Excessive Credit Card Interest and How to Maximize Our Economy

1) Require all credit collection agencies be licensed and bonded by Washington State. Same laws as in the construction industry would apply. If not bonded then the debtor would not have to pay the fees and would be able to collect back the fees plus $1000 in punitive damages and attorney fees would be paid by the collection agency upfront. No bond then the collection agency is assumed to be wrong. Also, the collection agency would have to pay off the entire balance of the credit card attempting to be collected. Fraud laws would be enforced against collection agencies and thus collection agencies and the owners would not be allowed to file bankruptcy protection. All assets of the collection agency and all personal assets would have to be sold to satisfy the debt. Piercing of the corporate vail would be allowed.

2) No collection agency will be able to collect interest while a debt is in collection.

3) Maximum interest rate which can be collected by a credit card is 12% interest. See above also.

4) Installment companies can charge a maximum of 18% interest. If no other credit cards exist at the time of signing the maximum installment rate would be 12% interest.

5) Maximum time of payout for a credit card is one year.

6) Payout time will be based upon FIFO (First-in First-out) accounting between credit cards.

7) If one credit card is late or overdue on a payment then notice by one credit card must be sent to other creditors. No additional credit will be allowed by the late credit card until the credit card is completely paid off to zero. Other credit cards must not go over the limit of the balance established in that month plus $200 until the previous credit card(s) is paid down to zero. New credit cards may not be issued until the balance is paid to zero. Installment plans may be used but at an 18% interest rate. Credit card notification would be between credit card affiliates only. So VISA to VISA and MasterCard to MasterCard and Discover to Discover and American Express to American Express and Diners Club to Diners Club. Notification from VISA to American Express would not be necessary.

8) If other credit cards are issued prior to payoff then a zero interest rate can be charged. New credit cards will have a secondary payoff rate or schedule.

9) The objective of this is to limit the usage of credit cards.

10) Multiple solicitation by credit card companies would thus take a lower priority.

11) Cash backed credit cards would become more prevalent.

12) Debit card usage would become more common and lower seller fees would be charged. So instead of a 3%-4%-5% credit card fee this would encourage 30 cent fees for debit transactions.

13) Would allow the consumer to pay less because sellers costs would be lower and bank losses would actually be lower.

14) This would create a short credit sales crunch but the consumers would adjust to a healthier level of non-interest pre-funded available consumption. The present economy presently has low consumer confidence and thus lower consumer spending so the ideal time to introduce this type of legislation is when the lowest possible consumer effect would take place.

15) Overall this would be healthier for our overall competiveness in the world economy. Lower overall consumer purchases would lead to a higher level of consumption previously allocated to interest rates which generate no economic stimulus benefit. The lower interest rate on consumers would stimulate the growth of the value of the dollar and thus consumer prices would be lower due to this additional affect also. More excess disposable income generated means the macro consumer would be healthy for Washington State consumers.

16) The need for unproductive employees in the national economy would be extremely reduced due to the consumers more prudent purchasing powers. Thus a shift from non-productive to other productive processes would elevate our economy to producing employees and make our macro economy stronger and indeed healthier.

17) Washington State tax revenues would increase dramatically because the consumers have excess disposable income for the actual purchasing of additional goods and services which would be taxed at a higher rate. Sales tax would be collected on this excess disposable income used for additional purchases rather than no sales tax being collected on the interest rate being charged.

18) Interest rates would not be able to be punitive in nature. No individual company should be allowed to collect punitive income just based upon the low credit repayment capabilities of the end consumer. Limiting the capability of excessive spending will benefit all other consumers and lower price scales will be the generally established pricing logic of consumer based retail establishments. The micro adjustments between the end consumer and the macro economy stimulus would be complimentary. Mentioned another way the pricing practices of the larger manufacturers would be modified to a higher production capacity and a lower $ micro economic policy. Profits would be the same as previously. Pricing policies would not need to be adjusted as dramatically for non-payment of manufactured goods by the retail establishment. Cost of Goods Sold and maximizing consumer penetration policies would still be used but the movement of the economic graph would be discounted due to the shift and lowering of risk. This would show both in manufacturing and in the retail markets.

19) Excessive non-risk income by credit collectors would not be as rampant as it is now. The capability of the end consumer to get to a level of credit card non-compliance would be limited and restricted. A shift to lower cost debit or prepaid credit cards would be a major macro economic phenomenon.

20) Excessive disposable income and more consumer cash on hand would not make the federal reserve defensive by lowering the interest rate but the interest rate would be increased. A more stable economy generates higher profits in the micro businesses where the adjusting of economic factors is lower. Big businesses would need to be more competitive and adjust prices downward in order to maintain market share. Profits thus for big business would be lower but not excessive due to cost adjusting factors already priced into a product for losses due to non-payment. This thus would allow our senior citizens who have major amounts of cash and investment assets to enjoy higher interest rates due to manipulation by the federal reserve. The inflation factor structure into interest rates would of course be lower but the relative power of the principle of the senior citizen would not be as dramatically eroded as previously priced into consumer prices and into interest rates. The strength of the pricing models both from macro and micro aspects will lower the relative risk priced into bank interest rates paid the bank account consumers.

Interest rates were even a problem and included in the Magna Carta (using the original in 1215 which lasted only three months). See also the Magna Carta of 1216, 1217 and 1225. See sections 9, 10 and 11 of the Magna Carta. Nine deals with foreclosures but instead of taking the land the bailiff would be required to rent the land out until the debt was paid off. Number ten refers to the debt will not incur any interest if from a Jew and an heir being under age. Todays talking would be refering to a usury rate of interest. In this timeframe of 1215 no one would be charging an interest rate for borrowing funds. Today even the IRS requires relatives to charge an interest rate to others. They want their income tax money out of the income pot. If the King or church would be holding the paper then only the principle would be taken with no interest. Section 11 refers again to Jews but we will refer to this as usuarous interest rates. If anyone dies then his wife will not have to pay the debt if usurous. This section aslo refer to the priority of payment of debt as well. In a way the Magan Carta continues even today. The IRS thinks it has all priorities of a decease assets over others in an established pecking order for debts and payments from estates. This still is "usually" the case also.

Sources:

http://www.freemasonry.bcy.ca/texts/magnacarta.html
Magna Carta 1215 version