Obamaloans

NATIONAL REVIEW ONLINE ^ | 1/15/2014 | Iain Murray

[grimalkin]

We know the pattern by now. A crisis arises. As my Competitive Enterprise Institute colleague Chris Horner puts it, this administration says, “There’s no time to waste, we must do something now, sign here, details to follow.” And every time, we discover that we have signed up for more than we bargained for. That was the case with the Dodd-Frank Act, passed in 2010 supposedly to solve the problems that caused the financial crisis. Only now are we seeing the details to follow. They amount to a government takeover of the financial industry and increased government control over our behavior, particularly over that of the poorest in society.

The big banks were the easiest. Dodd-Frank was supposed to end the Too Big to Fail (TBTF) phenomenon but instead entrenched it. Big banks became Systemically Important Financial Institutions (SIFIs), with increased regulatory supervision, but also with the expectation that they are thereby too important to be allowed to fail.

Worse, Dodd-Frank effectively requires responsible financial institutions to pay to fix problems created by others. Indeed, presumably in order to increase the pool of funds necessary to bail out “systemically important” banks, the Financial Stability Oversight Council has named several large insurance firms, such as MetLife, as SIFIs, even though those firms in no way contributed to the financial crisis. For this privilege, these responsible firms have to submit to much greater regulatory supervision, suppressing their ability to innovate and making them much more like the TBTF banks.

But it didn’t end at Wall Street. Dodd-Frank also increased regulation for medium-sized firms, which have greater compliance costs relative to their size than do the TBTF banks. This has led to a wave of mergers among small and medium-sized banks as they struggle to contain compliance costs. In the process — and thanks to other aspects of Dodd-Frank such as the Durbin amendment, which caps the amount debit-card issuers can charge retailers every time a card is swiped — bank fees have ballooned. ATM fees have gone up. Monthly maintenance fees have gone up. Minimum-balance requirements have gone up. Free checking is much rarer, and debit-card reward schemes have almost disappeared. The result has been that a million former bank customers are now “unbanked” — they have no checking or savings account with a bank.

Even more perniciously, while the Obama administration blames subprime housing credit as being the cause of all our current woes, it now deems the people who took out loans they couldn’t pay not irresponsible borrowers, but victims. And it has extended this mindset to other forms of credit and banking that cater to the subprime market. The administration is waging subtle war on the small financial businesses that serve this market. If it is successful and destroys these industries, what will replace them? The administration’s answer is simple: Obamaloans.

This is subtly building an infrastructure to allow the federal government to lend money to the poor through a network of intermediaries, financed by taxpayers rather than investors. And it offers another glimpse into how the Obama administration intends to change America.

Read the rest of the article here.

[TurboZamboni]

Loan given=”predatory lending”(”pwedatowy” if your’re a fat lisping moron)

loan denied=”redlining”

like “climate change”-have to cover all the bases and all our bases are belong to Barry.

[andyk]

Pfl

[Still Thinking]

So banks spend centuries learning how to predict who will repay their loans. Then, since there is a racial and income-level disparity in the results, the government orders banks to ignore their criteria (except when it would cause them to decline somebody white, then it's still OK) pretend they don't know who's going to repay, and issue the loans anyway. Then -- many of the people who got the ordered loans defaulted, so now the government calls the borrowers "victims" and the banks, whom they ordered to make the loans, "predators". Is that about right?

This sounds like something a Dumbascrap came up with.

[Truth29]

This is like termites. The Left is hollowing out the country and they are everywhere. The enemy is not only inside the gates, they have turned the country into rotten timbers just waiting to collapse.

[GeronL]

“We can fix the economy by mandating that all Americans take out a $25,000 loan. The resulting consumer spending will be a huge boost for the economy”

Yes I can imagine Obama doing this

[Slyfox]

We can fix the economy by mandating that all Americans take out a $25,000 loan.

That is essentially what Obama did when he got all that bailout money for his friends.

Just think about $25,000 per year, per person and we can't spend any of it cause he done spent it in our names.

In some quarters that is called identity theft.

And we are liable for it all.

[GeronL]

bump