Hey, they’re just buying shares in one of the best Senators money can buy:
U.S. Sen. Christopher Dodd, who has won praise from consumer groups for taking on credit card providers over predatory lending practices, has collected thousands of dollars in donations from people affiliated with the so-called payday loan industry.
The Democratic senator raised more than $44,000 from pawnshop owners and other businesses that provide high-interest loans, often to those with bad credit, according to campaign finance reports. The amount, while a fraction of the $1.05 million that Dodd brought in during the first quarter of 2009, nevertheless raises questions among those who scrutinize the link between fundraising and public policy.
Dodd is chairman of the Senate banking committee, and a bill being fought by the industry that would cap the annual interest rate on consumer loans at 36 percent has been referred to the committee.
I work in the credit card industry and the highest I’ve seen on any of our credit cards is about 33%…so, capping us at 36% wouldn’t actually cause a problem and that, of course, brings into question whether Dodd is fighting for the little guy or fighting for his usurious donors? Given the amount of donations Dodd has received from the financial and loan-shark industry, I’m going to tend towards it being an eyewash for the people, payoff for the donors effort.
There certainly does need to be a major overhaul in how lending institutions do business. From my experience with my employer I figure the major problem is that the corporate bosses are frightened rabbits. Under desperate pressure to produce profits or lose their cushy jobs they try expedient after expedient to squeeze every penny they can out of the borrowing public. This resulted, ultimately, in the practice of sub-prime lending which wasn’t just confined to home loans – banks were also issuing credit cards to people with 500 FICO scores (during the worst part of this lending spree I was tempted many times to ask some of our “valued clients” if they realized that when a bill comes, payment is expected…)…charging them fees out the wazoo and essentially making glorious profits by soaking the poor. Now that things have gone south, the frightened rabbits are trying desperately to cut losses (while our formally “valued clients” with the lousy credit are laughing at us when we expect repayment)…and so, scattergun, they are shutting down accounts willy-nilly for the most trivial of reasons. Which means that clients with decades of good payment history can lose their credit if they are late a day or two.
I’m so disgusted with my industry that I’d like to quit – but jobs are scarce and the bills do have to be paid. So, I’ve got a couple irons in the alternate employment fire, but for now I’m stuck trying to clean up the mess created by fools afraid of cretins. And, of course, said cretins do decide where the big political bucks go, and so their goal is to ensure that whatever happens they are protected in their ability to demand that high quarterly profits remain the holy grail of American corporate life. So, regulate the heck out of them, right? Are you kidding? You want to change profit-motivated cretins for power-motivated bureaucrats? Where’s the upside?
The key to success is to get the Dodds out of the mix and get the banks to cease being multi-national conglomerates and become, once again, the servants of local business enterprise. We won’t have to regulate Citi if it ceases to exist and becomes, instead, a score of regional and local banks looking after local and regional interests rather than trying to compete with other global monstrosities (whom do you think I trust more – Bank of America, or Nevada State Bank?). As long as we keep going down the route of more government regulation, the longer things will get worse. Dodd isn’t going to fix things – he doesn’t know how and isn’t interested in that, anyway. His only concern is getting himself re-elected next year and he figures that if he builds up a large enough war chest he’ll be able to demonize his opponent, put out huge amounts of BS about what a swell guy he is and then count on the special interests who’ve bought him to do the rest. Waiting for Dodd to help the people is like waiting for organized crime to voluntarily go out of business in a fit of public spirit.
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