Wednesday, November 11, 2015

Why the last Republican Debate Seriously Pissed me off

POLITICS: What the CFPB actually is.

Ok, so…I’m a woman, therefore I am gonna do what I can to ignore the blatant anti-choice, anti-woman views that each and every republican candidate (slight exception, John Kasich) eschews in every weird, convoluted way that they can hack, because it is no one’s business what I choose to do with my body, and should never be the issue of anyone other than me, myself, and I. Now that I’ve gotten that out, I would like to talk about the CFPB, and properly explain what it is, since, according to Republicans, it is what is ruining our country’s economy.
            CFPB stands for Consumer Financial Protection Act. It does not, as Carly Fiorana would have you believe, look into your finances and control them with NSA-level deftness. What it actually does is protect you, the person asking for a loan, from making a risky loan venture. Let me explain.
            Have you ever tried to take out a loan? Have you ever tried to take out a loan before 2011? When people used to go to a bank to ask for a loan they were given a Ulysses-length book that they were expected to thoroughly sift through and sign before taking out a loan. What was really happening was, the banks were hiring lawyers to write very wordy, very unclear contracts for the loans they were giving out so that the people taking out the loan had no idea what they were actually getting their self into. The reason is, much like when iTunes gives you a large user agreement to sign every time it updates, people were not actually reading their loans, and instead, trusting the banks at their word, because the bankers explained the loans as, “we are giving you this amount of money and expect it to be paid back at this very low rate.” I shouldn’t say that, people were also reading their loans, however, the diction was so dense and obscure that even a fellow lawyer couldn’t properly read the thing without getting confused. Basically, people were not realizing the life sentence of debt they were agreeing to. This all happened, of course, because banks make money from loan payments, especially loan payments that grow as the debtor increasingly struggles with meeting the monthly rate. However, every failing loan has a time stamp before the lender is forced to claim bankruptcy, so rather than dealing with these problems, the banks then packaged these risky loans up and sold them to other banks for more of a profit.
Republicans like to argue that they gave out more loans because democrats made them. They say this because Democrats said that every American deserves a home. But the truth of the matter is that, the loans they were giving out were unfairly written. And the latter’s intention wasn’t for risky loans, it was for fair loans with fair rates. Banks were supposed to look into your financial history and make a judgment call on whether you could pay them back, then give you an amount of money that they felt was within your means, followed by a fixed and fair rate. They stopped doing that the moment that regulation on them was lifted and they were allowed to do what they wanted (I’d like to clarify that this is not purely the Republicans’ fault, although the deregulation trend did start with Reagan, deregulation did not end with Clinton [please look up the Glass-Steigel Act]) (I’d also like to point out that before the process of deregulation occurred, there had not been a recession in the economy since the Great Depression ---50 years. Before the Great Depression it was just understood that a recession occurred cyclically every 15 years.)
Sorry, let me simplify this, what was happening is, they were telling these people they had to pay a certain rate, and then, the people figured, oh that is so low, I can afford to pay this back, and then found their rate tripled out of nowhere. That is where the James Joyce, Oddysian adventure of a loan comes in.  You see, lawyers are smart, especially the ones that the banks could afford, so they wrote in somewhere on the third paragraph on page 213 of the loan that they were allowed to change the interest rate in the event of a change in the market. The kicker here is that, with all these loans being passed out like candy, the market started doing great, and thus, interest rates were allowed to triple. The stock market was selling and trading loans with the rest of ‘em. (I’d like to note that this was just one of many tactics that the banks employed in order to get increasingly hirer monthly payments from their debtors, they also employed stuff like hidden fees and penalties.)
            The problem is that money is theoretical, and the people signing these loans weren’t actually able to pay back these loans at this new inflated interest rate since just because the theoretical market is doing well doesn’t mean the individual is making more money at their job. Which is what led to the economy’s collapse (that and some other stuff, but also that).
            Which brings me to the CFPB. All this committee wants to do is make sure the person asking for a loan is aware of the financial risk that their loan will incur. They got the banks to fit their 500 page loan agreement forms on one sheet of paper, with clear, straight-forward writing, so that people would have the ability to say, “oh, at first this loan is very affordable, but after 6 months the rate is allowed to change because of a change in the market, or some other thing, blah blah blah.
The CFPB isn’t bad for the people, it isn’t even remotely communist (although, why does that even matter), it just demands that the banks be honest. It’s like if you went on a date with a guy and he just said upfront, “hey, I just wanna have sex with you, I don’t want to actually date you.” So that you can either answer, “oh perfect, because you’re hot but seem dumb, so we’re on the same page.” Or “Oh, I wanted to date you, so I guess this date is over.” Wouldn’t that be much MUCH better???? 
Moral of the story: politicians on both sides are adept at using misleading words and emphatic speech to sway people to their aims, that is why they are politicians, that is why they are good at their jobs. In some ways this is good because no single individual, unless you are president, really wants to devote their energy to deciding what is best for this country everyday. But, in other ways, it is disceptive. I beg you, if you see an attack ad on some sort of policy that you aren’t familiar with, please please please, before falling down a propaganda hole, read what the policy is, the pros, and the cons. Obviously, I like the CFPB (and Elizabeth Warren, who is the person who first proposed it), but you might not. READ ABOUT IT AND VOTE PLEASEPLEASEPLEASEPLEASE.
Love you, kisses.


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