If you had read Ayn Rand’s essays, you’d know that one of the things she denounces the most is lobbying and government intervention.
This is part of what makes a statist philosophy so morally bankrupt in actual practice.
Um…msmith537’s response to credit card companies using political influence to change the rules regarding bankruptcy:
Sounds like there’s at least one person who has no problem with it, and I also suspect that Cheesesteak has no problem with it, either.
Is it now wrong to make the assertion that people need to pay back what they owe, AND people shouldn’t buy what they cannot afford to pay back?
If either/both of those principles were practiced by consumers, the point of this debate would be moot.
WRT bankruptcy law, I think there is a point of debate. I’m no expert on it, so I can’t say whether or not today’s laws are too lax or too strict.
I can imagine situations where consumers can take unfair advantage of bankruptcy law, especially with credit cards. CCs are open lines of credit, they do not go through review every time they are used, therefore if a person’s situation changes, the company can’t drop their limit right away. Other loan brokers can do a credit and income check at the time of request and refuse to offer the money. You know you’re in deep trouble financially, you can still max out your cards even if you could never get a mortgage or car loan. I haven’t the slightest clue what the companies are actually lobbying for, this is just some musing on my part. If spoke- has a link to show what sort of legislation they’re trying to get enacted, I’d love to read through it.
Be that as it may, the CC companies don’t write law, our duly elected Legislature does that. Any complaints about changes to the law should go there. The CC company has no responsibility to you, nor to the public at large, the lawmakers DO, and should not enact bad law because of some lobbying by a company.
I didn’t read his post that way, but if he did intend that, it’s really besides the point. I don’t actually have any issue with anyone arguing one way or the other about what the bankruptcy laws should be. But to insinuate that this action is somehow tied to libertarianism is utter nonsense. And then to use that tie-in to state that libertarianism is “morally bankrupt” is quite an insult to the posters on this board who subscribe to that political philosophy.
Well, what we have is corporations that contributed heavily to campaigns practically rewriting the bankrupcy laws. (There were various articles about this at the time in 2001, for example.) And, then there are people here who seem to have absolutely no problem with that.
I may have been a bit sweeping in my statements for effect. But, whether this is a formal tenet of libertarianism is irrelevant. The fact is that those in this thread who are defending this are using the typical arguments of libertarians. (The government nanny-state shouldn’t be interfering…") You may argue that they are not true libertarians or whatever, but we hear this sort of view from the libertarian-leaning people again and again whether on this messageboard or at CATO Institute, over a wide range of issues, i.e., a defense of corporations to have maximum freedom with minimum government regulation without regard to what the actual realities of the situation are. (I’m not saying they are defending the whole political influence by corporations part but they seem to be turning a blind eye to it when weighing in on these issues.)
Here and here and here and hereare a few links about the bankruptcy bill and the lobbying behind it.
It does have somewhat of a libertarian bent, but only because some of us feel that it would be unduly intrusive for the gov’t to stick its nose in this issue. There are certainly portions of the CC industry that should have regulation, interest rate caps, fee caps, rate change rules, bankruptcy law, etc.
Whether or not a company is allowed to extend credit to someone goes beyond where I want the gov’t to control. I am in charge of my personal finances, if a company is willing to loan me money, and I want the loan, I don’t want the gov’t to interfere. The fact that someone else can’t handle their finances is not my problem.
I’ll live.
So you’re opposed to having bankruptcy laws on the books? Do tell. That puts you at odds with our founding fathers.
:dubious: Don’t kid yourself.
You’re getting way ahead of yourself here.
What the rules regarding lending practices are and what the bankruptcy laws are are two different things that you are trying to link inextricably together. In the minds of the banks seeking to influence the laws of the land, they might be. But not to me.
I have mentioned support of future legislation that prohibits unfettered access to those unable to make sound financial decisions for themselves through no fault of their own. Now I’m not in favor of tightening the bankruptcy laws to please the banks, because they should sleep in the bed they made as much as anyone. Don’t want so many bankruptcies? Don’t offer credit to those who can’t pay. In a free society, laws need to encourage or discourage behavior, not dictate it. You seem to me to suggest that no one could be against “predatory lending laws” unless they subscribed to what you see as a libertarian mindset favoring a laissez-faire approach. Sorry, but I don’t fit into your pigeonhole.
I can’t see the logic in saying that banks can’t otherwise freely advertise their offered services because they are somehow inherently irresistible and don’t give any information. I get a dozen offers for credit a week. I look on the back of the letter. If I don’t like the rate (and I never do), it goes into the blue bin. If I am unclear or hesitant about what I would be signing onto, out it goes. Period. There is no defensible reason for engaging in any other behavior regarding such offers. What’s so irresistible?
Yes, mass bankruptcy is a great social problem. There are too many people who are deliberately ignorant about their own financial condition, and the burden they place on the rest of us is unconscionable. Should people who:
[ul]
[li]Can’t be bothered to learn the math[/li][li]Can’t be bothered to look at their finances[/li][li]Can’t be bothered to carefully consider whether or not to use the credit offered them once they accept it[/li][li]Can’t be bothered to learn enough about money to make sound decisions about themselves, their community, or their government[/li][/ul]
be therefore left hung out to dry?
Hell, YES!
Not at all. But is it also wrong to assert that companies shouldn’t extend credit to people that they KNOW cannot or will not pay their bills?
Here’s an extreme example. Let’s say you have a brother who, oh, is a crackhead. Every time in the past you have loaned him money to pay his child support payment, he has taken the money, bought crack with it AND never paid you back. Not only that, you know other people who have received the same treatment from him.
So your brother comes to you with a sob story about how he’s got to pay his child support for Little Johnny and can he please borrow $50. Based on his past performance, how dumb would you have to be to hand it to him and honestly expect to ever see that money again? 
If you, a private citizen, are smart enough to put two and two together, shouldn’t a corporation be smart enough to know that someone with a credit score of, say, 450 AND an income of $15,000 a year probably isn’t somebody they should give a credit card to?
True. And the credit card companies would be out of business, too. They want customers to live outside of their means as much as the customers want to. Their survival depends on our buy now, pay later and “want it NOW” mentality.
And now, I have a comment and a question.
Yesterday I received two … yes, two … credit card offers. I thought of you guys as I was sifting through the mail
My question is this: what if credit card companies stopped sending these offers in the mail? Let’s say that they still extended credit to pretty much anyone who asked, but YOU had to approach them to ask permission to apply, rather than them sending you the application in the mail? No more tables at college campuses, either, but same rules apply. If the consumer approaches them, they’ll give them one, but they have to ask.
Yes, I know, to expect companies to do this is not fair considering every other company on the planet is allowed to woo customers via mail, TV, internet, etc. But suspend reality for a moment and pretend that suddenly it’s considered fair to not allow credit card companies to make offers via mail, and those are our laws.
What would happen?
Would irresponsible people go out of their way to track down these companies so they can ask for a card, **in the same numbers ** that they sign the card applications they are sent in the mail? If people actually had to make an effort (albeit minimum), is it possible that some would-be financial idiots would never bother to get a card?
Is it possible that some people will only grab the carrot if it’s dangled in front of them, and won’t bother if they have to take the initiative?
I don’t have the answer. It’d be interesting to know what would happen, though, if it were studied. I suspect that those who get offers in the mail would, overall, have more credit card debt than those who have to go out and find their own card company and apply.
And whose fault is that mentality?
Why should the banks be singled out for no mail advertising? What, are the application forms laced with morphine that soaks into the skin?
The problem is that we don’t educate ourselves or our children about money. How is this educational gap going to be closed by laws against banks? Why should we defend ignorance?
I say, you don’t get a high school diploma until you can demonstrate that you know how to open a bank account and dexribe its features, balance a checkbook, make a household budget, and calculate interest and amortization on a loan of any amount over any period of time. That’s the reform we need.
Good grief, scotandrsn, did you actually read anything I wrote?
Note the first paragraph. Was I saying that banks shouldn’t be allowed to mail offers? No. I am asking, hypothetically, what would happen if they couldn’t.