(Conspiracy Nation, 4/22/05)
-- In "Tough Love For Debtors," Business
Week magazine reports that in January 2003, the Office of the
Comptroller of the Currency (OCC) published new rules. The banks
persuaded the OCC to allow a long transition period before the new
rules force them to double the minimum monthly payments on credit card
bills. (Business Week,
4/25/05) Coincidentally, the banking industry persuaded the U.S.
Congress recently to tighten the bankruptcy escape hatch. With 19
million households now making only minimum payments on their cards,
rising gas prices, rising interest rates, and record levels of
indebtedness, many millions of Americans barely scraping by are about
to be pushed over the edge.
What will "a lot of Americans" who are "getting hammered by credit
card debt" do? They cannot just file for bankruptcy, as in days of
yore. Maybe they will pray to icons of Andrew Jackson, who once said,
"Corporations have neither bodies to kick nor souls to damn." Anti-bank
sentiment could run high, with marchers carrying signs emblazoned with
the visage of "Old Hickory."
Andrew Jackson, seventh U.S. president, had won more popular and
electoral votes in 1824 than any other candidate. But due to there
having been several candidates, he had not received an overall
majority. So East Coast establishment candidate John Quincy Adams
became the "president select." Jackson roared back four years later
and, to the dismay of the "civilized" East Coasters, a rough
frontiersman occupied the White House.
Jackson very much hated something called "the Second Bank of the
United States." Known as the B.U.S., the name Bank of the United States
was misleading, since it was actually owned by wealthy East Coast and
European stockholders. Jackson considered it to be a monster monopoly
controlled by foreign and eastern stockholders, to the public
detriment.
Old Hickory withdrew government deposits from the B.U.S. Nicholas
Biddle, erudite Philadelphia aristocrat and manager of the B.U.S.,
retaliated by calling in the Bank's loans and demanding payment in
gold. British investors also called in their loans to Americans. The
result was an economic depression which lasted six years. The people
suffered and Jackson looked bad, but they stood by him nonetheless and
the "Bank of the United States" did not get its charter renewed. Today,
the B.U.S. is only a distant memory. (Source: "President Andrew
Jackson," http://en.wikipedia.org )
The legerdemain of banking and money is a hocus pocus not well
understood by most people. Also not understood is usury: even now,
there is no definite agreement about what usury is.
The people at the Office of the Comptroller of the Currency (OCC)
are do-gooders. Like Kevin Costner in the film, "The Untouchables,"
they say, "Come on, let's do some good!" The credit card companies had
set their minimum payments at a level so low that it would take decades
for minimum payers to get out of debt. The OCC do-gooders stepped in:
henceforth a larger portion of debt must be paid down each month.
Heretofore, the credit card companies had been making record
profits, based upon credit for all and essentially interest-only loans.
We were all part of the so-called "ownership society," yet it was
really the "rent-to-own society." When OCC cracked down, it was lucky
for the banks that Congress coincidentally dismantled bankruptcy
protection. Of course it is
merely coincidence, since here in magic land conspiracies never ever
happen.
OCC do-gooders had rightly feared that the interest-only type
minimum cardholder payments might be usurious. It's not easy, though,
to be sure when usury occurs. Aristotle had thought all
interest-bearing loans were unnatural. Money was consumed by use, so it
was barren and did not naturally reproduce. Roman law was more subtle:
a specific return rate was allowed: the Lex Unicaria of 88 B.C. set 12
percent per annum as the maximum permitted. But Christians of the late
Roman Empire were not so flexible. St. Jerome declared usury to be the
same as murder, since it consumed the life of the borrower. Exodus
XXII, 25 and Deuteronomy XXIII, 19-20 forbade the taking of interest by
one Jew from another. Martin Luther insisted "that anyone who charged
interest was a thief and murderer and should not be buried in
consecrated ground." But John Calvin interpreted Christ's saying "lend
hoping for nothing in return" to mean, in some cases, lending at
interest was all right. Calvin noted two Hebrew words which translated
as "usury": one, neshek,
meant "to bite"; the other, tarbit,
meant "to take legitimate increase." Thus, one could lend at interest
to business people who would make a profit using the money. To the
working poor one could lend without interest. To the impoverished one
should give without expecting payment. (Sources: "Usury," EH.NET
encyclopedia, http://www.eh.net and "Usury" Catholic Encyclopedia,
http://www.newadvent.org )
The folks at the Office of the Comptroller of the Currency must have
been reading up on this, because suddenly they noticed, "Whoa! Not only
is the average credit card rate at 16 percent, but the banks are
tacking on extortionate late fees and even higher interest rates for
any missed payment." You can just be late paying a phone bill and Pow!
Up go your rates, to an average of 29 percent on all your cards. (Business Week, op. cit.)
Now, things will change. Monthly minimum payments will, on average,
double, and people can more easily escape from "the bite." They can't
so easily use the back door of bankruptcy protection, but like Business Week says, it will be
"tough love." They are doing all this because they care.
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