| Government Legit Credit for Bad Credit People |
| By Credit Federal |
Published
07/1/2009
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Financial News
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Government Controlled Bad Credit Loans and Credit Cards?
With the launch of the Consumer Financial Protection Agency, the democrat-controlled government thinks it can regulate the credit industry to continue legit credit offers for bad credit people, but they fail to understand the high risks loan and credit card lenders face. And; surprisingly, democrats (who are quickly escalating the nation's debt) think they can make smarter financial decisions than the average American.
Actually, the name of the new agency (Consumer Financial Protection Agency), should perhaps be changed to "Consumer Financial Denial Agency", because government laws will likely drive-out all bad credit loans and credit cards for poor people.
You're poor. You have bad credit. Your car just broke down (or your child needs emergency dental work or you have some other tragedy), and you need a thousand dollars to get you through. You go to every bank in your city and none of them will loan you any money. You even offer to pay a high interest rate, but still no bank will give you a loan. You apply for a credit card yet every credit card company turns you down.
Why is this happening, and who is to blame?
Legislations are removing the abilities for subprime lenders to offer bad credit loans and credit cards, and democrats are at fault for all of this. For full details read our article about government bad credit control.
More related articles:
New Government Credit Card Act - how it may stop bad credit card and no credit check loan offers.
Government Credit Card Control Dooms Rewards - how government rules may stifle free competition.
So what is this new agency, "Consumer Financial Protection Agency (CFPA)", supposed to do?
The President asked Congress (which is under democrat-control) to create the agency "Consumer Financial Protection Agency", supposedly to patrol the fine print on credit card bills and mortgage documents. The agency would review fees, penalties and interest rates and decide; on their own, if they are fair.
Some of the agency's duties would be to regulate (or should we say "eliminate") credit cards, savings accounts, and mortgages. The agency would do in a way, what other government agencies do. For example, there are agencies that monitor toy and food safety. This may have evolved from consumer complaints that contracts contain too much fine print that no one can decipher.
The agency would enforce the new restrictions or laws on credit card companies. That law also stops interest rate hikes to offset potential losses by high risk consumers... and it also gives credit companies a nudge to completely discontinue offering loans and credit cards to bad credit people.
The agency would also start interferring with payday loans (about the last guaranteed loan that bad credit people have), and over-draft fees in the banking industry. They could regulate the terms on bank accounts like savings, checking, and debit cards.
Basically, the democrat-controlled government is once again claiming it is smarter than Americans... that Americans are too dumb to make financial decisions on their own. That's why democrats think they need to decide if you (bad credit people) deserve credit at all. Hence, their trying to drive out bad credit loan options all-together.
Many Republicans believe the strict rules will reduce options for bad credit people and will cause a higher price for financial products.
Others; however, think the agency will not hinder financial products on the market, that products simply need to have clearer terms. But how much clearer can they be, when democrats require indepth agreements with so much 'legalize'. In fact, democrats blamed the mortgage crisis on banks, saying they were not clear to borrowers about the terms. Truth be told; however, is that democrats ordered banks to lend money to subprime people who could not afford the homes in the first place. Under order of democrats, the banks did their best to make loans possible, hence the adjustable rate mortgage.
Republicans know the plan will put heavy restrictions on U.S. financial institutions, making it difficult; or impossible, to compete in a global economy. Goodbye, credit, for bad credit people. Republicans oppose the idea that the Federal Government would be deciding what financial products will be on the market and the interest rates charged on credit cards.
Instead of more government credit regulations, republicans suggest discharging regulators that failed, encourage credit, and protect investors' life savings from being swindled. It appears the democrat-controlled government is trying to take too much control. The President's goal is that this plan become law by the end of the year.
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