Elana Levin
Councilman Gioia, the New Chief Brody on this island
If the New York Post had its way, we'd all be out on a limb when it comes to usurous credit cards. They took a dismissive tone in their op-ed about Councilman Eric Gioia's new report warning that all credit cards are not created equal-- some, usually targeted to society's most vulnerable, are downright bloodthirsty. They think its silly for him to warn the public because everyone already knows that.
The Post is right that the problem seems obvious to many financially literate people but that doesn't mean we shouldn't do anything to help educate the public. AND it doesn't mean these practices should be acceptable by law. To quote Mark Winston Griffith " maybe getting screwed by banks isn't news anymore" but until the screwing-over stops, it needs to stay in the news. I'll give a shout-out to Congressman Weiner for his recent work calling attention to the extreme lack of banks and financial services in low-income neighborhoods even as bank branches proliferate in wealthy ones.
NYP does rightly suggest the Councilman go after Al Sharpton next time for loan sharking "his own people" in ads for AutoMax (Mark Winston Griffith's famed post, "Al Sharpton, Predator" lives here). But it sounds like they are saying that because they hate Al, not because they are worried about low income people being ripped off.
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Posted at 6:09 AM, Jan 06, 2006 in Banking | New York
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You can read here for Councilmember Gioia's letter to the editor in response to the NY Post's editorial:
http://www.nypost.com/seven/01052006/postopinion/letters/59849.htm
Triada Stampas
Director, Investigation Division
New York City Council
Posted by: Triada Stampas | January 6, 2006 03:52 PM
Your post paves the way for my favorite form of comparison: the analogy. Let's see dumping exorbitant credit on someone without financial education is like marketing cigarettes to school kids who haven't had great health education and who are especially prone to peer pressure. It's like no-holds-barred advertisement of lottery tickets in impoverished communities. It's a little like playing on a field that heavily favors one team.
The sneaky trap of credit cards is that they finance beyond a cardholder's means. And without financial education from, let's say, Bush's "No Child Left Behind" reforms, many find themselves drowning either on the brink of or claiming bankruptcy.
In an ironic turn, financial education is included in the Bankruptcy Reform Act, a long-shelved Republican bill expected to pass in this session of congress. This bill would require counseling services both before claiming and during bankruptcy and personal financial management courses post-bankruptcy as a condition of debt-forgiveness. Interesting legislation, probably helpful, too but shouldn't there be something more pre-emptive as well?
Bankruptcy isn't about credit card abuse. It's usually about a severe illness, losing your job, or divorce which is one of the largest causes of the impoverishment of women. (Making this issue interestingly gendered, huh) Pre-emptive education could mean already knowing what to do when the crisis hits, instead of trying to find your way through complex financial jargon and process when you're also fighting a custody battle.
Something helpful: http://www.pbs.org/wgbh/pages/frontline/shows/credit/eight/responsibility.html
Posted by: Sarah Solon | January 9, 2006 02:18 PM