Peter's Rant for 2023 Tax Season Because Money Just Rubs Me the Wrong Way
Usury (/ˈjuːʒəri/)[1][2] is the practice of making unethical or immoral monetary loans that unfairly enrich the lender. The term may be used in a moral sense—condemning taking advantage of others' misfortunes—or in a legal sense, where an interest rate is charged in excess of the maximum rate that is allowed by law. A loan may be considered usurious because of excessive or abusive interest rates or other factors defined by the laws of a state. Someone who practices usury can be called a usurer, but in modern colloquial English may be called a loan shark.
https://en.wikipedia.org/wiki/Usury
IMHO: As I open my daily mail and read the plethora of Credit Card offers I always turn to the interest rate that will be charged. After the very glamorous 6,12,18 months 0% "introductory rate" which will cost 5% of the transfer to initiate. i.e. 3 months of the "0 percent 'free' loan. AND the interest rates that used to be 24.5% are now 27.99% WTF!
I open my news and Japan has 3.5% inflation rate and ZERO interest rate on loans. What are they doing we are not? I read more after a search. AND they have Laws to govern interest rates and top them at 20% and most Credit Cards on purchases paid over 36 to 48 months are 14-15%. WHO ARE THESE AMERICAN CREDIT CARD HIGHWAY ROBBERS!!
A little history here from ancient Rome and Egypt and Israel to today the common interest rate is 3-5% on personal loans. 12-15% on larger loans i.e. business or home. And multiples of 12 or 12, 24, 48 percent on emergency loans. Loan Shark or Over-Night loans.
I repeat who are these American Highway Robbers charging 27.99% for Credit Cards which some folks run up 5-10K pretty quick and have to carry for several years. i.e. Christmas?? Take a vacation with the kids?? Buy furniture?? Fix the house?? or like my family sell your home after COVID and be homeless for 12 months because every MF selling a house is trying to "F" you.
Government OF the people BY the people FOR the people. How about we do what Japan does, who in retrospect has run circles around US because they have the ability to unite, and write Laws that protect Citizens from predatory Banks. Plan fundamental economic costs to benefit the Citizen i.e. oil/gas purchases, grain purchases, electric purchases on LONG TERM CONTRACTS. And reward Job retention over short term wage hikes. Senior and youth Savings over wasteful spending. And banking and government system that seeks to profit the whole Nation ... not just the 1% at the top.
3 minute readApril 18, 20237:10 PM MSTLast Updated 2 hours ago
More US consumers are falling behind on payments
By Tatiana Bautzer
NEW YORK, April 18 (Reuters) - Consumers are starting to fall behind on their credit card and loan payments as the economy softens, according to executives at the biggest U.S. banks, although they said delinquency levels were still modest.
Profits at Bank of America Corp (BAC.N), JPMorgan Chase & Co (JPM.N), Wells Fargo & Co (WFC.N) and Citigroup Inc (C.N) beat analyst forecasts as lending giants earned a windfall from rising interest rates. But industry chiefs warned that the strength would tail off this year as a recession looms and customer delinquencies climb.
"We've seen some consumer financial health trends gradually weakening from a year ago," Wells Fargo Chief Financial Officer Mike Santomassimo said on a conference call Friday to discuss its first quarter results.
While delinquencies and net charge-offs - debt owed to a bank that is unlikely to be recovered - have slowly risen as expected, consumers and businesses generally remain strong, the bank's CEO Charlie Scharf said.
The company set aside $1.2 billion in the first quarter to cover potential soured loans.
Citigroup also made larger provisions for credit losses even as it brought in more revenue from clients' interest payments on credit cards.
Delinquency rates were rising as anticipated, but still stood below normal levels in the bank's "very high quality" loan portfolio, said Mark Mason, the bank's finance chief.
"We have tightened credit standards specifically as a result of the current market environment in cards, we continue to calibrate our credit underwriting based on what we're seeing based on macroeconomic trends," Mason said.
PHOTO - [1/5] People shop in a grocery store in Manhattan, New York City, U.S., March 28, 2022. REUTERS/Andrew Kelly
Delinquency rates will probably return to "normal" levels of 3% to 3.5% for branded cards and 5% to 5.5% for retail services by early 2024, Mason said. Current delinquency rates are 2.8% for branded cards and 4% for retail services, according to Citi's presentation on its earnings.
Bank of America provisioned $931 million for credit losses in the quarter, much higher than the $30 million a year prior, but below fourth quarter $1.1 billion provision. Total net charge-offs with credit reached $807 million, increasing from the former quarter but still below pre-pandemic levels, the bank said in its earnings release.
"The consumer's in great shape in terms of credit quality by any historical standards. Employment remains good, wages remain good, and we haven't seen any cracks in that portfolio yet", Bank of America Chief Financial Officer Alastair Borthwick told reporters.
Some of JPMorgan's customers were starting to fall behind on payments, but delinquency levels were still modest, said Jeremy Barnum, finance chief at the largest U.S. lender.
“We are not seeing a lot there to indicate a problem,” he said.
The bank more than doubled the amount it set aside for credit losses in the first quarter from a year earlier, to $2.3 billion, reflecting net charge-offs of $1.1 billion.
Worsening economic conditions would lead to "credit deterioration throughout 2023 and 2024 with losses eventually surpassing pre-pandemic levels given an oncoming recession," predicted UBS analysts led by Erika Najarian. Still, loan defaults are forecast to stay "below the peaks experienced in prior downturns," they said.
As large and medium-sized lenders become more conservative in underwriting, their net charge offs will probably to peak in several quarters, wrote Morgan Stanley analyst Betsy Graseck. "This means slower loan growth" 2023 and 2024, she wrote.
American Express said in a filing on Tuesday its card loans net write-offs grew slightly in March to 1.7% from 1.4% at the end of February. Volumes of past due loans were stable from February to March.
Reporting by Tatiana Bautzer; additional reporting by Saeed Azhar; Editing by Lananh Nguyen and Nick Zieminski
Our Standards: The Thomson Reuters Trust Principles.
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