Sanders and Ocasio-Cortez Offer REAL 'Financial Choice' with Their Loanshark Prevention Act.

[Uncle Joe]

Last week Senator Bernie Sanders and Representative Alexandria Ocasio-Cortez introduced an important new piece of legislation - the Loan Shark Prevention Act. In addition to putting an end to a pervasive form of exploitation that underwrites systemic injustice, this Act would both (a) make a substantial contribution to the financial and macroeconomic stability of the United Sates, and (b) in combination with a public option in banking, bring real economic opportunity to some 63 million presently unbanked and under-banked Americans. The bill also further confirms Senator Sanders' and Representative Ocasio-Cortez's place at the forefront, along with Senator Elizabeth Warren and Representative Ro Khanna, of policy innovators aiming to restore our uniquely American form of "accountable capitalism."

Americans are used to hearing politicians and pundits decry “the national debt” as a threat to long-term economic growth and financial stability. But really it is private, not public debt that has been our economy’s primary threat since wage and salary incomes began stagnating some forty years ago. The most dramatic case in point was of course the financial collapse and ensuing debt-deflation of 2008-09, rooted in exploitative “subprime” mortgage lending and related practices by the financial “services” industry.

Since the crash, mortgage debt has unsurprisingly diminished somewhat – thanks in large part to mass default and ensuing foreclosures that threw millions of Americans from their homes. But other categories of private debt – notably student and consumer debt – have moved in to where mortgage debt once stood as a primary threat to middle class livelihoods and financial stability. At the time of this writing, student debt totals at over $1.5 trillion, while consumer debt has just passed the $4 trillion mark. These are record levels, the likes of which have not been seen since the fateful year of 2008. And together with continuing mortgage debt they have raised the level of aggregate household debt to over $13.5 trillion – nearly $1 trillion higher than the previous record set in … again, 2008.

(snip)

As Senator Sanders and Representative Ocasio-Cortez both point out, median interest charges on credit card debt today exceed 21%, while retailer-issued cards commonly entail rates in excess of 27%. And this is not even to mention the often bank-owned payday lenders and check-cashing “services” operating in inner city and rural areas where profit-maximizing banks don’t see fit to offer more mainstream financial products, which commonly charge from 400 to 800% APR. Against a backdrop in which large banking institutions can borrow from the Federal Reserve at less than 2.5% and enjoy taxpayer bailouts when their practices get both them and the larger economy into trouble, lending at such rates is as obscene as it is destabilizing.

(snip)


https://www.forbes.com/sites/rhockett/2019/05/13/sanders-and-ocasio-cortez-offer-real-financial-choice/#3908f2183c84

[Demsrule86]

1. It can't pass. And you know I work with poor folks...some of those payday places keep them from

Becoming homelesss...

[Tom Rinaldo]

9. And others make them homeless

There is a role for payday loaners, but not it they are predatory.

[Demsrule86]

20. They and the credit card industry are both predatory.

[HopeAgain]

11. You don't think the industry is dominated by greed?

High risk doesn't have to be rates that amount to extortion. The sharecroppers depended on the company store as well.

[Demsrule86]

17. Yes it is. So is the credit card industry.

[HopeAgain]

19. Which, funny enough...

is one reason Biden is not my first choice.

[Demsrule86]

21. This again. I could care a less...

[George II]

2. He raised this issue three years ago and earlier. Why didn't he introduce it back then?

https://www.ibtimes.com/alexandria-ocasio-cortez-bernie-sanders-seek-15-cap-credit-card-loan-interest-2791269

"Sanders has raised the proposed legislation before, during his 2016 bid for the presidency, as well as in 2009 during congressional debate over the CARD Act, which added modest protections for credit card users."

[comradebillyboy]

3. Another empty jesture. It would require Bernie to work hard

to line up support and craft a meaningful piece of legislation. He's never been able or willing to do those things in the past and I don't see him starting now. AOC might be capable of putting something together in the House but tying herself to Bernie won't get her where she needs to be.

[George II]

5. He also admitted last week in an interview that he knows it won't go anywhere in the Senate...

...I wish I had the forethought to note where that was.

[WeekiWater]

6. Now lets see what kind of leader he can be in the Senate.

When should we see the next legislative action on it? Can't be long with his leadership heading the way.

[NurseJackie]

8. Aw.

half of those on the DU would beg Trump to stay on!

Oh brother!

[George II]

10. Equating banks who issue credit cards to loan sharks is reckless.

[LongtimeAZDem]

12. And if Bernie Sanders shot someone on Fifth Avenue,

some of his supporters would be touting his "Radical Urban Renewal Initiative".

[demmiblue]

13. Good lawd.

[George II]

15. Bazinga!

[LanternWaste]

14. Creative little story you wrote.

Sacred cows can really get the juices flowing!

[ehrnst]

22. Isn't it, though.

[MarvinGardens]

16. If someone owes money to a "public option" bank,

and then they default on that loan, what happens? Is that loan dischargeable in bankruptcy?

[sarabelle]

18. Good deal. I think President Biden would sign off on that. :)