Subject: Comments for File Number S7-12-11

May 26, 2011

I’m writing because my family and I were affected by the economic collapse of 2008, and we don’t want it to happen again.

Wall Street greed and outrageous pay practices were a major cause of the collapse. One way to change the incentives so they don’t collapse our economy again would be to delay the bonuses for three, five or more years. That way, we’ll know if the loans they made in year one remain good. In the bad days, bankers paid themselves on the volume of loans (mortgages) they generated, not on their quality.

Thank you for considering my comment,

Banks, Credit Cards, Usury, the Bank Saver and the Taxpayer.

It is a fact that the government, the bankers, and others who use bank savings account money lent by the banks make money on interest except the saver whose account is being used.

It is unfair that the banks who use customer’s saving account and taxpayer’s money for use of credit card loans, to charge usurious rates yet not share a fair amount of some of this usurious money with the customer. The banks charge ten, twenty percent, thirty percent rates and whatever the banks can get away with but only pass on to the saver one-half of one percent and the saver is lucky to get a meager one percent. Who are we kidding? The banks must be regulated. The regulation need be and must be MANDATED for the bank as well as the customer. So that we can get better returns on our savings, we Demand COMPETITION amongst banks as well as regulation. How does the economy come into play here?

Why should greedy banks be allowed to set usurious interest? There was a time when usury was not allowed to the individual but it was allowed to the banks. Interest over ten percent was considered usury. Since banks use customer savings for credit card loans, and now use taxpayer’s money, the use of regulation to control usurious rates need be mandated. How does the economy come into play here?

Banks pay almost no interest to savings accounts but charge usurious amounts of interest. Shouldn’t these customer savings accounts share some of the interest that banks are making? Shouldn’t these accounts be making at least as much as the banks make? Would 50 percent be a fair amount to pay to the individual? How does the economy come into play here? After countries legislated to limit the rate of interest on loans, usury came to mean Charging Interest above the Lawful Rate. In common usage today, the word means the charging of unreasonable or relatively high rates. At one time in California, it was unlawful to charge usurious interest but allowed with proposition. Wonder if it was also lobbied away with a payoff from money earned from usurious rates? It is high time we consider regulating legal limits on usurious interest rates. How does the economy come into play here?

Wikipedia offers a religious context and cites,“ . . . one must always consider that usury, in historical context, has always been inextricably linked to economic abuses, mostly of the masses and of the poor.” “The main moral argument is that usury creates excessive profit and gain without "labor" which is deemed "work" in the Biblical context. Profits from usury are argued not to arise from any substantial labor or work but from mere avarice, greed, trickery and manipulation. In addition, usury is said to create a divide between people due to obsession with monetary gain.”

Issue two, Credit Cards and Usurious Interest Rates: Since the banks are now using taxpayer’s saving’s account money, and the public is affected, I believe that this situation must be regulated. At this time of our bad economy, the banks and the government treasuries refuse to offer hardly any interest for savings. Since the banks are using customer saving account money, for Credit Card Use and the banks are employing usurious interest rates, shouldn’t saving account’s share some of these rates. Should these interest rates be regulated?

At one time until the savings and loan scandal caused by the Keating 5 members of congress, the customer received 4 percent on his savings. This was not unreasonable. During the depression the bank customer received two percent.

“Do our politicians get their hands greased by the Bankers?”


sam Emmer

Newark, CA