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Confronting a 'Culture Of Debt'

Consumers need education, incentives to save more

By Mark Huffman
ConsumerAffairs.com

May 5, 2008

Plastic Prison
• Credit Tips And Tricks
• Get Control of What You Owe
• No Easy Way Out Of Credit Card Debt
• Penalty Fees, Interest Rate Hikes, and Misleading Contracts Await Credit Card Shoppers
• "Convenience Checks" Carry a Heavy Price Tag
• New Forms of Credit Scoring
• Understanding Credit
• Credit Bureaus: Who You're Dealing With
• Reading Your Credit Report
• Credit Scoring: The Fickleness of FICO
• Credit Knowledge: A Long, Hard, Struggle
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News
• Confronting a 'Culture Of Debt'
• Feds Back Tighter Credit, Debit Card Rules
• Director Takes Aim at Banks in New Film, 'Overdrawn!'
• Floating Due Date Snags Chase, Citibank Customers
• Congress Takes On Credit Card Interchange Fees
• Consumers Lobby Congress to End Credit Card Abuses
• Congress Takes On Credit Card Abuses
• Credit Counselors Go Risque With their Message
• Credit Card Debt Climbs Worldwide
• As Credit Delinquency Rises, So Does Credit Relief Scrutiny
• Congress Calls Out Credit Card Companies
• College Students Warned Against Credit Card Trap
• High-Fee, Low-Credit Charge Cards Prey Upon the Poor
• Senate Bill Would Curb Abusive Credit Card Practices
• Fed Proposes Tighter Controls On Credit Card Rates
• Senate Panel Slams Abusive Credit Card Practices
• Congress Targets Credit Card Companies For Reform
• Report Finds High Debit Card Overdraft Fees
• Bank, ATM Fees Continue To Rise
• Credit Card Fees Rise, Disclosure Statements Inadequate
• Free Credit Reports Mark First Anniversary
• Credit Card Debt Sinking Many Older Consumers
• Experian Launches New Credit Score; Critics Unimpressed
• Credit Cards Target Students
• Credit Card Companies Fear "Perfect Storm"
• Credit Bureaus Introduce New Scoring System
• More Banks Using Universal Default to Hike Interest Rates

While the world wrestles with the economic fallout of the subprime mortgage implosion, some consumer groups say it's time for the U.S. to confront its "culture of debt."

The coalition, which includes the Institute for American Values, New America Foundation, Demos, Institute for Advanced Studies in Culture, Public Agenda, and others, is calling for a campaign to promote a new thrift culture that would promote savings and sustainability.

"In recent decades, new predatory lending institutions have moved into the malls and Main Streets of America," said David Blankenhorn, president of the Institute for American Values. "In the private sector, they include payday lenders, some franchise tax preparers, auto title lenders, subprime credit card issues, subprime mortgage lenders, and private student loan companies.

"'Anti-thrift' institutions promise 'fast cash' and 'free money' at usurious interest rates and trap many Americans in a cycle of debt. The public sector has its own anti-thrift institution -- the state owned and operated lottery," he said.

The groups have compiled a report with recommendations for encouraging consumers to save more. The report calls for a marketing campaign along the lines of those against drunk driving and smoking. The report also urges increased support for credit unions and development of new sources of low interest loans.

The report calls for creation of a pro-thrift institutional environment that would encourage financial health, regular savings and wealth building for all Americans. Among its recommendations:

The report also calls for:

• Repurposing the state lottery to include a savings ticket feature
• Return to usury rate caps on small loans
• Establish Matched Savings Accounts for Children
• Expand and improve school savings programs.

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May 13 2008

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