Thursday, March 15, 2007

Debt - The Moral Values issue of 2008

I had a piece on Tom Paine today relating the subprime mortgages crash to credit card and student loan industry practices.

"America is at another Enron moment. Rather than shedding a tear for the traders who pumped up this market, we are now required as a country to reexamine the responsibility that creditors have to borrowers—to make a sane assessment of the ability to repay, not merely to make as much money as they can out of the risk. It is high time to block predatory lending of all kinds by reinstating usury laws, limiting interest rates, penalties and fees that creditors can charge."

It's possible , with the range of reforms now cooking, that student loans might even lead the way. That would be a victory for the members Generation Debt!

Update: today the Times covered the angle I was looking for: the homeowners.


Anonymous said...

I disagree that laws which forbid one party from lending to another party at terms agreed to by both would be a "victory" in any sense of the term. Destroying peoples' right to freely exchange their property as they see fit is a step back, it is not progressive.

That being said, the best way to prevent lenders from making loans which - in retrospect - make no sense is to let the debtors go bankrupt and bring down the firms who lent them the money in the first place.

That'll learn 'em.

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