Let me start with a quote made that I just find appalling.
It’s in nobody’s interest to lend people money they can’t afford to repay,
says Kathleen Day of the Center for Responsible Lending, so lets shut down business’s in order to fix this?!? Why don’t we look at this from the other side of the table, is this not exactly what large financial banking firms did with Mortgage loans in 2006-2007 causing the countries largest foreclosure rate ever. But thats ok right? What I find funny is that there is not retribution, no penalty for a large business when they make financial blunders, yet and individual or in this case a small business owner has to close his/her doors because we deem it irresponsible lending.
Credit Cards
Consider a sub-prime credit card that now comes with a 59.9 percent interest rate. The lenders serving risky borrowers say high fees and interest rates are necessary because their customers are more likely to default on loans. Restrictions on what they charge could put them out of business, and leave the neediest with no options at all, they say.
Once again I come back to my generally repeated statement, as long as it’s a large financial firm and / or the government is involved (getting there cut) excuses like the one used above are ok. Visa, Mastercard, etc etc they want to complain that they should be allowed to offer these sub-prime cards at such rates because they are taking such a large risk. How is this any different than a payday loan at a high rate?, Are the lenders of sub-prime loans not also taking a large risk that the funds being borrowed will not be paid back?
What this comes down to is, it’s ok to lend money to people who can not pay it back as long as you are a firm like BofA or Wells Fargo, MasterCard, VISA, but if you are a small business, please don’t try, all your doing is taking money from these large firms and they don’t like it, so they will abuse the persuasive power they have with government and financial leaders to kill the American dream of having your own company so that they can profit just a bit more.
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