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Usury: When did it stop being a CRIME?

By
Real Estate Broker/Owner with Riverbend Realty, Cape Girardeau, MO 2004008944

DebtIf most Americans were not buried under revolving credit, I believe they would be able to afford their house payments. Credit card companies charge rates that, in any other time in recorded history, would have been considered usury rates. And in any other time in history, that would have been a crime!

From Dictionary.com:

u·su·ry

[yoo-zhuh-ree] -noun, plural -ries.

1. the lending or practice of lending money at an exorbitant interest.

2. an exorbitant amount or rate of interest, especially in excess of the legal rate.

3. Obsolete . interest paid for the use of money.

What do you think? Have we all been lured into blaming the wrong credit mongers for our current crisis?

Maybe we no longer have debtors' prisons, but we have certainly allowed the credit industry to place shackles on the citizenry.

Again from Dictionary.com:

 

shack·le 

Stockade[shak-uhl]   noun, verb, -led, -ling. -noun

1. a ring or other fastening, as of iron, for securing the wrist, ankle, etc.; fetter.

2. a hobble or fetter for a horse or other animal.

3. the U -shaped bar of a padlock, one end of which is pivoted or sliding, the other end of which can be released, as for passing through a staple, and then fastened, as for securing a hasp.

4. any of various fastening or coupling devices.

5. Often, shackles. anything that serves to prevent freedom of procedure, thought, etc. -verb (used with object)

6. to put a shackle or shackles on; confine or restrain by a shackle or shackles.

7. to fasten or couple with a shackle.

8. to restrain in action, thought, etc., as by restrictions; restrict the freedom of.


Debt in our society is sort of like an inflated balloon--push in one place and the air just moves somewhere else. Consumer revolving debt is out of control, and I firmly believe that it has impacted the housing industry.

Much of the "hot air" that has caused our mortgage crisis is diverted pressure from revolving debt and the ever-increasing interest rates in that segment.

 

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Comments (22)

Fred Griffin Florida Real Estate
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

Credit Cards, Sub-Prime Mortgages, and Student Loans.   Most Americans are now Indentured Servants to one or more of these.

Don't Borrow Money!

Jun 17, 2011 05:27 PM
Andrea Swiedler
Berkshire Hathaway HomeServices New England Properties - New Milford, CT
Realtor, Southern Litchfield County CT

I agree with Fred, the best way around it is to cut up those cards, etc....

Jun 18, 2011 12:01 AM
Tni LeBlanc, Realtor®, J.D.
Mint Properties, Lic. #01871795 - Santa Maria, CA
Tenacious Tni (805) 878-9879

I love this post Liz and I suggested it. 

Learning about the laws of usury was "fun" to me in law school.  Some of those old fashioned states still have these laws on the books.  It is an important concept and should not be forgotten.  

And many of these new private student loans are the equivalent of charging an education.  Try short selling your degree.  LOL.

Jun 18, 2011 05:36 AM
Liz Lockhart
Riverbend Realty, Cape Girardeau, MO - Cape Girardeau, MO
GRI, Cape Girardeau Real Estate

Larry (Rainiac)~ We need credit to make the housing industry work. I wish that consumer credit were as regulated as housing credit.

Jun 18, 2011 08:31 AM
Peggy Hughes/pha logistix, inc.
pha logistix inc - San Francisco, CA
SF NYC LA

Really like your post Liz... I agree that most of us rely on credit cards way too much.  Even in my business, I pay cash 99% of the time.  If I don't have the money, I shouldn't be buying it in the first place!!

Jun 18, 2011 08:32 AM
Liz Lockhart
Riverbend Realty, Cape Girardeau, MO - Cape Girardeau, MO
GRI, Cape Girardeau Real Estate

Steve~ It seems apparent to me that unrestricted consumer interest rates have not worked. It's only been in the last 30 or so years that consumer rates have been unfettered--and look where it got us. 

Jun 18, 2011 08:35 AM
Paddy Deighan MBA JD PhD
http://www.medicalandspaconsulting.com - Vail, CO
Paddy Deighan J.D. Ph.D

I hear you.....I just had a client from Nevada get a car loan at THIRTY TWO percent interest. I am from Jerszey originally...that is what we refer to as a LOAN SHARK!!! LOL

Jun 18, 2011 08:35 AM
Liz Lockhart
Riverbend Realty, Cape Girardeau, MO - Cape Girardeau, MO
GRI, Cape Girardeau Real Estate

Fred~ Yes, we are a debt-indentured society. Paying interest on interest is keeping us that way. Since our economy is now dependent upon debt, I'm just saying that debt should be more fair.

Jun 18, 2011 08:38 AM
Liz Lockhart
Riverbend Realty, Cape Girardeau, MO - Cape Girardeau, MO
GRI, Cape Girardeau Real Estate

Andrea~ While "just say no" can certainly work, I just don't think it is that simple any more.

Jun 18, 2011 08:39 AM
Liz Lockhart
Riverbend Realty, Cape Girardeau, MO - Cape Girardeau, MO
GRI, Cape Girardeau Real Estate

Tni~ Thank you so much. You know that I value your opinion, and I am always happy when we agree!

Jun 18, 2011 08:44 AM
Liz Lockhart
Riverbend Realty, Cape Girardeau, MO - Cape Girardeau, MO
GRI, Cape Girardeau Real Estate

Peggy~ Credit cards are just part of the problem. In fact, it seems to me that mortgage credit is becoming the only type of credit that is actually fair.

Jun 18, 2011 08:46 AM
Liz Lockhart
Riverbend Realty, Cape Girardeau, MO - Cape Girardeau, MO
GRI, Cape Girardeau Real Estate

Paddy~ That's it EXACTLY! Loan sharks, Jersey, I-breaka-your-legs, Mafia--they all come to mind, but 32% interest is now legal. How in the WORLD did we let that happen?

Jun 18, 2011 08:48 AM
Richard Weeks
Dallas, TX
REALTOR®, Broker

I am not sure what the highest one can legally charge.  Shades of the Sopranos.

Jun 18, 2011 02:13 PM
Liz Lockhart
Riverbend Realty, Cape Girardeau, MO - Cape Girardeau, MO
GRI, Cape Girardeau Real Estate
Richard~ New laws enacted under the Obama administration are a start to regulation.
Jun 18, 2011 03:07 PM
Robert Vegas Bob Swetz
Las Vegas, NV

Hello Liz and it's just a control thing and another way to get rid of the middle class people! It should be a crime but I think the US government had their hand in the cookie jar also!

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Jun 18, 2011 06:46 PM
Liz Lockhart
Riverbend Realty, Cape Girardeau, MO - Cape Girardeau, MO
GRI, Cape Girardeau Real Estate

Robert~ Of course, the government is involved! It's the government (whoever that is) that allowed the deregulation that legalized usury. What has been considered unreasonable by all previous generations is now legal, and that is beyond reason.

Jun 19, 2011 03:13 AM
Robert Vegas Bob Swetz
Las Vegas, NV

Right on Liz and I wish as American citizens there was more we could do ... ;o(

Can you say "Revolution" ...

VB ;o)

Jun 21, 2011 02:25 AM
Liz Lockhart
Riverbend Realty, Cape Girardeau, MO - Cape Girardeau, MO
GRI, Cape Girardeau Real Estate

Yes, Robert, it has been a revolution--but consumers are on the losing side of it for now, at least.

Jun 21, 2011 07:40 AM
Alicia Barrington
THE ORIGINAL HOUSTON HOME STAGING - Katy, TX
Houston Home Staging Presents Alicia Barrington

I'm a little late to this party, but, I recall that any interest rates above 15% used to be in violation of the usury laws.   Am I right?  Dunno, but I totally agree with your point-of-view.

Jun 28, 2011 07:40 PM
Liz Lockhart
Riverbend Realty, Cape Girardeau, MO - Cape Girardeau, MO
GRI, Cape Girardeau Real Estate

Tom~ It sure seems like the sky is the limit now!

Jun 29, 2011 03:42 AM