Anonymous
Anonymous asked in Society & CultureCultures & GroupsSenior Citizens · 1 decade ago

Shouldn't legislation be passed prohibiting banks from charging racketeering rates for consumer loans?

Vermont Senator Bernie Sanders has introduced legislation that would impose a 15% cap on rates for all consumer loans, including plastic.

Banks, including those getting bail out money, are gouging consumers by raising their credit card rates in hopes of raising cash to cover the industry's bad bets in the housing market.

For example, Citigroup Inc. has told cardholders their rates could soar to almost 30% if a single payment is missed.

Capital One Financial Corp. is raising many cardholders' rates to nearly 18% -- even for people who pay their bills on time and haven't missed any payments.

Bank of America Corp., Wells Fargo & Co. and American Express Co. also announced large rate increases.

This is a despicable policy punishing customers including those on fixed incomes and responsible families who have been laid off and cannot afford to pay the total monthly balance.

I am emailing my Congressional Representatives and asking for their support of his bill. Will you please do the same?

Source:

http://www.latimes.com/business/la-fi-lazarus15-20...

Update:

I still remember when 10% was the legal maximum rate banks could charge.

Update 2:

I think those espousing a total free market economy are living in a dream world. A free market economy only works in a fair and ethical environment. That environment does not exist in our world. Sad, but true.

11 Answers

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  • 1 decade ago
    Favorite Answer

    Don't borrow. End of problem. Don't over extend your credit. Stay within one fourth of your monthly net income for a place to live. Don't buy 48 inch plasma TVs and a new car every other year. Don't eat out 5 times a week. Don't take cruises or huge vacations.

    Don't be part of the problem. Be part of the solution. I can recall quite vividly when house interest was up to 16 per cent. That was for those that had 5 per cent or nothing down. The most I ever paid for 2 different houses was 8 and three quarters. This was before everyone got the huge breaks and great deals they get now at 5 and 3/4 etc.Was also required to have 20% down to get that 8 and 3/4 interest.

    Living beyond a persons means is just that. Do without and don't borrow more than you have to and then all the mean old banks will quit whacking everyone so hard. I have not heard a validated story yet of someone that was made to take out a loan at gun point .

    We still make our own beds and then we have to sleep in it.Sorry to be so mean but that is the facts in a nutshell.

  • Yes they should. I have also heard on the news that some credit card companies will withdraw their customers' accounts if they pay off their balance every month. The Consumer Credit Act should be extended to enforce a maximum interest rate on both bank loans and credit cards.

  • Leslie
    Lv 4
    4 years ago

    It's a circle that the credit card companies have been running for a long time to keep people paying them so that they generate more capital. Yes it is loan shark rates, this kind of crap is ridiculous anymore.

  • Geri42
    Lv 7
    1 decade ago

    Of course legislation should be passed to prohibit the exploitation of the consumer. Good luck with that, however.

    On the other hand, the way to avoid paying exorbitant prices for credit is to live within your means and only by stuff you have cash for. Some of us still do that.

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  • 1 decade ago

    Madnob the problem is banks are handing out sub-prime loans willy nilly. US banks have been handing out loans to people with poor/no credit rating for years and now they are realising that they aren't going to get their money back. The banks are writing off billions of dollars of bad debts and receiving bail out cash as compensation. To gain the cash flow they need to survive they are charging insane interest rates to the people that they have written off as bad debts on their books.

    Yes legislation should cap interest rates. It should be capped at 7% in my opinion. Don't borrow anything now unless you absolutely need to!

  • Anonymous
    1 decade ago

    This is a step on the socialist road and not, IMO, a good idea at all. Next we'd want to cap the price of gas - after all the oil companies are making insane profits - and increase the price of fattening food and on and on. Price is supposed to be regulated by supply and demand; if no-one borrowed at stupidly high rates, then these rates would go away.

  • 1 decade ago

    Yes yes 100 times yes.

  • 1 decade ago

    Usury laws, some states already have them. South Dakota does not and many credit card companies are based there.

  • madnob
    Lv 5
    1 decade ago

    Don't borrow so much,the current financial crises is the result of too many people borrowing more than they could afford.

  • Anonymous
    1 decade ago

    Yes, I agree. I think they should also ban overdraft charges.

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