With the recent financial turmoil, one has to wonder just how far our financial institutions have gone for a profit. Many have wondered where the risk management was. Didn’t anyone realize the danger? Didn’t anyone speak up and say hey, we’re overleveraged here, what if things go south? So far, if they did, they didn’t speak loud enough. On top of that, a number of consumers have been led astray with predatory lending practices utilizing loans with supremely high interest rates, as a recent article over at CNN Money examined.
A number of former employees confessed that they were pushed to sell consumers loans they didn’t really need. They were also apparently told to gloss over the terms of the loan, bordering on unethical explanations of the terms and waving off the high interest rates.
Does this mean that no one should go get visa credit cards? Of course not. What it does do, however, is portray a more urgent need for legislation to protect the average consumer. Many consumer advocates are taking advantage of the chaos in the markets to point out that increased regulation of lending practices could have prevented this from happening. I’m not sure that’s entirely true, but we’ll see how it all plays out.