Skip

Guy Fawkes, meet Robin Hood
January 26, 2010 7:30 PM   Subscribe

Debt collectors call him a credit terrorist. “Cunningham beats the debt collectors at their own game. He turns their money-making practice into a financial liability. He is a regular guy who has become a radical enemy of the banking system.”

“In 2005, two foreclosures pushed Cunningham near financial ruin. Like many Americans, he fell enchanted by the siren's song of easy credit and borrowed more than $100,000 to bet on risky, high-yielding investments, such as stock in the now vilified sub-prime mortgage industry. Then, while stationed with the Army in El Paso, he attempted to become an absentee landlord and got zero-percent-down sub-prime mortgages to buy low-income four-plexes in Houston and Dallas. With the interest earned on his high-yielding stocks he was paying back his low-interest credit card debt; now, he was using the mortgages to borrow even more.

Then, the bottom fell out. [...]

While most Americans with unpaid bills dread the collector's call, Cunningham sees them as lucrative opportunities. Many collection and credit card companies, intentionally or not, violate little-known consumer rights laws, and Cunningham's favorite pastime is catching them doing so and then suing them. In fact, it's a profitable side job.”
posted by Kadin2048 (113 comments total) 35 users marked this as a favorite

 
Your link attempts to print something out.
posted by You Should See the Other Guy at 7:37 PM on January 26, 2010


Apparently the single page version does that if you don't have NoScript. My bad.

Here is the regular (paginated) version.
posted by Kadin2048 at 7:39 PM on January 26, 2010


“In 2005, two foreclosures pushed Cunningham near financial ruin. Like many Americans, he fell enchanted by the siren's song of easy credit and borrowed more than $100,000 to bet on risky, high-yielding investments, such as stock in the now vilified sub-prime mortgage industry. Then, while stationed with the Army in El Paso, he attempted to become an absentee landlord and got zero-percent-down sub-prime mortgages to buy low-income four-plexes in Houston and Dallas. With the interest earned on his high-yielding stocks he was paying back his low-interest credit card debt; now, he was using the mortgages to borrow even more.

Oh, poor real estate speculator, lured into borrowing like crazy and flipping houses in Dallas and Houston! Nothing against him beating the collectors at their own game, in fact, kudos to him for that. But the article's editorializing, trying to make a victim of the very behavior that fucked up the lives of lots of people who were buying their houses, you know, to live on them... that's just pathetic.
posted by qvantamon at 7:44 PM on January 26, 2010 [10 favorites]


Fuck it. I'm now describing Martha Stewart as a "homemaker terrorist".
posted by Joe Beese at 7:45 PM on January 26, 2010 [1 favorite]


Slumlords vs Scumlords!
posted by Artw at 7:46 PM on January 26, 2010 [2 favorites]


All right Cunningham. Dude. Stickin' it to the Man. Gaming the System. Fighting for what's right.
Since nobody has showed up to bail Cunningham out, he's decided some of the $100,000 debt he once amassed will never get paid back.

"I already paid them off," he says. "The government took my money without asking me and gave it to the banks. And since I owe the banks money, but they already got my money from the government, I say we're even."
OK, now he's lost me. These debts of his, they aren't just with banks; they're with small companies like the local alarm company he mentions. Will they get the shaft because he's "already paid?" Sounds like selective morality.
posted by Hardcore Poser at 7:48 PM on January 26, 2010 [3 favorites]


Robin Hood? No. Douchebag.
posted by applemeat at 7:48 PM on January 26, 2010 [10 favorites]


Well, I just don't know exactly how to feel about that.
posted by rollbiz at 7:48 PM on January 26, 2010 [1 favorite]


yeah, pretty much what qvantamon said. The fellow was part of the problem... now he is a leech of leches. Guy Fawkes? Pah.
posted by edgeways at 7:49 PM on January 26, 2010


Yeah! Fuck the man! The banks already got all my ... hey, wait a sec. This guy is just plain evil.
posted by Cool Papa Bell at 7:51 PM on January 26, 2010


I do hope he wins his $200,000 case against CMI, employing professional help if needed. It sounds like they violated all manor of federal laws while pursuing him and thus deserve big fat bill.
posted by jeffburdges at 7:53 PM on January 26, 2010 [3 favorites]


CreditCajones.com. < -- DOES NOT EXIST BUT SHOULD

Snark is easy, simple and "riffy". But when it comes to the "morality" paying off credit card debt, anybody that spouts an aphorism is very busy not paying attention.

It used to be called usury and it used to be illegal.
posted by Moistener at 7:57 PM on January 26, 2010 [20 favorites]


Only Nixon could go to China.
posted by eclectist at 7:58 PM on January 26, 2010 [4 favorites]


If his creditors would like their money back, all they have to do is follow the law. Not hard.
posted by unSane at 7:58 PM on January 26, 2010 [40 favorites]


This guy is just as much to blame for the mess we're in as the big bad evil bankers.

He was willing to gamble everything to get rich without any of the actual blood sweat and tears typically involved, he lost that gamble and now he's unwilling to man up to it.

Pathetic.
posted by rulethirty at 7:59 PM on January 26, 2010 [3 favorites]


Cunningham is a speculator and was stupid to make risky investments with borrowed money. But the article makes a good point about how rampant violations from the debt collectors really are.
posted by demiurge at 8:01 PM on January 26, 2010 [5 favorites]


Reminds me off Andrew Capoccia, a lawyer who advertised "debt reduction" and was featured on Errol Morris's HBO documentary series First Person in an episode titled Mr. Debt in 2000. Here's how that turned out six years later:
The former owner of a fraudulent debt-reduction center was sentenced to serve more than 15 years in prison Friday for bilking thousands of clients out of several million dollars.

posted by eggplantplacebo at 8:02 PM on January 26, 2010 [2 favorites]


It used to be called usury and it used to be illegal.

If you want the pre-1545 legal system, you're welcome to it.
posted by Inspector.Gadget at 8:02 PM on January 26, 2010 [6 favorites]


>If you want the pre-1545 legal system, you're welcome to it.

Your snark is Fail.
posted by Moistener at 8:06 PM on January 26, 2010 [17 favorites]


...looks like they deserve each other
posted by HuronBob at 8:07 PM on January 26, 2010


I'm 100% against collection agencies and have no sympathies with the them or the people who loaned out money, unsecured, to people that may not pay them back.

But one part worries me about his approach, he's getting $1,000 here and there when individual phone operators have made a mistake or, actually, probably just followed company policy.

I worry those people: in low paid, demeaning jobs. Who have no better opportunities than to be employed by scum, will lose their jobs for "costing the company $1,000".
posted by selton at 8:08 PM on January 26, 2010 [4 favorites]


I'm happy this guy exists. I'm really really happy I'm not him.
posted by poe at 8:10 PM on January 26, 2010 [8 favorites]


Your snark is Fail.

Actually, you're not even talking about the same use of the word "usury"...
posted by Inspector.Gadget at 8:11 PM on January 26, 2010


But when it comes to the "morality" paying off credit card debt, anybody that spouts an aphorism is very busy not paying attention.

I'm quite fond of the aphorism that you shouldn't buy shit that you can't afford.
posted by UbuRoivas at 8:11 PM on January 26, 2010 [6 favorites]


Hardcore Poser: "These debts of his, they aren't just with banks; they're with small companies like the local alarm company he mentions. Will they get the shaft because he's "already paid?"

They will not get shafted anymore than they already have if they've sold the debt off to an external collector.
posted by pwnguin at 8:12 PM on January 26, 2010 [4 favorites]


Snark is easy, simple and "riffy". But when it comes to the "morality" paying off credit card debt, anybody that spouts an aphorism is very busy not paying attention.

I agree with you, Moistener, that the collection agencies, notorious for playing fast and lose and using dishonest and illegal practices, deserve a lesson like this. That doesn't make Cunningham a hero.

It used to be called usury and it used to be illegal.

Also "riffy," as anyone who genuinely believed that "charging interest for lending money" should be illegal would be asking for a very undemocratic world for the majority not born into wealth.
posted by applemeat at 8:12 PM on January 26, 2010


Debt collection in the USA is a generally shitty industry. You have to remain in legal compliance with the laws of every state you operate in, simultaneously - and these laws are often very, very different. The punishments for being caught are steep, and the profit margins are small. The people working for these companies are underpaid.

What saves them is that the poor are often unaware of their legal rights, and often allow them to be trampled. That, and the market is almost completely unregulated, so the worst that can happen is an out-of-court settlement - and thankfully the poor are cheap to buy. Of course, if you are near-bankruptcy you can't usually afford a legal defense.... so these sorts of settlements become a rare and minor cost of doing business.
posted by mek at 8:14 PM on January 26, 2010 [5 favorites]


We need people like this, in small numbers, to keep debt collectors from violating existing consumer protection laws. They say it's "minor technicalities", but what's that mean when the technicality benefits the debt collector? Pretty soon those minor technicalities become standard operating procedure. Debt collecting is notoriously a nasty business and there is no such thing as nice people on either side of the fence, only winners and loosers.
posted by stbalbach at 8:14 PM on January 26, 2010 [8 favorites]


Cunningham was obviously stupid with his earlier investing, but I have no problem siding with him now.

The debt collection agencies are doing things that are illegal and Cunningham and others like him are bringing these problems out into the open and holding the companies responsible. He's using the law the way it was meant to be used, to protect consumers.
posted by DoublePlus at 8:15 PM on January 26, 2010 [8 favorites]


I'm torn between this guy being an unlikeable jerk and my frothing loathing for collection agencies.
posted by Pope Guilty at 8:19 PM on January 26, 2010 [15 favorites]


rulethirty> This guy is just as much to blame for the mess we're in as the big bad evil bankers.

If this guy had actively gone to banks and sold them on the idea of sub-prime and interest-only mortgages, I'd agree. Instead, he bought a product that was actively pushed by the financial industry, and he's much less to blame than they are.

selton> But one part worries me about his approach, he's getting $1,000 here and there when individual phone operators have made a mistake or, actually, probably just followed company policy. [emphasis mine]

The phone operators aren't the ones who have to pay out, it's the companies. One, if they followed company policy, then the companies are guilty of having a policy which placed them squarely in violation of the law. Two, if they didn't, it's funny how those operators always make mistakes which lead them to make definitively false statements about garnishing and liens (or, as in other cases, that people are responsible for paying off the credit card debts of their relatives).
posted by UrineSoakedRube at 8:20 PM on January 26, 2010 [6 favorites]


Since nobody has showed up to bail Cunningham out, he's decided some of the $100,000 debt he once amassed will never get paid back."I already paid them off," he says. "The government took my money without asking me and gave it to the banks. And since I owe the banks money, but they already got my money from the government, I say we're even." OK, now he's lost me. These debts of his, they aren't just with banks; they're with small companies like the local alarm company he mentions. Will they get the shaft because he's "already paid?" Sounds like selective morality.

Sounds like a guy whose been grasping at straws his entire life and just grabbed another one. This doesn't end well.
posted by Ironmouth at 8:21 PM on January 26, 2010


selton: "Who have no better opportunities than to be employed by scum, will lose their jobs for "costing the company $1,000"."

I know people who work for these places, and I can assure you that it takes a lot to get fired. These places operate with high turnover in staff, even in a recession as epic as the most recent. They're far more concerned about satisfying their clients collection policies because the consequences are considerably more substantial and there's no court of appeals.
posted by pwnguin at 8:22 PM on January 26, 2010


Hrrm, the guy borrowed $100,000 to fund his risky scheme and due to his incompetence as a businessman lost the money. Why should we have any sympathy for him?

I have sympathy to people in tough financial situations due to things outside their control, such as medical issues or being laid off. But this guy caused his own problems, with no one else to blame but himself.

For him to paint himself as the victim is offensive.
posted by Argyle at 8:22 PM on January 26, 2010 [1 favorite]


Gordon ran his own third-party collection agency for years until a spate of FDCPA lawsuits in 2008 forced him out of business.

AH HA HA HA HA HA HA HA!

(gasp for breath, pause)

AH HA HA HA HA HA HA HA HA HA HA HA HA HA HA!
posted by UrineSoakedRube at 8:23 PM on January 26, 2010 [14 favorites]


I'm not particularly conflicted about this. I hate the stupid 'shuffle the money around until you get rich' game he was trying to play. However, if these debt collectors are breaking the law, they should be slapped around for it. And I'm glad that there are people around like him to do the slapping, because I'm not all that interested in finances and if a collector illegally threatened to garnish my wages, I probably wouldn't question it. I have things I'd rather do aside from trying to read through the multitudes of arcane laws that could potentially affect me at any given time. Unfortunately, most of the settlements are so small ($1,000 for lying about the amount someone owes... really?!) that it's probably cost-effecive for collectors to continue down their current path of not giving a crap about the laws, even if there are some people out there who are paying attention. Still, though, I do support his crusade. You don't have to be a saint to make a positive impact. To me, this quote sums up what it's all about:

"It's their system," says Cunningham. "I didn't make the rules. I'm just learning what the rules are."
posted by Consonants Without Vowels at 8:25 PM on January 26, 2010 [8 favorites]


We can agree that the guy is a douche in many respects, but I still think it's great that he's suing companies that are, after all, violating the law and are, after all, much bigger douches to many more people with much greater frequency.
posted by kenko at 8:25 PM on January 26, 2010 [19 favorites]


Debt collectors call him a credit terrorist.

We're apparently on the pie-face terrorism scale. Man, I thought this was going to be about some guy who decided to actually go out and amass massive debt on purpose just to screw the system. That would be cool. Falling into a bunch of stupid easy-money investment scam debt, not as cool. I find it hard to find much fault with what he's doing to debt collectors, though. Reminds me of a story that ran in my local rag a while back.
posted by nanojath at 8:28 PM on January 26, 2010 [1 favorite]


I'm torn between this guy being an unlikeable jerk and my frothing loathing for collection agencies.

If only there were some sort of spherical structure one could place two opposing parties into, perhaps with various improvised weapons and a gaggle of drunken slobs in surrounding bleachers...
posted by Inspector.Gadget at 8:28 PM on January 26, 2010 [4 favorites]


Hrrm, the guy borrowed $100,000 to fund his risky scheme and due to his incompetence as a businessman lost the money. Why should we have any sympathy for him?

Don't have any sympathy for him qua failed businessman, if you feel it was due to his incompetence. That doesn't justify debt collection agencies in breaking laws designed to protect debtors (who, I'm sure you will acknowledge, do not always end up in debt owing the the moral failings you've so keenly sniffed out in this guy's case). I mean, people in this thread are being awfully quick to find fault with this guy, while seemingly having no problem with abusive debt collection agencies and agents.
posted by kenko at 8:29 PM on January 26, 2010 [2 favorites]


Who is this hypothetical "people in this thread who have no problem with abusive debt collection agencies"? As far as I can tell, the comments fall in one (or both) of two buckets: "Kudos for him for fighting those assholes", and "This guy is a fucking dirtbag". Those are not mutually exclusive.
posted by qvantamon at 8:39 PM on January 26, 2010 [2 favorites]


expressio unius, exclusio alterius. Learn it. Know it. Live it.
posted by kenko at 8:41 PM on January 26, 2010 [2 favorites]


We're apparently on the pie-face terrorism scale. Man, I thought this was going to be about some guy who decided to actually go out and amass massive debt on purpose just to screw the system. That would be cool.

Yeah no doubt. I see all the knee-jerk reactions in here about how he's a douchebag and I think to myself, hey, I bet pretty much everyone in this thread loved Fight Club.
posted by jock@law at 8:42 PM on January 26, 2010


And anyway I did say "seemingly". You read the article and you come back to mefi to exclaim about his dirtbag nature? You seem (!) to take greater interest in the circumstances of his being in debt in the first place and his accountability for that than what (to me, more (soi-disant) interested in social justice and what really matters, man) is the real interest of the article, to wit, sticking it to debt collectors. That's what you're focusing on, after all.
posted by kenko at 8:44 PM on January 26, 2010


Also "riffy," as anyone who genuinely believed that "charging interest for lending money" should be illegal would be asking for a very undemocratic world for the majority not born into wealth.

Usury is not just the charging of interest, that's a simplistic definition that is made of fail specifically ignores the heart of the matter.

Usury is the charging of exorbitant rates of interest, often above the legal/customary limit. Usury is about using wealth to abuse poor borrowers who may have little other options, not about preventing trade and commerce.

This is why payday loans with what amounts to an annual rate of 730% are decried as being usurious.
posted by Pirate-Bartender-Zombie-Monkey at 8:49 PM on January 26, 2010 [5 favorites]


I'm not particularly conflicted about this.

Me either, any more than I would be conflicted about supplying the Red Army in 1943.
posted by ROU_Xenophobe at 8:59 PM on January 26, 2010 [2 favorites]


Pirate-Bartender-Zombie-Monkey, I apparently missed the part of the article that indicated that the loans upon which Cunningham defaulted charged illegal rates of interest. This article is not about payday loans, and Cunningham was not particularly poor borrower.
posted by applemeat at 9:00 PM on January 26, 2010


I was focusing on the editorial slant of the article. Read the last sentence from that post, and see what "I came back to exclaim". This could be a perfectly good article from an angle of "disgruntled debtor fights fire with fire", or "here's an asshole fighting bigger assholes". I would have less of a problem if they simply left out the circumstances in which he acquired the debt, and focused on what he is doing now. But they made the decision to include that information, and blatantly editorialize it as if he were he had been a victim all. his. life. Kudos to him for fighting those assholes. This guy is a fucking dirtbag. The editorializing in this article is pathetic.
posted by qvantamon at 9:02 PM on January 26, 2010 [2 favorites]


Two wrongs, at a very attractive APR.
posted by pompomtom at 9:04 PM on January 26, 2010 [5 favorites]


Usury is about using wealth to abuse poor borrowers who may have little other options,

Amen.
posted by Moistener at 9:05 PM on January 26, 2010


Inspector.Gadget: "If only there were some sort of spherical structure one could place two opposing parties into, perhaps with various improvised weapons and a gaggle of drunken slobs in surrounding bleachers..."

No. Are you kidding? Why should they get to go to Burning Man for this?
posted by mullingitover at 9:09 PM on January 26, 2010 [3 favorites]


What credit card companies, payday loan companies, etc., do to consumers in the pursuit of exorbitant profit may or may not be usury, but it is most definitely immoral -- and it should be illegal.
posted by blucevalo at 9:14 PM on January 26, 2010 [2 favorites]


So, is he publishing a list of what the collection companies et al. are doing, and why it is wrong, and how much he is collecting?

Because a list like that, published for free online, would really be a great thing. Laws that exist to protect people might as well not exist if the people don't know about them.
posted by paisley henosis at 9:14 PM on January 26, 2010 [5 favorites]


mek:What saves them is that the poor are often unaware of their legal rights, and often allow them to be trampled. That, and the market is almost completely unregulated, so the worst that can happen is an out-of-court settlement - and thankfully the poor are cheap to buy. Of course, if you are near-bankruptcy you can't usually afford a legal defense.... so these sorts of settlements become a rare and minor cost of doing business.

If more people did this, you could bet that there would be some hardcore lobbying to gut whatever's left of the consumer bankruptcy system and return to the days of debtors prisons and workhouses.
posted by dr_dank at 9:19 PM on January 26, 2010


selton: I worry those people: in low paid, demeaning jobs. Who have no better opportunities than to be employed by scum, will lose their jobs for "costing the company $1,000".

Screw them. They're breaking the law in a way that harms people. I don't see why I should feel more sorry for them than I do for a mugger or purse-snatcher. They're just as likely to be victims of circumstance.
posted by Mitrovarr at 9:24 PM on January 26, 2010 [4 favorites]


Pirate-Bartender-Zombie-Monkey, I apparently missed the part of the article that indicated that the loans upon which Cunningham defaulted charged illegal rates of interest. This article is not about payday loans, and Cunningham was not particularly poor borrower.

"[W]hile stationed with the Army in El Paso, he attempted to become an absentee landlord and got zero-percent-down sub-prime mortgages to buy low-income four-plexes in Houston and Dallas."

Those zero-percent-down sub-prime mortgages are absolutely stuffed to the gills with corruption and fraud, specifically luring people in with low interest rates that balloon up later. That entire class of loans was predicated on loaning money to people who otherwise wouldn't qualify in order for the broker to make a commission on closing the deal. Then the debt was sold off to Wall Street and the original broker is out of the equation with their cut and doesn't care what happens.

If the banks and brokers were doing due diligence and not committing systemic fraud, he never would have been able to rack up $100,000 is debt for them to sicc their auto-dialing hellhounds on.

Robin Hood "the man" could have been a douchebag. But the person is less important than the legend. Because legends inspire movements.

And your definition of usury, independent from the particulars of this article, is still made of fail. Just saying.
posted by Pirate-Bartender-Zombie-Monkey at 9:37 PM on January 26, 2010 [4 favorites]


And your definition of usury, independent from the particulars of this article, is still made of fail.

Hey Aristotle, Thomas of Aquina, Dante: Your definition of usury is made of fail! Guess those guys aren't all in the seventh circle of hell, after all... suckers!
posted by qvantamon at 9:57 PM on January 26, 2010


For those of you against this guy's actions against the credit companies, let me ask you, who else is going to enforce the laws?

It's only people like this trying to game the system that will make credit collection companies stay within the law. Having a guy in Texas sue collection agencies to make sure they stay legal is a really cheap way to regulate the industry. There's no other way to easily keep this industry on their toes.

You can make an argue about his previous investments and how foolish they were, but the source of his debt has no bearing on his response to the illegal actions of the credit companies.
posted by amuseDetachment at 10:00 PM on January 26, 2010 [6 favorites]


Aristotle, Thomas Aquinas, and Dante didn't speak 21st century English where "usury" seldom means strictly "charging interest for lending money" but also implies "an excessive, predatory or illegal rate of interest." For many years in the previous century, anti-"usury" laws allowed for the charging of reasonable interest rates, but set caps on them. Don't set up a straw man that anyone decrying "usury" here objects to all lending at interest.
posted by tyllwin at 10:13 PM on January 26, 2010 [3 favorites]


This guy is an asshole. Yeah, credit collection agencies are awful and deserve to be sued if that's the only way to try to get them to follow the laws, but it's kind of hard to muster up any sympathy for someone who says he "doesn't believe that people are morally obligated to pay back their debts".

If he doesn't believe that he should honour his contracts, why should anyone else? He admits to using the system to reap the biggest benefit for himself re: his credit scores, but now it's everyone else's fault when he can't pay it back. If this was someone who had been duped into entering a high interest loan agreement they didn't understand, I'd be all for them. This guy appears to have known exactly what he was getting in to and is upset that his high-risk strategy turned to crap when the financial markets crashed.
posted by Kris10_b at 10:14 PM on January 26, 2010


those of you against this guy's actions against the credit companies

Again... where are all those people against this guy's actions against the credit companies?
posted by qvantamon at 10:16 PM on January 26, 2010


The thing is, what was decried was what "used to be called usury and it used to be illegal.". One of the definitions is still called usury, and is still illegal. The other one is Dante's definition.
posted by qvantamon at 10:20 PM on January 26, 2010


The thing is, what was decried was what "used to be called usury and it used to be illegal.". One of the definitions is still called usury, and is still illegal.

This is where you are mistaken. Since Marquette v. Omaha, there is no limit to interest rates in this country.
posted by enn at 10:41 PM on January 26, 2010 [2 favorites]


The important thing is: I've already guaranteed my spot in the seventh circle, by opening a savings account. And I've already mortgaged that spot (demand is going up on that area!). If that fucker Dante goes changing definitions on me, I'm defaulting on that shit.
posted by qvantamon at 10:52 PM on January 26, 2010


Cockroaches fucking cockroaches - doesn't that just give you more cockroaches?
posted by DreamerFi at 11:01 PM on January 26, 2010 [3 favorites]


If that fucker Dante goes changing definitions on me, I'm defaulting on that shit.

When your spot in Hell is worth less than the sins that got you there, you're upside down and it's best to just walk away. ;-)
posted by Pirate-Bartender-Zombie-Monkey at 11:08 PM on January 26, 2010 [5 favorites]


This guy appears to have known exactly what he was getting in to and is upset that his high-risk strategy turned to crap when the financial markets crashed.

Good thing he's not a bank then, or the taxpayer would already have bailed him out. Remember, the lenders chose to give him unsecured low cost credit, and mortgages secured on assests that everyone knew were going to collapse at some point. At what point do we assign some blame to the lender for failing to do their due dilligence and price in the risk of non-repayment, or in the case of the foreclosures, that the asset recovered would be worth substantially less than what they lent - and then come crying to us for help when the stream of easy profit dries up?

Is this guy a douchebag? Yes. Should he have the same consumer protections from fraudulent practices by debt collectors as the rest of us? Yes. Good on him.

FTA:

"A cottage industry has sprung up to counter the flood of cases. Two new companies now offer the credit and collection industries databases of repeat plaintiffs filing under the FDCPA. The companies, FDCPA Case Listing Service LLC and WebRecon, offer something akin to a background check for collection agencies. For example, if an agency received a delinquent account belonging to Cunningham, it could run his name through a database and learn he's a repeat litigant; then the agency could either close his account or sue him first."

Because people protecting their rights under the law are clearly terrorists and need to be watched carefully. If the debt collectors can't stay within the pitifully weak laws that protect consumers from aggressive, lying and fraudulent debt collectors, then to be blunt, fuck them.
posted by ArkhanJG at 11:09 PM on January 26, 2010 [9 favorites]


he fell enchanted by the siren's song of easy credit

mm, I hear the clank of the tin-ear combo from here
posted by mwhybark at 11:21 PM on January 26, 2010


This will do no good, because it's in self-interest. The capitalist lie is that self-interest improves the lives of everybody. I think it's pretty clear that's not true now. In this particular case, he'll keep going (and granting interviews like this one) until the companies involved roll their eyes, forgive the $100,000, and give him a little $50,000 settlement to shut him up. And he'll be happy to.

What we need is an actual Robin Hood. A dyed-in-the-wool socialist who's aware of the ideological damage that's being done. I don't know exactly what he'll look like, but I know one thing: he'll actually give to the poor.
posted by koeselitz at 11:26 PM on January 26, 2010 [4 favorites]


When your spot in Hell is worth less than the sins that got you there, you're upside down and it's best to just walk away. ;-)

Yeah, that's the Eighth Circle, Bolgia Three. Good thing I used all that mortgage money to buy a bishop title, then...
posted by qvantamon at 11:29 PM on January 26, 2010 [1 favorite]


If you borrow, pay it back.

If you're having trouble paying it back, negotiate terms to make it easier, and continue paying it back.

If the company won't play ball and sics a debt collection company on you that breaks the law when coming after you, by all means protect yourself (the good part of the article).

If you take high risks and lose your shirt, which causes you to not be able to pay your debts, then certainly protect yourself from bad collections agencies, but don't make yourself out as some kind of consumer hero, all the while claiming you have no moral obligation to pay your bills.

You do. It's called paying what you owe. Otherwise, it's called stealing.
posted by bwg at 11:58 PM on January 26, 2010 [2 favorites]


bwg: “If you take high risks and lose your shirt, which causes you to not be able to pay your debts, then certainly protect yourself from bad collections agencies, but don't make yourself out as some kind of consumer hero, all the while claiming you have no moral obligation to pay your bills. You do. It's called paying what you owe. Otherwise, it's called stealing.”

I agree that the particular person in the linked article is a jerk, and that he took silly and stupid risks purely because his eyes were full of the huge profit he could make; but this is rarely the case.

This fundamental premise of capitalism – that people should know how to be greedy and take care of their own money and buy their own stuff, and that if they don't know that stuff they are not worth anything as human beings – is horrendously untrue. Ignorance of finance is not a sin, and it shouldn't be a crime. Moreover, I think it's very, very hard to argue that there aren't 'predatory' lenders out there taking advantage of the poor in order to make as much money off of them as possible.

Robin Hood is a hero for a reason, and capitalist curmudgeons don't besmirch the beauty of the legend for me. Take from the rich and give to the poor. If we're afraid of doing this because we're concerned that it's criminal, we should have the government do it for us so that it's legal.
posted by koeselitz at 12:15 AM on January 27, 2010 [7 favorites]


And I think stealing isn't nearly as wrong as making people suffer and making people starve. There should be more stealing in our society, but we're cowards - and I have a feeling a time is coming when there will be a lot more of it. Given who's generally in charge now, I don't mind the prospect.
posted by koeselitz at 12:17 AM on January 27, 2010 [1 favorite]


hahaha, this is not a nice person but I love what he's doing.
posted by krautland at 1:56 AM on January 27, 2010


a very undemocratic world for the majority not born into wealth.

Sounds like an apt description of the world we all live in.
posted by Hickeystudio at 3:20 AM on January 27, 2010 [1 favorite]


Kudos to this fucking dirtbag.
posted by Phanx at 3:23 AM on January 27, 2010 [2 favorites]


Levy: You are amoral, are you not? You are feeding off the violence and the despair... You're stealing from those who themselves are stealing the lifeblood from our city. You are a parasite who leeches off--

Omar: Just like you, man.
posted by TheophileEscargot at 3:35 AM on January 27, 2010 [2 favorites]


Moistener: “It used to be called usury and it used to be illegal.”

applemeat: “Also "riffy," as anyone who genuinely believed that "charging interest for lending money" should be illegal would be asking for a very undemocratic world for the majority not born into wealth.”

That sounds more than a little odd - do you care to elaborate? Exactly how would believing that charging interest is wrong be asking for an undemocratic world? Please don't give me this Greenspanian nonsense that interest encourages the wealthy to hand money to the poor on the hope that they will make money out of the deal – I don't buy it, and anyway the whole point is that the system clearly doesn't work well under that method, right? So what is it that makes charging interest essential for democracy?

Lest you think that this is an academic question, I'll remind you that Muslims believe that charging interest is a sin, and refuse to do so. Muslim bank accounts and even retirement investment plans are available to them which take no part in charging interest. Are you saying that the system they've worked at building is inherently antidemocratic toward the poor?

I'm sorry if this sounds like a trolly question; Islam might very well be undemocratic, and there are plenty of cases where religion is not democratic at all. That's okay; I don't think Muslims would have a huge problem with that, so if you really think interest and democracy go hand in hand, please say so. It's only that I'm extremely skeptical at the point of the arguments I hear which seem to want to indicate that capitalism and democracy are inherently related, because as far as I can tell, they really, really aren't.
posted by koeselitz at 3:55 AM on January 27, 2010 [1 favorite]


Morality and ethics have no part in contract law. If you have a credit card account, you have a contract. Mortage? Contract. Car loan? Contract. A contract that spells out the entirety of the deal between you and the lender, net codified legal requirements. (Seriously, look for the "entirety" clause.) Your contract states that you can pay back the loan, or default.

Both options are covered in the contract. Your choice to pay back the loan, or default, is not a moral or ethical choice. It is simply a flowchart node. Anyone putting morals or ethics into a contract discussion is simply a tool, because the lender is going to completely ignore those morals or ethics to make the contract operate in its favour.

Morals and ethics are for human relationships. Not business deals; not for contracts.

Sorry for the derail, just sick of this "morality" shit.

Dude's definitely a douche, but he's a douche doing work that needs to be done: enforcing the contracts and the law.
posted by seanmpuckett at 4:21 AM on January 27, 2010 [9 favorites]


Robin Hood is a hero for a reason, and capitalist curmudgeons don't besmirch the beauty of the legend for me. Take from the rich and give to the poor. If we're afraid of doing this because we're concerned that it's criminal, we should have the government do it for us so that it's legal.

Wasn't Robin Hood taking from the government agent and giving to the people whom that government agent was overtaxing? What is the sound effect for curmudgeons? Can I use the word curmudgeon? I curmudgeon you!
posted by prefpara at 4:53 AM on January 27, 2010 [2 favorites]


Morals and ethics are for human relationships. Not business deals; not for contracts.

Um. The Courts of Equity would like a word with you. There is a specific body of law that is primarily guided by morals and ethics. They grant, among other things, amendment and rescission of contracts. Primarily when said contract is unconscionable, which can arise when there's a power disparity between the signers of the contract. One explanation of the tenets of equity is on page 12 of this book - most people have heard of "no right without a remedy". That's equity.

Sorry to continue this derail, and I'm not ragging on you directly seanmpuckett, but for people to believe that courts are these mechanical beasts following the letter of the law, never caring about what is fair, is both wrong and sad. Equitable courts are the closest thing to a conscience that this country has. Don't knock them.
posted by Lemurrhea at 4:56 AM on January 27, 2010 [1 favorite]


Inspector.Gadget: If only there were some sort of spherical structure one could place two opposing parties into, perhaps with various improvised weapons and a gaggle of drunken slobs in surrounding bleachers...

Come on, can't we just get beyond Thunderdome?
posted by fireoyster at 5:05 AM on January 27, 2010 [1 favorite]


Dude's definitely a douche, but he's a douche doing work that needs to be done: enforcing the contracts and the law.

Unfortunately, that's what it's come to in our society. When arbitration, a common tool in contracts, goes from "rather than waste the court's time, we'll use an objective third party to negotiate contract disputes" to "rather than embarrass ourselves, we'll use a third party favorable to our interest to hide or deny civil or criminal wrongdoing", contracts have failed.

Contracts, for the last few decades, haven't been used to ensure that both sides have explicitly codified their responsibility to each other. Contracts between provider and customer are obviously there to give the provider as many rights and benefits over a customer as possible, at the expense of the customer. Contracts between employer and employee are obviously there to give the employer as many rights and benefits over an employee as possible, at the expense of the employee. Most of the time, contracts are drafted only by one party and forced onto the other parties - end-user license agreements, in which just peeling back a label or taking off shrink wrap suddenly means you're now subject to the contract contained therein, is a great example. Service agreements, which one party can change at will without requiring the consent of the other party, are another example. In such situations, customers and employees have had to use state and federal law to protect their own interests - in many cases, state and federal laws drafted in part by the very folks who generated the contracts.

As soon as a customer or employee starts using such legal means to defend against the illegal practices of middleman enforcers for such contracts, suddenly he or she is a "radical enemy?"
posted by FormlessOne at 5:06 AM on January 27, 2010 [7 favorites]


Since I moved into my house four years ago, I've been getting regular auto-dial calls from a collections agency. The person from whom they are trying to collect is not someone I know, is not someone who currently lives in this house, and is certainly not me. Is there any way I can turn the situation to my advantage?
posted by Faint of Butt at 5:13 AM on January 27, 2010


Equitable courts are the closest thing to a conscience that this country has. Don't knock them.

And, thanks to arbitration clauses, chances are you (as an individual) will never see one. Sure, businesses use them on a regular basis - but individuals have had their equitable rights slowly removed from under them by, among other things, forced arbitration.
posted by FormlessOne at 5:16 AM on January 27, 2010 [4 favorites]


The major deciding principle of contract dispute isn't "ethics", it's "restoration." In other words, if someone fucks someone else, if it gets as far as court, the judge will seek to unfuck the fuckee -- unfuck according to the letter of the contract. Set things right, as it were. Where right is defined by the terms of the contract. Of course, often when one has been fucked, an unfucking doesn't really help all that much. It's not a second kick in the face, but you'd really rather not have the first and that's not an option.

Anyway, I'm not talking about contract VIOLATIONS here. I'm talking about OBEYING the contract -- the clause that speaks to default. That's not a violation of contract, and doesn't have anything to do with restoration or with equitability.
posted by seanmpuckett at 5:55 AM on January 27, 2010 [1 favorite]


The bit at the very end about getting countersued for acting like a lawyer, by giving legal advices to others (I presume), is interesting given some of the MetaTalk threads here.
posted by smackfu at 5:59 AM on January 27, 2010


Laws that exist to protect people might as well not exist if the people don't know about them.

It probably doesn't even matter. The loopholes in the law that this guy is exploiting will soon be closed, as soon as the collection agency lobbyists start applying the pressure.
posted by notswedish at 6:02 AM on January 27, 2010


The debt collectors know they break the law, they do it because it makes people pay them. If a guy sitting in a dilapidated house in his bathrobe sues them for a couple of thousand, it's just the cost of doing business.

This article has no sympathetic character in it, and I think that we react negatively to that. Cunningham is just one of those "I'm too smart for my pants" guys who worked the system. The system sucks because they should have been reticent to lend money under those circumstance, and they did anyway. The collectors are bottom-feeders and always have been. Who loses in these scenarios? Somehow I think I do, but I can't exactly put my finger on it.

It has something to do with real estate speculation, my own mortgage and home value, foreclosure, job loss, bail-out and fat cats on Wall Street getting big bonuses. Wait....no, thought I had it, but then I lost it.
posted by Ruthless Bunny at 6:21 AM on January 27, 2010 [1 favorite]


One way we might resolve this question of Craig Cunningham's character would be to ask ourselves: Would I play D&D with him?

For my part, after reading this article, I'd say yes.
posted by wobh at 6:32 AM on January 27, 2010 [2 favorites]


I'd find it a lot easier to sympathize with the guy if he could be bothered to keep up his yard.
posted by banwa at 6:42 AM on January 27, 2010 [1 favorite]


HERO This post needs the Hero tag. People pay unjust bills because credit score has become so important; even some employers use it to assess employees. Big corporations have stupid, rigid procedures that make correcting bills very difficult. They sell the bill to a collection agency that will lie and harass. Screw them.

Anecdote filter: I'm nearly done waiting 7 years for a bogus Worlcom/Verizon charge to scroll off my credit report. The Verizon rep told me "There's no way to get into the system to correct it - call the FCC and file a claim." right.

When I had a land line and white pages listing, I got lots of collection calls for another T. Fifty-five, including a company that robo-called daily, and reps who harassed me and accused me of lying. Screw them. I'm sorry I didn't take them to court and collect.

The Consumerist is fantastic; they're doing the job that the Consumer Affairs Division should be doing. HERO tag for them, too.
posted by theora55 at 6:59 AM on January 27, 2010


Some days I feel like such a schmuck for not becoming an investor or a landlord, keeping my charge cards paid off, and for just holding a job and paying down our mortgage, instead of living large.

seanmpuckett: Morality and ethics have no part in contract law.

I've seen this argument in several guises, most recently from someone trying to defend the selling of derivatives, CDOs and other financial abstractions. Their argument was that if you can do something "legally" (eg under a legal contract), then it's A-OK. Even if said action caused the whole house of cards to fall as it recently has.

My comeback to that is that at the root, laws are a society's attempts to capture what is agreed to be mutually beneficial behaviour in a set of rules to enforce said behaviour, mostly by punishing behaviour that goes against the agreed path.

Everyone knows that there's no way that every single citizen can be effectively policed to ensure compliance. The reason things work as well as they do is because MOST PEOPLE will act ethically.

So to the broker who knowingly sells a risky investment to an unsophisticated buyer, or to a mortgage lender who gives a sub-prime mortgage to an unqualified borrower, and neither feel a moral/ethical obligation... i would like to respectfully point out that the thing that keeps me from running your Lexus off the road on the way back to the Hamptons, blowing your head off with a shotgun, and grabbing your Rolex is a little thing I like to call morality.(with a healthy dose of fear of anarchy) (and a dislike of Rolexes)

So, to those businessmen, if ethics and morality have no part in your business, better lock those doors then.
posted by Artful Codger at 7:03 AM on January 27, 2010 [3 favorites]


I find it fascinating that the moralizing commenters on the blue will, time and time again, focus on the supposed moral failings of the individual profiled in this article, rather than the much, much more fascinating point of the story - collection agencies are systemically breaking the law in their recovery of debt and a group of people is fighting back. That's frickin' awesome.
posted by RajahKing at 7:03 AM on January 27, 2010 [8 favorites]


One way we might resolve this question of Craig Cunningham's character would be to ask ourselves: Would I play D&D with him?
posted by wobh


Only if the dude stays out of jail.
posted by haveanicesummer at 7:08 AM on January 27, 2010


I agree with RajahKing. You don't have to like this guy to like his exposing the illegal practices of debt collection.
posted by Mister_A at 7:14 AM on January 27, 2010


Debt collectors belong in the eighth circle. They are th lowest form of business vermin around feeding off of the poor and disenfranchised. As stated in the article, nearly every debt collection attempt violates the law yet these vultures are allowed to continue their harassment. Good for Cunningham. I hope he wins the $200,000, plus costs. All the moralizers here have probably never worked with anyone in serious debt being hounded by the debt collectors. They probably do not also realize that more well to do debtors, see yesterday's real estate post, routinely walk away from bad investments. Many of the creditors are nearly as bad as the debt collectors, extending high interest credit to people who re surely bad risks. They make money when those people are behind on their credit. They count on it for profit. Cunningham is perhaps no Robin Hood, but his enemies are not walking the moral high ground either. When an industry, like debt collection, is essentially based upon breaking the law then people like Cunningham do everyone a service by punishing them for their wrong doing. State attorney generals are falling down on the job, and perhaps it is because so many sops side with the moralizers in this thread.
posted by caddis at 7:19 AM on January 27, 2010 [1 favorite]


Rajahking, caddis, for sure you're right that debt-collection is an ugly, abusive game. It's just ONE part of the system, though. Less people led into debt would mean less debt collection.

I guess I'm just sad that the most effective means of outing a criminal system is another criminal.
posted by Artful Codger at 7:34 AM on January 27, 2010


I guess I'm just sad that the most effective means of outing a criminal system is another criminal.

black hat to white hat? hey, however they rehab, I'm ok with it.
posted by toodleydoodley at 8:19 AM on January 27, 2010


collection agencies are systemically breaking the law in their recovery of debt and a group of people is fighting back. That's frickin' awesome.

Seriously. Debt collectors lie, harass, commit fraud, and destroy people's lives. (See, for example, the massive fraud in New York, where debt collectors and their process servers didn't serve defendants in consumer debt cases but filed false affidavits of service, leading to thousands of bogus default judgments.)

Debt collection issues are a regular part of my practice. This guy may be a douchebag, but he's fighting against the people who freeze bank accounts containing disability and social security checks, making it impossible for old, sick people to pay rent and buy food. He's fighting against the industry that gave credit cards to people with $700 a month in income, and then harass them to pay back their debt when they can barely afford food.

I've had clients who became suicidal at the pressure placed on them by collection agencies--and these are clients whose only income cannot be touched by collection agencies or courts. They're judgment-proof, but the collection agencies never tell them that, never take them off their harassment list, never give them a moment's peace. My clients have no idea they don't have to pay and have no idea they can make the calls stop.

This guy isn't an angel, but fuck the credit card companies and fuck the debt collection agencies.
posted by Mavri at 8:35 AM on January 27, 2010 [3 favorites]


I guess I'm just sad that the most effective means of outing a criminal system is another criminal.

He may be a creep, but I don't see anything criminal in the article. And, quite frankly, it might take a creep to do what he does. A lot of people just aren't going to have the motivation for learning these laws, keeping meticulous records, and representing yourself in lawsuits. His motivation comes from desperation (of his own making), spite, and vindictiveness. That's fine with me. Most of my clients who are confronted with problems like this are just too beaten down to do anything like this on their own. I think more people here would be sympathetic to someone filing these lawsuits if their debt had been accrued in a less offensive manner, but a lot of those people just aren't going to have the time or the fire to do anything like this.
posted by Mavri at 8:40 AM on January 27, 2010


At least your clients don't give your number to their debt collectors like mine do. I get like six robocalls a day at my work number from an attorney who sounds exactly like Harry Shearer. It cracked me up at first...and then...it didn't...stop. It's been almost a year now.
posted by The Straightener at 8:42 AM on January 27, 2010


And I think stealing isn't nearly as wrong as making people suffer and making people starve. There should be more stealing in our society, but we're cowards - and I have a feeling a time is coming when there will be a lot more of it. Given who's generally in charge now, I don't mind the prospect.

Our house got broken into a few months ago. Last I checked, we're not "in charge" of anything. I think you'll find the rich and powerful are very very rarely the victims in these kinds of crimes.
posted by kmz at 8:44 AM on January 27, 2010


Guy Fawkes, Robin Hood, whatever. This guy is nothing more than debt-collection QA. Sad, but I'm rooting for him, I guess.

Otherwise, it's called stealing.

No, it's not. It's called borrowing money and being unable or unwilling to pay it back. I know you can tell the difference.

Cunningham is just one of those "I'm too smart for my pants" guys who worked the system.

I'm pretty sure if he was too smart for his pants, he wouldn't be in this situation. There are easier ways of making it.

Ignorance of finance is not a sin, and it shouldn't be a crime.

Repeated for truth, but tell it to the IRS (I mean, seriously, call you tell the IRS that for me?)
posted by mrgrimm at 8:59 AM on January 27, 2010


I sort of look at this as a guy committing vandalism; spray-painting walls, shitting on doorsteps, breaking windows... All things I generally disapprove of and would condemn. But, in this particular metaphorical instance, since the building that he vandalizing is dedicated to strangling puppies, I have to acknowledge that I don't condone his actions, but if it makes those fucking people in the building a little more miserable, I'm willing to look the other way.
posted by quin at 9:12 AM on January 27, 2010 [1 favorite]


This guy is nothing more than debt-collection QA.

Isn't that an oxymoron?
posted by blucevalo at 9:29 AM on January 27, 2010


Otherwise, it's called stealing.

No, it's not. It's called borrowing money and being unable or unwilling to pay it back. I know you can tell the difference.


Unable is one thing, but unwilling? It seems like borrowing money and being unwilling to give it back is pretty much stealing, plain and simple.

The power that debt collection agencies have to fuck you over is frightening, even (or especially) if you don't actually have a legal obligation to pay. When I hear stories of people who are wrongly pursued for debts they've already paid off, or debts that have been forgiven through bankruptcy, or debts they never owed in the first place because the stupid company has them confused with someone else and won't take their word for it that they're who they say they are...well, it's scary. My own brief run-ins with a debt collection company were a case of mistaken identity where they were calling my home and work and asking for someone I'd never heard of, and even that was enough to make me jittery about answering the phone. I'm glad that these low-lifes are being forced to follow the letter of the law.

This guy was definitely gaming the system as hard as he could. This isn't some unsophisticated buyer who bought more house than he could really afford because he was confused by temporarily low interest rates. As far as I'm concerned, he's on the side of the angels when it comes to his fight against predatory collection agencies, but his way of making money during the boom years is just gross to me.

(This is why I will never be rich, I guess.)
posted by Salieri at 9:30 AM on January 27, 2010 [1 favorite]


"I never even thought about it". I think this is the core of his issue. I don't like the guy, I think he was wrong to take on all this debt in the first place.

However, I think taking on the debt collection agencies is a good thing, I just think he's in it only for himself and will still be in the same situation in 10 years time thanks to another get rich quick scheme.

My feeling is, you incur a debt, you pay it off. It's the right thing to do, that goes for the banks as well. Ignorance of the hole you're digging yourself into is not an excuse.
posted by arcticseal at 9:58 AM on January 27, 2010


Great post. Thanks, Kadin.
posted by zennie at 10:46 AM on January 27, 2010


I can't decide whether this guy is Batman or the Punisher.
posted by localroger at 12:20 PM on January 27, 2010


Muslim bank accounts and even retirement investment plans are available to them which take no part in charging interest.

Sharia-compliant banks make their money in other ways. That something is not nominally interest doesn't mean borrowers aren't paying to borrow capital.
posted by Inspector.Gadget at 12:47 PM on January 27, 2010


Cunningham, a high school athlete, dreamed of making millions playing pro football, but he was accepted to U.S. Military Academy at West Point, where a degree would give him a more grounded back-up plan. The economics major also sought out an additional perk unique to West Point: stipends and absurdly low-interest loans. In his junior year, in 2002, Cunningham took out the maximum amount for a loan and dumped the $25,000 into the booming stock market.

I like that he complains about other folks working the government teat.
posted by IndigoJones at 2:38 PM on January 27, 2010


there was a great interview with steve randy waldman recently; the whole thing is worth reading, but here's a particularly relevant section :P
Mortgage Calculator: You have written recently about the issue of “strategic default,” and garnered a fair bit of attention in the process. Can you summarize your position on this issue for the benefit of my readers. Is it fair to say that you believe that borrowers should weigh this decision primarily from a financial – rather than moral – standpoint?

I think that the moral thing for most borrowers to do, under present circumstances, is to default on loans when it is in their financial interest to do so.

Much of my thinking on economic and social issues comes back to T.S. Elliot’s proposition, “It is impossible to design a system so perfect that no one needs to be good.” Once upon a time, I chose to disagree. I thought it was the challenge of our day, and the grand project of modern economics, to build a system in which people pursuing their own self-interest would provide all social goods, in which the benevolent invisible hand would rule all and we’d have no need to rely upon ideas as shifty and manipulable as “virtue”. I have done a full 180 on this question. Economic self-interest and formal legal frameworks are simply insufficient to regulate a decent society. Elliot was right.

But it’s crucial to remember that “what is moral” is something we collectively decide, and not without constraints. A social order that routinely demands heroic sacrifice of people in the name of virtue will fail. Clever hypocrites will be rewarded while naive saints pay, and the overall tenor of society will not be virtuous. The most we can demand of fuzzy constructs like morality and social norms is what Arnold Kling calls “soft rule utilitarianism”, under which people accept modest personal costs on the theory that if everybody does so, we’ll all better off. But emphasis on the word “modest”, and expectations of reciprocity. Economic and legal scaffolding has to sit beneath informal social constraints so that in general it makes sense to be good. It is like the relationship between flesh and bone: You could not build anything as beautiful as a smile out of bone, but the smile will not survive if the jaw beneath is fractured and misshapen. We regulate the “bone structure” of our society explicitly via legal arrangements, and more subtly, via social and reputational incentives. There’s a kind of hygiene we have to attend to, in order to ensure that doing well and being good are not terribly inconsistent. Over the past few decades we’ve failed to attend to that hygiene, in large part I think because we let simplistic economic ideas persuade us that we didn’t have to, and that the pursuit of wealth yields virtue automatically and dirty is the new clean.

Whatever the reason, we find ourselves disillusioned. People in the financial industry earned huge sums making loans that shouldn’t have been made, offering “affordability products”, Orwellian slang for means of selling homes at unreasonable prices that buyers could not afford. They failed to perform the core social duty of creditors, which is to make prudent judgments about whether loans are likely to be in the mutual interest of borrower and lender over the full term of the debt. Once originators could resell loans, once the financial industry adopted practices of paying cash commissions and bonuses at the time of origination, once we had severed the nexus between the self-interest of the people making lending decisions and the long-term interest of borrowers, it was inevitable that bad loans would be made. So they were. Now that those bad loans are doing what bad loans do, lenders have suddenly found religion, and argue that the moral fabric of our society would be riven if homeowners behaved like, um, bankers. I think that under the circumstances, quite the opposite is true.

The financial industry has changed the economic and legal landscape surrounding consumer lending so that it simply bears no resemblance at all to interpersonal loans among people of good will in continuing relationships. But those are the norms they ask borrowers to adopt with respect to repayment. That act, demanding others act in accordance with standards from which one exempts oneself, is morally offensive. In a society which, despite economic difference, accepts no social class, ones moral obligation is to behave towards others as others must behave towards you. It is clear that, in general, banks and the special purpose entities that increasingly replace them treat their transactions with borrowers as hard-nosed business arrangements which they are willing to pursue on adversarial terms when doing so is in their interest. Borrowers should do the same. To do otherwise is to reward the cynical immorality of others, which serves no social good.

We might (or might not) wish to revise the norms surrounding bank loans to resemble those surrounding interpersonal lending. But that would be a forward-looking project, and would imply radically altering the behavior of future lenders, not simply exhorting borrowers to assume all responsibility and pay.
cheers!
posted by kliuless at 1:23 PM on January 28, 2010 [3 favorites]


« Older On the rapid proliferation of powerful chess...   |   Trusting the FOX Newer »


This thread has been archived and is closed to new comments



Post