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October 1, 2014 9:34 AM   Subscribe

Rodney Durham stopped working in 1991, declared bankruptcy and lives on Social Security. Nonetheless, Wells Fargo lent him $15,197 to buy a used Mitsubishi sedan. “I am not sure how I got the loan,” Mr. Durham, age 60, said.

Mr. Durham’s application said that he made $35,000 as a technician at Lourdes Hospital in Binghamton, N.Y., according to a copy of the loan document. But he says he told the dealer he hadn’t worked at the hospital for more than three decades. Now, after months of Wells Fargo pressing him over missed payments, the bank has repossessed his car.
_______________

The thermometer showed a 103.5-degree fever, and her 10-year-old’s asthma was flaring up. Mary Bolender, who lives in Las Vegas, needed to get her daughter to an emergency room, but her 2005 Chrysler van would not start. The cause was not a mechanical problem — it was her lender.

_______________

This is the face of the new subprime boom.

More on subprime auto loans from Forbes, Quartz and a series of bubble-denial articles in the Washington Post.
posted by Potomac Avenue (69 comments total) 29 users marked this as a favorite
 
This is some Dickensian shit. I sent this to my dad, who's a bankruptcy lawyer, a few days ago, and he had this to say:
Note that the main users identified were credit unions, supposedly the home of warm and fuzzy lending. BS. They are more ruthless than banks by far.

And if the need for the shut off device as mentioned early in the shopping, people would walk away or buy a cheaper car. But you know it gets thrown in at the end as an inconsequential clause in the purchase contract by a sales person wanting to close and get the commission.

It clearly is tortious to kill a car if the payments are current too. Some class action lawyer is going to make a bunch of money, but the actually in default people have a much harder case to make.
posted by Aizkolari at 9:38 AM on October 1, 2014 [31 favorites]


Wow. These are an obvious public safety hazard and should be banned as such.
posted by graymouser at 9:43 AM on October 1, 2014 [4 favorites]




I see a market for somebody skilled enough to disable those starter interrupters.
posted by MartinWisse at 9:45 AM on October 1, 2014 [12 favorites]


Snatçhing back cars that were not being paid for used to be done by Repo men...this is simply an upgrade, eliminating a human, as is now customary, and perhaps also making repossession quicker and cheaper.
If you rent in a building you own, rent or sell cars, etc., do you believe you as lender, seller should have some recourse for what is owed you?
posted by Postroad at 9:52 AM on October 1, 2014 [5 favorites]


This makes me so glad I own my car outright...and that I don't bank with Wells Fargo. (The one foreclosure in my neighborhood was pressed by Wells Fargo, and the people wouldn't talk to her and wouldn't talk to her and wouldn't talk to her.)
posted by Tailkinker to-Ennien at 9:53 AM on October 1, 2014 [1 favorite]


I get that there is and may continue to be a need for payday loans for the foreseeable future but these predatory subprime house and car loans should be made illegal. Oh, wait, campaign contributions. Subprimes won't ever be banned. Never mind.
posted by fuse theorem at 9:54 AM on October 1, 2014 [5 favorites]


Coming soon to prosthetic limbs and transplanted organs!
posted by blue_beetle at 9:55 AM on October 1, 2014 [25 favorites]


540/ month for a car? 24% Predatory lending, and Congress doesn't even begin to care, because those people are, duh, not wealthy. This shit makes me so angry.
posted by theora55 at 9:57 AM on October 1, 2014 [27 favorites]


Funny story! We had one of those loans, like, 10 years ago or something? Something like that. Anyway, we had one of those sub-prime loans for the car with a remote shutoff. We forgot a payment. They shut it off. Suddenly the car wouldn't start and I was stuck in a parking lot somewhere.

We didn’t realize what had happened and had it towed to a mechanic. He said “there was a problem with your remote starter, it was keeping the car from starting.” We said “we didn’t know we had a remote starter.” He said, “Well, you did! I disconnected it and the car works fine now!” “Thanks!” It was a cheap repair, and we shrugged about the mystery “remote starter."

Eventually the loan company got ahold of us by phone to dun us for the missed payment and we said “oh crap! Sorry about that! Here’s your money!” — we paid up and everything was fine. They told us they had remotely disabled the car and we had no idea what they were talking about, we said it the remote disable must not have worked. It was only later on we made the connection to the “repair” of the “malfunctioning remote starter."

Luckily we did have the money available and nobody, like, died of an asthma attack because they couldn't get to the hospital, that time. That would have made the story way less funny. In fact there are a whole lot of ways that story could have been way less funny.
posted by edheil at 9:59 AM on October 1, 2014 [96 favorites]


It's a distinctly American thing for someone to think "the poor can't afford cars; what should we do?" and then conclude "ahh, we must lend them cars through draconian schemes" instead of "we must remove the conditions that make car ownership compulsory."

Like, I get that this is theoretically helping people break out of that catch-22 where being too poor to afford a car means that you can't get a job that could help you not be poor anymore. But it's just one more "fix" duct-taped onto the grotesque Rube Goldberg machine that has unfolded from the tragic urban planning decisions we've made in the last century.
posted by savetheclocktower at 10:05 AM on October 1, 2014 [95 favorites]


The worst part is that investors are hungry for these subprime loans and are actually driving banks to push them on unsuspecting poor people. Whatever investors can fuck up, they will.
posted by grumpybear69 at 10:12 AM on October 1, 2014 [9 favorites]


Snatçhing back cars that were not being paid for used to be done by Repo men...this is simply an upgrade, eliminating a human, as is now customary, and perhaps also making repossession quicker and cheaper.
If you rent in a building you own, rent or sell cars, etc., do you believe you as lender, seller should have some recourse for what is owed you?


Did you read the fucking article? It's about people having cars disabled for late payments, not situations where a repo man would ordinarily be called. You're a day late, boom, car starter is killed. Frankly, no, lenders should not have that level of recourse. Being poor doesn't mean a bank should manage your life.
posted by graymouser at 10:13 AM on October 1, 2014 [69 favorites]


It's not like those without money are people, right? I mean, come on!
posted by blue_beetle at 10:21 AM on October 1, 2014 [2 favorites]


In case anyone wants to read more — it's a few years old, but unfortunately still relevant: Gary Rivlin's Broke, USA is a great read on this and assorted other similar poverty-profiteering schemes.

This current boom in "buy here, pay here" and other kinds of exploitation lending is one of those subjects that doesn't get enough reporting, I think, partly because it doesn't tend to affect reporters or people they know; there's a kind of social invisibility about it, where it seems unfortunate but also more remote than it should.
posted by RogerB at 10:27 AM on October 1, 2014 [4 favorites]


When I'm late on my mortgage I can't go home and I have to stay on a friend's sofa, so this makes perfect sense to me.

No, wait....
posted by anotherpanacea at 10:31 AM on October 1, 2014 [4 favorites]


And, like payday loans, these loans are deliberately structured to maximize the chance of failure -- they want the buyer to miss a payment, so that they can pile on fees, so that they default, so that they can resell the car to another victim once they have extracted all available worth from the first victim.
posted by tavella at 10:35 AM on October 1, 2014 [35 favorites]


I wonder if, when self-driving cars become mainstream, they'll be designed to drive themselves to a holding area instead of just shutting off.
posted by Sangermaine at 10:38 AM on October 1, 2014 [8 favorites]


Payment records show that Ms. Bolender, the Las Vegas mother with the sick daughter, was not in default in any of the four instances her ignition was disabled this year.

PassTime and the other manufacturers say they ensure that their devices comply with state laws. C.A.G. declined to comment on Ms. Bolender’s experiences.


"We would never disable a car unless payments were 30 days late!"

"here is an instance where no payments were ever late, not once, and you almost killed a child."

"NO COMMENT LA LA LA"

Also, pretty gross that a NYT Pick in the comments begins with "Funny how they never have the payment, but they always have money for a lawyer."

You know what I think is funny? The fact that CAG claims it is not possible for their devices to shut off a car while it is running, and yet they paid a settlement to the woman who almost died when it happened to her. Oh wait, not funny. HORRIFYING.
posted by a fiendish thingy at 10:39 AM on October 1, 2014 [39 favorites]


Historically there would have been a bloody revolution in this nation by now. But the 1% have studied their history and figured out how to keep the poor -and now the middle class - docile and living a life resembling one of wealth while ensuring a penniless death - easy credit.
posted by any major dude at 10:45 AM on October 1, 2014 [4 favorites]


When I'm late on my mortgage I can't go home and I have to stay on a friend's sofa, so this makes perfect sense to me. No, wait....
- posted by anotherpanacea


Electric locks could easily be fitted to houses, don't give them ideas.
posted by Lanark at 10:45 AM on October 1, 2014 [9 favorites]


What happens if you get one of these subprime loans to pay for your heart surg
posted by orme at 10:46 AM on October 1, 2014 [19 favorites]


Fuck all of this.
posted by popcassady at 10:46 AM on October 1, 2014 [8 favorites]


The problem isn't really the ability to remotely disable the car, exactly, it's that it's as easy as flipping a switch. With the traditional repo-man model, the bank has the cost of the repo-man, storing the car, and then selling the car (often at a loss) so it's something they put off as long as they reasonably can. Instead, you get phone calls and letters for weeks or even months or they'll try and restructure the loan. I wouldn't be surprised if some lenders will pay defaulted borrowers to surrender the car voluntarily. Either way, it should come as no surprise to the borrowers when they wake up some morning and their car is gone, they'll have gotten several letters letting them know that they need to get the loan out of default or they'll be coming to take the car back.

If the followed the same process of phone calls and letters telling the borrowers, "Hey, you need to make your payments or we're going to remotely turn off your car." I wouldn't feel all that much sympathy for them. The predatory interest rates are mostly a separate issue.


The solution to Mr. Durham's problem from the first link is pretty simple. Just extend the Qualified Mortgage (QM) and Ability to Repay (ATR) rules to any secured lending, not just mortgages.

There are a lot of echos of the problems that led to the housing bubble. The recession drove used car values up since they are a cheaper substitute product for New Cars and the costs of recovering the asset have gotten driven down mirroring the ever appreciating home values that caused the cost of defaulting mortgages down/negative.

If a bank wants to be able to bundle their loans up into CDO's they have some very stringent and thorough requirements on how the applicant's income should be calculated and how they need to document that income. They can certainly ignore those requirements but then they have to own those loans and if they write a bunch of bad loans banking on the underlying assets to have sufficient value to return a profit and that falls through, it will sink the bank and the larger banks are subject to enough systematic risk that they just won't do that.

Before QM/ATR, the theory was that people usually won't apply for loans that they can't afford and that's their problem so, from the bank's end, all they really need to do is decide how thoroughly they need to document the applicant's income to protect themselves. When the value of a loan that will default and the value of a loan that gets paid as agreed are about the same, the answer is, "Not f-ing much" to "none at all." The attitude became, if the borrower couldn't afford the loan, they shouldn't have applied for it.

QM/ATR gets talked about like the CFPB is forcing the bank's to protect customers from themselves and that is one of the goals. Really though, it's just a move that ensures that the value of the CDO is based ONLY on the present value of the future payments rather than the present value of the future payments AND some estimation of the value of the collateral against the risk of default.

I work for a BIG bank as one of the people in charge of enforcing the QM/ATR rules and I can tell you first hand that the QM/ATR rules seem to be doing what they're supposed to. The only caveat to that is that the bank I work for tries really hard to be more stringent internally than any of the various external regulatory bodies that audit us.
posted by VTX at 10:50 AM on October 1, 2014 [20 favorites]




Note that the main users identified were credit unions, supposedly the home of warm and fuzzy lending. BS. They are more ruthless than banks by far.

That's really interesting... I've had nothing but great experiences with my credit union, including three car loans and a home loan, and they routinely waive check holds without my even asking, for checks as big as $50,000, and seem to go out of their way to help in every way... but I've never gotten behind in payments on anything, so who knows...
posted by Huck500 at 11:15 AM on October 1, 2014 [3 favorites]


I see a market for somebody skilled enough to disable those starter interrupters.

"While his date turned the ignition switch, Mr. Fabela used a screwdriver to rig the starter, allowing him to bypass the starter interruption device."

yeah, a lousy screwdriver ...

but what really worries me is what happens if someone should hack into one of these systems and turns everyone's car off? - we all know how security conscious corporations are, especially the fly by night ones
posted by pyramid termite at 11:18 AM on October 1, 2014 [7 favorites]


These sub-prime car dealerships expect to repossess most of the cars. That's why they focus on making it easy to track and repo or kill the cars. They make almost all their money on the down payments. If they don't get the car back easily when someone stops making payments, that kills their profit.
posted by smackfu at 11:30 AM on October 1, 2014 [2 favorites]


I'm familiar with a bankruptcy lawyer who tells people to get their money the fuck out of a credit union, and put it in a bank, when they declare bankruptcy, so maybe there's something to the "credit unions are ruthless with debtors" thing.
posted by edheil at 11:33 AM on October 1, 2014 [3 favorites]


but what really worries me is what happens if someone should hack into one of these systems and turns everyone's car off? - we all know how security conscious corporations are, especially the fly by night ones

This is basically the BSG miniseries, right? As if this whole thing weren't awful enough as is (and it really is), we're also being set up for even more trouble once the machines become self-aware.
posted by Mrs. Pterodactyl at 11:39 AM on October 1, 2014


any major dude:But the 1% have studied their history and figured out how to keep the poor -and now the middle class - docile and living a life resembling one of wealth while ensuring a penniless death - easy credit.

Easy credit is only one part of the picture. Falling wages have taken a big bite out of the buying power of the average american. Hang around old folks long enough and they'll tell you how they paid for their house in cash, cars paid for upfront, etcetera. Apart from the well to do, nobody has hundreds of thousands of dollars to buy a house with. Some are lucky to buy a car outright. Money went further in those days.
posted by dr_dank at 11:50 AM on October 1, 2014 [4 favorites]


Is this any different than mortgage lenders being entitled to remotely access your home's door locks in case of a late mortgage payment?

Same thing, right? Wonder why that doesn't happen?

Maybe because subprime borrowers lack the means and the political influence to defend themselves against it.
posted by stupidsexyFlanders at 11:52 AM on October 1, 2014 [1 favorite]


I will merely say this: in the bankruptcy of my parents, the only creditor who gave us any real trouble has been a credit union, and they have been scorched earth ruthless about everything. I do not know if this is structural (like the QM/ATR stuff) or cultural. Certainly they were all too forgiving pre-bankruptcy, letting my dad roll over a personal loan month after month after month, which helped conceal other debt problems leading to the default. But when we came to them with my dad's diagnosis of cognitive impairment, they flat-out refused to help us, customers of three decades' standing, with any sort of forbearance or restructuring.

Wonder why that doesn't happen?

The major difference here is that cars depreciate in value much faster than homes. Banks can always take back the home and -- pre-crisis, anyway -- have confidence they would be able to sell it for more than the deficiency. Car loans were almost always upside-down, though, because the car drops thousands of dollars in value the moment you drive it off the lot.
posted by dhartung at 11:59 AM on October 1, 2014 [3 favorites]


Recently I started hearing ads on the radio from the credit union I belong to (a fairly small one) for no-money-down mortgage loans, including jumbo loans. It was like a flashback to the housing bubble. I realize they may have really strict requirements for one of those loans, but how any financial institution can offer those sorts of deals after all that has gone on is a complete mystery to me. They should just put a fast-talking disclaimer on the end that says "we will be the source of the next financial crisis".

Needless to say, I am seriously reconsidering having an account there.
posted by CosmicRayCharles at 12:21 PM on October 1, 2014


It's almost like THE MAN wants some a bank CEO to get dragged out of their corner office and hung from the nearest lamppost…
posted by ob1quixote at 12:33 PM on October 1, 2014



Historically there would have been a bloody revolution in this nation by now.

nah. I am not going to take up arms to fight so a guy who owes money and loses his car can get to keep it without paying money he owes...there are causes and then there are causes.
posted by Postroad at 12:57 PM on October 1, 2014 [3 favorites]


I can't believe this is legal after the cars shutting off while running situation. Where's the regulating bodies? Ignition shut off while running is why all those GM cars were recalled. People fucking died because the airbags won't deploy in that situation.

I'm aware this is supposed to be just a starter interlock, but it's obvious that on some vehicles it isn't.

I know it won't be, because real life sucks and regulatory capture and money and shit, but this SHOULD be illegal for safety reasons alone.
posted by emptythought at 1:03 PM on October 1, 2014 [3 favorites]


but what really worries me is what happens if someone should hack into one of these systems and turns everyone's car off? - we all know how security conscious corporations are, especially the fly by night ones

This is basically the BSG miniseries, right?


There's no need to invoke Science Fiction here. Police offers around the country are already stalking people they know with online systems, and those at least have theoretical monitoring systems built in.
posted by Phredward at 1:04 PM on October 1, 2014


Note that the main users identified were credit unions, supposedly the home of warm and fuzzy lending. BS. They are more ruthless than banks by far.

in the bankruptcy of my parents, the only creditor who gave us any real trouble has been a credit union, and they have been scorched earth ruthless about everything

Citation, elaboration, anything else on this? I've never declared bankruptcy--I have defaulted on student loans--but my experience has been very much counter to these statements. Are there references y'all had in mind?
posted by late afternoon dreaming hotel at 1:21 PM on October 1, 2014 [1 favorite]


This is basically the BSG miniseries, right? As if this whole thing weren't awful enough as is (and it really is), we're also being set up for even more trouble once the machines become self-aware.



ssssssst! Skynet is listening!
posted by TheWhiteSkull at 1:31 PM on October 1, 2014


When I'm late on my mortgage I can't go home and I have to stay on a friend's sofa, so this makes perfect sense to me.

Aren't there some mortgages where people can be foreclosed on after 30 days of late payments?
posted by corb at 1:35 PM on October 1, 2014


Thanks for the writeup. I read a few of these and didn't have the effort available to post here so I just tweeted them instead.

I can't believe we're doing this all over again. We learned literally nothing.
posted by spitefulcrow at 1:36 PM on October 1, 2014


Suddenly, I'm realizing how a relative of mine who's on disability is able to get an auto loan (even though she's already had one car repossessed). And she's someone who would be in a really bad place personally if it were remote-deactivated at the wrong time.

Also, I am utterly unsurprised that The Volokh Conspiracy is chiming in with "Problem? What problem?"
posted by Halloween Jack at 1:39 PM on October 1, 2014 [3 favorites]


Aren't there some mortgages where people can be foreclosed on after 30 days of late payments?

Does that somehow make remote shutoff of cars after payment is one day late more acceptable? Two wrongs don't make a right.
posted by graymouser at 2:00 PM on October 1, 2014


Oh, did any of them mention how rent-to-own places RAT the computers they sell?

Because they do. Which is why you should NEVER EVER buy one from them.
posted by NoxAeternum at 2:17 PM on October 1, 2014 [1 favorite]


Citation, elaboration, anything else on this?

Well, all I have is my own experience, and that's just one credit union, but amongst two more national mortgage lenders and multiple creditors large and small, all of whom are entitled (especially under the 2005 bankruptcy "reform") to a lot more assholery than they displayed.

Nolo: Bankruptcy and Credit Unions: Things to Look Out For

Credit Unions and Bankruptcy: The Friendly Face of an Unforgiving Creditor
Credit unions can be wonderful to deal with as a customer on a day-to-day basis. People like the friendly, personal service they often receive and, to some extent, the notion that they are not simply “customers” but are “members” of the credit union. There is an intimation of fellowship to doing business with a credit union, in other words, and many credit union members who come to me for advice regarding a potential bankruptcy are dedicated fans of their credit unions.

That friendly attitude that credit unions project on a day-to-day basis, however, changes dramatically when one of their customers to whom they have extended credit files for bankruptcy. At that point, the credit unions become the tiger in the room.


Hidden Traps of Credit Unions When Filing Bankruptcy

Historically (e.g. 2002), credit unions were emphatic advocates of the 2005 bankruptcy reform, which many bankruptcy attorneys opposed just as emphatically -- a fight they lost. Since the reforms a lot of data has been crunched and we now know, for example, that medical debt -- almost impossible to predict -- is one of the largest drivers of bankruptcy filing, quite different from the public image of spendthrift consumers racking up debt on credit cards because they have poor impulse control. This is where I wonder about a cultural effect.
posted by dhartung at 2:29 PM on October 1, 2014 [6 favorites]


I am not going to take up arms to fight so a guy who owes money and loses his car can get to keep it without paying money he owes...there are causes and then there are causes.

The important thing to remember is that what's also being lost is any incentive for the lender to the due diligence on its customers. At least if repossession remains hard, the lender has some incentive to ensure the car is affordable to the purchaser, but with this, the lender is incentivised to pressure the borrower into as large a loan as possible, especially because the vehicle can be recovered cheaply and resold at effectively the same price it was previously sold for. Essentially, if the vehicle's repossessed within 3 months, the borrower's down payment and monthly payments are pure profit for the lender.
posted by ambrosen at 4:21 PM on October 1, 2014 [8 favorites]


Postroad: nah. I am not going to take up arms to fight so a guy who owes money and loses his car can get to keep it without paying money he owes...there are causes and then there are causes.

This is the sound of the beast so to speak. They're counting on you having this attitude.

The problem here is that efficiency fucks people over. It 100% benefits the lenders and banks/CUs, and fucks over not just the average person but the wheels of society turning at the low levels.

There's been a slow, but relentless march towards this sort of thing on all fronts. In the old days if you missed a phone payment by a couple days? No biggie. They have to send out a tech to actually disconnect you, so they're not going to schedule that until you're like a week overdo. Ditto with basically any service.

Now? If you're one minute late on your cell phone bill they can automatically shut it off with a script.

The fucked up thing is how this is applied. In this case it specifically targets subprime loans where people are likely to be late, but on more egalitarian anyone who can pay gets the same service services like cell phone plans, it's only the people who have been late before who get the instant shutoff.

This is cruel, callous, and the same kicking-them-while-they're-down punitive logic as suspending a kid for missing school, or kicking someone out of a drug treatment program because they used again. Someone can't pay their car payment exactly on time? Let's stop them from getting to work! Can't pay their phone bill on time? Lets shut off their phone, so they can't even CALL in to work and tell them why they're going to be late and get fired!

There aren't debtors prisons yet, but that's the only next logical conclusion i can think of. The entire system seems to be structured to induce chain reaction failure as quickly and harshly as possible if you encounter any hardship or make one misstep.

It's such fucked, "eww how dare they buy ice cream with EBT" logic too. This doesn't get them their money faster, if the person has no money. And not being able to flex the payment at all by letting it run late makes people literally prioritize a car payment over food.

I hate the fucking people who came up with this, and i hope i live long enough to stand cheering as i watch their offices and homes burn to the ground.


The next post like this is going to be about smart meters shutting off peoples power when they're 2 hours late. And don't get me wrong, i'm completely pro smart grid/smart meter as technology and a solution to our shitty power grid, but that's exactly what they're going to do with it unless some fucking laws are made.
posted by emptythought at 5:24 PM on October 1, 2014 [32 favorites]


Now I'm going to have nightmares about losing my insurance and having somebody do this to my insulin pump.
posted by The Underpants Monster at 5:40 PM on October 1, 2014 [1 favorite]


but what really worries me is what happens if someone should hack into one of these systems and turns everyone's car off?

Remember these words -- "Klaatu barada nikto."
posted by JackFlash at 5:53 PM on October 1, 2014 [1 favorite]


Note that the main users identified were credit unions, supposedly the home of warm and fuzzy lending. BS. They are more ruthless than banks by far.

Keep in mind that credit unions are owned by their members. They operate on a shoestring budget. There are no million dollar CEOs. They don't run all of the profit sucking scams of the big banks so don't have money to spare for defaults.

When you borrow money from a credit union, you are literally borrowing from your next door neighbor. When you default, you are literally taking money out of your next door neighbor's pocket. The credit unions are looking out for the interests of their members, not CEO bonuses.
posted by JackFlash at 5:58 PM on October 1, 2014 [2 favorites]


I work for a credit union that has an explicit mission of serving low-income people (though I'm not involved with our lending). We do sometimes foreclose on people or repossess cars, etc., but I know that we try really hard not to. We have staff whose whole job is to reach out to delinquent borrowers to try to get them into payment plans, to do loan modifications when people need to so that they can avoid default, etc. I'm sure there are some credit unions that are ruthless but there are plenty of credit unions like mine that are absolutely not out to extract as much money as possible from borrowers.
posted by aka burlap at 6:19 PM on October 1, 2014 [1 favorite]


with this, the lender is incentivised to pressure the borrower into as large a loan as possible

In addition, the borrowers in the subprime car market have (or believe they have) no other options.

With a house, subprime borrowers could at least have stayed in their rental. But a car, which is such a crucial element of life and earning, isn't as optional. And for a depreciating asset, when your credit is bad the options dwindle much faster. So these borrowers have little choice (even if they understood) in taking these awful 24% loans ....That's what gets me, that they're grateful that some predatory lender 'gave them another chance'
posted by Dashy at 6:34 PM on October 1, 2014 [2 favorites]


/When you borrow money from a credit union, you are literally borrowing from your next door neighbor.

And what do you think the source of funds is when you borrow from someone else?
posted by JPD at 7:22 PM on October 1, 2014 [1 favorite]


And what do you think the source of funds is when you borrow from someone else?

Oh, that's easy. In that case you are borrowing from criminal enterprises run by the likes of Jamie Dimon or Lloyd Blankfein.
posted by JackFlash at 7:53 PM on October 1, 2014 [2 favorites]



Like, I get that this is theoretically helping people break out of that catch-22 where being too poor to afford a car means that you can't get a job that could help you not be poor anymore. But it's just one more "fix" duct-taped onto the grotesque Rube Goldberg machine that has unfolded from the tragic urban planning decisions we've made in the last century.


It would bother me a lot less if at least the nation as a whole was moving past those bad decisions. But a large section of the Midwest is intent on keeping things this way.
posted by ocschwar at 8:02 PM on October 1, 2014


they can resell the car to another victim once they have extracted all available worth from the first victim.

Gosh, the way you say that, it makes these people seem like they are predators who don't give a shit about their fellow citizens or even anyone they don't know, except as a source of meat - like some kind of zombies. It even makes them seem like they are the epitome of everything we admire here in America - never giving a sucker an even break - like we're all locked in a cage together and they keep us alive just to feed on us.

Well said. Next time just throw in 'vampire squid' and 'blood funnel'. Cuz them's the facts, Jack.
posted by Twang at 8:44 PM on October 1, 2014 [2 favorites]


Oh, that's easy. In that case you are borrowing from criminal enterprises run by the likes of Jamie Dimon or Lloyd Blankfein.

At least the mob is honest about murdering you for nonpayment.
posted by Pope Guilty at 9:22 PM on October 1, 2014 [2 favorites]


All of my credit union experiences have been overwhelmingly positive, but I can imagine how the same structure could be used in ways that end up harming people.

The buy here/pay here car places, though, are just awful. I have had a number of employees end up in hock to them and it's horrible to watch. As has been described above, it's easy to imagine the same technology being used to immediately shut off utility services, lock an apartment door, or anything else that used to be handled with long warning periods and plenty of second chances.
posted by Dip Flash at 9:32 PM on October 1, 2014


"There aren't debtors prisons yet, but that's the only next logical conclusion i can think of. "


Debtors Prisons

posted by Ik ben afgesneden at 10:29 PM on October 1, 2014 [3 favorites]


RE: Credit Unions and bankruptcy

I think that nearly all of the really big banks have landed at about the same place on the spectrum of "the minimum that is legally required/allowed" to "the most that they could do" that helps or hurts their customers and protects themselves that also minimizes losses. I'd guess that there are a lot more smaller credit unions and small banks and there is a lot less uniformity. Then either they tend lean more towards the "the minimum that is legally required/allowed" or the people who have to deal with that are a lot more vocal about it. That would account for why there seems to be a lot comments about how CUs are total dicks to people declaring bankruptcy while others comment that their CU was a lot nicer about it than they thought they would be.

I can get a hamburger at Applebees or TGI Fridays or any other similar, large chain and I know that they're all going to be about the same, decent if mediocre quality. Or I can go to a bunch of different one-off or Mom and Pop burger joints and they'll run the gamut from "totally amazing" to "totally awful".
posted by VTX at 6:32 AM on October 2, 2014 [1 favorite]


so that they can resell the car to another victim

I've mentioned before that I had a third-party contractor gig inside a big, slick car dealership in the Chicago suburbs. Looked like a very professional place. I got to overhear conversations about customers that were as cynical as could be, and one of them was "Yeah, she probably won't be able to [make payments], but then we'll get the car back."

The credit unions are looking out for the interests of their members, not CEO bonuses.

That may be, but it's also just another way of saying that credit unions are going to be ruthless, regardless of their customer service plaudits. I could go into detail, but it gets a bit messy to do that. The real problems start with the 2005 changes to the law, which were based, like Voter ID laws and so forth, on a false premise and stereotype of persons of weak moral fiber who need to be reined in. This isn't some sort of anti-CU crusade I'm on, just more of a still-stunned-that-happened reaction. They were there for my dad all the years his mind was failing, but when we got control of the finances, they closed the door.
posted by dhartung at 11:44 AM on October 2, 2014


Now I feel bad for this person. Someone should warn them.
posted by agentofselection at 5:21 PM on October 2, 2014 [1 favorite]


Bank of America ripped me off far less than my local credit union. They took me for thousands using practices that are now illegal.
posted by The Underpants Monster at 7:03 PM on October 2, 2014


In other news:
The former Federal Reserve chairman, speaking at a conference in Chicago yesterday, told moderator Mark Zandi of Moody’s Analytics Inc. -- “just between the two of us” -- that “I recently tried to refinance my mortgage and I was unsuccessful in doing so.”

When the audience laughed, Bernanke said, “I’m not making that up.”

“I think it’s entirely possible” that lenders “may have gone a little bit too far on mortgage credit conditions,” he said.
posted by Nonsteroidal Anti-Inflammatory Drug at 11:14 AM on October 3, 2014


Bernanke: “I recently tried to refinance my mortgage and I was unsuccessful in doing so.”

That is total BS. Bernanke is the absolute worst.

Bernanke could walk into any bank in the U.S. and refinance a mortgage in 10 minutes. What he is talking about is probably an on-line computer application in which, when asked to fill in his employer, entered "None." That's right, he's currently unemployed.

Well, of course the computer rejected his application. Remember the NINJA loans (no income, no job) which Bernanke oversaw and did nothing about that caused the financial crisis and put millions of people out of work? Of course his application would be rejected by computer today. Of course you should get greater scrutiny if you are unemployed. That doesn't mean he couldn't easily modify his application, submitting documentation of other sources of income, such as speeches he gives for $250,000 a pop.

Bernanke is simply trying to undo the sensible reforms put in place as a result of the last time Bernanke destroyed American jobs. This is the guy who bailed out his Wall Street friends and then did the least possible to help people on main street. To give the false impression that poor old Bernanke can't get a refi is rank lying of the worst kind.
posted by JackFlash at 12:12 PM on October 3, 2014 [5 favorites]


I wonder if, when self-driving cars become mainstream, they'll be designed to drive themselves to a holding area instead of just shutting off.

Mainstream self-driving cars are predicted to be the end of mainstream car ownership as they'll function as a cross between a taxi/minibus and a ZipCar, so this shouldn't be an issue, but I bet they will do that.

Credit unions can be aggressive about losses for two main reasons. One, they are smaller than banks. Two, their boards are full of people who are afraid of losing money. That said, if you're being hounded by one, you can still get a meeting with someone who can do something about it, which is not always the case with large banks.
posted by michaelh at 6:32 AM on October 22, 2014


From 2010 - 100 cars disabled over the internet.
posted by marienbad at 4:49 AM on October 26, 2014


We learned literally nothing.
Not true.
We learned that you can

- bankrupt the global economy
- cause immense suffering, heartache and ultimately death
- commit trillions of dollars worth of fraud

and the repercussions were negligible.
posted by fullerine at 5:43 AM on October 26, 2014


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