40% Credit Interest and Climbing

A friend of mine got a cash advance from her bank card. When she got the bill, her interest rate was a whopping 40%. She was in financial straits, which was why she borrowed. This 40% interest pushed her over the edge rather than saved her.

The new Abu Ghraib mentality toward unsuspecting borrowers will drive many into financial ruin, a thing you'd think the banks and credit companies wouldn't want. If their customers go bust, how would they collect? The answer is the legislation laughably called the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. This piece of legislation would end the traditional protection that goes back thousands of years to forgive a debt after seven years. Outrage against usury burying people in unrecoverable debt goes back at least as far as Jesus casting the money lenders out of the temple. But that is a part of the Bible that Bible thumpers prefer to think of as quaint and outdated.

Credit card companies were some of the largest Repugnican contributors. They have been posting record profits while pushing Congress for legislation to guarantee them their pound of flesh even as they aggressively pursue poor-risk borrowers from whom they can flay unlimited penalties and fees.

This new Republican Bankruptcy Profiteering and Consumer Predation Act ( a better name in my opinion) that passed the Senate and is expected to pass the House refused to add Democratic amendments to cap interest at 30% or to raise the minimum wage by even one dollar. The other aspects of the bill as explained to my friend by her bankruptcy attorney would make it impossible for her to escape the payments and penalties for the rest of her life. She wondered how this could have come to pass and why she hadn't heard about it before. She is conservative in her views and so does not read the NYTimes. I, on the other hand, had been following the bill's course throught he Senate because I do read the Times, both LA and NY.

When I called the authors of this Senate bill before passage, their offices scolded me for believing the liberal press, and that this bill would not affect anyone but a small percentage of scammers. The man in Senator Grassley's office pooh-poohed my concerns as distortions and confidently told me I had been misled by the liberal hysterics.

$40% interest is not hysterics. It is not some wild exaggeration by the "left." It is here.

I want you to do three things. I want you to call your Congressman or Congresswoman about this. Capital switchboard: 202-225-3121. (You can find your Representative's name if you don't know it at House.gov) Tell them how terrible you think the Bankruptcy legislation is. Keep it to one issue. If you have another issue, make a separate call.

Second, I want you to call your State level politicians and explain that although you know they don't vote in Washington, you want them to use their position to bring it up with the state's representatives in Congress. They do talk, and this was suggested to me by my own Congresswoman's office as an effective way to bring pressure to Washington.

Third, I want you to forward this to all your friends, liberal and conservative, especially those who live in conservative states, and ask them to do the same.

If anybody says the Democrats are just the same, don't let it pass. Look below at the amendments they tried to add and that got swept aside. The votes were almost exclusively along party lines and the Dems who voted against are mostly from Heartlessland states like Nebraska and South Dakota.

40% interest. No forgiveness of debt no matter what the cause: illness, failure to receive child support, military service (see the failed amendments below.)

DEMOCRATIC AMENDMENTS THAT FAILED:

S.AMDT.16 Amendment SA 16 proposed by Senator Durbin. To protect servicemembers and veterans from means testing in bankruptcy, to disallow certain claims by lenders charging usurious interest rates to servicemembers, and to allow servicemembers to exempt property based on the law of the State of their premilitary residence.
3/1/2005: Amendment SA 16 not agreed to in Senate by Yea-Nay Vote. 38 - 58. Record Vote Number: 13.
3 Dems voted against, 0 Reps voted for.

S.AMDT.17 Amendment SA 17 proposed by Senator Feingold. To provide a homestead floor for the elderly.
3/2/2005: Amendment SA 17 not agreed to in Senate by Yea-Nay Vote. 40 - 59. Record Vote Number: 14.
3 Dems voted against, 0 Reps voted for

S.AMDT.15 Amendment SA 15 proposed by Senator Akaka. To require enhanced disclosure to consumers regarding the consequences of making only minimum required payments in the repayment of credit card debt, and for other purposes.
3/2/2005: Amendment SA 15 not agreed to in Senate by Yea-Nay Vote. 40 - 59. Record Vote Number: 15.
4 Dems voted against, 1 Rep voted for

S.AMDT.28 Amendment SA 28 proposed by Senator Kennedy. To exempt debtors whose financial problems were caused by serious medical problems from means testing.
3/2/2005:Amendment SA 28 not agreed to in Senate by Yea-Nay Vote. 39 - 58. Record Vote Number: 16.


S.AMDT.29 Amendment SA 29 proposed by Senator Kennedy. To provide protection for medical debt homeowners.
3/2/2005:Amendment SA 29 not agreed to in Senate by Yea-Nay Vote. 39 - 58. Record Vote Number: 17.

S.AMDT.32 Amendment SA 32 proposed by Senator Corzine. To preserve existing bankruptcy protections for individuals experiencing economic distress as caregivers to ill or disabled family members.
3/2/2005: Amendment SA 32 not agreed to in Senate by Yea-Nay Vote. 37 - 60. Record Vote Number: 18.

S.AMDT.31 Amendment SA 31 proposed by Senator Dayton. To limit the amount of interest that can be charged on any extension of credit to 30 percent.
3/3/2005:Amendment SA 31 not agreed to in Senate by Yea-Nay Vote. 24 - 74. Record Vote Number: 20.

S.AMDT.37 Amendment SA 37 proposed by Senator Nelson FL. To exempt debtors from means testing if their financial problems were caused by identity theft.
3/3/2005:Amendment SA 37 not agreed to in Senate by Yea-Nay Vote. 37 - 61. Record Vote Number: 21.

S.AMDT.42 Amendment SA 42 proposed by Senator Schumer. To limit the exemption for asset protection trusts. ( a way for rich people to protect their property from banruptcy liquidation )
3/3/2005: Amendment SA 42 not agreed to in Senate by Yea-Nay Vote. 39 - 56. Record Vote Number: 23.

S.AMDT.70 Amendment SA 70 proposed by Senator Dodd for Senator Kennedy. To exempt debtors whose financial problems were caused by failure to receive alimony or child support, or both, from means testing.
3/10/2005:Amendment SA 70 not agreed to in Senate by Yea-Nay Vote. 41 - 58. Record Vote Number: 36.

S.AMDT.119 Amendment SA 119 proposed by Senator Dodd for Senator Kennedy. To amend section 502(b) of title 11, United States code, to limit usurious claims in bankruptcy.
(withdrawn for lack of support)

The list goes on and on. Check it out yourself at http://thomas.loc.gov/cgi-bin/bdquery/z?d109:SN00256:@@@S