Crawling to Potter
Y’know, it may just be momentum, but I can’t help but add to my previous posts on the bankruptcy bill.
I’ll start by saying this: if you aren’t already reading Slacktivist on a regular basis, you should be. Fred has posted a series of thoughts on the bankruptcy bill and the state of the lending industry in general that are well worth checking out:
In his last three posts, Fred explores the Biblical understanding of usury and how the meaning of that word has changed for the modern Christian church. The early church considered lending money (or land, grain, oil, etc.) at any interest at all to be usurious and worthy of condemnation. Today’s church no longer has a problem with charging interest, but would define usury as charging “excessive interest.” How do we determine what is “excessive”? Fred has this to say:
Lending can empower or it can exploit. The former is a good, the latter is evil — the sin of usury. Lending at interest enables lenders to continue their business of empowering. It was in recognition of this that Christians — right around the same time as the modern market economy was developing — began reconsidering the meaning of the prohibition against usury.
I have had some experience working with and around international relief and development agencies, and I’ve heard countless stories of the opportunities created by small community microlenders like the one Fred discusses in his post. Many of these banks start with generous gifts from charitable donors, but soon become self-sustaining through the minimal interest that they charge. These banks are a valuable communal resource and are very careful about who they support with loans, particularly early on. By doing so, the banks make sure that they are making sound investments while the resources they offer make a visible difference in the small businesses that they help start: a weaving collective, a rickshaw service, a grocery stand. These early successes encourage others in the community to seek these microenterprise loans, and it is the meager interest charged on these loans that allow the banks to expand their ability to empower their community.
Contrast that with MBNA or Citibank. Sure, these banks make it possible for consumers to make purchases, invest in their businesses, and take risks that thay might not otherwise have taken. And in that sense, the credit that they provide can be a positive economic force. But these same banks are also profoundly exploitative. As I’ve written in my previous posts, part of their business model is to market aggressively to customers who are clear credit risks, charge them high interest rates, and then when the customer misses a payment, raise the interest rates even more. These banks are no longer interested in empowerment, they are interested in exploitation, and they’re successful to the tune of $31 billion a year.
I don’t know how we go about encouraging the former kind of lending while working to curtail the latter. I’m open to ideas. But it reminds me of one of George Bailey’s monologues in It’s a Wonderful Life:
This town needs this measly one-horse institution if only to have one place where people can come to without crawling to Potter.