The Latest from Seton Motley seton@substack.com
10:36 AM (3 hours ago)
DC Looks to Price Cap Big Banks’ Tiny Competitors – Not Big Banks
SETON MOTLEY
JAN 8
The Latest from Seton Motley | Less Government | LessGovernment.org
Only Selectively Applied….
To begin:
Price caps are totally and completely stupid – any and everywhere.
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However, this obvious fact – is not germane to the point I am making today.
That being said….
How nauseatingly obvious is DC’s cronyism?
This nauseatingly obvious….
U.S. Senators Introduce Legislation to Cap Consumer Loans at 36%:
“‘Payday, car title, and other shady loan practices target Ohio’s military families, veterans, and vulnerable consumers with high-interest, predatory loans that are designed to trap them in a cycle of debt. Many Americans have to renew their loans so many times they end up paying more in fees than the amount they borrowed,’ said (Ohio Democrat) Senator (Sherrod) Brown.”
Not mentioned by any of the above fraudulent Senators? The Big Banks.
Payday and car title lenders – are infinitesimally smaller than the Big Banks. Their combined held debt – is infinitesimally smaller than that held by the Big Banks….
Credit Card Debt Hits Record $1 Trillion, Young Adults Have Highest Delinquencies:
“Transunion reports borrowers have an average of more than $6,000 in credit card debt.”
That average debt – is a whole lot higher than the average debt owed to the average payday lender.
Whose operational model is to lend you something small – like $300. For a week or two – until payday – so you can fix your car and keep going to work.
Americans are not racking up anywhere close to +1+ trillion in payday loans.
What’s Behind America’s Record-Breaking Credit Card Debt?:
“Credit card APRs have gone up 30% over the last year and a half. That’s the yearly interest rate consumers will pay if they carry some balance on the card.”
Those increases – are a whole lot larger than the average rate increase from the average payday lender.
Maxed Out: Inside America’s Credit Card Debt Crisis:
“As soon as Josué Henriquez turned 18, he applied for a credit card. He wanted to start building his credit so he could one day finance the purchase of a car or home.
“’I was told it was the only way I could start my credit in this country,’ he says, having relocated to the US from El Salvador as a child.
“His credit card limit was low at just $500, with a requirement to keep $250 in a savings account to use it.
“But over the next decade, as more offers rolled in, both his credit limits and balances ratcheted up.
“Henriquez’s credit card debt ballooned to over $25,000, and he eventually sought out a debt relief company for help.”
Sounds exactly like the debt “trap” – to which the above Senators referred.
But the above Senators – aren’t targeting the Big Banks doing the trapping.
And this highlights yet another Big Gov-Big Bank cronyism scam….
Credit Cards Can Improve Your Credit Score, Not Debit Cards:
“Debit cards and checking accounts do not get reported to the credit bureaus, so using them won’t help your credit score.”
Get that? If you have and spend your own money – they won’t raise your credit score.
To raise your credit score – you have to borrow against credit cards from the Big Banks.
That is some seriously corrupt cronyism.
With all of the above in mind:
Why is DC capping the infinitesimally smaller lenders – and not the Big Banks?
Because the infinitesimally smaller lenders can’t bribe – oops, I mean politically contribute to – DC anywhere near like the Big Banks can.
Here’s a 2024-election-cycle list of the biggest Big Bank political contributions and lobby expenditures….
JP Morgan Chase: $3,487,113
Bank of America: $2,897,294
Citigroup: $3,558,094
Wells Fargo: $4,252,744
Goldman Sachs: $2,949,447
Morgan Stanley: $2,395,884
The strip mall storefront payday lenders are unable to bribe – oops, I mean contribute to – DC to anywhere near this degree.
So DC looks to price cap the infinitesimally smaller lenders – and not the Big Banks.
Because that’s how Big Gov-Big Biz DC rolls.
