Thomas Frey:  For years the government has turned a blind eye to banks and lending institutions that “raped and pillaged” their customers.  Now with tough new bankruptcy laws in place, consumers have no relief valve left and many are simply walking away from their mortgages and going underground.

We currently have money systems that simply don’t work for most people.  Everything seems reasonable and above board on the outside, but in actual practice the money lenders are imposing fees on their customers at a record pace, often on the customers that can least afford the penalties.

Here’s how it works.  My daughter recently got a credit card offer for a credit card with a $150 limit.  If she ever went over the $150 limit there was a $29 penalty.  If she was ever late making a payment, there was a $29 penalty.  And it came with a minimum monthly payment of 50 cents, regardless of whether there was any balance there or not.  The offer was riddled with trip-wires.

Credit card companies making these types of offers have no other intention than to bleed money from their customers.  They take as much money as they can possibly get, destroy the credit rating, and simply move on.  The sad part is that it is totally legal with our current laws.  Usury laws apply to interest rates on loans, not fees.

Enter the new bankruptcy laws.  With credit card companies and banks lobbying hard, the government bowed to the pressure signed the new tougher bankruptcy laws into being.  And in doing so, they took away the only escape mechanism left for consumers to get away from the predatory lenders.

People have no other option than to simply walk away from their mortgages, walk away from their debt, and live in a sort of “financial underground”.

As a result, we are seeing a collapse of the housing industry, collapse of the mortgage industry, and a bailout package working its way through congress that will cost taxpayers hundreds of billions of dollars.

The goal of democracy is to create fair systems for us to operate in.  Its time to for congress to start doing their job and stop catering to the barnacle lenders that are torpedoing our economy.