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Showing posts from May, 2009


Usury (lending money at excessive interest)

Why are we in such a financial mess? It started in 1978 when the U.S. Supreme Court ruled that banks could lend at interest rates set by the state where the bank is chartered and not where the loan is made (Marquette National Bank v. First of Omaha Service Corporation). In effect Minnesota could not enforce its usury law against a credit card issued by a Nebraska bank. The effect of that was that banks set out to find states that had no ceilings on interest rates. And you wondered why credit cards were being issued from South Dakota?

Reasonable state limits of 5 to 9 percent were cast aside as states repealed their limits and lessened any usury laws in order to meet the competition. Interest rates spiked.

Of course, ceilings on interest rates are still on the books in many states and you will often read that it is against the law to charge too much interest. However, Congress took care of those state laws when it comes to mortgages and cre…

Follow the Money through the Criminal Justice System

I usually write about finance but I saw this article the other day on fusion centers and I thought I would share this with you.
We should always follow the money. The way we spend our resources defines who we are. If you as an individual like to buy lots of books, it defines you just the same way you are defined if you like to buy lots of clothes. This nation likes to buy safety and it is under the illusion that it can do so by putting people in jail. According to a study by Office of Justice Program’s Bureau of Justice Statistics, almost 7.2 million people were under federal, state, or local probation or parole at the end of 2006. 298 million people lived in the United States in 2006. The rate of incarceration in prison at year-end 2006 was 501 sentenced inmates per 100,000 U.S. residents, up from 411 in 1995. This amounts to 1.5 million people which means 8.7 million people were involved either in prison or on probation in the United States in 2006; that is 3% of the United States …