Why Americans Find Predatory Lending Offensive

"Menis - the author translates as "indignant rage" - It is the kind of rage arising from social betrayal that impairs a person's dignity through violation of "what's right." (p21), Achilles In Viet Nam - Combat Trauma and the Undoing of Character, Jonathan Shay, M.D., Ph D.

"The vulnerable relationship between child and parent is a metaphor for the relationship between a soldier and his army. It is also more than a metaphor when we consider the formation and maintenance of good character. The parents betrayal themis - (the ability to feel good about oneself , self esteem, self image) - through incest, abuse, or neglect puts the child in mortal danger. Despite intellectual limitations, the small child usually grasps the danger, although the child's mental representation of the danger differs from adults. The child's inner sense of safety in the world emerges from the trustworthiness, reliability, and simple competence of the family.

"Similarly, the child's acquisition of self-control, self esteem, and consideration of others depends upon the family. Absent inherited mental disorders, good parenting will produce good character and all the other adult resources of dignity and maturity, including ideals, respect for others, self respect, ambitions, self-care, pro-social rather than anti-social activity, reliable capacity to distinguish reality from fantasy, and so forth.

"Lurking behind these supposedly settled truths is the platonic assertion that good character is a firm wall between a good person and evil acts, regardless of the betrayals of "what's right" and other blows, such as bereavement that may simply happen to an adult. Often there is the invisible unstated assumption that those that hold power in society exhibit loyalty and care in fulfillment of themis. (p 32)

"If military practice tells soldiers that their emotions of love and grief - which are inseparable from their humanity - do not matter, then the civilian society that has sent them to fight on their behalf should not be shocked by their "inhumanity" when they return to civilian life. (p 67)

"Viet Nam narratives reveal that the events that drive soldiers berserk are betrayal, insult, or humiliation by a leader; death of a friend-in-arms; being wounded; being overrun, surrounded, or trapped; seeing dead comrades who have been mutilated by the enemy; and unexpected deliverance from certain death." (p 80)

Even in families without children the parents are leaders. Parents make financial decisions that impact the future of their children, their stature in the community, self worth, and dignity. There is nothing dignified about the effects of predatory financing. Yet there is an initial assumption that those who impact the credit scores of Americans are exhibiting loyalty and care in fulfillment of their chosen occupation. Americans believe our laws and regulations such as Regulation "Z" protect their rights. There is a strong belief that the system will work.

The economic downturn of 2000 through 2002 is firmly grounded in consumer spending and consumer debt. The real estate boom infused more disposable income into the economy. Exportation of manufacturing and services sector jobs to foreign countries, plus the huge trade deficit add to our woes. In early 2003 the federal budget deficit and the threat of war add to troubled economic times. Bankruptcies achieved record high levels. However, as with history and military battles, we must learn from the past to see the future and prevent future mistakes.

William F. Aldinger started his career with CitiGroup, learning quickly that sub-prime financing in the CitiFinancial subsidiary was a lucrative business. After leaving Citi, Aldinger went to Wells Fargo, and then to Household International as CEO. All three companies are now classified as predatory financing companies, and all three have been forced to settle with the states, government, and consumers. Household restated earnings for the entire time that Aldinger was with the company. HSBC has a four year agreement with Aldinger to continue as Chairman and CEO of Household under HSBC, and then he will become chairman and CEO of HSBC North America, Inc and director of HSBC Holdings. The past tells us the future. HSBC contends that there will be no changes to their business model. Therefore it is safe to predict that HSBC will become the largest global predatory lender ever witnessed by a civilized orderly society.

Those that managed to delude themselves into thinking they are financiers providing a service to society, while masquerading as predators, argue that they are servicing a sector of society that would otherwise not receive adequate attention. Countering that argument, the Community Reinvestment Act perhaps should be revisited and strengthened. Perhaps federal and state governments should remove predatory abilities from the private sector while providing structure and funding. Americans should not be abused by a system that is failing.

Historically, if we use the actions of predators to show us what areas need reform we can reverse the economic downturn we see today. Just like gangs, organized crime, and similar activities, the government should look for the cause of the problem while instituting prevention and removal of the opportunity for predators.

Credit cards are responsible for a huge portion of American debt. Easy credit and the need for credit is expected in today's society. Again predators have an opportunity. Household International provides financing for, and ongoing compensation to merchants under their existing contracts. Again, there is an initial assumption that those who impact the credit scores of Americans are exhibiting loyalty and care in fulfillment of their duties, that they will follow Fair Credit Reporting and Fair Credit Billing, etc. With over twenty million transactions a day, and over sixty participating merchants, Household International impacts the lives and family values of many taxpaying Americans every day.

Consumer watchdog organization Household Watch receives consumer complaints daily. Based on their web site log statistics Household Watch only receives complaints from 5% of those who visit. Many others get the information they need from their web site data. Over 400 people per day use the Household Watch web site to find links which enable them to pay their bill online.

The Federal Trade Commission, therefore, recognizes Household Watch and sister site BestBuyCard as a source of consumer help. Where predators see an opportunity the government should step in to stop them. When the government does not step in, consumer organizations step in to fill the gap. We sincerely hope, therefore, that the consumer organizations will be heard a loudly as the predators and the government when decisions are made. They speak for the public, with emphasis on the public that experiences violations of regulation "Z" and other areas where they expected special trust and confidence.

About The Author

Timothy Blake has a Bachelor's Degree in Business with a specialty in Management of Technology. He is an investigator for Consumer Advocacy organization Household Watch at www.householdwatch.com

Important Things to Know About Divorce and Credit

Joint debts remain joint debts.Both spouses signed a legally binding... Read More

Debt Collection Agencies

Debt collection agencies are often a viable option for receiving... Read More

10 Signs You May Need Credit Counseling

Debt management programs can be of real help for people... Read More

Which Credit Card?

Bewildered by the sheer variety of debit cards and credit... Read More

Give Yourself Credit

The Beginning of the Credit Card EraIn 1951, Diners Club... Read More

Dealing With A Collection Agency

Step I - Selecting A Collection AgencySelecting a credit collection... Read More

Fight Credit Card Fraud with Common Sense

By now, you have undoubtedly heard of credit card fraud,... Read More

Avoiding ID Theft and Credit Fraud

Article excerpted from the new book, "How to Do Space... Read More

Triple AAA in 30 Days

Have you ever wonder about how to get good credit... Read More

Five Credit Card Billing Problems and How to Fix Them

It goes without saying that your first and best defense... Read More

Getting Married? What Are The Finance and Credit Implications?

There is a big difference between looking after your own... Read More

Consolidating Credit Cards

Credit card consolidation is a popular solution for those with... Read More

Trying to Land a Job? Poor Credit Scores May Hurt Your Chances

Many employers are now looking at an applicant's credit report... Read More

Tips for Credit Card Surfers

Moving money from credit card to credit card to take... Read More

Credit Verus Debt

Secured and unsecured debt - what's the difference?It's easy to... Read More

Dealing With and Repairing Bad Credit

Bad credit can be a burden for otherwise good credit.... Read More

Credit Counseling -- Why It Doesnt Work For Most Debtors

"Cut Your Payments in Half!" the headline screams. "Consolidate Your... Read More

Credit Report Secrets: Do You Know What They Reveal?

If you've ever applied for a credit card or loan,... Read More

5 Things Your Credit Card Company Keeps Quiet About

Credit Cards can bankrupt you if you let them run... Read More

Do You Know The Top Five Credit Card Mistakes?

When you're dealing with credit cards, you're playing with fire.... Read More

Your Credit Score

Credit scores: all lenders use credit scores to determine interest... Read More

The Things That UK Lenders Like to See on Your Credit File, (and? What They Don?t Like to See!)

Lenders are quite fussy about what they like to see... Read More

Different Types of Credit Cards and Features - Part 1

Just as there are too many credit card companies to... Read More

Keep Your Credit History Clean - Remove A Negative Credit Record From Credit Report

The three major credit bureaus, Experian, Equifax and Trans Union... Read More

Repair Your Credit - The Right Way!

How to Repair a Bad Credit Rating?The Right Way!If you... Read More