Wendell Tucker Saves The World

Another one bites the dust. This weekend as Hurricane Ike submerged southern US States and the Midwest, two financial giants also found themselves drowning. Lehman Brothers Global Investment Bank has begun proceedings to file for Chapter 11 Bankruptcy. Perennial Wall Street powerhouse Merril Lynch has been bought out by Bank of America for a mere $29 per share or around $40 billion. Earlier this year we saw the fall of Bear Stearns, which was bought by J.P. Morgan Chase. Speculation abounds around the potential sales of Wachovia, Wells-Fargo and American Express. Is the collapse of these financial giants signalling an economic doomsday for the USA?

While I am quite sure that many Wall Street execs are losing sleep and hair over the economic turbulence, one industry that is suprisingly stable is the Credit Union. Because of the "Credit Crunch" one would be led to believe that the Credit Union (CU's from henceforth) would be suffering at this time. Not so. Being that CU's are not-for-profit organizations that do not play into the same financial charades as corporate banks, their approach to customers is more fiduciary and there for less risky. While banks will angle to get a customer into any kind of loan possible in order to increase their P&L, CU's are much more likely to give a more straight forward discussion and deal as it relates to lending. Even though the CU may have less atm's and branches, the low overhead allows them to give you higher rates and less fees. This is especially important when you consider the fact that the average American pays around $200 a year in "courtesy" overdraft fees. Most credit union patrons do not experience this, because many CU's offer an opt-out provision for the "courtesy" overdraft program. The not for profit status makes a world of difference. There are far fewer money grubbing shareholders, so the CU can put its focus on pleasing the consumer instead.

As a former employee of a major banking institution, I am very aware of how banks prey on consumers. We were consistently encouraged to sell credit cards to customers whether or not the could afford them or needed them. The maximum amount a customer could have was 5 cards. We were encouraged to get them to the max. Aside from the obvious moral issues with this approach, there is the economic issue. If you give a person more credit than they can pay back, no only do you sabotage that person's finances, but your institution's as well. This is what caused the credit collapse. For years banks have preyed upon the least wealthy their patrons. The more money you make, the more credit you can AFFORD and the lower your rate. The less money you make, the more credit you NEED and the higher your rate. What follows is simple. Mass credit default caused by a banking system who sold too much credit at a disproportionately high rate to people who couldn't afford it.

How do we fix it? Simple, revamp our crediting system. Credit Unions have shown that it can be profitable to to treat people correctly. So here's a 4 step solution to fixing our credit crisis.

1) Get rid of FairIsaac. Every credit score in America is determined by one corporation: FairIsaac. The Algorithm used to determine whether or not you are deserving of credit is a secret more closely kept than The Colonels 11 Herbs and spices. But what is not a secret is this. The Algorithm is designed to keep the credit scores of the wealthy high, and the credit scores of the poor low. It is a social control device that has helped crush many dreams, deprive families and keep middle to lower class right where they are. By abolishing their system of assesment and replacing it with a new one that EQUALLY takes into account payments and missed payments, chargeoffs and fulfillment of debt, and opening and closure of credit lines, Americans will have a FAIR opportunity to utilize the credit products available. Even more important, financial institutions will have a better way of assessing potential customers and will be able accurately discern who and who is not "credit worthy."

2) Impose Specific Federal Restrictions on High Interest Credit Products. The federal government is responsible for the general well being of America. The cancerous policy of raising rates due to income has been eating away at our financial body for too long. I agree that institutions should be compensated for the risk they incur from crediting. I disagree that a person should be punished for not being wealthy. 2.5% over the prime rate is more than enough for any loan. There must be an adjustable ceiling that cannot be surpassed. This is especially neccessary in the realm of Payday Loan institutions, where the interest can literally be as high as 600%.

3) Make the Courtesy Overdraft Opt-Out policy a law. Forcing a person to take a 45-300% loan is not a courtesy. That is exactly what happens when you overdraft. Many CU's and smaller community banks have already adopted the Opt-Out Policy. What resulted was higher balance growth and greater client retention. Seeing how this has played out on the smaller scale, one can logically assume that would occur exponentially on the larger corporate scale.

4) Mandate Financial Education in All State and/or Federally Funded Elementary and Secondary Schools. If a school recieves government funding, then that school should be required to teach finances to all students. A lack of financial education has caused many consumers to fail economically. There is no reason why an 18 year old should not be able to discern credit from debit or understand the difference between stocks and bonds. Financially educating the masses is key to salvaging our economy.

If these 4 things were to occur today, within 20 years, we would be in the midst of an economic boon. Banks would be able to find more credit worthy customers because of the accuracy of open-market credit scoring. Customers would be able to pay less fees and more bills, increasing economic stabilization across the board. Most importantly, consumers will be far more saavy than they currently are, leading them to make better decisions and be more financially responsible. Things have to change. We are watching our economy crumble right before our eyes. Being third world is only two worlds away.

Ladies and Gentlemen, the world is turning inside out. This contest for the Presidency of the United States of America has completely ripped the veil of sexism, racism and economic discrimination of the the red and blue painted face of our nation. What had previously thought to be progress in tolerance has now been revealed to be little more than a masquerade, and the GOP could not be happier about it. I used to believe that there was truly little difference between Democrats and Republicans. In my eyes and in the matter of many, they were all simply people who sought to be part of the ruling class. After years of social neglect and failed policies on behalf of both parties, who could tell the difference between one failure and another?

The difference has been made clear. I now understand what separates the two and its surprisingly trivial. While watching the Democratic convention, I became aware of a theme. It was not political and while there is definitely a primary agenda, it took a backseat towards a more important task. Uplift the masses. Each eloquent speech, every chant for change, the mantra of "yes we can", all of it geared to remove the bureaucratic sludge that has weighed down the spirit of America. 7 years after 9/11, this is not the same country that defiantly came together after one of the greatest atrocities to happen in our country. Barack Obama correctly diagnosed our country with having a lack of belief, idealism and optimism. Slumping economy, lowest rated congress ever, lowest rated president ever, bleak housing market... How could the spirit of our country be in good order? How can we begin to change the ideas and practices that got us her. It had to begin with the heart and soul. So thats what he began to work on. After four days of jubilation it was all capped with a roadmap of the work needed to be done to get where we needed to be.

One week later, the GOP whom I perceived to be of little difference, had the opportunity to undertake the same task in their own way. But as opposed to attempting to uplift the masses, they sought to fire up their own. What followed was a disgusting onslaught of childish attacks, outright lies and brutal disrespect of a cornerstone of American culture and by default America itself. At times I found myself physically feeling ill, as I envisioned satan himself sitting stage right, smiling approvingly on the stage shaped like a 40 foot middle finger. I watched in horror as the Republican front blatantly attempted to steal the Democratic mantle of Change. Where as experience had been the centerpiece of the McCain campaign, they were about to throw that idea completely out the window in favor of someone with even less "experience" than Sen. Obama. Night after night, you began to hear more and more about change from those who opposed it. As the convention pressed on, anticipation built for the national debut of McCain's ace in the hole: Sarah Palin. Brought in to once again use the Alan Keye's tactic against Barack Obama, Gov. Palin was brought in to take the vaunted disenfranchised "clinton-ites". A ploy that at surface seems foolish and shallow untill you look at the underlying issues as to why they would feel disenfranchised in the first place.

He's black people. Before you start crying about playing the race card lets look at the facts. Even after all the lies about him being Islamic, raising taxes for poor people, attending extremist schools, attempts to associate him with Saddam Hussein, blaming him for the remarks of other people and the 1001 other smear tactics were all debunked, thousands of people fell back to the "there's just something about him that I just don't trust." We know what it is, even if it hurts to say it. His skin.

Unfortunately, Gov. Palin seems more than comfortable being used for this purpose. Under an armor of gender bias and "small town sensibility", this pompous newcomer unleashed a vile verbal tirade against Barack Obama, his supporters and confusingly, community organizers. The latter confounded me most, this country was founded by community organizers. Their campaign is sustained by community organizers. These are the people that pick up the slack when our politicians fail us. i.e. Red Cross, Easter Seals, Americorps, Shriners... I was taken aback, not only by the fact that they would so blatantly belittle their own supporters, but that their supporters applauded the disrespect that their own party was showing them.

Being that I am not running for president let me say this: Ladies, bitchiness is not the same as strength. Gentlemen, sarcasm is not a substitute for substance. The fact of the matter is that, for all of her scripted stingers and GOP rhetoric, there is no substance below the surface. Just an ambitious woman, who is willing to do whatever she is told in order to further her career. A puppet making a mockery of the womens liberation movement.

Yet thousands applauded. Why? Because we have become enamored with drama? Manufactured conflict is being confused with political debate. Sarcasm is now a surrogate for intelligent rebuttal. Lying is expected of our leaders, Smear tactics, defamation of character and pandering is now considered campaigning. Even stealing your opponents campaign theme is now fair. Why? It makes for good drama. The ultimate in reality TV. American Idol: Presidential Edition.

We stand at a crossroad in history. As a country we have had time to mature, work out our issues, and move forward as an example for the world to follow. The choice has been set before us. If we are too foolish as a whole to make the obvious decision for what is better for us, then we will get what we deserve. Do not be fooled. Let down the scales of bias from your eyes. Our government should be composed of rational human beings and compassionate individuals, not "mavericks" and "pit bulls". An ideal situation can only be created by an idealist. Contrary to what the GOP says, our government SHOULD be a fiduciary organization. If they are not, then who's best interest are they looking out for? Allow yourself to see the truth for truth. Change can not come from those who believe everything is ok. Things are not ok, but they can be. We simply need a person who is not afraid to say "yes, we can" be a more perfect union, "yes we can" work towards a fair society, and "yes we can" lead ourselves with honesty, compassion and dignity. This is not the time for drama. It is time for America to look back to its infancy, to when it had the dream to be the perfect society, look to the present, and see that we are on the precipice of that society, and look to the future and see that without that idealist spirit, we will be walking in circles and the next time we come around, that road may have turned into a bridge to nowhere.