Hi all! Welcome to a thread where we can all play nice! This diary is mostly focused on the recent unveiling of Edwards plan to create One America. Edwards focuses on helping American families save, reigning in on high mortgage rates and home foreclosures and ending greedy practices by the credit card and payday lending industries. Enjoy!
After focusing heavily on foreign policy and Iraq the past couple months, Edwards is back to talking about the bread and butter issues. Today the issues Edwards is addressing in his Presidential plans to build One America are the payday lenders, credit card companies and the mortgage industry and also plans to help American families save. First is the credit card companies and their abusive practices:
Limiting Abusive Credit Card Practices: Edwards will restore balance in the credit card market through a Borrower's Security Act. The strong new law will require credit card companies to: (1) disclose the true cost of making only minimum payments, (2) restore a 10-day grace period before imposing late fees and penalty rates, (3) apply interest rate increases to future balances only, and (4) end the practice of universal default, where a creditor can change borrowers' terms based on their debt and payments to other creditors.
I want to stress a couple points above and first up is the part of Edwards plan where he would restore a 10 day grace period before imposing late/penalty fees. This grace period would have helped me last month when my credit card company charged me a $39 late fee. I sent out the bill a couple days before it was due, thinking it was no big deal since they would receive the bill by the due date. I was wrong, they ended up cashing the check one day after the due date and therefore I owed them $39. That's just not fair, especially when the $39 was more then my minimum payment. I'm glad to see Edwards thinks these penalties are unfair and plans to address them. I also think that credit card companies should only be able to increase the interest rate on future balances. I mean, think about it, they can come in and raise your rate on your past purchases, and wham they make a killing. Moving on to payday lenders here's what Edwards plans to do:
- Banning the Most Abusive Payday Loans: After the Pentagon concluded that exploitive payday loans undermined military readiness, Congress capped interest rates on payday and other loans to military families at 36 percent, a cutoff that many states use to prevent loan sharking. Edwards will extend this cap to all payday loans.
I've heard the horror stories of the people who end up owing tons of money because of predatory lenders. I've heard that they can raise the interest rates on money owed to unbelievable heights that even credit card companies don't do. I also live in the state of Oregon where there are more Pay Day lenders then there are McDonalds and Starbucks combined. I'm glad that Edwards wants to reign in on this industry. They don't prey upon the people who can afford their high interest rates, they prey upon people who cannot and something has to be done to regulate this harmful industry. Next, we're on to what Edwards will do about predatory mortgages:
Protecting Homeowners against Predatory Mortgages: Edwards will pass a strong national law to prohibit the worst abuses in the mortgage market, such as steep prepayment penalties, mandatory arbitration clauses, balloon loans, loan flipping, and excessive fees. The law will strengthen underwriting standards to ensure that borrowers receive affordable loans suited to their means and reach non-bank lenders and mortgage brokers. To help the estimated 2.2 million families already facing foreclosure, Edwards will create a Home Rescue Fund to help families get into more affordable mortgages and let families shed excess mortgage debt that exceeds their home's value through bankruptcy. [Center for Responsible Lending, 2007; New America Foundation, 2007]
The rise of home foreclosures has been covered here and elsewhere on the blogs, but I haven't heard a peep from the MSM about it. I like Edwards plan in particular to help families who are facing foreclosure. By getting them more affordable mortgages and letting them off the hook in regards to some of their mortgage debt will help keep their initial investment in tact. I can't possibly understand what it must feel like to be able to invest and buy a home and then because of financial reasons have it all taken away.
Here's how Edwards proposes to help American families save starting with proposing alternatives to high cost credit cards:
Supporting Alternatives to High-Cost Credit: Because commercial banks rarely make personal loans anymore, high-interest credit cards and payday loans are often the only option for families with unexpected expenses. Edwards will help non-profits and states administer low- or no-interest emergency loans directly to taxpayers. States could choose to use state tax refunds as collateral. Because neighbors have a stake in one another, Edwards will help community groups establish up local revolving loan funds.
Here's how Edwards to help Americans save:
Helping Families Save and Get Ahead: Savings are how families cushion themselves against bumps in the road. Edwards will create new "Work Bonds" to help low-income workers save up to $500 a year. He will subsidize banks to offer free savings accounts to the 56 million Americans without them, giving them a way to save and avoid exorbitant check-cashing fees. Finally, he will give taxpayers the option of directly depositing their tax refunds into a retirement account.
Edwards plans to subsidize banks to offer free savings accounts is great, as well as helping start the savings by offering low income workers "work bonds". It kind of reminds me of how the Brits do baby bonds, except in Edwards case it's working bonds for low income workers.
Here's what Edwards proposes to modernize the Community Reinvestment Act:
For decades the CRA has led financial institutions to serve millions more families, helping them save. However, lower-income families, people of color, and rural Americans are still underserved and President Bush has weakened the law's requirements. Edwards will modernize this important law by expanding its reach to non-bank finance and mortgage companies, securities firms, insurers, and services in areas without bank branches. The new CRA will reward financial institutions for marketing financial products at fair terms to underserved consumers and collect the data we need to ensure that all Americans have equitable access to financial services.
Edwards proposed plans to reign in credit card abuse, payday lending and high mortgage rates would be wonderful reforms to an industry that preys upon low and middle income Americans. I also think his ideas for helping Americans save is just another way to help low income Americans get the opportunity other middle and high income Americans are afforded. If you'd like to read more about his plans go here:
http://johnedwards.com/...
Here's some video excerpts of Edwards recent speech to the Cooper Union in case you missed it:
John and Elizabeth Edwards will be traveling to Nevada for the next few days. If you want to find out more about his upcoming events go here:
http://johnedwards.com/...
The end of Q2 is coming up and it's coming up fast! If you can give anything, $5, $10 or $15 that would be wonderful! If you'd like to contribute to the Edwards campaign please click on the link below!
http://actblue.com/...