Monday, November 16, 2009


A vegetarian, in an op-ed piece in today's Washington Post, wrote that he's tired of apologizing for causing inconvenience at dinner events. He argued that it's time for carnivores to apologize for their adverse environmental effects.

I'm a debitarian and I think it's time for the high users of consumer credit to apologize to the rest of us for their adverse economic impact. If they hadn't been greedy, and susceptible to encouragement from mortgage brokers and other moneymongers, the recent financial collapse might not have happened. I'm not against credit altogether. I support responsible use -- say, a mortgage loan well within the borrower's ability to pay, a credit card balance he or she could pay off within a month (or maybe three), and occasional use for true personal financial emergencies, such as medical treatment.

Did you know that beginning about 2004 banks began allowing customers to exceed their account balances when they used debit cards? Now over 80% of banks allow this. Abracadabra, the debit card suddenly becomes a "credit" card, often without its user even knowing it.

I think practices like this contributed to the financial crisis we're in and may hurt our ability to crawl out of it. I expressed this opinion, including my recommendation that the Federal Reserve Board ban the practice, when I commented on the Board's proposal to sanction the practice so long as the banks disclose what they're doing.

The Fed ignored me. The banks "need" those overdraft fees. The final regulation, adopted last week, simply requires disclosure in advance, which could be as early as when an account is opened.

The mom of Phil, a banker who had the hots for Virginia, was impressed by Virginia's reaction when she learned that she had "earned" the trust of her grandfather. Even before Virginia knew how much money was involved, she made sure her sister would share the bounty. Virginia was a debitarian, too.

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