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ANTI-USURY CAMPAIGN TAKES OFF
William Greider, Nation - [A] campaign seeks a legal ceiling of ten percent imposed on the interest rates for credit cards and predatory practices like "payday loans." Ten percent approximates the old ceiling on interest rates before 1980, when deregulation repealed the federal law against usury. Ten percent is also the tithe religious adherents give to their churches. As one campaigner put it, "If 10 percent is good enough for God, it should be enough for the bankers."
The anti-usury initiative was launched in mid-summer, from Boston to North Carolina, from New York City to the Midwest, and has already produced some startling results. In Massachusetts, the leading candidate for Ted Kennedy's old Senate seat, Attorney General Martha Coakley, answered "yes, yes, yes, yes" to the demands expressed by the Greater Boston Interfaith Organization, when 800 of its members turned out to address the candidates. . .
The most startling development for the anti-usury campaign is the endorsement from the CEO of Citigroup, Vikram Pandit. Like other leading banks, Citi has been kicking up its credit-card rates as high as 30 percent, even as Citi is kept afloat with billions from the taxpayers. Nonetheless, Pandit told editorial writers at the Boston Globe he would support a legal ceiling on interest rates if it is applied industry-wide. "We're completely in support of having a rational rate structure." Pandit said.
The Citigroup executive did not endorse a specific ceiling, but cited the example of the 10 percent credit cards his bank introduced several years ago, believing other banks would follow and lower their rates too (when they didn't, Citi lost money in the venture). The Globe's exchange with Pandit was most likely inspired by news stories about the anti-usury actions in Boston.
Pandit made the telling observation that sky-high interest rates are among the impediments to ending the recession. If interest rates are curbed, he explained, banks would likely defend profitability by reducing the available credit and some high-risk borrowers would doubtless be cut off (the banking industry is already pursuing this strategy). However, Pandit added, a dramatic reduction in rates would help deeply indebted families recover their purchasing power. "I don't disagree," he said, "with the notion that having high rates in this environment is not conducive to driving economic recovery."
ANTI USURY CAMPAIGN
The anti-usury initiative was launched in mid-summer, from Boston to North Carolina, from New York City to the Midwest, and has already produced some startling results. In Massachusetts, the leading candidate for Ted Kennedy's old Senate seat, Attorney General Martha Coakley, answered "yes, yes, yes, yes" to the demands expressed by the Greater Boston Interfaith Organization, when 800 of its members turned out to address the candidates. . .
The most startling development for the anti-usury campaign is the endorsement from the CEO of Citigroup, Vikram Pandit. Like other leading banks, Citi has been kicking up its credit-card rates as high as 30 percent, even as Citi is kept afloat with billions from the taxpayers. Nonetheless, Pandit told editorial writers at the Boston Globe he would support a legal ceiling on interest rates if it is applied industry-wide. "We're completely in support of having a rational rate structure." Pandit said.
The Citigroup executive did not endorse a specific ceiling, but cited the example of the 10 percent credit cards his bank introduced several years ago, believing other banks would follow and lower their rates too (when they didn't, Citi lost money in the venture). The Globe's exchange with Pandit was most likely inspired by news stories about the anti-usury actions in Boston.
Pandit made the telling observation that sky-high interest rates are among the impediments to ending the recession. If interest rates are curbed, he explained, banks would likely defend profitability by reducing the available credit and some high-risk borrowers would doubtless be cut off (the banking industry is already pursuing this strategy). However, Pandit added, a dramatic reduction in rates would help deeply indebted families recover their purchasing power. "I don't disagree," he said, "with the notion that having high rates in this environment is not conducive to driving economic recovery."
ANTI USURY CAMPAIGN
3 Comments:
Mr. Greider is correct, ten percent should be enough for the bankers. And the government. --wam
I haven't heard anyone explain why my credit has just gone up to 21% (with excellent credit and money in the bank - 32% from then on if I should miss two payments) whereas the substantial money I have on deposit AT THE SAME BANK are yielding me .3% How can interest rates simultaneously be at an all time high and an all-time low (both in the directions that screw customers)? Anyone?
I just missed a monthly credit card payment by one day. I'm sure my APR jumped up.
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