Banking laws are all stacked against the working poor. Most egregious is the fees charged for overdrafts on bank debit card accounts. Senators like Kennedy and Dodd have talked about that.
The experience of the early 90s dealt more with "first time home owners" and then credit cards. The ability to get a mortgage with no money down but a good employment record paid off for people I know. Then came easy credit with real credit cards because home ownership counted. When real estate prices remained somewhat stable, the newly creditworthy had it made, providing they didn't go crazy with purchases. It is hard to teach those who have never used credit that the rate of monthly charges were set to put them in perpetual debt on the road to bankruptcy. When bankruptcy was relatively easy, it even allowed many in this category to come out ahead. The bankruptcy laws tightened but the credit card fees persisted.
Debit cards are a road to ruin for the unwise. I've known some who find themselves with a letter from the collection agency, not having any idea of why their banks did that to them.
With personal relationships dealing in this kind of cycle of ignorance and chicanery, I have decided saving one family==perhaps involving two generations--is putting a finger in the dike. And I'm not waiting for a revolution in Congress. During the 60s we finally got a truth-in-lending law after years of complaint.
If I were advising a president or legislator, I would stick to the only remedy I see that will really help. And that is education, mandatory for schoolchildren, and available for older people.
Here's my reasoning. Take marriage and divorce. Tennessee charges less for a marriage license if the couple brings a notarized letter saying they have had so many hours of marriage counseling. And if couples with children sue for divorce, they are required by law to attend divorce counseling.
Why isn't it possible for a mortgage lender to say to a person who has never owned property that he must attend so many hours of class? The rapacious mortgage lenders which are now a part of our economic woes can be controlled through legislation can maybe be curtailed. But it will take better knowledge on the part of the borrower to make it work.
Thoughts?