Fair Interest Rates Bill (Law'd)

[MasterJedi]

Fair Interest Rates Bill

Section 1: Interest Rate Caps

1. No percentage rate applicable to an extension of credit obtained by use of a credit card may exceed 20 percent on any unpaid balances.

2. No percentage rate applicable to the purchasing of "payday advance loans" may exceed 30 percent on any remaining charges.

3. This section shall not be interpreted as to prevent or overwrite stricter interest rate limits in any region.
Spon: Sen. Marokai Blue

[MasterJedi]

Bump, in case nobody saw this.

[Marokai Backbeat]

I think interest rate caps are absolutely essential, especially in the times we live in. Credit card companies sometimes charge 35% interest or higher, and all of their tricky clauses are in the fine print to let them get away with it. Payday loans are similarly deceptive and harmful, and are often designed to take advantage of people.

In order for people to get a leg-up in the recession we're facing, we need to make sure that people aren't getting raped by horrific interest rates that they didn't know they were going to end up paying, and to make sure that businesses don't take advantage of desperate people just trying to survive on a week-by-week basis.

[Associate Justice PiT]

     I find that hiking interest rates into infinity is a rather disturbing practice. Rather, credit card companies should be encouraged to just pull the cards from the deadwood & make them pay back whatever they owe before they can get the cards back.

[Purple State]

This doesn't seem all that controversial: save people from incredibly detrimental cartel-esque tactics.

[Marokai Backbeat]

This doesn't seem all that controversial: save people from incredibly detrimental cartel-esque tactics.

Ideally I would prefer the process of payday loans banned, given that they're basically designed to trap you in them, but a cap on interest rates I suppose would save us from eliminating a market, however detrimental I view it.

[Associate Justice PiT]

This doesn't seem all that controversial: save people from incredibly detrimental cartel-esque tactics.

     A better way than forcibly denying credit to those who do not make proper use of it?

[Purple State]

This doesn't seem all that controversial: save people from incredibly detrimental cartel-esque tactics.

     A better way than forcibly denying credit to those who do not make proper use of it?

I would support an amendment, albeit a bit more moderate than that, to ensure that those that you mentioned cannot receive credit.

[Marokai Backbeat]

This doesn't seem all that controversial: save people from incredibly detrimental cartel-esque tactics.

     A better way than forcibly denying credit to those who do not make proper use of it?

I would support an amendment, albeit a bit more moderate than that, to ensure that those that you mentioned cannot receive credit.

Draft one up, I'm interested in seeing it.

[Associate Justice PiT]

This doesn't seem all that controversial: save people from incredibly detrimental cartel-esque tactics.

     A better way than forcibly denying credit to those who do not make proper use of it?

I would support an amendment, albeit a bit more moderate than that, to ensure that those that you mentioned cannot receive credit.

Draft one up, I'm interested in seeing it.

     I think both that & an interest rate cap would be redundant, as the sorts of people who would be denied use of credit are also the ones who would be charged 30%+ interest.

     I'll draft one up if you both think that it is an acceptable alternative to an interest rate cap.

[Purple State]

The cap would likely be more efficient than any other type of correction we could concoct. It sets the ceiling and allows the companies to adjust appropriately, rather than the government simply saying who can or cannot receive credit.

[Associate Justice PiT]

     The problem though is that people have the sense that they are entitled to a middle-class existence, & furthermore that a credit card is a license to spend, which causes them to end up in that sort of situation. If we revoke their credit cards as a penalty for racking up huge expenditures that they cannot easily pay back, it helps teach them that credit is not a tool to spend as much as you want whenever you want.

[Marokai Backbeat]

The cap would likely be more efficient than any other type of correction we could concoct. It sets the ceiling and allows the companies to adjust appropriately, rather than the government simply saying who can or cannot receive credit.

I do agree with you. It would seem a bit complicated, and honestly pointless, to try and weed out those who just don't deserve credit cards in the first place.

Isn't that what credit cards are for, anyway? To spend credit because we can't always have thousands of dollars on hand so we can repay it later? Perhaps we should revoke someone's ability to have a credit card if they use several of them and rack up a ton of expenditures, but it would seem to me to be more efficient if we capped interest rates. We're not just talking about these people, anyway, everyone can get slammed with huge interest rates.

Also, the payday loan industry is a predatory one and an absolute disgrace, we shouldn't forget that this bill deals with more than just credit cards. (Which people rely on.)

[Franzl]

It's a difficult topic.

I'm not a fan of regulating stuff...obviously, but I'm willing to consider reasonable credit card interest rates.

Might surprise some people....but I'd prefer to simply ban the practice of payday loans.

[Marokai Backbeat]

It's a difficult topic.

I'm not a fan of regulating stuff...obviously, but I'm willing to consider reasonable credit card interest rates.

Might surprise some people....but I'd prefer to simply ban the practice of payday loans.

Actually, I would much prefer doing that as well, but I try to moderate my bills a bit when I'm writing them. (My first draft had the credit card cap at 15% )

[Associate Justice PiT]

The cap would likely be more efficient than any other type of correction we could concoct. It sets the ceiling and allows the companies to adjust appropriately, rather than the government simply saying who can or cannot receive credit.

I do agree with you. It would seem a bit complicated, and honestly pointless, to try and weed out those who just don't deserve credit cards in the first place.

Isn't that what credit cards are for, anyway? To spend credit because we can't always have thousands of dollars on hand so we can repay it later? Perhaps we should revoke someone's ability to have a credit card if they use several of them and rack up a ton of expenditures, but it would seem to me to be more efficient if we capped interest rates. We're not just talking about these people, anyway, everyone can get slammed with huge interest rates.

     Sure, if you don't mind people not learning the lesson that credit is not an infinte reserve of cash for them to dip into whenever they want something. As I said, people today have the terrible impression of being entitled to all sorts of nice things, & of being able to obtain whatever they want through credit.

     Maybe you just want to protect people from credit card companies, but I want people to learn fiscal responsibility, or how to manage money just using credit cards to pretend that they can live the lives of the rich & famous.

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     Any language dealing with that could be retained along with any amendment made to the bill.

[Franzl]

I'm much more comfortable with setting a maximum interest rate than letting the state determine who is allowed to get credit at all, fwiw.

[Associate Justice PiT]

I'm much more comfortable with setting a maximum interest rate than letting the state determine who is allowed to get credit at all, fwiw.

     Seriously, I am as well, but there is a severe attitude problem in society that the former would do nothing to rectify.

[Franzl]

I'm much more comfortable with setting a maximum interest rate than letting the state determine who is allowed to get credit at all, fwiw.

     Seriously, I am as well, but there is a severe attitude problem in society that the former would do nothing to rectify.

We'd have to ban credit cards to rectify that problem

[Purple State]

Perhaps to assuage your worry of underlying societal problems, the government could administer or promote a course, sort of like driver's ed, that will lower your interest rate if you take it. That way those who never need to make interest payments won't bother to take the taste, while others who could be getting screwed would take the test to help them out and also learn how to better use their cards.

Thoughts? If there is general agreement I can work up an amendment.

[Associate Justice PiT]

I'm much more comfortable with setting a maximum interest rate than letting the state determine who is allowed to get credit at all, fwiw.

     Seriously, I am as well, but there is a severe attitude problem in society that the former would do nothing to rectify.

We'd have to ban credit cards to rectify that problem

     We probably would, but I was hoping that if we took their cards away when they racked up huge expenditures that maybe they'd get the idea.

Perhaps to assuage your worry of underlying societal problems, the government could administer or promote a course, sort of like driver's ed, that will lower your interest rate if you take it. That way those who never need to make interest payments won't bother to take the taste, while others who could be getting screwed would take the test to help them out and also learn how to better use their cards.

Thoughts? If there is general agreement I can work up an amendment.

     That would be nice. People badly need to learn fiscal responsibility, & that's probably the best way of doing so.

[Marokai Backbeat]

I'm much more comfortable with setting a maximum interest rate than letting the state determine who is allowed to get credit at all, fwiw.

     Seriously, I am as well, but there is a severe attitude problem in society that the former would do nothing to rectify.

We'd have to ban credit cards to rectify that problem

     We probably would, but I was hoping that if we took their cards away when they racked up huge expenditures that maybe they'd get the idea.

Not a very libertarian idea

Perhaps to assuage your worry of underlying societal problems, the government could administer or promote a course, sort of like driver's ed, that will lower your interest rate if you take it. That way those who never need to make interest payments won't bother to take the taste, while others who could be getting screwed would take the test to help them out and also learn how to better use their cards.

Thoughts? If there is general agreement I can work up an amendment.

I would be interested in seeing such an amendment, but it can't be a compromise solution to interest rate caps. This is a nice way of teaching people how to handle their money properly, but there still must be measures taken to prevent harmful interest rates from credit card companies, and that can't be the only solution.

[Associate Justice PiT]

I'm much more comfortable with setting a maximum interest rate than letting the state determine who is allowed to get credit at all, fwiw.

     Seriously, I am as well, but there is a severe attitude problem in society that the former would do nothing to rectify.

We'd have to ban credit cards to rectify that problem

     We probably would, but I was hoping that if we took their cards away when they racked up huge expenditures that maybe they'd get the idea.

Not a very libertarian idea

     Hey, anything that stops further economically leftist policies, eh?

[Purple State]

I intend it as an additional clause for this legislation. I offer the following amendment as friendly:

[quote]
4. The government of each region shall administer a 6-hour education course on the proper uses and risks of credit. Upon completion of the course and passage of a final examination, the government shall subsidize a reduction in the individual's credit interest rate by half. A passing grade on the final examination shall be deemed as performance exceeding 75%, not to be interpreted as to prevent or overwrite stricter grades in any region.

[Marokai Backbeat]

Looks good to me, I have no objections to the amendment.