banks

I just received an urgent call to action from Demos announcing this week as THE week we must call our Senators to urge them to protect us against the abuses that led to the financial crisis.

How You Can Help

The toll-free number, 866-544-7573 , will ask you to dial-in your zip code. You will automatically be connected to your Senator's office. Once connected, tell your Senator's Office that:

"I want you to support financial reform that holds the big Wall Street Banks accountable and creates a strong and independent Consumer Financial Protection Agency (CFPA)."

"American families need a Consumer Financial Protection Agency to rein in financial products like the deceptive mortgages, credit cards and overdraft fees that are drowning families in debt."

"We need a truly independent consumer agency. Weak reform that subjects the consumer protection agency to the control of another bank regulator is not real reform. Bank regulators got us into this mess by failing to stand up for consumers."

The call-in days are focused on a prioritized list of Senators on the Banking and Agriculture Committees, who will be the first to take up this critical legislation: Sen. Lincoln (AR), Sen. Bennet (CO), Sen. Dodd (CT), Sen. Bayh (IN), Sen. Tester (MT), Sen. Menendez (NJ), Sen. Schumer & Sen. Gillibrand (NY), Sen. Reed (RI), Sen. Johnson (SD), and Sen. Warner (VA). However, the toll-free number will work in all 50 states, and generating calls all around the country is encouraged.

For more information check out their website.

The first lesson we learned from the current economic collapse is:

The market does not solve everything. Despite what the neo-cons like Ronald Reagan and George Dubbya told us, turning all state responsibility over to the market means that the entire country is motivated by profit and therefore operates under a value system of greed. This market-first government has not benefited most of us. In fact, it's only really benefited the super rich, like Reagan and Dubbya.

The second lesson is:
A government unduly influenced by the market, by corporations' and banks' lobbying and political contributions, will not be able to fulfill its responsibility as regulator of the market.

A case in point: student loans.

The banking industry is lobbying Congress (and to a lesser extent, the American public) to convince us that the current system of student loans is working just fine. Last Thursday, the House passed a bill that would stop giving money to the banks so they can no longer extract wealth from students. The House bill would give money directly to the students.

The banks are trying to convince us that this will be "bad for students" and "end competition" and "cost the US taxpayers more money." The banks are, of course, lying through their teeth, but again, their motive is profit, not truth.

Brainstorm - Increasingly Desperate Arguments Against Student Loan Reform - The Chronicle of Higher Education.

The truth about student loans is that they became, under the incredibly pro-market policies of Ronald Reagan, a way to extract profit from students. At this point, the average graduating college student is about $24,000 in debt in commercial loans to banks as well as another couple of thousand dollars in credit card debt. That's because the government student loan subsidies started going to commercial banks (rather than being distributed through Pell grants and other state-run programs) so banks could make a profit off of students and their families.

Some will say: yes, but that college student will earn on average a million dollars more in her lifetime than someone who doesn't have a degree and therefore it's "worth it." But that is, of course, a misrepresentation of what "average" means. Most college grads will not earn huge sums. Some (and probably mostly those who did not take out loans in the first place) will earn spectacular sums. Furthermore, a larger percentage of students who take on loans will drop out and never finish college. Makes sense- you take on loans because you're poor, you also take on a job or two, have trouble finding a place to live near campus, commute long distances, etc. and not surprisingly, you drop out.

Then there's the other lie about averages: rich students don't go into debt for college so the $24,000 is often misleading. Many students are more than $100,000 in debt before they even get their college degree. If they even get their college degree. For some research I was doing on an unrelated topic, I interviewed college students and recent college grads at a state university. Many of them had more than $60,000 in student loan debt. When I asked them about taking on such huge debt loads, they said "I was born in debt. I'll die in debt. What difference does it make how much debt." Okay, they weren't econ or accounting majors, but really? Is that the lesson we've taught the next generation?

And imagine starting your life out with this sort of debt burden. According to Jose Garcia of the Demos Organization,

According to the Survey of Consumer Finance, the average debt for families 35 years old and younger in 1989 was $50,000. By 2007, the average debt carried by the same age group doubled to an astounding $100,000.

The recession has certainly not helped. Recent data from the U.S. Education Department shows that the 2008-9 academic year saw a 25 percent increase in the total of student-loan disbursements to $75.1 billion, making it the largest increase in recent memory.

And what if you never even finished that degree or the degree is more or less worthless because it's from a school with no prestige? So then you get some job that does not pay a livable wage and without health insurance so you can take on even more debt through credit cards. Or when a medical issue comes up your "friends" at the bank will now give you a medical credit loan. And then when you die, heavily in debt, your family can take out a funeral loan. That way the banks can continue to extract wealth from poor Americans though out their lives and afterlives.

Brilliant, for the banks. No wonder they want to keep Americans stupid and in debt. That way the banks keep themselves profitable and in power.

Crossposted from TrueSlant

With the Credit Card Holder's Bill of Rights voted out of committee yesterday, the full House goes to vote next week. According to the Speaker's Blog

"The Credit Cardholders’ Bill of Rights protects Americans against the unfair and often abusive practices of credit card companies. Americans should never be subject to excessive credit card fees, sky-high interest rates, and unfair, incomprehensible agreements that credit card companies revise at will. But during a recession, with so many families in economic peril, these practices can be devastating.

This legislation is a departure from an era of government indifference to anti-consumer practices. I commend Congresswoman Carolyn Maloney for her tenacious work on this legislation in the face of continued opposition from corporate interests. I look forward to a strong, bipartisan vote in favor of the Credit Cardholders’ Bill of Rights and to working with the Senate to send this critical pro-consumer legislation to President Obama for his signature into law."

While the economy is in freefall and CEOs are jumping out of windows, Americans are seeking refuge in bankruptcy courts and in the offices of credit counselors across the country. Young people are no different.

What predatory lenders peppering corners with high interest pay-day loans are to the poor, blood sucking credit card companies offering free t-shirts and unlimited cash on campuses are to youth.

In a report this week from the Online News Hour

"According to a study commissioned by Sallie Mae researchers, the average undergraduate carries $3,173 of credit card debt -- the highest level since researchers started collecting data in 1998."

The current legislation includes a section forbidding credit cards to emancipated minors under 18 years old. That's a pretty small community of people, and provides zero protection for students on campuses and new high school graduates. The Online News Hour piece referenced above suggested originally Congress was considering making it harder to issue credit to anyone under 21. The piece also mentions a hardcore lobby effort from the Bankers Association, which is probably the reason for the 21 to 17 and under emancipated youth switcharoo. The partnering Senate Bill The Credit Card Accountability, Responsibility and Disclosure Act (CARD Act) proposed by Sen. Chris Dodd has the 21 year old limit.

The House Bill is a joke. As open as I'm sure so many progressives want to be, lets be realistic. Credit.com reports that a majority of young people begin establishing lines of credit between 18 and 22. They also say that the majority of those 18-22 year olds don't understand how their financial decisions impact their credit.

At the same time

"Credit card companies spend billions of dollars marketing to young people through the Internet, television, phone and old-fashioned brochures in the mail offering pre-approval, low interest rates, and even "free money" if you sign up now.

They are especially aggressive on college campuses, buying lists of students from schools and entering into agreements that allow them to set up tables in front of dining areas and activity fairs.

"They were everywhere...like vultures: outside of my dorm, at football games and in the quad. I took their teddy bears, free pizza, tote bags and complicated, convoluted signup forms," Kali Dun, a University of Virginia student, told a congressional hearing on credit card abuses. "

Many colleges have banned the vultures and some state governments have worked from their level to protect students. Is it so much to ask that the feds do the same?

The Newsletter for the Federal Courts warned, years ago, that young consumers should be wary about credit card companies and their practices.

"Many of the debtors who come into bankruptcy court admit that if someone had warned them about the pitfalls, they would not be in that predicament," said Chief Bankruptcy Judge John Ninfo of the U.S. Bankruptcy Court for the Western District of New York. . .

"It is especially troubling that more and more young people are falling victim to credit card abuse and turning to bankruptcy as a means to relieve their oppressive debts," Chief Judge John Walker of the U.S. Court of Appeals for the Second Circuit added."

I'm grateful for Sen. Dodd's 21 year old cap but I wish both bills would make all public universities a safe haven from credit card companies that pull the rug of financial stability out from under young consumers.

This new documentary goes point by point by point, showing how Obama is continuing and expanding the Bush administration's criminal policies and programs, and makes the case that the white house is puppet show, and that the past eight or nine presidents have been funded into office, for the sole purpose of serving the central banks in a quest for an oligarchal world government, and taking the flak from the public for taking away our liberties, and making us more dependent.