Do you mean usury in the biblical sense, which means no lending? In the Islamic sense, which forbids loans, but allows co-investment and allowing one partner to buy out the other (a form of Islamic lending)?
Do you mean high interest rates, and how do you define what is high? (For example, many of my rates were 20-30%, but when you calculated loan losses, cost of borrowing, cost of issuing and servicing loans, actually only netted 3-5% profit.)
Or do you mean structuring loans in such a way as to make it impossible for the borrower to repay the loan (including lending more money than the borrower can service) or get out of recurring debt (like high credit card percentages)? Or what we generally refer to as predatory lending?
As a (former) ethical lender, predatory practices boil my blood. I had a 98% repayment rate and a minimum 40% annual growth rate. But I also had to sell people’s houses and cars and livestock, camp out on people’s doorsteps when they defaulted their loan and ghosted the bank. I’ve had to sue people and collect from guarantors. None of it pleasant, none of it fun, but all of it necessary. I also restructured nearly ten thousand loans in Kazakhstan during an economic crisis, and eventually collected on more than 90% of the outstanding value.
What this new rule allows is a travesty. But debt collection is an integral part of lending, and it can be done ethically and in a manner that doesn’t diminish the dignity of the borrower.
I can’t imagine having a normal conversation with somebody where tell people I was the “CEO of ACA International, a trade association for debt collectors” and not be deeply embarrassed / ashamed.
You want to tell that to my mom, as debt collectors called her when she was at her husband’s death bed? I’m sure it would have been a great comfort to her as he husband died of cancer.
Capitalist realism has got people thinking that being abused is the only way they can survive. Like a battered spouse who thinks they can change their abusive SO, when the real solution is to walk out.
So, society isn’t perfect, doesn’t mean that tearing it down will be any better. How do you plan on dealing with a murder if there are no cops? How will a lender get any money back if the borrower can just shrug and say “I won’t pay”? How will a young person without wealthy parents get a home if there is nothing to rent?
Now were getting way out into anarchist territory. You prefer a barter economy? I’ll give you a sack of grain for your goat.Too bad that what you really needed was a new rain coat.
Ah! Only a slight disagreement from me there: I think money as a abstract means of exchange is okay, but Capitalism as practiced in the US (and most of the world?) is immoral.
If you go back and read I never said there should be no cops.
I never said there should be no compelling payment of debts.
I never said there should be no rentals.
What I hear is People are dicks, so we need these things - cops, predatory debt collectors, landlords? to make sure that people fulfill their committed obligations.
I’ve been a landlord that had to pursue deadbeat tenants, and I’ve had to chase debts. I’ve also been a tenant, as well as fought off asshole debt collectors. So people can be dicks, and so can cops and debt collectors and landlords. Our current model is predicated on this, because nothing matters than whether or not the money goes where its presumed to supposed to go. There is no empathy there, only dickhood. Its all about the money, and we’ve abdicated the structure of our life to people who want nothing more than to have as much of the money as they can get. It leaves the rest of us who don’t really give a shit about money being forced to play their game. I’m just saying it does not have to be that way. You’ll find there is a lot less murder if people are not desperate, not afraid of being indebted just to keep a roof over their head, or thrown out of that shelter. The big what if that inevitably rolls out –– we going to let free-loaders just sit at home watching tv eating bonbons? I feel, why the fuck not. If that’s what you think is a good life, go the fuck ahead. We certainly create enough wealth in this world to let people do that if they want, so where the fuck is the harm in it. Personally I believe that there are not so many people that really would want to do that - its more of an escape from the threatening horror that is surviving in capitalism. More people would pursue productive ends if it was not the threat of ending their lives. Who will do all the shitty jobs? Those jobs will have to stop being so shitty, won’t they? If the job is indeed shitty its going to have to pay better. Enough to make you pass up on bonbon tv land to earn some more and expand your possibilities. But spare me the bullshit that the ones that hoard the most capital are the most capable.
My deepest sympathies to your mother and yourself. That was and is clearly immoral, and it should never happen. I’ve been on the other side when a borrower died or was dying. We restructured or forgave those loans. It does no one any good to collect under those circumstances.
One reason I didn’t continue in banking when I returned to the US was that the US banking system was no longer a proper banking system, but a streamlined money extraction machine, and much to my shame, I didn’t understand credit unions at the time, and so didn’t consider working for one.
It’s not just with my family. I bet there are thousands of families right now going through the same thing. Our current financial system is shot through with this kind of brutality, top to bottom. How it operates is highly immoral and anti-person.
If there were one law I think could be passed to prevent another crash like 2008, it would to forbid lenders from selling their loans, unless they were sold under bankruptcy or part of an acquisition.
If you have to service the loans you originate, you’ll be more careful to make sure the borrower is able to repay their loan, which will result in fewer defaults, and less need for collection.
The foreseeable side effect would be fewer loans to “Unbankable” customers (POC, poor, immigrants), which would need to be addressed, potentially through regulation and guarantee funds (which I think should be administered through credit unions, which do a better job providing service and education to underserved groups).
Did anybody else think it looked like a good thing to have debt collectors chasing Donald J. Trump in the cartoon with the headline? Maybe it was just me (and I realize the tie needed to be longer).
When a home is used as collateral and the borrower can’t (even after restructuring) or won’t pay, the home needs to be sold. We sold it at the highest price we could get, then gave the borrower the difference between the house sale and the defaulted loan. Same with cars and livestock. I had to camp on doorsteps to serve legally required notices. (There was no effective registered post, or registered delivery services). I wasn’t there to scare or harass the borrower, and once notice was served, left. Sometimes it was to negotiate new repayment terms with a borrower who didn’t realize we could or would do that if they made a good faith effort to repay.
It didn’t happen often, thankfully. That was in part because I/we (the company I worked for) took great efforts to be an ethical and trustworthy lender.
I completely agree. The US financial system is horrid. The only shining lights are credit unions, and even they aren’t angels, just not actively evil devils.
Civilization as we know it is extremely inhumane. We’d be better off getting rid of all these inhumane institutions that support it, and build something better than modern capitalist civilizations predicated on stealing surplus value from laborers. And then when the laborer’s surplus value isn’t enough for the capitalists, forcing everyone to go into debt, so that rich capitalists can make even more money and take even more wealth from those who are too broke to live already.
How are you not outraged with the totality of this system? Where the rich take from the poor then the rich invent debt for the children of the poor today to have to pay tomorrow? It’s just stealing again, except they’re not only stealing most people’s present, but their future and future generations’ futures as well.
I see no way to reform this abusive system. The whole edifice is built on contempt for humanity. It needs to be dismantled and something pro-human built instead.
