Thursday, August 16, 2007

The Duncan Anti-Usury Act

Congressman Jimmy Duncan has authored a piece of legislation that I think is long overdue-a bill that would limit the credit limit that credit card companies could give to college students to 20% of their annual income or $500 for students with no cosigner.

Millions of Americans are swimming in massive credit card debt, and for many of these folks their journey into the world of credit debt slavery began when they were in college. Have many people been financially irresponsible? Yes they have. Others realize that they have been irresponsible but didn't know the wiser when they were 18, on their own for the first time, and had very little that was truly their own.

Parents ought to teach their children a little about fiscal responsibility, that much is certain-and many parents have failed to do so before Johnny or Susie hits campus for the first time. Still others have taught their children this important fiscal virtue but they can't compete with the credit card representatives handing out goodies in return for signing up for a shiny new credit card.

I'm not saying that the credit card companies don't have a right to try and make a buck, but they go well beyond that-they sign up the penniless student for a credit card at an extremely exorbitant interest rate (precisely because the student is cash poor) hoping to induce Joe or Jane Student to spend money they do not have. The credit card companies view young, impressionable, and-yes-gullible college kids as a potential endless stream of profit, because if they are lucky they'll have them all hooked on credit cards they can't pay off by the time they graduate.

In the Bible charging excessive interest on money owed is a sin-the Scriptures call it usury. Ezekiel 18:13 tells us that a man:

That giveth upon usury, and that taketh an increase: shall such a one live? He shall not live. Seeing he hath done all these detestable things, he shall surely die, his blood shall be upon him.

Strong words from the Supreme Ruler of the Universe about those who milk excessive interest from others. The prophet gives us the impression that the Ever-Living isn't at all fond of the practice. Indeed, it is enough of a serious matter that mention of usury makes it into the same chapter of the Bible as "the soul that sinneth, it shall die." (Verse 20) Among the nastiest of the sins of Israel and Judah mentioned in Ezekiel 22:12 is that:

They have taken gifts in thee to shed blood: thou hast taken usury and increase, and hast covetously oppressed thy neighbours: and then hast forgotten me, saith the Lord God.

Profiting from usury is right up there with forgetting God on the Almighty's list of things that make Him very unhappy. Somehow I don't think that Bible verse makes it into the lunch hour Bible study group at Capital One.

It bears remembering that usury is a practice that was prohibited in canon law by the Church for over a millennium. That the Scriptures speak so negatively of it may have something to do with the fact that usury can cause entire peoples to be eternal debt slaves.

While Congressman Duncan's bill obviously has a very useful secular purpose, I do wonder if he drew just a little inspiration from the pages of the Holy Writ.



At Thursday, August 16, 2007 8:55:00 AM, Anonymous Griff said...

Mr. Oatney:
I didn't have you figured for a nanny-stater. I hate debt more than the average bear, and I haven't incurred any in many years, but this law seems to be gov't sticking its fat nose in private enterprise, where it doen't belong. How does one find themselves against the smoking ban, but for this intervention in private enterprise? When it comes to unsecured debt, Caveat Emptor.

At Thursday, August 16, 2007 9:47:00 AM, Blogger Matt Daley said...

I've also got to disagree with you, David. As someone who has fallen prey to the type of credit problems that you speak of, I know the issue personally.

I was never taught about fiscal responsibility, and I would agree that credit card companies probably duped me.

However, I refuse to eschew personal responsibility here. -I- was the one who chose to make the purchases that put me into debt, not the credit card companies. -I- was the one who didn't take the steps to learn about fiscal responsibility, not anyone else.

This is a nanny-state-ish idea. Requiring companies to restrict their own business practices would only cause more people to be irresponsible. Like with every other nanny-state idea, this requires people to depend on government to make wise choices for them. What would be next...saying that McDonalds can no longer sell Big Macs because they're unhealthy?

Should credit card companies do some of the things they've been known to do, especially to college students? Of course not.

However, that doesn't change the fact that those companies should be able to choose that path for themselves. If you or I don't like it, we can choose not to do business with them. That's the FABULOUS thing about capitalism and the free market.


At Thursday, August 16, 2007 10:09:00 AM, Blogger Dave Oatney said...

Griff and Matt;
While I agree with both of you from a standpoint of personal responsibility, we should remember that even if one is an unbeliever, the Bible is (at the very least) a pretty good guide about what is just and unjust-and it is pretty clear that usury-excessive interest on money-is unjust.

The credit card companies aren't merely trying to use the free market, they are trying to take advantage of the gullible in something that resembles a Ponzi scheme. In this regard, both creditors (who know damn well many of the people they lend to are high risk) and consumer debtors bear equal responsibility for the present economic downturn/

At Thursday, August 16, 2007 10:40:00 AM, Blogger LeftWingCracker said...

I'm Buddhist, so the Biblical implications have no effect for me, but brother Otaney is dead solid perfect on this one.

it is IMMORAL for credit-card purveyors to PREY on unsuspecting college kids and attempt to load them down with debt.

it is IMMORAL for there legalized loan sharks to go after the weak.

Bravo to Congressman Duncan and Bravo to brother Oatney for bringing this up..Usury is a word that needs to be re-established in the English language.

At Thursday, August 16, 2007 1:45:00 PM, Blogger A. Renee Daley said...

Dave and LWC;

So what other "immoral" business practices should be banned? How much government regulation are you two willing to accept in the name of protecting people who should otherwise know better?

David, we share our religious views/beliefs, and we both agree that the Bible is a wonderful tool for anyone to use as a guide to live one's life. While our laws are based in Judeo-Christian philosophy; you must remember that our that our government is secular and for good reason. A significant percentage of our population is non-Christian or non-believers. While we believe that biblical philosophy is sound and good to live by, that reasoning alone is not proper justification for legislation such as this. There must be some over riding reason to enact this type of legislation. And while a reason may be there, those reasons could be used to create further (and much more damaging) intrusions into our private lives.

While this may seem like a good idea at its base, good intentions do not always make good legislation. Quite frankly, I'm not willing to give government more power in the name of protecting people. If you think this is a good idea, then David --then why do you despise the Patriot Act so much?

Wasn't it Dr. Franklin who said, "Those who would give up essential liberty to purchase a little temporary safety, deserve neither liberty nor safety"?

At Thursday, August 16, 2007 2:52:00 PM, Blogger Dave Oatney said...

If you don't think that the agents of excessive credit are not working hand-in-hand with those who favor government in largesse, I have news for you-big and intrusive government is a huge benefit to the mega-banks, the credit card companies, and other agents of debt enslavement. The bigger the government, the more likely it will regulate in such a way as to benefit these huge agents of private credit since government depends on private creditors to purchase its bonds. Big banks in 2007 rather like big government.

It wouldn't be the first time in U.S. history that the banking establishment had ties with government that were too close for comfort.

Andrew Jackson was a champion of small government and limited federal power. He was also intent that small farmers and landowners should be protected from the credit vultures of big banks that had become intertwined with the government.

The banks' willingness to extend credit to people who they knew were such high risks merely for the sake of profits nearly led the economy to collapse in the late 1890's.

In 1913 under Woodrow Wilson's Administration (a Democrat, no less), the Federal Reserve Act became law, which again placed the nation's money supply and interest rates in the hands of private bankers. The banks began to give credit to people who were very high risk. First, farm prices floored in the 1920's-farmers everywhere were foreclosed on because they had lived on a credit bubble for nearly a decade-one the banks promoted. Then, lo and behold, people in more urban areas who used the credit the banks freely extended to them to invest in the stock market, save for retirement, and buy their homes went bust when the market crashed in 1929. FDR actually came along with a "New Deal" to clean up a mess that really began under one of his Democratic predecessors. He promised people the moon, but he did not attack the usury at the root of the problem.

Congressman Duncan's bill is not excessive regulation at all. It attempts to put an end to usury-at least where college kids are concerned. It does not prevent credit card companies from charging interest, and it should not. It places an interest ceiling on what they can charge these kids. That does more than protect young kids-based on past experience, it has the potential to protect the overall economy from a later credit implosion and an economic collapse.

At Thursday, August 16, 2007 5:50:00 PM, Blogger Matt Daley said...


I think you're missing the point that Renee and I are trying to make.

It's not necessarily this specific bill that we take issue with. We're looking at the bigger picture here.

Honestly, I can't believe that you'd be naive enough to think that the government would stop at this type of regulation. While Congressman Duncan might, and you might, and I might...others won't. And this sort of legislation sets dangerous precedent -- precedent that I don't believe is worth the benefits of this particular legislation.

Look at all the smoking bans that have been enacted, in the name of public good, in recent years? And what about New York City, where they're trying to ban trans fats and infant formula, among other things?

Further, the "we have to protect ourselves from the big bad businesses that work with the big bad government" line doesn't ring true with me, either. It's a fact of life that big business works with big government now. The oil industry, drug and insurance companies, food re-sellers, retailers...they all do it. Are you suggesting that we then regulate all of them?

Remember also that the "we won't go down a slippery slope" argument has also been used by others, especially pro-abortionists. Unfortunately, that sentiment just doesn't become reality.

You know, David, if I could believe that all regulatory legislation meant to "protect us" could be common sense and not overtly harmful to business, I'd be fine with it.

Unfortunately, I outgrew fairy tales a long, long time ago. And the idea that government can be trusted to create only common-sense, good business legislation is nothing but a fairy tale.

As Renee said, this bill may be a good idea...but it sets a dangerous precedent, and I'm just not willing to start travelling down that road. I find it hard to believe that you would be.


At Thursday, August 16, 2007 9:39:00 PM, Blogger Fabian's straight talk said...

Private enterprise should be left alone HOWEVER we all know these companies target these irrresposible kids. CC companies know what will happen. I am against government nannisms but this legislation has a good goal. The comment about whats next is ridiculous. Preach it on Brother Oatney

At Friday, August 17, 2007 3:02:00 PM, Blogger Dave Oatney said...

The problem is that the major credit banks love government regulation, just not the kind that force them to be responsible stewards.

Thomas Jefferson was the champion of States' Rights, limited government, and personal freedom. He favored strong limitations on the power of major banks.

Alexander Hamilton favored strong central government, virtually no States' rights, government limitations on freedom, and virtually no limitations on major banks.

Notice a pattern here?

At Saturday, August 18, 2007 3:57:00 AM, Blogger Matt Daley said...


I won't question whether or not you might be right with regards to this specific issue, but that's the problem. You don't seem to be looking at the bigger picture here.

And I refuse to accept legislation -- even good legislation -- when it will certainly pave the way for things that are far worse.

Think of it this the days after the Roe v Wade decision in the early 70s, there were certainly people who thought that it was a good decision that would help young women but who also wanted the rights granted to have a very limited scope.

Some of these people, I'm sure, could not have envisioned the tens of millions of abortions that have been conducted or the lack of respect that life has in the post RvW society.

In fact, the woman who was the catalyst in that case is one of those people.

My point is this -- regardless of how good a piece of legislation may be, it's long-term effects AND the impact that it will have in terms of precedent and societal change MUST be examined and evaluated before we can start singing the praises of the legislation.

I think you would agree, David, that we live in a far more fractured country than we did even 10 years ago. And personally speaking, I just don't think we can even give an inch, lest the other side take a mile.

Even if that means that otherwise good legislation must die. These times are that important.

At Saturday, August 18, 2007 11:49:00 PM, Blogger Dave Oatney said...

The difference is that I just don't see this as giving an inch. I see it as protecting our people. I respect free enterprise as much as the next man, but you also learn very quickly in the political game that Wall Street doesn't often share the same conservative vision for America that Middle America has.


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