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Slight shift in [usury] law changed trajectory of state's history

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Senior Contributor

Slight shift in [usury] law changed trajectory of state's history

As Liz Warren correctly noted, most of Citibank's defaults aren't in South Dakota, but all the Citibank jobs from the usury law change are in South Dakota.

http://www.argusleader.com/apps/pbcs.dll/article?AID=/20070813/NEWS/708130308/1001

PIERRE - State lawmakers with a collective free-market philosophy drove legislation that eliminated South Dakota's usury law, helping to lure credit card powerhouse Citibank to Sioux Falls and making the state a major player in the banking industry.


Message Edited by Noah_Bodie on 08-23-2007 02:51 PM
Message 1 of 8
7 REPLIES 7
Senior Contributor

Re: Slight shift in [usury] law changed trajectory of state's history

I always thought usury was an "arm" and a "leg". Smiley Happy
If we never set higher goals we would never get as far.
sol, credit 101, acr, abbreviations, calc
Message 2 of 8
Senior Contributor

Re: Slight shift in [usury] law changed trajectory of state's history



ilovepizza wrote:
I always thought usury was an "arm" and a "leg". Smiley Happy


Originally, it prevented lenders from charging that.
 
Today they are merely limited to charging that.
Message 3 of 8
Valued Contributor

Re: Slight shift in [usury] law changed trajectory of state's history

I am generally opposed to usury laws. Interest is merely the price of using someone else's money. Interest caps amount to price controls, which rarely work and often backfire. Price caps discourage legitimate suppliers of a commodity from bringing it to market, and thereby tacitly encourage illegal suppliers (i.e., underworld types who really do break arms and legs for nonpayment).

I am wholly in favor of truth-in-lending laws, however...if a payday loan place is going to change 2000% interest, they need to state that clearly, up-front, in no uncertain terms.
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in a credit-scoring postnuclear Stone Age...
Message 4 of 8
Senior Contributor

Re: Slight shift in [usury] law changed trajectory of state's history

Usury laws existed from before the founding of the republic, the founders of our nation appear to have been very supportive of usury laws, and usury laws served the nation well for the first 202 years.
Message 5 of 8
Established Contributor

Re: Slight shift in [usury] law changed trajectory of state's history

so now we can blame the Supreme Court for the national credit card debt, but for them, I don't think CCCs wouldn't have the Monsters they are today if they could only do business in two states
People say "Only apply for credit you NEED"

I say "apply for credit you have PRATICAL use of"

I don't have AMEX card because I don't want a card that suffers from PMS
Message 6 of 8
Senior Contributor

Re: Slight shift in [usury] law changed trajectory of state's history



rbbyrbsn wrote:
so now we can blame the Supreme Court for the national credit card debt, but for them, I don't think CCCs wouldn't have the Monsters they are today if they could only do business in two states


There is blame to go around, but when home prices and other fixed expenses (like healthcare) have risen significantly and incomes have not kept pace, I would note well duh that CC debt is up.
Message 7 of 8
Valued Contributor

Re: Slight shift in [usury] law changed trajectory of state's history

If you look at the numbers, the U.S. standard of living (measured in terms of the hours of labor the average worker has to labor in order to obtain housing, health care, food, and transportation) peaked in the early 1970s. The U.S. economy has been going downhill ever since, at least in real terms.

Up until fairly recently, the decline was masked by politicians and executives. But the overall power of an empire is represented by a bell-shaped curve, and after the asset bubble of the late '90s, we rounded the crest of the curve (where decline is relatively slow) and fell onto the right shoulder, which is steeper.

Now the only way to maintain the illusion that Americans as a whole are getting richer is to go from one source of fiat (fake) money to another...from one asset bubble to another. We went from the stock market itself to dot-coms to real estate, like a junkie going from one drug to another, trying to shovel in virtual, pixellated cash to cover the growing trough.

But that game is just about up now.
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in a credit-scoring postnuclear Stone Age...
Message 8 of 8
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