IF BARACK OBAMA IS LOOKING FOR bipartisan issues to bring the country together in this economic crisis, I have one for him.
A friend of mine has a credit card account with about six thousand dollars on it—not an enormous amount in these times. His credit rating is immaculate, and he owns his own home.
A short time ago, his bank was absorbed by another, and during the change-over, he was locked out of his online account by the bank. He was given no warning of this, and consequently expected to regain access quickly.
Unfortunately my friend had accepted his bank's constant prodding to move to online payments, and thus could not make his payment as usual because the site was down.
The new bank used the fact that this single payment was "late"—he made it as soon as he could connect to the site—as an excuse to change his interest rate from 0% to 29%. On a balance of $6000, this means $1800 extra per year in payments.
In a little over three years at this rate, he will have paid interest equal to 100% of the principal.
Years ago, this country had usury laws—laws that limited the amount a bank could charge in interest. Then there was a court ruling that a credit card company operated under the laws of the state it was incorporated in, rather than the laws of whatever state it was doing business in.
Some states saw this as a golden opportunity to attract credit card companies, by allowing whatever interest rates the traffic would bear.
Guess what? The national credit card companies have moved to those states. And, since then, laws have been passed to allow even local companies to bypass state restrictions.
That means they can charge rates of interest which at one time only the Mafia charged.
All that's left is for a tough guy to show up on my friend's doorstep making hints about how bones break and fires start.
I leave it as an exercise for the reader to decide which are more morally depraved: the states or the banks.
It's unconscionable, and shows, once again, the foolishness of giving carte blanche to large corporations.
What should be done? Congress should pass a national usury act, limiting the amount of interest a financial organization can charge to a reasonable level—say, a small percentage above the federal reserve rate.
Senator Bernie Sanders has come out in favor of a 15% cap, the same as the current limit for credit unions, which seem to be doing just fine. That might be a reasonable compromise.
A corporation should also not be allowed to raise rates on a customer without repeated warnings and a fair investigation.
Why do I think this is a bipartisan issue? Because according to both the Bible and long-standing Christian tradition usury is a sin. Dante even reserved a special place in Hell for usurers.
Obama should be able to sell the idea easily to the Republican base, which consists of conservative, bible-believing Christians.
The party may not like it, but if the base can be made to see that it's the right—and Christian—thing to do the politicians will have to get behind it.
At least, that's what I think today.
