Why Americans Find Predatory Lending Offensive
"Menis - the author translates as "indignant rage" - It is the kind of rage arising from social betrayal that impairs a person's dignity through violation of "what's right." (p21), Achilles In Viet Nam - Combat Trauma and the Undoing of Character, Jonathan Shay, M.D., Ph D.
"The vulnerable relationship between child and parent is a metaphor for the relationship between a soldier and his army. It is also more than a metaphor when we consider the formation and maintenance of good character. The parents betrayal themis - (the ability to feel good about oneself , self esteem, self image) - through incest, abuse, or neglect puts the child in mortal danger. Despite intellectual limitations, the small child usually grasps the danger, although the child's mental representation of the danger differs from adults. The child's inner sense of safety in the world emerges from the trustworthiness, reliability, and simple competence of the family.
"Similarly, the child's acquisition of self-control, self esteem, and consideration of others depends upon the family. Absent inherited mental disorders, good parenting will produce good character and all the other adult resources of dignity and maturity, including ideals, respect for others, self respect, ambitions, self-care, pro-social rather than anti-social activity, reliable capacity to distinguish reality from fantasy, and so forth.
"Lurking behind these supposedly settled truths is the platonic assertion that good character is a firm wall between a good person and evil acts, regardless of the betrayals of "what's right" and other blows, such as bereavement that may simply happen to an adult. Often there is the invisible unstated assumption that those that hold power in society exhibit loyalty and care in fulfillment of themis. (p 32)
"If military practice tells soldiers that their emotions of love and grief - which are inseparable from their humanity - do not matter, then the civilian society that has sent them to fight on their behalf should not be shocked by their "inhumanity" when they return to civilian life. (p 67)
"Viet Nam narratives reveal that the events that drive soldiers berserk are betrayal, insult, or humiliation by a leader; death of a friend-in-arms; being wounded; being overrun, surrounded, or trapped; seeing dead comrades who have been mutilated by the enemy; and unexpected deliverance from certain death." (p 80)
Even in families without children the parents are leaders. Parents make financial decisions that impact the future of their children, their stature in the community, self worth, and dignity. There is nothing dignified about the effects of predatory financing. Yet there is an initial assumption that those who impact the credit scores of Americans are exhibiting loyalty and care in fulfillment of their chosen occupation. Americans believe our laws and regulations such as Regulation "Z" protect their rights. There is a strong belief that the system will work.
The economic downturn of 2000 through 2002 is firmly grounded in consumer spending and consumer debt. The real estate boom infused more disposable income into the economy. Exportation of manufacturing and services sector jobs to foreign countries, plus the huge trade deficit add to our woes. In early 2003 the federal budget deficit and the threat of war add to troubled economic times. Bankruptcies achieved record high levels. However, as with history and military battles, we must learn from the past to see the future and prevent future mistakes.
William F. Aldinger started his career with CitiGroup, learning quickly that sub-prime financing in the CitiFinancial subsidiary was a lucrative business. After leaving Citi, Aldinger went to Wells Fargo, and then to Household International as CEO. All three companies are now classified as predatory financing companies, and all three have been forced to settle with the states, government, and consumers. Household restated earnings for the entire time that Aldinger was with the company. HSBC has a four year agreement with Aldinger to continue as Chairman and CEO of Household under HSBC, and then he will become chairman and CEO of HSBC North America, Inc and director of HSBC Holdings. The past tells us the future. HSBC contends that there will be no changes to their business model. Therefore it is safe to predict that HSBC will become the largest global predatory lender ever witnessed by a civilized orderly society.
Those that managed to delude themselves into thinking they are financiers providing a service to society, while masquerading as predators, argue that they are servicing a sector of society that would otherwise not receive adequate attention. Countering that argument, the Community Reinvestment Act perhaps should be revisited and strengthened. Perhaps federal and state governments should remove predatory abilities from the private sector while providing structure and funding. Americans should not be abused by a system that is failing.
Historically, if we use the actions of predators to show us what areas need reform we can reverse the economic downturn we see today. Just like gangs, organized crime, and similar activities, the government should look for the cause of the problem while instituting prevention and removal of the opportunity for predators.
Credit cards are responsible for a huge portion of American debt. Easy credit and the need for credit is expected in today's society. Again predators have an opportunity. Household International provides financing for, and ongoing compensation to merchants under their existing contracts. Again, there is an initial assumption that those who impact the credit scores of Americans are exhibiting loyalty and care in fulfillment of their duties, that they will follow Fair Credit Reporting and Fair Credit Billing, etc. With over twenty million transactions a day, and over sixty participating merchants, Household International impacts the lives and family values of many taxpaying Americans every day.
Consumer watchdog organization Household Watch receives consumer complaints daily. Based on their web site log statistics Household Watch only receives complaints from 5% of those who visit. Many others get the information they need from their web site data. Over 400 people per day use the Household Watch web site to find links which enable them to pay their bill online.
The Federal Trade Commission, therefore, recognizes Household Watch and sister site BestBuyCard as a source of consumer help. Where predators see an opportunity the government should step in to stop them. When the government does not step in, consumer organizations step in to fill the gap. We sincerely hope, therefore, that the consumer organizations will be heard a loudly as the predators and the government when decisions are made. They speak for the public, with emphasis on the public that experiences violations of regulation "Z" and other areas where they expected special trust and confidence.
About The Author
Timothy Blake has a Bachelor's Degree in Business with a specialty in Management of Technology. He is an investigator for Consumer Advocacy organization Household Watch at www.householdwatch.com
MORE RESOURCES:
Credit Card Overhauls Seem Likely New York Times, United States - By JANE BIRNBAUM Consumer advocates say regulation of the credit card industry has long been without teeth. But as card holders struggle under the weight of ... Congress want's to spy on your credit card purchases. |
 Boston Globe | Credit crunch: UBS piles $7.5bn on to its write-down bill guardian.co.uk, UK - The Swiss bank said that if it managed to break even in the second quarter it would only be due to an unexpected tax credit. The bank, once renowned for its ... Tax Credit Saves UBS From Large Loss Helped by tax credit, UBS expects to beat analyst forecasts for ... Tax credit to save UBS from another hefty loss |
When Credit Gets Tight, a 401(k) Loan Becomes Tempting New York Times, United States - Banks are frantically reducing the credit lines on existing home equity loans. Credit card issuers are deploying similar tactics. That makes 401(k) loans a ... |
 Boston Globe | Crisp snares the ball, but doesn't get credit Boston Globe, United States - Coco Crisp's glove touched the ground, but the ball never did as he caught Derek Jeter's liner. Still, umpire Wally Bell ruled that Crisp trapped the ball. ... |
 Hürriyet | CGFS calls for credit ratings change Financial News, UK - According to the report: "credit rating information should support, not replace, investor due diligence; CRAs should enhance the information underlying ... EU urges credit competition Builder Toll Bros. has its credit rating slashed SEC’s effort to ease reliance on credit raters is limited by host ... |
Improved credit score could mean big savings Chicago Tribune, United States - If you can improve your credit scores, you will probably spend less money, perhaps hundreds or thousands of dollars less each year. ... Stay well on top of your credit score Do you take his debt when you tie the knot? National Class Action Settlement Can Help Your Rates |
Home values fed spiraling card debt Indianapolis Star, United States - To her surprise, her credit-card limits soared even more. One card issuer more than tripled her spending limit, to $17000. Another increased her limit 60 ... The Sky's No Longer the Limit |
Figuring out, raising your credit score should be first step of ... Atlanta Journal Constitution, USA - They want to know how likely you are to pay back the loan on time, and they look to your credit score for that information. But if you're like many home ... |
Investment advice: Surviving the cash crunch New Zealand Herald, New Zealand - An investment-grade credit rating. This is a Standard & Poor's rating of BBB- or better. UDC: Owned by ANZ and lends to businesses buying vehicles and ... City of Moore's credit rating upgraded S&P to review Starbucks credit ratings Standard Pacific ratings affirmed with negative outlook - S&P |
 AFP | Credit Mutuel makes firm offer for Citibank in Germany: sources AFP - PARIS (AFP) — Credit Mutuel of France has made a firm bid for the German retail banking activities of US giant Citigroup, which operates in Germany under ... Credit Mutuel of France bids for Citigroup Deutsche Bank Still Running for Citigroup Unit, Bild Reports Commerzbank drops out |
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