Op-Ed Columns

Critics loudly and repeatedly had their say on The Star's multi-part editorial series on predatory lending.

One anonymous poster on our Web site wrote, "It would appear that the editorial department believes that [Alabamians] are not smart enough to handle their own money and choose what is best for them."

Another wondered, "Whatever happened to personal responsibility?"

In a guest column, industry defenders dismissed the series as "a campaign to take away the financial freedom of thousands of Alabamians."

Whoop, whoop! Stand back, code language coming through!

Turns out, according to the dissenters, poor people desperately turning to lenders who charge usury rates are actually consumers exercising financial freedom. Sounds vaguely like the old song lyric, "freedom's just another word for nothing left to lose."

The editorial page series discovered examples of financial freedom gone bad. In one case a woman in ill health and down on her luck was caught in a web of crushing debt. For her, the happy smiling faces of the predatory lending ads were long gone, replaced by harassing debt collectors.

In another example, the series discovered a 40-something man who by his own admission is mentally handicapped and illiterate. Court records showed how one short-term loan of $1,157.74 left the man with $66.83 in cash once, according to the editorial, all "the life insurance, interest, interest surcharge, credit life insurance, property insurance and other fees and charges, including those from previous loans" was subtracted.

The desperate poor are turning to modern-day loan sharks, and the state of Alabama is turning a blind eye to this loosely regulated outrage.

In 2007, the city of Anniston responded to a glut of what we call predatory lenders and what industry defenders might call "financial freedom centers." The city placed a moratorium on the issue of business licenses. The reasons for the halt is easy enough; Quintard Avenue is a ghetto of quick-buck artists looking to separate people from what precious few assets they have.

For the record, the newspaper's editorial board is not opposed to financial freedom; it seeks greater regulation of the industry and the creation of other, less burdensome forms of micro-credit.

Reckless and loosely regulated capitalism injures more than risky lenders and unsteady borrowers. It puts a strain on everyone as property values decline and a town's sense of itself shrinks.

Over the past 18 months, we've witnessed a national tragedy as the subprime mortgage crisis created many ill effects, including sharp declines in home values, financial danger for lending institutions and a 60 percent one-year jump in home foreclosures.

Freedom's just another word for nothing left to lose. You betcha.

Speaking recently on Bill Moyers' PBS program, financial journalist William Greider said Wall Street, Washington and U.S. consumers "were sold a fantasy, an illusion, which sounded wonderful about how markets make better judgments than government and the public. And that liberating finance and business from prudential rules that society imposes upon them will produce a bigger, better economy and better returns for everyone."

Greider continued, "All those fantasies have been destroyed by these events, I mean, wiped out. And if you think about it, as we go through the hard months ahead, America's going to have to take some pain, right? In one form or another. The government's going to have to probably ask for some sacrifices."

The pain is evident in Calhoun County. The Sheriff's Department assists with evictions. Chief Deputy Matthew Wade reports it's a full-time job for one deputy and several inmates who do the heavy lifting. What's worse, their workload is rising.

On average, Wade said, the department handles between one and two evictions a day. Between evicting people from their homes and helping creditors repossess items like cars and appliances, it's an unpleasant role in the rough-and-tumble economy.

In the late 1990s, government oversight's No. 1 foe was Phil "No Whining" Gramm, a former Texas senator who led the charge against New Deal-era rules created to protect consumers and banks from risky financial behavior.

In the world of banking deregulation, Gramm was an economic freedom fighter, a member of the money-class mujahadeen.

Former (and soon-to-be former) homeowners foreclosed upon can shake their fists at Gramm (and a host of others in Washington). We'd suppose those recently kicked out of their homes are casualties in the war for financial freedom. Industry defenders might prefer victims of collateral damage. Either way, no roof over one's head is a strong argument for more federal involvement in finance.

Defenders of predatory lending are fond of Phil Gramm and his ilk.

A local chapter of the Phil fan club calls the state Legislature home. Legislators there have kept mostly quiet about predatory lending. Until recently one legislator, Sen. Lowell Barron, owned a significant stake in various predatory lending storefronts.

Remember, the state regulates short-term lending, though one could hardly call it "regulation" in Alabama. The law allows unjust interest rates to be charged to folks so desperate for cash that they'd pay a $17 interest charge in two weeks just to get $100 in their fist today.

While the defenders of so-called financial freedom in the predatory lending industry have cried like a stuck pig over The Star's series, not one member of the Legislature has said a word.

If they are waiting for an opportunity, now would be a good time.