While I don't necessarily disagree with the message of your post, I don't agree that Wells Fargo would change their tune if they saw the "consequnces of their policies." I am quite sure that it is solely about dollars and cents, period, end of story, and they couldn't care less about "consequences" good, bad or otherwise to the community. If they make money, good, if not, bad. Will the consequences in passing this legislation to Wells Fargo mean making less money, and therefore deciding to get out of the loan business to risky clients altogether? How will that help the "community"? Education of the "vulnerable" is the answer.
I've said it before and I'll say it again: deception is not good, and I am not advocating that it exist or continue on any level whatsoever at all. However, risky lendees pay higher interest than less risky lendees, which is a function of the market. I don't want to see that tampered with. Mike Thompson Windom ----- Original Message ----- From: Becca Vargo Daggett To: Michael Thompson ; [email protected] Sent: Wednesday, June 15, 2005 1:21 PM Subject: Re: [Mpls] Predatory Lending - Taking a stand to end the practiceinMpls 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
