Are Banks the New Loan Sharks?

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Wikipedia defines a Loan Shark as a person or body that offers unsecured loans at high interest rates to individuals, often backed by blackmail or threats of violence. Is that no different than what banks and credit card companies are doing today? If it is, then why do million of American, the Government, and consumer agencies tolerate it? Why aren't Americans, young and old, using the same manpower that put President Obama in office using the same bandwidth to help change this nation? Is the power in number not the key to getting anything positive done in America?

I recently watched an episode of Bill Maher on HBO where he interviewed Harvard Law Professor Elizabeth Warren. Elizabeth also chairs the congressional oversight of how Treasury spends tarp. Bill posed the question regarding Goldman Sachs’ recent report of record profits to Elizabeth and asked "If the economy is so bad, where did these profits come from?" Below is Elizabeth’s response:

"Well, the profits from these guys are coming from business as usual. That is, they are still selling for example the big Wall Street banks. They are still selling consumer credit cards, mortgages, car loans, and that sort of thing that they make good profits off. And then at the other end of the spectrum, Goldman Sachs in particular, they are still trading in all of those fancy high risk instruments that they traded in that brought us to the brink of economic collapse."

"When I was here last, I thought that we were on the brink of real financial reform and that we were going to really change the system. That we were going to have consumer agencies to make sure that we rolled back all of the crazy abuses, tricks, and traps. I also thought that we would change the rules on things like derivatives and that we were going to change the rules on resolution authority, and what to do with these big banks. we were going to get rid of too big to fail. The problems could not be more obvious and quite frankly the solutions are just about as obvious; but, we can’t seem to get the two together."


"The reason that we are not changing things right now is because banks have lobbyists in Washington in numbers that I have never seen. They are coming not just once a month, once a week, or once a day. These guys are coming in two and three times a day. They are making phone calls; they got the position and they just keep slamming in the same direction over and over and people who just want to advocate for American families and make some changes and level the playing field, they just don’t have that type of lobbying power and what we are really watching here is a David and Goliath story in monumental proportions."

"When this crisis started in October 2008, Secretary Paulson said the problem is too much concentration in the banking industry meaning a bunch of big banks that hold too much. What’s happened is the banking industry has gotten too concentrated. He said we are worried about toxic assets on the books of the banks. In fact, we still have toxic assets on the books of the bank. We are worried about the financial products that are sold to consumers; the credit cards, the mortgages, that are sold on still a tricks and traps basis and that still happens every single day. Credit Cards alone cost American families last year $120B in penalty fees and interests. This affected 50 Million American families. The Center for responsible lending has done an analysis of what’s going on and they said that of the ten practices that have been outlawed, the credit card companies have already figured out 8 new devices for getting around them." [Please watch Fareed Zakaria video on my xtagged portal at www.xtagged.com.]

What is it going to take to wake Americans Up?

Let me hear from you.

Ms. Trunews