Rely on Senator Bernie Sanders to state the obvious and someone, finally introduces legislation to stop these predatory loan practices:
Sanders Press release Loan Sharks in Three-Piece Suits:
Sen. Bernie Sanders will introduce legislation this week to cap interest rates charged by credit card companies that now slap consumers with rates of up to 30 percent. "This is money that comes right out of their hides and it hurts," Sanders told The Burlington Free Press. His legislation would impose 15 percent interest rate ceiling. It also would limit fees. “We are going to introduce a national usury law which will prohibit any financial institution from charging these outrageous rates,” he told Thom Hartmann’s nationally-syndicated radio show. “These loan sharks wear three-piece suits, but they’re not much different than those guys who break people’s knee caps.”
At the same time that banks are receiving the largest taxpayer bailout in U.S. history and at the same time that the Federal Reserve has lowered short-term interest rates that banks pay to near zero percent, the same banks are charging consumers outrageous fees and sky-high interest rates on credit cards and other loans.
Citibank, Bank of America, Wells Fargo, and American Express recently notified customers that their interest rates are going up, in some cases to 30 percent, if a single payment is missed. They also are jacking-up interest rates on consumers who pay their bills on time and never go over their credit card limit.
No duh! Make sense to not jack up interest rates to 30% when people are going under in debt? Hell yeah! What are consumers supposed to do, take on a contract hit or rob a bank to pay off Citigroup and Bank of America (who already took a ton of their money?)
Considering Meredith Whitney today warned credit cards are the next crunch and consumer debt is listed as the next bubble to burst, does it make sense to jack up rates to guarantee people will default on this debt?
Ya know, you're in trouble, can't make the bills so wala, now your payments are ballooned and you're paying 30% interest?
Folks, this is a true Populist cause, Sanders bill. We should demand this immediately. Banks should not be the new loan sharks and if we do not get them under control, odds are we will get legislation where they have the right to come out and break your leg!