INTEREST, INSULT, INJURY 1/16/10

by

M. Holmes

I took my sister to work today because it's raining and she can't afford to register her car. She had the money. She 'earned it' by walking to work instead of renting a car for the two months it took to fix her car after an accident. The reimbursement was her registration money. But she gave it to my mother who needed it to pay her office rent. Some pencil pusher decided it would be better to spend over nine thousand dollars to fix an eleven thousand dollar car than totaling it. Someone must have benefited from that decision, but not my sister. I'm sure she would have preferred losing the car altogether, taking the bus and walking, to being saddled with the luxury of driving her economy class Nissan Versa. But the loan with interest that will probably stretch into the next millennium will keep going whether her car does or not. Insult. Injury.

Six years ago, my mother, my sister and I all had excellent credit. But now we have credit scores that would most likely preclude us from getting a job, or renting an apartment or an office, should that need arise. We’re not where we are today because of living large. We all live in the same rented apartments. My mother and I have less expensive cars than the mid-class models we used to drive. My sister drives ... well, that's complicated. In addition, she has already been turned down for jobs she is overqualified for, due to the fact that her credit report is legally accessible to potential employers. Right to privacy? Patriot Act. Insult. Injury.

Yesterday, experts on The Today Show financial segment explained that mortgage holders, (the same banks and financial institutions that were loaned billions of taxpayer dollars and are currently handing out multi-million dollar executive bonuses), have the right to sue the previously displaced owners of foreclosed homes for the difference between the inflated value at the time of purchase and the foreclosed sale price. Many of those previously hard-working homeowners are currently homeless. Insult. Injury.

I watched two financial segments today on Today. One of the experts in the first segment was the woman from the reality show 'Shark Tank', where bad boy moneylenders and this woman choose to finance, (or don’t), the inventions or business dreams of the show’s participants. Of the five financial experts in the two segments this morning, she was the only one who showed much common sense or humanity. She said the same thing I've heard her say on at least three separate occasions regarding the failure of the government-subsidized homeowner bailout program, which hasn’t enjoyed anything like the dazzling success of the banking and automobile industries rescue missions. The homeowner’s program is a spectacular failure because, as Barbara the Shark Lady put it, “There is nothing that requires the banks to participate. So they don't.”

Here are a few more reasons why less than five per cent of those who have applied have received any help at all. The process is impenetrable. Too much fine print. This is according to pundits and experts at a major network with research teams at their disposal, not to mention yearly salaries that allow them to sleep well at night, and pontificate in the morning. Wow. Bank loans. Real estate. Fine print. Impenetrable. Sound familiar? Added to that, the designated bailout money is only applicable to the usurious interest rates, not the inflated principal, and if someone is upside down in their loan due to the reduction of property value, as are the majority of the applicants in need, the program offers nothing whatsoever, save the time, energy and grief spent slogging through the fine print to find that out. And as one of the experts explained, “many of these people have another credit problem. They are out of work.” Maybe it’s because of their credit scores?? Insult. Injury.

So let's recap. 1. Most of us couldn't fathom the small print if our lives depended on it. 2. This ‘bailout’ doesn't even address the real problem. 3. The banks can and do ignore the whole thing with impunity. The same way they are ignoring The President of the United States who tells them that it’s immoral to give those obscene bonuses. The same way they have ignored congressional admonitions to stop raping the public with their credit card practices. The same Congress that recently passed laws to hold the banks “accountable”.

Accountable to what, you might ask? More impenetrable small print that is unfathomable to even the most savvy and conservative consumers and fiscal experts. Accountable in the same way that allows those same financial institutions to charge up to 79% interest upon unleashing an intentionally cloud-seeded perfect storm of small print and dire circumstance delivered to the consumer. That's right. 79%.

My mother's roommate . . .(Oops—that is a lifestyle change I forgot to disclose. My 80-year old mother now has a roommate to help her pay her apartment rent) . . . has a credit rating of 800, a statistical near impossibility, yet he just had a credit card canceled. Surprise! Credit ding! His shortsighted fiscal crime was not using it enough. But if he had been the one to cancel it, his credit would also take a hit. So he should spend. But not too much. He might go over the ever-shifting spending limit, which could change between the time he charges something and gets his statement. And don’t forget that pesky 20-80% interest problem. And he should only make purchases on the third Tuesday of the month, and pay the bill from a phone booth while wearing a dress. But not a print dress. Never a print.

In other words, lawmakers, lobbyists and financial institutions have stacked the deck to make it impossible to win. Oh wait. The new law says the consumer can opt out, but as the experts said, 'if you do that, “MAKE SURE TO READ THE FINE PRINT.” Read it, but whatever you do, don't wear it on your sleeve, because along with your heart, the fine print is where the blood is. And everyone knows what happens when sharks smell blood.

Then? The customer was always right.

Now? The customer always bleeds.