Discount Rate For Banks: 0%; Discount Rate For The "Rest Of US": 400%; For Everything Else There's TaxpayerCard

Tyler Durden's picture

When your local friendly Too-Big-To-Fail bank needs a 'helping hand' loan to get through pay-day or buy some extra S&P futures, it picks up the shiny red phone and asks Ben for unlimited access to free money. When the 'rest of us' need a little extra - to get through the next week before our pay-check hits, we call this guy - who charges a 400% APR. The Central Bank Discount Window - Priceless.

What is perhaps most notable that no matter how much the CNBC anchors tried to corner this gentleman into admitting his vig is a little rich, the bottom line is that his services are in demand, and by a customer that has a far higher annual household income that we would have expected... once again the 'middle-class' is hurting to maintain any standard of living.

 

 

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Ahmeexnal's picture

Hope and Change!

Tijuana Donkey Show's picture

I'm hoping for some change, silver change.....

Stackers's picture

Obama Secret Service code name: Mastercharge

smlbizman's picture

how about the sap that takes a loan to pay a loan to take a loan to pay a loan...hmmmm, were have i heard this finance model before?...oh i get it, its ok if your a sophisticated customer like the u.s.a...who knows what they're doing..

JohnKozac's picture

I'm going to 'unfriend' Ben....I don't want to see him on my FB page anymore.

There.

malikai's picture

I saw ads for some of those things on the tube here in London. The effective rates were 1100%!

smiler03's picture

There's a UK company called "Wonga" which advertises a LOT on TV.

From their website...

"Our flexible, short term service comes with a Representative APR of 4214%, but bear in mind that the loan duration is only up to a month. We provide short term loans and APR is an industry standard calculation that looks at annual repayment costs. We don't actually charge thousands of percent in interest!"

https://help.wonga.com/help/misc/general-info/loan-cost

Matt's picture

It is more cost effective to default on a payday loan and pay the maximum interest rate then to keep paying it off every two weeks and re-borrow it, since most of the money is in fees rather than in the actual interest rate.

fonzannoon's picture

"A credit union that will only charge 18%".....

Geez we need to bring back the mafia I think they were cheaper.

LMAOLORI's picture

 

 

 

Pretty funny I was watching the Untouchables they had an episode about the Mob running a lottery and now look who runs the lottery

rayduh4life's picture

Around here, it's the gypsys - $2,000 fo 2 weeks for 50 bucks.  Sounds cheap by compartson.

Xibalba's picture

Banksters are pissed that they are not the end all be all??

Slightly Insane's picture

I'ld rather deal with the "Goombalooch" ..... i.e. the mafia for a loan.  In fact I would rather have the Mafia take over for the current administration, as I know the "guys" would take care of all these shenanighans.  My effective tax rate would be far less, everyone in the neighborhood would be taken care of, the "gang banger's", well they'ld get their one warning, and everything would be good.  Unemployment would be 1-2%, and "unemployment insurance" would be "un-necessary"...... same for every other type of "insurance".   These "guys" would at least respect "property rights" and the "politicians" would be effectively "nullified". 

chet's picture

The mob would respect your property rights?

laomei's picture

At least when the mob taxes you for protection, they generally live up to their end of the deal

Agent P's picture

It never ceases to amaze me how much money can be taken from people who have none to begin with. 

trebuchet's picture

This is so true and yet so sad... history of human race since money and power began.

 

 

LMAOLORI's picture

 

 

An informed citizenry is a wise citizenry

 

The Trouble With Democrats

 

snip

 

American Usury

 

One of the fundamental issues that party managers wished to avoid was the scandal of American usury. Usury is the ancient sin of charging inflated interest rates sure to ruin the borrowers. It is considered immoral by Judaism, Christianity and Islam because usury involves the powerful using their wealth to ensnare weak and defenseless borrowers. The classic usurer offers an impossible choice that debtors cannot easily refuse. If they reject the terms of the loan, they will not be able to pay the rent or buy necessities. If they accept the usurious interest rates, their debts will accumulate until they are bankrupted (at which point the creditors claim their property). No civilized society can endure in such conditions.

Usury used to be illegal in the United States but it was "decriminalized" in 1980--the dawn of financial deregulation. A Democratic president and Congress repealed all interest-rate controls and the federal law prohibiting usury. Thirty years later, American society is permeated with usurious practices--credit cards charging 30 percent and higher, subprime mortgages and other forms of predatory lending, the notorious "payday" loans that charge desperate working people an effective interest rate of 500 percent or more. Businesses, especially smaller firms, are also prey to usury in less direct ways.

in full

http://www.thenation.com/article/trouble-democrats?page=full#

 

silverserfer's picture

no it wasnt Jimmy Carter that pushed usuary on this country.  Your beloved catolic church changed from being a sin to being allowed. It has been abused by BANKERS ever since.

http://www.catholicculture.org/culture/library/view.cfm?id=646&CFID=4985929&CFTOKEN=14912740

 

Bendromeda Strain's picture

Nice deception, except the article in question was published by The Nation, which means it wasn't a hit piece. Just because you didn't like what it said doesn't change that fact. If you had started your rebuttal with anything but "No, it wasn't" (fixed your semi-literate punctuation for you - you're welcome) then you might have some traction. Having said that, as Denninger the Nazi chihuahua has pointed out many times, the Catholic Church has backslidden on numerous fronts, support for usury and EMTALA (state charity) being two.

holdbuysell's picture

Sheezus...that guy really earned his $200 in that hotbox. He actually did a good job and came across credible and well-informed with defensible data, including from actual banks who also charge a kajillion percent APR on overdraft charges....next time let's have those questions presented to Moynihan and Dimon and see how they do in such a hotbox.

Bendromeda Strain's picture

.

next time let's have those questions presented to Moynihan and Dimon and see how they do in such a hotbox.

No problem. They will be ably represented by Nathan Thurm, Esq.

Raymond K Hessel's picture

The Konsumer Federation declares war on Tuubigtufale.  

 

STupid.  36%?  How was that put together?  35% is okay. 37% no fucking way!

Just take responsibility for yourself.  Honestly.

Gromit's picture

Kinda interesting how South Dakota has won the credit card business.

Their usury laws are very attractive for the banks!

 

 

Bendromeda Strain's picture

Delaware is planning to declare war. General Biden will lead the charge.

Rainman's picture

Sheez....there's literally a scheme in place to fuck you from cradle to grave.

Doncha love the ongoing criminal enterprise called capitalizm !?

AlphaDawg's picture

tbtf is not capitalism, 'tis facism dude

MalthusWasRight's picture

A rose is a rose is a rose...

Count de Money's picture

I watched this interview and saw how CNBC hacks were trying to spin the discussion. The typical attitude of these talking heads is that the rubes in the sticks are too stupid to figure this out for themselves.

The alternatives don't look much better. I have an checking account with an overdraft line. It used to be that if I wrote a check for $100 and had only $99 in the account, the bank would loan me the $1 and charge interest by the day until I paid it back. A few years back, I noticed that they changed the policy. Instead of the earlier example, they would leave the $99 in the account (at no interest) and advance me $100 from the overdraft and charge interest on that. Then they added a $10 fee for just touching the overdraft. Try figuring out an APR on that.

pamplona's picture

These CNBS anchors are idiots trying to demonize the pay day loan industry while they protect the Jamie Dimons and the Jon Corzines of the world. 

 

I spent $150 on groceries yesterday, annualized thats $55,000 a year on groceries!  But who says that I buy groceries every day?

 

Jackasses.

pamplona's picture

as an addendum, it's comical that these guys make a living as financial reporters yet don't understand that the concept of compounding interest does not apply in this context.  

SwingForce's picture

Yeah, but No monthly minimum balance, NO monthly service charge, No overdraft or overlimit fees. Who cares what the % computes to, its still CHEAPER than a TBTF bank account. Really. And WalMart is gunning for this guy...

buzzsaw99's picture

cnbc doesn't give a rat fuk about anyone but their joo bank owners

look over there, an outrage that isn't connected to the felonious ny mafia!

q99x2's picture

I pay cash for everything and no longer have any debt. I'm a bankers worst nightmare. Fuck the predators. Let them eat each other.

brown_hornet's picture

My bank charges me $5 to transfer MY OWN MONEY to me from my savings acct

silverserfer's picture

and you deserve to pay said fee for CHOOSING to bank there. 

YesWeKahn's picture

Bernanke for president!

mademesmile's picture

Anyone else notice many of the " higher brand " companies are now offering rent-to-own options? This commercial is playing every 20 minutes in the St. Louis area. The main selling point is you get to make payments on the furniture for 48 months! Technically, it's not rent-to-own, but if you don't own it for 4 years, what else is it? 0 percent interest on 40% overpriced crappy furniture, AKA in house financing. Other new areas for buy now, pay later: new cars, carpet, Dental work, bathtub inserts, car repair, lawn furniture, pools, electronics.

Not many care about the cost or quality, just the monthly payment.

http://www.ethanallen.com/express

 

WTFx10's picture

ETHAN ALLAN is crappy furniture? What do you consider not crappy?

AldoHux_IV's picture

The "Loaner Games"?

At this point, I'm all for Sheila Bair's idea of giving everyone $10milsky-- I mean really everything has reached the point of absurdity.

Hey Government! We get it, you like-- LOVE the banks, even though this relationahip is going to kill our country you're going ahead with it.  Just give us our cash and we'll leave you to whatever your unholy love fest is and be on our way just don't invade/or touch us in any way.

ebworthen's picture

Organized crime - sanctioned by courts, politicians, and the "justice" department; "Corleone and Guido" now "Dimon and Corzine."

mrdenis's picture

My bank Vally National charged me 2 bucks to check my balance ...not at another bank but at another Vally bank branch ! 

dwill6413's picture

HAHAHA, sounds like the BIG BOY BANK shills are pissed that this consumer option is cutting into their profits from overdrafts, late fee charges and other fee's. Always look behind the curtain. :)

 

robertocarlos's picture

I am soon out of debt. The bastards charge me 6 percent so that's 25 bucks a month.

 

I forgot the bank charges me $1.75 to withdraw any savings so I pay them about 28 bucks a month. I previously had 2 free withdrawals from my savings account every month.

rufusbird's picture

Support your local credit union.

laomei's picture

$15 for a $100 loan for 2 weeks.  It's basically a dollar and some change a day.  In all honesty it's not the WORST thing in the world.  Anything over 10% is predatory to be honest, but it really comes down to the amount that's being talked about and if that rate is compounding or not.