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[–]worm 1 insightful - 2 fun1 insightful - 1 fun2 insightful - 2 fun -  (4 children)

And knowing all of that, you would still support a ban on usury? For that matter, you have not given any definition on what you would consider an overly-high interest rate to begin with. Would your definition perhaps be softened now that you've actually thought about what it would entail?

[–]magnora7 2 insightful - 1 fun2 insightful - 0 fun3 insightful - 1 fun -  (3 children)

There's already a ban on usury, I'd just advocate bringing the max interest rate allowed down gradually over time. I wouldn't just pull the rug out from under the existing system, it would have a 50-year wind-down plan if I were in control. And small interest rates would still be allowed.

[–][deleted] 3 insightful - 1 fun3 insightful - 0 fun4 insightful - 1 fun -  (2 children)

should have 4% or around there be max interest for all loans

I get that bankers need something for overhead but they don't need to be getting rich off this idea. Let them be middle class guys, make like 80k a year max.

[–]worm 1 insightful - 1 fun1 insightful - 0 fun2 insightful - 1 fun -  (1 child)

Let's imagine that we imposed a maximum rate as you suggest. What do you suppose would happen to the people who are too poor or unreliable or otherwise have a black mark against their records which indicate that it is unwise to lend them money at a low rate?

Such people would now be unable to obtain any legal loans at all, as it would not be a sound decision to give cheap credit to people who may not be able to repay them. An implementation of a cap on interest in fact harms the most vulnerable people and will only lead to the creation of shadow banking systems.

As I have repeatedly said, there is no reason why you should have usury laws at all. It seems to me that the only possible justification for such laws is to assume that borrowers are too foolish to understand the implications of their borrowing to begin with.

[–][deleted] 1 insightful - 1 fun1 insightful - 0 fun2 insightful - 1 fun -  (0 children)

if poor, get to work. shouldn't need loans

end fed reserve, nationalize it, put out low interest loans for those who apply with a plan and deserve it