Michael made it clear to me in an off-list response to that my seat
belt example is a bad one.
This isn't a case where education can be substituted for legislation.
Predatory lending involves deliberately deceptive practices on the part
of lenders, and deliberate targeting of people whose circumstances make
them vulnerable.
Mike writes:
So, in other words, "community good" can be legislated?
Interesting..........
No, of course it can't. But the further those who make the rules (in
this case, federal regulators and national bank executives) are from
the consequences of their decisions, the less likely they are to make
decisions that strengthen communities.
Charter leasing (or charter renting) by national banks is a greater
problem than predatory lending practices by the banks themselves
because the lessors have nothing to lose, no name to protect. The
independent, store-front, payday lender/check cashing service is then,
through agreement with a national bank, exempt from all state banking
laws.
In this case, federal regulators have put into place rules for national
banks that are much more lax than most state rules. They have done this
because it is good for the constituents to which they have the
strongest connections (representatives of the financial services
industry). On the other hand, state and local governments have seen the
negative consequences of predatory mortgage lending and payday lending
in their communities. They have chosen to enact rules that put
reasonable restrictions on predatory lending practices (e.g. courts
upheld a Georgia law that says rates must be lower than 300% APR).
So why does predatory lending continue? Because since the mid-1990s the
federal government has fought hard to exempt federally-chartered banks
from state consumer protection laws, even though the courts have ruled
that states are well within their authority to enforce these laws.
If Wells Fargo executives at the Minneapolis offices were making
decisions about lending policies, and they saw the consequences of
their policies, and they heard from community members who saw the
consequences of their policies, I speculate that they would not engage
in predatory lending practices. But the reality could not be further
from the truth, and thus communities need to make laws to protect their
interests (and hope that they will not be preempted by federal
regulators).
Becca Vargo Daggett
Seward
REMINDERS:
1. Be civil! Please read the NEW RULES at http://www.e-democracy.org/rules. If
you think a member is in violation, contact the list manager at [EMAIL
PROTECTED] before continuing it on the list.
2. Don't feed the troll! Ignore obvious flame-bait.
For state and national discussions see: http://e-democracy.org/discuss.html
For external forums, see: http://e-democracy.org/mninteract
________________________________
Minneapolis Issues Forum - A Civil City-focused Civic Discussion - Mn
E-Democracy
Post messages to: mailto:[email protected]
Subscribe, Un-subscribe, etc. at: http://e-democracy.org/mpls
