Monday, 7 March 2005

Consumer Lending and the Bankruptcy Abuse Prevention and The Consumer Protection Act of 2005

I don’t think there is anyone reading this site who has been fortunate enough to not need credit cards or loans at some point in their life. We’ve all probably had times when we were in the black, or nearly paid off, but I don’t think any of us has ever had the luxury of making a big purchase or taking a trip by simply peeling a few Benjamins off a fat money roll whenever we felt like it.

The reason we don’t have to sell our sisters or risk getting our thumbs sawn off by loansharks when times are tight is the miracle that is consumer lending. Banks issue credit cards and loans, giving us extended purchasing power and a grace period for repayment. In exchange for this generosity, we pay interest to the bank and adhere to a fair, regulated timetable by which we can repay our debts. Credit cards and loans not only enable us to buy a third TiVo or front the supplies for a competitive eating contest, they allow us to fiscially survive the unexpected and weather financially shaky circumstances like a recession.

It’s true that many of us have problems responsibly managing our finances, and in times when we’re working more and making less, living within our means often translates into going without much of what we want. But while some people are serially irresponsible and get themselves into insurmountable debt over bullshit like expensive clothes and entertainment centers, most people who are in financial trouble are doing no such thing. They play by the rules, work hard and save money, but are simply unlucky; faced with caring for a sick relative, an out of work spouse, a marital problem, these are not the callous throwaway dollars of a compulsive spender.

Credit cards companies know this better than anyone. They give money to get money. They set the rates, they levy the fines, they give you the rope to hang yourself with. They find you when you’re the most in need of a credit lifeline, and they carpet-bomb you with offer letters and pre-approved cards; and if you fuck up once, miss a payment or are late with a check, they will squeeze you, squeeze until there’s nothing left. And for the unluckiest among us, bankruptcy is the last refuge short of total ruin.

Today the Senate is voting on the "Bankruptcy Abuse Prevention and Consumer Protection Act of 2005," probably the single cruelest piece of legislation I’ve ever heard of in my life (I’m sure I’m missing one or two that are even crueler, but I’m so angry I can’t think of them right now). The Rude Pundit has addressed this as ably as I ever could, as has Digby. But in a nutshell this bill, sponsored by Sen. Charles Grassley (R-IA, who should suffer anal warts for the rest of his days), would lift most of the remaining provisions that protect consumers from the usurious impulses of their credit card companies. It sickens me to outline the full details of this horrific piece of shit they call a Bill, so go read it yourself.

This affects you. I don’t care if you pay your bills a day early each month and seal the envelope with a chocolate kiss — we are all vulnerable to the unexpected, we could all fall on hard times, and we all deserve a second chance to set our lives straight. They want you to believe that this is only targeted towards those who abuse the system, and they are lying through their goddamn teeth. The same people — extremely rich people, mind you — who have no problem bailing out a badly indebted airline or a failing aerospace firm are saying that Americans flattened under the weight of crushing interest rates need to pull themselves up by their bootstraps? FUCK YOU. This is robbery, Robin Hood in reverse, a bag of cash torn from the hands of the most vulnerable among us dropped straight into the laps of the most vicious legal loan sharks in the country.

Read the bill, it’s probably too late by the time you read this, but shit, what else are you gonna fucking do at this point, yell at your cats? I did that already.