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15% Cap on Credit Card Interest Rates

NPC D4617 said:
How about. Dont live in LA if you cant afford it. There are other places to live with far cheaper housing, more job opportunities, and basically a cheaper economy.

I really dont understand this argument that people feel its their right to live in a 4500 square foot home in LA on the beach working some low skilled labor job, 30 hours a week, and have free health care, free education, a nice car, etc..

The **** is a pipe dream. That utopian scenario is not coming in our lifetimes. The only way that ever happens is when the robots are doing practically everything. Even then, you still wont have the right to live wherever you want. You will have to pay for it.

Get the hell out of LA. Its overcrowded and its a liberal nightmare with ridiculous property taxes. I dont feel sorry for morons complaining about LA's economy.

You have choices.
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You must be easily triggered if you get worked up and worry about what people in Los Angeles do.
 
NPC D4617 said:
How about. Dont live in LA if you cant afford it. There are other places to live with far cheaper housing, more job opportunities, and basically a cheaper economy.

I really dont understand this argument that people feel its their right to live in a 4500 square foot home in LA on the beach working some low skilled labor job, 30 hours a week, and have free health care, free education, a nice car, etc..

The **** is a pipe dream. That utopian scenario is not coming in our lifetimes. The only way that ever happens is when the robots are doing practically everything. Even then, you still wont have the right to live wherever you want. You will have to pay for it.

Get the hell out of LA. Its overcrowded and its a liberal nightmare with ridiculous property taxes. I dont feel sorry for morons complaining about LA's economy.

You have choices.
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I know you don't actually read anything but both of the rentals I mentioned are 1400 sq ft in a middle class area in Redlands. And unemployment here dipped below 3% recently so there are many many jobs here, in fact we are facing a shortage of workers in a big way. We just recently raised our wages to be more competitive in the local market. So it's all market driven, a capitalist Utopia of higher wages, plentiful jobs, and nowhere to live.

Your argument about going elsewhere is highly unreasonable by the way. Most of these people won't find jobs out of state that will relocate them and there is almost no way they can relocate themselves. You make it sound so easy to flit around the country, ever tried it on 14 bucks an hour?
 
framer said:
Ahh, you are speaking of California. You cannot ascribe the economic behavior of the real estate market there with naked capitalism as there are many, many facets of government intervention that have led to where you are at.

Isn't property tax locked in to whatever value the property had the last time it was sold? That being the case, THAT would be the reason why the house is staying in the same family, even though it is small. Upgrading to a new house would cost a fortune just on the extra taxes.
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These are rentals. Most houses here are selling to rental companies, I think the last report I read was that 60% of single family home sales were to rental companies.
 
NPC D4617 said:
What good does it do to demand higher wages when business owners will just be forced to raises prices? Meaning, your wages still wont buy you what you think you deserve.

The problem with the liberal Utopian idea that people have the "right" earn a livable wage is just a fallacy. You have that "right" as much as I have the "right" to have magic powers.

"Free" healthcare. Nah, its not free. Someone has to work their *** off to know how to heal you. On top of that, you want a house, a "free" education. Tv's, couches, 40 years of other people taking care of you when you retire. All for what? You putting in minimal effort and producing 1/50th of what you think you deserve.

Tell me. How does flipping burgers equal out to someone building a house, a car, furniture, and many other things for you? There is a reason why you desperately want to make that trade. Its because you know its a great trade for you. But its not a great trade for the other guys.
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Do you know anything about history? Or data? Or that other places besides the US exist?
 
LogGrad98 said:
These are rentals. Most houses here are selling to rental companies, I think the last report I read was that 60% of single family home sales were to rental companies.
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Yeah, but part of the shortage problem is that people are never going to leave a home that they are paying 1980's property tax on, especially when those property tax rates have skyrocketed like they have. The won't leave even if a different sized home or another area might make sense to them. This has stunted the market for rentals and home ownership. The same thing applies for New York City rent controls.
 
LogGrad98 said:
I saw my neighbor who has 3 generations living in the same 1400 square foot house because it is going for 400k on this housing market. So far so good, amirite?
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Yeah that's a b****** price for a 1400 sq ft house. Sell that **** while its high and go buy something bigger in a different area for 250k.

EDIT: Didn't know they were renting, in LA/Calif of all places. Get the hell out of LA I say..
 
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Zombie said:
I understand why they feel the need to try to tackle the debt problem many Americans face, but to my mind this is treating the symptom rather than the cause, which is that wages are not high enough in this country to support the lifestyles we have become accustomed to. Not to mention skyrocketing medical debt.
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I thought this was a good point. I think if they are trying to fix the actual issue, it's a mix of assistance to the poor (welfare type assistance, job training, tax credits) and some training to assist people in learning to live within their means. If the 2nd part doesn't happen, I'm not sure anything else the government does can help.
 
One Brow said:
It's both, actually.
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I'm not saying that lenders aren't screwing over some people, but it's hard to really prove that they are all in cahoots to ensure that the poor stay poor through high interest rates. I tend to assume that most people are good people. I think it's primarily driven by the default rates among "risky" (poor) borrowers.
 
idestroyedthetoilet said:
I'd love to read your argument that usury should be legal and is not the business of the government. It will make for good example of when the capitalist mentality goes too far into libertarianism.
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1- When two parties enter into a mutually agreed-upon arrangement (no coercion), I believe the argument to apply regulation would need to come from the government side.
2- Who has the right to define what usury is? At various points in history charging ANY interest on loans was considered usury.

I'm not opposed to the government stepping in to try and help people that actually need it, but just capping interest rates seems arbitrary and is unlikely to actually help people get out of debt. If anything, it might encourage people just to borrow more.
 
The Thriller said:
I don’t favor going back to the 1930s, when opening up a line of credit first evolved and opened the door for our consumer economy. But from what I’ve read, we need stronger regulation and limits to protect both consumers and lenders.
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I agree that if regulation is passed, it does need to protect both sides. I'm not sure if everyone is aware of how many scumbags rack up a ton of credit card on electronics, vacations, etc. knowing that they will be declaring bankruptcy in the near future and that the debt will be wiped clean.
 
candrew said:
Credit card interest rates caps were based on state law up until the late 70's. I'd much rather go back to that than have a federally mandated cap.

Obama's 2009 Credit Card Act was the common sense legislation we needed that did away with the hidden fees and fine print ******** credit card companies used to pull to generate revenue.
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While I don't know the deep details of Obama's Credit Card Act, this is at least legislation that makes some sense. Consumers were not understanding what the lenders were doing (hidden fees that most would have trouble understanding) and the government required more transparency to protect borrowers.
 
LogGrad98 said:
Come to the LA area and the inland empire. Rent is out of control. Housing prices are bubbling but this time there are no signs of a burst in the wings. Not good here right now. Someone recently moved into our Ward, they rented a 2 bedroom 900 sq ft apartment and moved in with 2 generations (3 families essentially) because the rent was 2100. As I said, my neighbor lives with 3 generations of family because the rent on their house is 2800. It's crazy.
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From my understanding, there are lots of capitalists that want to invest and bring additional affordable housing to places like LA and San Francisco. Unfortunately, the local governments don't want to let them do that. They place so much red tape that it's virtually impossible. I watched a John Stossel video once that described trying to build new housing in San Francisco as virtually impossible. Essentially, local people don't want new housing, because that will only lower the value of their properties.
 
AlaskanAssassin said:
I'm not saying that lenders aren't screwing over some people, but it's hard to really prove that they are all in cahoots to ensure that the poor stay poor through high interest rates. I tend to assume that most people are good people. I think it's primarily driven by the default rates among "risky" (poor) borrowers.
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I'm not sure what to tell you if you don't think the lenders know that people will make poor long-term decisions, and rely on that to take advantage of the poor.
 
One Brow said:
I'm not sure what to tell you if you don't think the lenders know that people will make poor long-term decisions, and rely on that to take advantage of the poor.
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All that you have clarified is that poor people are more prone to making bad long-term decisions. That's not the lender's fault. Should we be focused on helping people make better long-term decisions, or restricting legal, non-coerced transactions?

Is capping interest rates the solution to fix the issue and help poor people get out of debt? If a 20% rate is necessary for lenders to break even on these high-risk loans and defaults (I have no idea what the actual break even % is) then capping the rate at 15% is going to restrict borrowing on those who might genuinely need it.
 
AlaskanAssassin said:
All that you have clarified is that poor people are more prone to making bad long-term decisions.
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Wow, you sure have a sense of entitlement. I said, "people will make poor long-term decisions", which is equally true regardless of their financial status. However, poor people are less able to recover from these bad decisions.

AlaskanAssassin said:
That's not the lender's fault. Should we be focused on helping people make better long-term decisions, or restricting legal, non-coerced transactions?
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It's much more difficult to change human cognitive processing than to protect people from their own tendency to make bad decisions. Still, if you have a plan for helping people avoid hyperbolic discounting, I'm all ears.

AlaskanAssassin said:
Is capping interest rates the solution to fix the issue and help poor people get out of debt?
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It helps them avoid debt in the first place.

AlaskanAssassin said:
If a 20% rate is necessary for lenders to break even on these high-risk loans and defaults (I have no idea what the actual break even % is) then capping the rate at 15% is going to restrict borrowing on those who might genuinely need it.
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In reality, the people who get these credit cards make current purchases using present bias and unrealistic assumptions about their ability to pay them off.
 
One Brow said:
Wow, you sure have a sense of entitlement. I said, "people will make poor long-term decisions", which is equally true regardless of their financial status. However, poor people are less able to recover from these bad decisions.
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How do I have a sense of entitlement? I agree that poor people are less able to recover from bad decisions. However, in general, poorer people have a tendency to make worse long-term financial decisions. Denying this would be to deny that personal choices have an impact on an individual's prosperity. I grew up in a shoddy trailer park. Trust me, most of the reasons my parents lived there were due to their personal choices in life.

One Brow said:
It's much more difficult to change human cognitive processing than to protect people from their own tendency to make bad decisions. Still, if you have a plan for helping people avoid hyperbolic discounting, I'm all ears.
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I wish that high schools required a basic personal finance class that emphasized avoiding debt and living within your means. I think it should be required to graduate. If this class was run well I think it could have a strong impact on a lot of people's lives.

One Brow said:
It helps them avoid debt in the first place. In reality, the people who get these credit cards make current purchases using present bias and unrealistic assumptions about their ability to pay them off.
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I want them to avoid debt too. I wish we could accomplish it without restricting their free-will.
 
AlaskanAssassin said:
However, in general, poorer people have a tendency to make worse long-term financial decisions. Denying this would be to deny that personal choices have an impact on an individual's prosperity. I grew up in a shoddy trailer park. Trust me, most of the reasons my parents lived there were due to their personal choices in life.
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Yeah, that's what I mean about a sense of entitlement right there. Our tendency to blame poor people for their status in the world.

AlaskanAssassin said:
I wish that high schools required a basic personal finance class that emphasized avoiding debt and living within your means. I think it should be required to graduate. If this class was run well I think it could have a strong impact on a lot of people's lives.
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They all do. Sometimes, if you are on the STEM track, you don't take them, but every high school curriculum I have see has included some sort of "Consumer Math" or "Personal Math". However, you can't lecture cognitive biases from people's minds.

AlaskanAssassin said:
I want them to avoid debt too. I wish we could accomplish it without restricting their free-will.
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We have to craft public policy to deal with who humans are, not who we think we want them to be.
 
LogGrad98 said:
Your argument about going elsewhere is highly unreasonable by the way. Most of these people won't find jobs out of state that will relocate them and there is almost no way they can relocate themselves. You make it sound so easy to flit around the country, ever tried it on 14 bucks an hour?
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This.
People that use the argument "well if they don't like it they should just move" are idiots. Moving isn't easy or cheap for most people.
Hack is an idiot though so no surprises here.

Sent from my ONEPLUS A6013 using JazzFanz mobile app
 
Wow, I can't believe this is happening... I actually talked myself into agreeing with AOC and Bernie. But only because I think people are bad at sacrificing in the present in exchange for benefits long-term even if they are educated (e.g., ~16% of Americans still smoke and we all know that is dumb). I see this as a nice way of limiting the amount of credit offered to poor people, except democrats would be upset if packaged that way so they instead focus on the interest rate.

Also, I am assuming that this proposal is backed by studies which find the cost to society from entering into credit card debt is greater than the benefit (otherwise why are we even discussing this).
 
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