During the last recession of 1999, regulations were intiated which repealed the Banking Act of 1933. In this undertaking the banks were kept out of heavily being involved in securities and insurance.
If I remember correctly, this law was designed to restore confidence in the financial industry. The move was initiated to extend the opening of loans, investments to insurance. Of course some people debate abiout these initiatives until today including the respect to privacy act as consumer data were being exchanged. The needed ammendment was that consumers must then have been given the right to their personal privacy.
If you look at thrid world poverty stricken countries for example, people with bad credit resort to predatory lender practices such as money stores, finance stores and even payday loans. Today, the so called telecheck services cripples one's individual right to get a loan or even open a bank account because of such report made through computer inquiries aside from the normal consumer credit reporting agencies.
For all we know, much of this personal hardships by people are cause by enormous predaory practices of institutions creating the so called overdraft, non-sufficient fees and service charges. As a personal victim of the scheme I should know as this has given me a lot of struggles. What is suprising to note is that sometimes for a mere $1 you will be extremely penalized from $25 to $33. And of course if we understand the pyschological behavior of people, the said bad financial behavior as some gurus stated may have been caused by severe poverty stricken issues like an extreme medical condition, a job loss, a divorce or real life threatening issues. Of course, this is not to say that some people are really avoiding paying and or are habitual liars. But the question lies is how does a good financier, banker or lender really asssess one's consumer and credit behavior outside the numbers and boxes.
In such countries as mentioned above, there are even some form of discrimination if they are a minority or even based on the personal grooming when we meet potential lenders. Hardly, there are a few analytical thinking financiers who are really knowleadgeable on economics, pyschology or even sociology.
It is always about the numbers, the profits that will be generated or the magnificent potential of products that can be offerred to a potential client.
There are some insitutions who are supposed to be giving outright counseling on improving the financial picture of an individual or business. However, the reality is "time" will heal over and or is there someone that this person can co-sign for the loan.
So before we grill on trying to ask the question of where the bail-out money is sitting, is it being extended to people that need it, are the needed financing being disburse perhaps we should look into the standard accreditation processes. It is a mere basic saying that we can't solve problems if we don't find the root causes and then fix the problem from the roots.
Thus, we can start the forum of asking if we need another financial services modernization act pattern towards the people who are in the worst credit situation, jobless, unemployed and or with limited or no income.
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