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Plenty of blame to share




It’s the time of year when many Americans confront irresponsible spending – but now, the days of reckoning are taking on an air of desperation in many households, as families face bills they can’t pay.

Nobody forced these families to spend beyond their means. And many debtors acknowledge that they are, themselves, to blame for much of their problem. But credit-card companies also must take responsibility for extending credit without a firm indication that debts could be repaid – and most certainly deserve blame for predatory practices that make the plight of many families far worse than it would otherwise be.

These companies’ profits still are running high. In fact, many card companies have adopted policies that make it likely that the default rate will continue to spike, and purposefully target high-risk debtors, loading on fees that assure the accounts will be profitable even if the borrowers default. …

But Congress and federal regulators also should examine the costs of high default rates on a wider scale, especially when coupled with the still-developing mortgage-foreclosure boom.

…Federal regulators should face reality: Too much of the U.S. economy is based on high-risk debt, much of which probably should never have been extended in the first place. …

– The Daytona (Fla.) Beach News-Journal


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