en-us http://backend.userland.com/rss Your Friends @ Myvesta.org.uk (stever@myvesta.org) myvestaukblog_archive.html steve.rhode@myvestafoundation.org 134637668480195254 A little read story recently may be a precursor of events to come in the credit card world if a conscience and personal responsibility carry any weight with credit card company executives.

For far too long credit card issuers have placed profits ahead of social responsibility and have spewed credit cards over the past recent years to people that never should have had them in the first place.

While the benefits of having easy access to credit helps us all by boosting the performance of an economy based on the power of consumption, we can’t lose sight of the fact that the collective “we” is made up of lots of individuals known as you and me. We are the people.

When credit card lenders, hell, all extenders of credit, open the spigot to easy credit, what they do is shift the need for this quarter’s corporate performance onto the backs of people that either don’t want to recognize or can’t recognize when they should or should not take advantage of access to credit.

Extending credit to sub-prime candidates comes with a risk of ruining lives but credit card companies never seem to take that into account. If these companies insist on mainlining credit into the veins of everyday people they should be legally required to offer a real way for people to get out of excessive debt without bankruptcy.

Let’s look at former BestBank owner Edward Mattar who swung a hammer with force the other day and shattered the window of his 27th story apartment window so he could leap to his death. What was left of his disfigured body was positively identified using fingerprint records.

Mattar was facing 14 years in prison and the forfeiture of millions of dollars at his fraud sentencing Friday. The bank he once owned was seduced into what felt like a magic solution for easy profits as his bank paid high rates of interest to attract deposits, then turned around and issued more than 500,000 credit cards to credit-challenged borrowers. As losses mounted, Mattar and fellow defendants hid the numbers from regulators while receiving performance bonuses.

With the wind of subprime troubles blowing it is only a matter of time before a major bank begins to disclose the funds they will need to set aside for their portfolios of bad and poorly extended loans and credit cards. BestBank won’t be the last bank to be caught up in this mess.

What truly hurts is that banks make poorly thought through decisions by chasing profits and then put the burden of responsibility on the sore shoulders of consumers, requiring them to bear the burden of responsibility for excessive debt. In fact what the banks are doing is nothing less than abdicating their moral and corporate responsibility of proper loan underwriting onto the lives of the very consumers they once approved as good candidates for their interest based products.

Consumers are then made to feel like second-class citizens when they find themselves in financial trouble and unable to meet the obligations the banks placed them under by allowing them to suckle at the teet of easy credit. People laboring under the burden of financial misfortune suffer from depression, damaging stress, ruination of relationships, dissolution of marriage, loss of employment, suicide and much, much worse, and for what, so banks can maximize their profits?

The loss of a single human life unnecessarily is tragic but wouldn’t it be nice if the tables were turned on lenders and instead of the lives of consumers being ruined and castrated by irresponsible lenders, it was the lenders that suffered the loss of respect of their children, personal shame, loss of self-esteem, loss of self-confidence and made to feel like the loser.

I challenge all lenders to stop for a moment and contemplate your role and responsibility in the easy extension of credit and to look yourself in a mirror and ask if this is the way you want your precious children to be treated when they grow up. Will you be proud and feel comfortable when your pride and joy is the target of a slick advertising campaign to put easy credit into their hand and the lender will not offer a reasonable way out of debt when they fall into the trap of easy credit?

Mr. and Mrs. Banker, what role do you individually have to protect your customers rather than sacrifice them over the pit of profits?