(05-10-2019 06:51 AM)Fo Shizzle Wrote:  

(05-10-2019 12:32 AM)HeartOfDixie Wrote:  I'm for restoring usury laws.

There will be much gnashing of teeth over this but its a reasonable offering.

Im not a fan of regulation..but..Im also not a fan of predatory lending. Some level of balance is reasonable IMO.

Regulation of banks and the financial industry is inherent in both the Federal government and the state government though.

I think our usury laws should be restored across the country.

It is indefensible to trap people in poverty because of their desperation.

This is just more proof that the Democrats are anti-personal responsibility.

Get on that gub'ment teet and stay there.

(05-10-2019 08:30 AM)ECUGrad07 Wrote:  This is just more proof that the Democrats are anti-personal responsibility.

Get on that gub'ment teet and stay there.

...what?

You do know laws like this where on the books for most of America's history.

(05-10-2019 08:35 AM)HeartOfDixie Wrote:  

(05-10-2019 08:30 AM)ECUGrad07 Wrote:  This is just more proof that the Democrats are anti-personal responsibility.

Get on that gub'ment teet and stay there.

...what?

You do know laws like this where on the books for most of America's history.

I think the less the government controls, the better.

You don't HAVE to sign up for a credit card with a 29% APR. You just don't.

Now, payday loans? That is another story.

(05-10-2019 08:20 AM)HeartOfDixie Wrote:  

(05-10-2019 06:51 AM)Fo Shizzle Wrote:  

(05-10-2019 12:32 AM)HeartOfDixie Wrote:  I'm for restoring usury laws.

There will be much gnashing of teeth over this but its a reasonable offering.

Im not a fan of regulation..but..Im also not a fan of predatory lending. Some level of balance is reasonable IMO.

Regulation of banks and the financial industry is inherent in both the Federal government and the state government though.

I think our usury laws should be restored across the country.

It is indefensible to trap people in poverty because of their desperation.

Don't generally disagree...

BUT

trapping people in poverty because of their desperation, caused at least in part by their poverty (If they're over-using credit cards?) It's a circuitous argument.

You can't simply say 15% and that's it. As some have suggested, you at least have to have it be libor or prime or fed funds + X%

But even that doesn't address the 'math' of credit cards.
If someone defaults, it's not like a mortgage where you likely get much if not all of your principal back... you usually get nothing back... So you're out not only the interest, but the principal.... which is 100%. You don't have to lose very often in order for a 5% or 10% or even 20% margin to be eliminated.

This isn't my area so I could be wrong in detail, but the concept is correct.... Pawn shops usually hold $5-600 worth of value for every $300 that they lend at 100-300%. THAT is usurious. It's actually insane. THEIR rate on that secured loan should be 10% (Prime +5 or whatever). Credit card companies hold nothing.

This group of people also are FAR more likely to be offering 'banking' services to the desperately poor.

Let's focus on the low-hanging fruit.

Why is 20% too high for an unsecured loan, but 50-300% isn't for a secured one?

I suspect because credit card companies are large with deep pockets, no warehouses and CEOs that make millions while most pawn shops are mom and pop.... but no reason it HAS to be that way

(05-10-2019 08:44 AM)ECUGrad07 Wrote:  

(05-10-2019 08:35 AM)HeartOfDixie Wrote:  

(05-10-2019 08:30 AM)ECUGrad07 Wrote:  This is just more proof that the Democrats are anti-personal responsibility.

Get on that gub'ment teet and stay there.

...what?

You do know laws like this where on the books for most of America's history.

I think the less the government controls, the better.

You don't HAVE to sign up for a credit card with a 29% APR. You just don't.

Now, payday loans? That is another story.

There is little moral difference between a pay-day loan and a high interest credit card though.

Usury laws were on the books of 49/50 states and they played an important roll keeping people from being ripped off. Returning to them isn't a bad idea given the rampant abuse of the financial system.

I don't see that as a matter of government interference. Its something specifically outlined as a power of the government and its one I think should be exercised. There simply is no right to rip off your fellow Americans regardless of ones ideological beliefs on the free market.

(05-10-2019 08:44 AM)Hambone10 Wrote:  

(05-10-2019 08:20 AM)HeartOfDixie Wrote:  

(05-10-2019 06:51 AM)Fo Shizzle Wrote:  

(05-10-2019 12:32 AM)HeartOfDixie Wrote:  I'm for restoring usury laws.

There will be much gnashing of teeth over this but its a reasonable offering.

Im not a fan of regulation..but..Im also not a fan of predatory lending. Some level of balance is reasonable IMO.

Regulation of banks and the financial industry is inherent in both the Federal government and the state government though.

I think our usury laws should be restored across the country.

It is indefensible to trap people in poverty because of their desperation.

Don't generally disagree...

BUT

trapping people in poverty because of their desperation, caused at least in part by their poverty (If they're over-using credit cards?) It's a circuitous argument.

You can't simply say 15% and that's it. As some have suggested, you at least have to have it be libor or prime or fed funds + X%

But even that doesn't address the 'math' of credit cards.
If someone defaults, it's not like a mortgage where you likely get much if not all of your principal back... you usually get nothing back... So you're out not only the interest, but the principal.... which is 100%. You don't have to lose very often in order for a 5% or 10% or even 20% margin to be eliminated.

This isn't my area so I could be wrong in detail, but the concept is correct.... Pawn shops usually hold $5-600 worth of value for every $300 that they lend at 100-300%. THAT is usurious. It's actually insane. THEIR rate on that secured loan should be 10% (Prime +5 or whatever). Credit card companies hold nothing.

This group of people also are FAR more likely to be offering 'banking' services to the desperately poor.

Let's focus on the low-hanging fruit.

Why is 20% too high for an unsecured loan, but 50-300% isn't for a secured one?

I suspect because credit card companies are large with deep pockets, no warehouses and CEOs that make millions while most pawn shops are mom and pop.... but no reason it HAS to be that way

In fairness, this is not a new tradeoff. This isn't a new analysis. This isn't a new concept.

We've bad the bankruptcy code and credit cards for sometime prior to the current scheme. It's a tradeoff that favors regular people.

(05-10-2019 09:08 AM)HeartOfDixie Wrote:  In fairness, this is not a new tradeoff. This isn't a new analysis. This isn't a new concept.

We've bad the bankruptcy code and credit cards for sometime prior to the current scheme. It's a tradeoff that favors regular people.

Of course not....

But with the focus on the deep pockets and large number of people impacted rather than the issue facing actual people in poverty, it is incredibly politically transparent

(05-10-2019 08:20 AM)HeartOfDixie Wrote:  

(05-10-2019 06:51 AM)Fo Shizzle Wrote:  

(05-10-2019 12:32 AM)HeartOfDixie Wrote:  I'm for restoring usury laws.

There will be much gnashing of teeth over this but its a reasonable offering.

Im not a fan of regulation..but..Im also not a fan of predatory lending. Some level of balance is reasonable IMO.

Regulation of banks and the financial industry is inherent in both the Federal government and the state government though.

I think our usury laws should be restored across the country.

It is indefensible to trap people in poverty because of their desperation.

(05-10-2019 08:44 AM)ECUGrad07 Wrote:  

(05-10-2019 08:35 AM)HeartOfDixie Wrote:  

(05-10-2019 08:30 AM)ECUGrad07 Wrote:  This is just more proof that the Democrats are anti-personal responsibility.

Get on that gub'ment teet and stay there.

...what?

You do know laws like this where on the books for most of America's history.

I think the less the government controls, the better.

You don't HAVE to sign up for a credit card with a 29% APR. You just don't.

Now, payday loans? That is another story.

How is that another story? Payday loans are bad, but 29% credit cards aren't? Care to quantify? Where is the line where the government should get involved?

These charlie kirk/ben shapiro conservatives that shill for trillion dollar megacorporations aren't doing any favors for the right. People are annoyed with the alt-left, but they are increasingly becoming annoyed with these muh free market/muh private companies/at least it's not the goberment talking points.

(05-10-2019 09:08 AM)HeartOfDixie Wrote:  

(05-10-2019 08:44 AM)Hambone10 Wrote:  

(05-10-2019 08:20 AM)HeartOfDixie Wrote:  

(05-10-2019 06:51 AM)Fo Shizzle Wrote:  

(05-10-2019 12:32 AM)HeartOfDixie Wrote:  I'm for restoring usury laws.

There will be much gnashing of teeth over this but its a reasonable offering.

Im not a fan of regulation..but..Im also not a fan of predatory lending. Some level of balance is reasonable IMO.

Regulation of banks and the financial industry is inherent in both the Federal government and the state government though.

I think our usury laws should be restored across the country.

It is indefensible to trap people in poverty because of their desperation.

Don't generally disagree...

BUT

trapping people in poverty because of their desperation, caused at least in part by their poverty (If they're over-using credit cards?) It's a circuitous argument.

You can't simply say 15% and that's it. As some have suggested, you at least have to have it be libor or prime or fed funds + X%

But even that doesn't address the 'math' of credit cards.
If someone defaults, it's not like a mortgage where you likely get much if not all of your principal back... you usually get nothing back... So you're out not only the interest, but the principal.... which is 100%. You don't have to lose very often in order for a 5% or 10% or even 20% margin to be eliminated.

This isn't my area so I could be wrong in detail, but the concept is correct.... Pawn shops usually hold $5-600 worth of value for every $300 that they lend at 100-300%. THAT is usurious. It's actually insane. THEIR rate on that secured loan should be 10% (Prime +5 or whatever). Credit card companies hold nothing.

This group of people also are FAR more likely to be offering 'banking' services to the desperately poor.

Let's focus on the low-hanging fruit.

Why is 20% too high for an unsecured loan, but 50-300% isn't for a secured one?

I suspect because credit card companies are large with deep pockets, no warehouses and CEOs that make millions while most pawn shops are mom and pop.... but no reason it HAS to be that way

In fairness, this is not a new tradeoff. This isn't a new analysis. This isn't a new concept.

We've bad the bankruptcy code and credit cards for sometime prior to the current scheme. It's a tradeoff that favors regular people.

What is relatively new is Dodd-Frank/CARD act that limited ability to price higher risk customers properly, so that risk was spread to all customers, meaning APRs would increase for the base population. This is what I worry about when government gets involved in trying to make things "fair" to everyone, everyone gets equally screwed. Let's be honest, what will happen if APR is capped (esp without Prime indexing, which would open banks up to losing money every time they loan a dollar) is that customers with lower credit scores (< 750 FICO) will never be able to get credit, or new fees will be invented to make up the lost revenue. This will reduce buying power (maybe a good thing for a segment of the population) and put the economy in a tailspin. This will not end well, not even getting into the Post Office portion of this proposal.

(05-10-2019 12:34 AM)HeartOfDixie Wrote:  

(05-09-2019 01:59 PM)Oman Wrote:  I would like to know what article of the constitution authorizes congress to set caps on interest rates.

... interstate commerce

That's an easy one.

Don't want to hijack the thread, but that's a broad interpretation of "interstate commerce", and while congress likes very much to regulate and tax whatever the he!! suits them, I would suggest this is a state issue. let the states set a limit if they want, it is not a responsibility expressly given to the Fed... did loans with interest even exist at the time of the framing?

(05-09-2019 11:26 AM)VA49er Wrote:  

Quote:Democratic presidential candidate Bernie Sanders and Representative Alexandria Ocasio-Cortez accused banks of acting as “modern-day loan sharks” and called on Congress to enact a federal limit of 15% on credit card interest rates.

The two self-identified democratic-socialists are set to propose legislation on Thursday capping rates on credit card and other consumer loans and letting post offices offer low-cost basic financial services, such as loans and checking and savings accounts.

Sanders, Ocasio-Cortez Propose 15% Cap on Credit Card Interest

I wonder if either of these two realize the result of this legislation would be the extinguishing of debt to those that would otherwise qualify for such debt? Credit is priced based primarily on repayment risk. If that risk can't be priced in via the rate, then the credit simply will not be made. We already know AOC doesn't understand taxes given her Amazon debacle and now we see she doesn't understand banking.

Wow, this is just sad. I almost feel sorry for them...almost.

Sanders and AOC and the like simply hate profits and want to regulate them all away. They simply don't comprehend that the opportunity to make a profit is what drives people to start and grow businesses. Large multinationals will cope easily with their agenda. They will simply move everything overseas. That's harder for mom and pops to do. So we will end up with everybody going to Walmart to buy stuff made in China. One problem with that is there are no middle-class jobs in that economic model.

We have been experimenting with that approach for the last 50 years or so. Until 2017 our corporate tax rate was the highest in the world, almost 20% higher than the worldwide average. Guess what? Corporations moved profits overseas. Some were pretty obvious tax avoidance tactics, like the "double Irish" gambit that the technology companies used to pay basically zero taxes. But most of them involved actually moving value-added (and therefore taxable income rich) components of their businesses overseas. Because those are the components that can economically justify paying higher wages, our middle class has shrunk while the rest of the world has seen tremendous middle class growth. I've seen one estimate that the world as a whole has added 1 billion people to the middle class in the last 50 years. We cut corporate taxes back to somewhere close to world levels (still higher when state taxes are included, but by only a couple of percentage points) in 2017 and guess what? We've added 400,000 manufacturing jobs, unemployment rates are approaching record lows, and average wages are climbing. Who woulda thunk it?

(05-10-2019 10:20 AM)Kronke Wrote:  

(05-10-2019 08:44 AM)ECUGrad07 Wrote:  

(05-10-2019 08:35 AM)HeartOfDixie Wrote:  

(05-10-2019 08:30 AM)ECUGrad07 Wrote:  This is just more proof that the Democrats are anti-personal responsibility.

Get on that gub'ment teet and stay there.

...what?

You do know laws like this where on the books for most of America's history.

I think the less the government controls, the better.

You don't HAVE to sign up for a credit card with a 29% APR. You just don't.

Now, payday loans? That is another story.

How is that another story? Payday loans are bad, but 29% credit cards aren't? Care to quantify? Where is the line where the government should get involved?

These charlie kirk/ben shapiro conservatives that shill for trillion dollar megacorporations aren't doing any favors for the right. People are annoyed with the alt-left, but they are increasingly becoming annoyed with these muh free market/muh private companies/at least it's not the goberment talking points.

The interest rates and fees on payday loans are WAY crazier than some 29% credit card.

Western Sky PayDay Loan

$5,000 Loan
84 monthly payments of $486.58.

$40,872.72 to pay off a $5,000 loan.

"Typical" APR is: 116.73% APR.

(05-10-2019 10:42 AM)ECUGrad07 Wrote:  

(05-10-2019 10:20 AM)Kronke Wrote:  

(05-10-2019 08:44 AM)ECUGrad07 Wrote:  

(05-10-2019 08:35 AM)HeartOfDixie Wrote:  

(05-10-2019 08:30 AM)ECUGrad07 Wrote:  This is just more proof that the Democrats are anti-personal responsibility.

Get on that gub'ment teet and stay there.

...what?

You do know laws like this where on the books for most of America's history.

I think the less the government controls, the better.

You don't HAVE to sign up for a credit card with a 29% APR. You just don't.

Now, payday loans? That is another story.

How is that another story? Payday loans are bad, but 29% credit cards aren't? Care to quantify? Where is the line where the government should get involved?

These charlie kirk/ben shapiro conservatives that shill for trillion dollar megacorporations aren't doing any favors for the right. People are annoyed with the alt-left, but they are increasingly becoming annoyed with these muh free market/muh private companies/at least it's not the goberment talking points.

The interest rates and fees on payday loans are WAY crazier than some 29% credit card.

Western Sky PayDay Loan

$5,000 Loan
84 monthly payments of $486.58.

$40,872.72 to pay off a $5,000 loan.

116.73% APR.

So,

29% = okay
116.73%= not okay

What amount of "crazy" is okay vs. not okay? The conservative argument is that both are okay, but you already shot yourself in the foot on that.

(05-10-2019 10:46 AM)Kronke Wrote:  

(05-10-2019 10:42 AM)ECUGrad07 Wrote:  

(05-10-2019 10:20 AM)Kronke Wrote:  

(05-10-2019 08:44 AM)ECUGrad07 Wrote:  

(05-10-2019 08:35 AM)HeartOfDixie Wrote:  ...what?

You do know laws like this where on the books for most of America's history.

I think the less the government controls, the better.

You don't HAVE to sign up for a credit card with a 29% APR. You just don't.

Now, payday loans? That is another story.

How is that another story? Payday loans are bad, but 29% credit cards aren't? Care to quantify? Where is the line where the government should get involved?

These charlie kirk/ben shapiro conservatives that shill for trillion dollar megacorporations aren't doing any favors for the right. People are annoyed with the alt-left, but they are increasingly becoming annoyed with these muh free market/muh private companies/at least it's not the goberment talking points.

The interest rates and fees on payday loans are WAY crazier than some 29% credit card.

Western Sky PayDay Loan

$5,000 Loan
84 monthly payments of $486.58.

$40,872.72 to pay off a $5,000 loan.

116.73% APR.

So,

29% = okay
116.73%= not okay

What amount of "crazy" is okay vs. not okay? The conservative argument is that both are okay, but you already shot yourself in the foot on that.

I have no issue with either considering how it's a choice to do either one. I do believe both should be regulated, like any other financial instrument. They are both options, and options have a cost.

(05-10-2019 10:20 AM)Kronke Wrote:  How is that another story? Payday loans are bad, but 29% credit cards aren't? Care to quantify? Where is the line where the government should get involved?

These charlie kirk/ben shapiro conservatives that shill for trillion dollar megacorporations aren't doing any favors for the right. People are annoyed with the alt-left, but they are increasingly becoming annoyed with these muh free market/muh private companies/at least it's not the goberment talking points.

Not speaking to his point, but payday loans are not credit score driven. They are usually taken out by people who can't get other types of loans.

Why does the size of the corporation behind it matter though? You're sort of implying that big=bad and small=good. My experience is that big=more competitive and small=less competitive.

Banking is about risk/reward. I have a tough time understanding how someone with an unsecured loan is taking greater risk and thus warrants a greater rate than someone with a secured loan, especially when they are physically holding the item.... yet banking regulations specifically specify lower rates for lower risk items/people. They don't set a rate, they merely review and ask that the bank justify what they do. It seems the biggest reason why pawn shops and payday loans are smaller is to avoid much banking regulation.

(05-10-2019 10:26 AM)Oman Wrote:  did loans with interest even exist at the time of the framing?

I'm pretty sure we can date loans with interest back to BC

(05-10-2019 10:57 AM)Hambone10 Wrote:  Why does the size of the corporation behind it matter though? You're sort of implying that big=bad and small=good. My experience is that big=more competitive and small=less competitive.

I'm just letting you know what's going on in the current political climate. The shilling for the jeff bezos' and zuckerberg's right to own the entire world and become trillionaires, because that's the "free market" -- it's cringe, and even Trump supporters are beginning to turn on it.

And big=more competitive certainly doesn't ring true in banking. My checking account is at a local credit union where they pay me monthly dividends and refund my ATM fees, not at Chase where you pay them a monthly service fee.

(05-10-2019 10:46 AM)Kronke Wrote:  So,

29% = okay
116.73%= not okay

What amount of "crazy" is okay vs. not okay? The conservative argument is that both are okay, but you already shot yourself in the foot on that.

You're missing the point of 'conservative'.

The variety of regulation in some, but not in other industries creates hierarchies within them. You can't get a credit card with a 500 FICO.... not because there isn't a rate at which they could make money at it, but because regulations don't let them charge that rate. In a true free market, they could MAKE credit card loans to someone with a 50% interest rate

Paydays are less regulated/differently regulated.

The REAL economic rate for a payday loan for someone with a 500 score might be more like 30 or 50%... but they charge 100 because they know you don't have choices and they have less competition.

In recent times we've started to see apps that will compare such loans as well as loans at 30-50%... so the lines are clearly blurrier than they were a decade ago... but they still exist.

To me it's more about inconsistent regulation and the laws of unintended consequences. Set a law that only people who employ more than 50 people have to follow and at the margin, you encourage companies to stay at 49 or (likely) go to 100.... or even 1000.