The Lowest Of The Low, Preying On The Poorest Of The Poor

2 comments August 9th, 2008at 08:21pm Posted by Eli

This is absolutely disgusting:

Last night’s Bill Moyers’ Journal had heart-wrenching coverage of the growing industry that preys on the 25% of U.S. citizens who are living in poverty. The article concentrated on the angle of inveigling people into debt they can’t afford by getting them to fill out forms that detail their financial circumstances, then matching what they can eke out with the price of what they’re buying.

A major example was given, of a lady needing a car to perform the job she was paid for. After she told the salespeople all of her expenses and income, she was sold a car that cost more than what was left over after all her other bills were paid. Eventually, she had to return the car. In the Journal report, it was explained that most cars sold under this arrangement are returned, but the costs are covered by the amount of interest that the buyers have been socked with. It is this kind of tactic that has seen subprime lending burgeoning in many industries.

MATT FELLOWES:I’ve estimated in my research that among the bottom 25 percent of households, they’re collectively bringing in about 650 billion dollars every year.

So you can imagine why an amount of money that large is attractive to a great variety of businesses, from large financial services companies to new, uh, to entrepreneurs looking for innovations to serve this market.

SILVIA CHASE:That the poor can be lucrative to big business was intriguing enough to the reporter. But Matt Fellowes’ evidence for that case was even more so. The Fellowes report noted that wages have been stagnant for years; to compensate the working poor are buying items small and large by taking out loans from companies all too happy to lend them the money at a very high rate.

MATT FELLOWES:Lower income families tend to pay higher prices for nearly every basic necessity from groceries to the price of a car to the price of a mortgage.

MATT FELLOWES:Between 1989 and 2004, they borrowed about 240 percent more debt than they did in1989. So there is this enormous increase in the amount of debt held by low and moderate level income houses.

But wait, it gets better…

[T]he report from Bill Moyers touched on an investigation that is now going on at MotherJones. If you’ve noticed, there are reports there of people associated with the very organizations that have grown up to defend the needy, that have begun taking a role in selling them new and abusive credit services.

BILL MOYERS: CFSA has been especially active in urban, African American communities — that’s a primary target for predatory lenders. On our website at PBS.org, you can link to a startling investigation in the current online issue of MOTHER JONES.

The magazine reports that the CFSA and the subprime credit card company CompuCredit, have co-opted several prominent civil rights organizations to bolster their efforts to fend off stricter regulation. Seals of approval for payday lending have come from CORE — that’s the Congress of Racial Equality, the National Conference of Black Mayors and local chapters of the National Urban League.

Even the WASHINGTON POST was caught off guard.

Charles Steele Jr., president of the Southern Christian Leadership Conference, invoked Martin Luther King Jr. as he argued against the proposed Credit Cardholders’ Bill of Rights Act. He defended subprime credit card lending.

The POST later had to issue a clarification that the Southern Christian Leadership Conference has a partnership with CompuCredit that includes plans to market “SCLC-branded” credit cards. Shameful.

“Shameful” is too mild.  The predatory lenders are evil enough, but the enablers who abuse their positions of trust are beyond despicable.

Entry Filed under: Corruption/Cronyism,Economy

2 Comments

  • 1. woody  |  August 10th, 2008 at 3:25 pm

    I like the Chinese solution to predatory war-profiteers: Give ’em a shovel and make ’em dig a hole. Strip ’em to their underwear and make’em kneel fi front of the hole. Put two small-caliber bullets into the back of the head. Kick carcasses into hole and cover with quick-lime…

    Put it on film and show it in Business Schools around the land…I wouldn’t want to vouch for the deterrence, but it’s king-hell on recidivism. And in a modern, mass culture you don’t have to kill that many folks to make your point…You video one or two, and just keep repeating the video footage…

  • 2. Eli  |  August 10th, 2008 at 3:30 pm

    I think it *would* be a deterrent, actually. Most government and political criminals operate under the mostly accurate assumption that they will never be held accountable, so they are free to do anything they please to increase their profits or power.

    Even impeachment and jailtime would be a huge deterrent over what we have now. Which is to say, pretty much nothing.


Contact Eli





Feeds

Linkedelia!

Most Recent Posts

Archives

Categories

Calendar

August 2008
M T W T F S S
« Jul   Sep »
 123
45678910
11121314151617
18192021222324
25262728293031


Thinking Blogger

Pittsburgh Webloggers

Site Meter


View My Stats *