The Family Shredder

Every business day, some credit card company or other sends me a sheet of "checks" that are attached to a document covered with a lot of very fine print.

The company is trying to get me to fill out the checks, which I'm pretty sure are nothing more than a credit-card cash advance at very high interest and penalties. I've never used the checks or bothered to read the fine print, because I know a scam when I see one, even when it's being offered by a big-name bank.

Instead, the checks go through our family shredder, along with the other credit card applications that arrive daily. (You should have a shredder too, to prevent identity theft.) But not everyone is so wary, and some people in tough situations probably do use those checks, which are the crack cocaine of credit.

Today the banks who lure the unwary, the unwise, or the desperate into the credit habit got a big break from the U. S. Congress, which just passed a bankruptcy "reform" bill. The bill makes it much harder for people to start out again with a clean slate if they get into credit trouble because of a catastrophic illness or a lost job. My friend David Hoggard has some insight into this kind of situation.

I agree with Glenn Reynolds that companies which grant credit indiscriminately, with sneakily usurious interest rates and penalty schedules, should bear the consequences of their own high-risk lending decisions. This bill protects them from that risk and shifts the cost of the risk to consumers.

Why not a credit reform bill that limits fees, penalties, and APRs, outlaws payday loan sharks, and encourages saving and investment?

Don't answer. I know the answer, and I don't like it.

Anyhow, just FYI: in Dante's Inferno, unscrupulous lenders are forced to spend all eternity lying naked on burning sands, their eyes fixed open and staring at their bags of money (each bag marked with the insignia of the appropriate bank), while an unending shower of burning, sulfurous flakes rains down upon their bodies. Just FYI.