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Blasphemous Moneylenders

By Robert Scheer

What separates a criminal loan shark from a legal bank-run credit card operation? About a gazillion dollars in D.C. lobbying fees and campaign contributions. Both willfully violate God’s law as defined by biblical scripture, which unequivocally condemns usury.

Unlike mortgage rates, there is no such thing as a fixed credit card interest rate. In the fine print of most applications, credit card companies can raise interest rates at ANY TIME for ANY REASON. And they do, with increasing abandon. Younger people may not realize there was a time not long ago when the idea of getting jacked for 30% interest because you were late for a single payment would have seemed insane. Now it is the norm, as are incredibly shrinking grace periods, scandalous annual fees and misleading ads that push low-interest cards but send you a high-interest one because you “didn’t qualify.”

Having bought enough politicians, from both parties, to make the system its toy, the creditors are really going to town. One of the worst scams is something called “universal default,” in which the card companies raise rates based on late payments to other institutions! Add to that the obscene rates banks slap on ATM cash advances, credit card late fees (which have soared some 400% in the past decade on average) and the overall national decline into deep indebtedness, and you’d think more somebodies in D.C. would decide to rein in this out-of-control industry. Instead, Congress has been doing everything it can to facilitate our getting screwed, including slashing the bankruptcy laws to benefit the usurers.

The results are predictable. The fees collected by credit card companies from late charges alone went from $1.7 billion in 1996 to $11.7 billion in 2004—almost a sevenfold increase. Credit card debt rose 31% between 2000 and 2005. Americans now owe more than $800 billion on credit cards, according to the Federal Reserve, and last year the average household carried $9,200 in card debt.

The industry, in turn, has rewarded its top dogs handsomely. Over five years, the CEO of Citigroup made more than $500 million in total compensation, and the CEO of Capital One more than $169 million. In 2002 alone the top four executives at card giant MBNA made more than $300 million. These guys are feasting on the bones of broken families.

Of course, they—and their political pets—will tell you that this is simply an issue of personal responsibility, but this argument only goes so far. Experts estimate almost half of Americans live paycheck to paycheck, making the seductive and misleading offers of easy cash almost irresistible, especially when a financial crisis hits—whether a blown transmission or unexpected surgery or fast-rising student fees.

Once they are targeted, often as teens, cardholders are bombarded with forests worth of offers by competing cards, often with blank checks enclosed. The pharmaceutical industry would love to be able to market painkillers, uppers and Viagra this way—here, try a bottle or two at this low introductory fee!

Of course, credit is a healthy part of any functioning free market. But is it too much to ask that the government responsibly regulate an industry which is peddling something—easy cash—far more addictive than marijuana? In fact, the credit card industry now works much like addiction-based Big Tobacco: Hook ’em young and poor, especially targeting students with no income.

The vast majority of borrowers, of course, sincerely intend to pay off the money quickly, but any number of things gets in the way—losing a job, poor health, addiction, divorce. And that’s when the real trouble begins—once a significant portion of a family’s income is going to pay the balance minimums, many heads of household see further borrowing as the only way to keep from losing their home, car, utilities or leased furniture. Forget saving for a house or college tuition for the kids, both of which would benefit the larger society.

Watching television, they’ll see the myriad ads for “nonprofits” promising to help them out of strangling debt, but most of these are actually sponsored by the credit industry to negotiate debtors away from bankruptcy and keep them in a modern form of indentured servitude.

This perpetual debt machine has been hypocritically supported by the Religious Right despite the Bible’s clear definition and condemnation of usury. The Old Testament—revered by Jews, Muslims and Christians alike—mandates debt forgiveness after seven years, for example, as was pointed out by an organization of Christian lawyers in a letter to a key sponsor of the bankruptcy bill, Iowa Republican Senator Charles E. Grassley.

“I can’t listen to Christian lawyers,” said the senator, who actively opposes abortion and same-sex marriage on biblical grounds, “because I would be imposing the Bible on a diverse population.” How convenient to forget that it was Christ who threw the moneylenders out of the Temple.


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