Thief13x on 21/6/2009 at 00:18
Is it just me or are things getting a little too nice around here? I want some action.
Seriously though, I'm curious to know what people's thoughts are about the proposed creation of the "Consumer Financial Protection Agency," that according to Obama is charged with protecting consumers from 'fine print' and unfair lending practices which it will ban.
(
http://politicalticker.blogs.cnn.com/) http://politicalticker.blogs.cnn.com/
Most of you probably know where I stand politically (libertarian ahem) and hence where I probably stand on this issue. The truth is though, I'm pretty opened minded at the moment, namely because I havn't had alot of personal experience in borrowing.
I don't own a credit card or a new car (just a redneck beater with peeling clearcoat which I proudly drive to the office and park next to the BMW's) but I have taken out a 100k+ loan for college which I read carefully and completely understood, and have not been surprised
yet by Citibank
Anyways, I genuinely am curious what people's opinions are. For those who might not watch the news alot, this is a hot subject because alot of folks feel that government is not only protecting us, but overstepping its boundary to protect the 'dumb folk' from themselves and unnecessarily meddling in every day affairs while increase government spending.
The other side essentially say that those who oppose the creation of the agency are pretty much crooks, bankers, CEO's or libertarians and oppose change or are stuck in Bush era thinking, and that it was the lack of this type of regulation that caused the current economic mess.
My natural instinct is to be aggressively against it, but I wonder if it's just because I've never really borrowed
Thoughts?
Scots Taffer on 21/6/2009 at 00:38
and people thought howie's thread was bad
fett on 21/6/2009 at 01:51
It was. :p
Muzman on 21/6/2009 at 02:10
Is this one of things that every other western nation has and is no big deal? The kind of thing that if some non-profit service or group did it (one which even attracted government funding) libertarian 'personal responsibility' zealots wouldn't bat an eyelid at, but because the government boogieman is doing it it's the end of the world?
(this is all self importance really, since I've never borrowed money in the US you see and need something to talk about.)
Renzatic on 21/6/2009 at 03:02
All I know is my credit card company (Bank of America for those curious) tried to bend me over and shaft me lubeless...AFTER I paid them off.
See if you can make any sense out of this. I pay off my card to the penny on the 5th day of the month. 2 months go by without me receiving a bill, which I find I rather enjoy. But then...oohh...I get a bill showing a cyclical interest charge and a late fee attached to it. For no solid grounded in reality reason, I go from owing all of zero to $120. Long story short, double cycle interest billings and their negligence in sending me a bill...which they claim is not their responsibility, I should be the one keeping tabs on my debts (I DID! I PAID IT OFF AT THE BEGINNING OF THE MONTH)...cost me some cash. I argue with them for a few months, neither of us give on the issue, they eventually write off the amount as bad debt, which puts a dent in my once rather nice credit score.
Oh, and let me tell you about the time I was late by 24 hours on a payment. I had their card for two years...TWO YEARS...without a single late payment. I miss that one time, and my interest goes up from 8.5% to 15%. I could understand this happening if I were habitually late, but comeon. One time! If they were intending on making money at my expense, they truly failed. I was paying $500 a month. I would've had the card paid off in 6 months, which would've given them a healthy amount from interest. On top of that, I would've used it again in the meantime. I would've stayed in a controlled amount of debt. Instead, they try to screw me, I pay off the card in one lump sum, and shred the card. Course then they reared back up on me and the story above began.
Basically, I'd say the current US credit system comes out to something like "you owe us money, and in the meantime, we're legally able to charge you whatever we feel like on top of that without any repercussions". I'd love to see a change.
Starrfall on 21/6/2009 at 14:12
The only kind of debt that is easier to manage than student loans is borrowing five bucks from a friend.
I'd be more interested in actual arguments of how/why this is the government overstepping instead of a bunch of insisting that it just IS.
I'm so fucking sick of these knee-jerk reactions to the any bit of new government regulation by people who benefit greatly from government regulations that are currently in place. Especially when government regulation typically results (whether directly or indirectly) in consumers getting more information which, as anyone who actually knows how free markets work knows, is vital to the operation of said free markets.
Let me know when the opposition has some real arguments and not just a butt-hurt Pavlovian reaction held over from Reagan.
aguywhoplaysthief on 22/6/2009 at 01:57
My guess is that concern about this thing is that it will end up causing higher interest rates because they have to be more up front and therefore get less money from fucking around with people.
I don't have a clue what's in the bill, or whether or not it would actually cause an increase in interest rates or not, so I'm not going to take a position one way or the other on it, but I'm pretty sure that that would be the main issue for opponents of this.
heywood on 22/6/2009 at 02:45
I'm all for keeping government out of it as long as lenders are behaving. But they haven't been behaving, so fuck em. There needs to be some regulation to prevent predatory lending practices, and disclosure/notification rules are not enough.
However, I do question whether there needs to be a new agency to do this. It's a sign that the rules are going to be unnecessarily complex and laden with special cases, exemptions, and other bones thrown out to the industry and interest groups. One of the positive accomplishments of the Reagan era Congress was a dramatically streamlined tax code. Since then it has bloomed to something like 11000 or 13000 pages (IIRC) and it takes large teams of corporate lawyers to understand and comply with it. Similarly, my bank's policies keep getting more complex and I think I'd need a lawyer of my own just to understand them. They send me a pamphlet full of 4 point text every few months with just the policy changes. That's why disclosure doesn't work - nobody can keep up with it.
I'd rather see regulation in the form of simple, tight, understandable rules that don't require a new bureaucracy to interpret and enforce. Why perpetuate the complexity?
Matthew on 22/6/2009 at 11:40
heywood: in the UK, every time I get one of those change leaflets it is prefaced with a short, simple-to-understand summary. I suspect that UK or EU legislation requires this.
Starrfall on 22/6/2009 at 14:19
Quote Posted by heywood
I'd rather see regulation in the form of simple, tight, understandable rules that don't require a new bureaucracy to interpret and enforce. Why perpetuate the complexity?
See this is an actual argument!
I don't know what the "official" reasons offered to justify a new agency are, but I can come up with a few reasons myself.
First, the new regulations will almost certainly be made by the new responsible agency. Congress doesn't write regulations for the most part: they delegate responsibility to various administrative agencies, who go through a lengthly public rulemaking process where everyone in the damn country gets to say how much they hate everything the new agency is doing. This process takes more people and work and time than anyone thinks it should. So if you put this responsibility in a pre-existing agency (maybe the FTC?) the first big concern would simply be the massive workload of getting the new regs out. The same goes for enforcement once the rules are in place.
My second big concern about using a pre-existng agency would be entrenchment. If we are to create an agency that is meant to provide new protections in what I assume will sometimes be novel ways, it is my opinion that it shouldn't be done by people who have already been working in agencies for decades. This one may be a little hard to explain but basically the attitudes of some long-time government employees can make you want to scratch your eyes out in frustration. This is probably not a surprise.
Third for me would be oversight. It's probably easier to keep tabs on an "independent" agency than it is to keep tabs on old empoyees doing new stuff. I don't think continuing to compartmentalize existing agencies is a good way to go. It may be that the proposed CFPA will actually technically come under one of the other agencies, but its still easier to keep track if it is a distinct thing, rather than just adding the duties to another agency's list.
Finally, either way if this gets done there WILL be new bureaucracy. This is the nature of new regulation and it is not necessarily a bad thing. If it's going to be new bureaucracy anyways, the only difference I see between putting it into an already existing agency and creating a new agency is that creating a new agency would be more ideal.
