Friday, September 17, 2010

My op/ed on "Usury" ran in Sioux Falls today

They archive this stuff and the links go cold in about a week...

My Voice: Loss of credit card jobs sign of better times | | Argus Leader

They edited out some key quotation marks (the banker's hypothetical questions were a direct quote from the same paper). They also dropped the citation on Ezekiel. But Glory to God for this opportunity, and I pray that it will comfort some burdened neighbor, or keep someone out of bad borrowing, or touch a conscience here and there. Here's my draft:

South Dakota is losing some jobs in the credit card business, and some see that as bad news. Let me tell a different story.

Late last year, my wife gasped out “What’s wrong?” She saw me hunched at the computer, the online bill pay program flickering, my face blank and my hands limp in my lap.

“It’s gone” was all I could say. Years of mounting debt, tens-of-thousands of dollars of it, had disappeared in five minutes. It was beyond belief, and I just sat staring at the screen.

Our financial deliverance was a big retroactive check for my wife’s first years of disability. I sat down immediately to pay off the credit cards that we had run up since she had to stop working.

That’s right, we paid our debts. We had borrowed to pay huge, persistent medical bills, used cards to buy groceries and medicine when paychecks couldn’t stretch far enough, and I worked extra jobs to juggle the payments. We tapped friends, family and church when unexpected, overwhelming bills landed. We sold one car and shared the one that was left. We struggled to keep paying the mortgage on the equity-losing home where we care for two disabled family members. We contemplated bankruptcy but kept clawing and crawling, sometimes to the lenders for “payment plans.” And when we had the money together, we paid.

In other words, we played by the rules and still came within a few months of being wiped out under them.

"Whose responsibility is it to know the balance on a card? Is it you or the bank? Is it the bank's responsibility to keep you from spending more than you have?" The questions were posed last February in the Sioux Falls Argus Leader by Dana Dykhouse, CEO of Sioux Falls based First Premier Bank. He affirmed the moral order of our culture: when there’s debt, the moral onus is on the borrower.

Allow me to speak financial heresy and say that’s upside down. There is another point of view, in which the moral onus is on the lender. Believe it or not, that’s what the Bible – often cited as the moral foundation of the Prairie – sets up.

The Bible warns lenders to refrain from overburdening borrowers. Seasons of debt forgiveness are commanded and there are harsh pronouncements against “usury,” the layering on of interest that keeps the borrower stuck in debt.

The Prophet Ezekiel, for example, warns against the “violent” person who “…does detestable things. He lends at usury and takes excessive interest (18:12-13).”

But America accepts the violence of usury.

We’ve allowed lenders to mail out unsolicited credit cards, pimping debt where none was sought, with the conditions and consequences buried in pages of small print legalese.

Until President Obama signed the Credit Card Reform Act late last year, “two cycle billing” was normal practice in the credit card industry, letting it heap interest on our balances coming into and going out of each month.

Lenders then tweaked their products to meet the letter of the law. Last December msnbc reported one of First Premier’s new products, aimed at people with poor credit. It offered a “79.9 percent interest rate and $75 annual fee... There's also $29 penalty if you pay late or go over your $300 credit limit.” In other words, banks ask you to establish credit by practicing bad borrowing habits.

“Pay Day” lenders continue to charge absurdly high interest for short-term loans marketed as compassionate help to the cash strapped.

The housing market is a mess because government entities solicited voting blocs by handing out money people couldn’t realistically repay.

Yes, people should repay their debts. But they should not be offered defective financial products that generate budget-busting interest and discouragement. Business, government and culture have colluded to dump both debt and blame upon moral, reasonable and hard working people.

So if some usury-generated, usury-generating jobs go away, I think things are moving in a better direction. +++

By the way, most of the "lost" jobs are by attrition or early retirement buy outs. There are not hordes of suddenly destitute bankers living under bridges as the industry apologists warned.


caheidelberger said...

Excellent article, Father Tim! I agree wholeheartedly. Get people out of the usury industry and turn their talents and energy toward building real things, work they can be proud of.

The Archer of the Forest said...

I will be truly interesting to hear what official responses you get either directly or via letters to the editor in the paper.

For the record, I am also quite glad you called out the First Premier Bank for that editorial they wrote a while back. The logic in that editorial was abysmally disgusting.

Steve Hickey said...

Great stuff Tim!