Is Government Action Tough Enough Analysis

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Professor XXXX Intro to Writing February 8, 2012 13% APR Comes at a Heavy Cost In a discussion about the reasons why low-income people use cash lender services, the Academic Writing II class feels that low-income people often live paycheck to paycheck and do not have a savings to pay for unexpected expenses. One student, Marvin Amazan, states that low-income communities opt to use these high interest services because “they are least able to secure normal lower-interest-rate forms of credit.” Victoria Berry, another student in the class, adds that high interest loans may be appealing because these services do not require social security numbers or other forms of identity. I say this makes it appealing to undocumented workers who either…show more content…
He explains that federal regulation dates back to the Great Depression when millions of unemployed Americans lost their homes, life savings, and farms. Out of this economic disaster were added protections and insurance for depositors, investors, and loan recipients. Jost states that by the 1970s, the Supreme Court became critical of all the anti-fraud rules. Since then, there have been deregulatory initiatives that have shifted the power, once again, to the hands of the banks. Rodriguez argues that more needs to be done about regulating cash lender services, similar to the way banks have been regulated for decades. What I find interesting is that if banks have been experiencing a period of de-regulation in the last 40 years, and it’s still cheaper to get a bank loan or create a checking account, then how many regulations are these cash lender services exempt from? In other words, how bad is it,…show more content…
Some workers may stay temporarily with relatives with bank accounts and good credit, but the family network is aware that income is not reliable in America. Thus, it would be too risky for relatives to co-sign loans, credit cards, or bank accounts. In addition, relatives feel that by offering assistance in the form of room, board, and transportation is more than generous. The family unit is central in the Hispanic community, so it is not uncommon for residents to assist undocumented family members and friends. If it were not for the family unit, then I do not believe that undocumented workers could possibly handle the costs associated with cash lender services. However, without federal regulation of these predatory services, then the cycle of poverty will continue within immigrant communities. The longer we remain ignorant about our country’s banking system, the longer we continue to suppress the upward mobility of the poor and benefit from their economic

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